Debate on Annual Budget Statement

Order read for Resumption of Debate on Question [19 February 2018],

"That Parliament approves the financial policy of the Government for the financial year 1 April 2018 to 31 March 2019." ‒ [Minister for Finance].

Question again proposed.

11.32 pm

Mr Liang Eng Hwa (Holland-Bukit Timah): Mr Speaker, Sir, this year's Budget sets out the challenges we are facing, how do we respond and the measures needed and how do we find the means to carry out the comprehensive set of plans and initiatives in the medium to long term.

Deepening economic transformations continue to be the focus, with various schemes streamlined and better integrated, such as the Productivity Solutions Grant (PSG) and the Enterprise Development Grant (EDG), the piloting of the Open Innovation Platform to spur partnerships and the enhancements of various tax incentives, such as IP licensing, amongst others. I will speak on the economic measures during the MTI Committee of Supply (COS) debate.

I am glad that the introduction of the carbon tax would be phased in gradually to monitor the impact and applaud the Government’s commitment that the projected $1 billion revenue collected over the first five years will be used to support projects that will achieve greater emission reductions.

I also welcome the measures to further improve social mobility, such as increasing the annual Edusave contributions, updating the income eligibility for the Edusave Merit Bursary and enhancing the MOE Financial Assistance Scheme, among others. I believe we can do more on this front.

But among the most talked about aspect in this year’s Budget is, of course, the topic of fiscal sustainability and the two-percentage point increase in GST.

The timing of the GST increase, at least three years from now, should not come as a surprise as both the current and previous Ministers for Finance have already made it quite clear that we do have sufficient revenue to meet the increased expenditures for this term of Government. So, this increase in GST is not a deferred tax. It is meant to take care of future spending increases beyond 2020.

I appreciate the Government sharing this way ahead of time so that Singaporeans and businesses can better prepare for the increase. It will also give the Government time to work on offset schemes to further enhance the progressivity of our GST system, something quite unique to Singapore.

We know the reason why we need more revenues. Our expenditures have been rising rapidly, with healthcare and infrastructure spending among the main drivers. In the next decade, this trajectory is likely to continue with even higher healthcare and other recurring expenditures.

In some ways, as Members of Parliament, we have a part to play in these rising expenditures. To progress as a society and to improve the well-being of Singaporeans, we are relentless in pushing for more spending in many areas, such as education, housing, healthcare, transport and others. We asked for more subsidies to help low- and middle-income families; we ask for more facilities in the constituencies we represent. It is our duty to improve lives.

So, I must admit I am one of those. For example, I requested the Minister for Health for a polyclinic in my constituency three years ago. I am glad that construction will start this year. But I know that it would cost the Government tens of millions of dollars to build a polyclinic and, when completed, it will incur recurring operating and maintenance expenses in perpetuity. I have made another request to the Minister for Health for a Senior Care Centre, which I understand will cost about $1 million to build and, of course, will come with its operating costs thereafter.

But such facilities and the various expenditures are necessary to improve lives. Between not spending on these items or cutting spending, I would rather the Government spend prudently but look for more revenue sources so that we can continue to provide more to improve the quality of life for our people.

I believe most Singaporeans can understand why the expenditures are rising. The question is how do we find more revenue to pay for these rising expenditures. Some had suggested why not increase the share of Net Investment Returns Contribution (NIRC) beyond 50% and asked if the Government is too prudent or conservative in managing the finances. So, let me offer my thoughts on this.

When I studied Civil Engineering at the Singapore Polytechnic, one of the structural engineering concepts that I learned was this term known as the "Factor of Safety". Essentially, what it meant is that whether it is a building or a structure like a bridge or a tower, engineers will design and build structures with a load carrying capacity way beyond the expected or intended loads ‒ often between two and three times. This is to reduce the probability of the structure collapsing due to unforeseen factors to a negligible level as you can never be 100% sure that the inputs that you use will be accurately captured in the calculations. There could be unexpected extreme wind loads or seismic movements due to major earthquakes nearby, for example, or other possibilities.

So, buildings and structures are purposely built much stronger than needed for normal usage, with a "factor of safety” added to, hopefully, cater for the extreme unexpected emergency situations.

Similarly, when we look at the long-term finances of a country, should we not also load a “factor of safety” so that, as a country, we will never be caught in a position where we are unable to decisively respond to an unexpected crisis or disaster? Should we not want to ensure that we have the ability to fight back and recover from an extreme risk event? And these risk events could be known unknowns to us or total unknown-unknowns to us. It could be weather calamities, severe global or regional economic crises or even geopolitical crises in the region.

Look at what happened to Qatar. Last year, Saudi Arabia, Bahrain, UAE and Egypt cut diplomatic relations with Qatar and imposed an air, sea and land blockade, with the aim to isolate Qatar’s economy. According to estimates by the ratings agency Moody’s, the Qatari government injected almost US$40 billion into the economy, just in the first couple of months of the crisis. Qatar’s huge reserves have certainly come into play in how they cope with the crisis.

We are a tiny island state. We are smaller than Qatar in size, with no oil or gas underneath us. Our economy heavily depended on external trade and investments to sustain our economic livelihood. Any changes to the global economic and trade order can have severe direct impact on our economy, more than any other countries in the world, due to our openness as an economy.

And given our inherent circumstances with almost no domestic hinterland, we will always have to be an open economy to seek opportunities. Our domestic consumption can never sustain growth in our economy and will certainly not earn us the foreign currency needed to pay for the imports that we need and want.

As we transform into a more innovative, entrepreneurial and internationalised economy, our risk exposures to the volatility of the world market will increase, not decrease.

The other reality of a small economy is that we will always be a price taker in the fiercely competitive world out there. Today, we have a vibrant and viable economy. We have strong export capabilities and we continue to be able to attract good investments into Singapore. But one day, if this global economic order changes and turns against us or countries decide to impose unfair trade barriers on us, we may really need to count on our reserves to help us buy time to turn things around. This is about survival.

So, I asked myself – what can go wrong for a country like Singapore to be more conservative in managing our finances? What are the downsides for doing that and what are the upsides?

Our solid financial position helps us to maintain our position as one the few countries in the world with a triple "A" credit rating – very few left in the world. It helps us to keep our Singapore dollar strong ‒ an important counter-inflation tool. It strengthens our position as an international financial centre, ensuring our connectivity and relevance to the world and, of course, creating very good jobs.

Perhaps, what is even more tangible is that the reserves that our forefathers have painstakingly built up over the decades have generated investment returns, and 50% of it is today the largest contributing revenue helping to balance our annual Budgets. This amounts to about $14.6 billion in FY2017, which is actually an expansionary injection to the economy, as it is not taken in through tax leakages.

Over the last 10 years, the Net Investment Returns (NIR) – previously the Net Investment Income (NII) – contributions of past Budgets have added up to more than $100 billion. Imagine us not having NIRCs or much lesser NIRC, our spending and subsidies of programmes would have been much lower and/or we may have to raise even higher taxes.

Parliament had debated the NIR framework in the past and had agreed on a 50-50 split between spending now and saving for the future. This is a fair balance between the current and future generations. I voted in support of the framework then and my position remains firmly unchanged.

It is always tempting to go for short-term painless solutions. Our forefathers were resolute in not taking that easy path and so should we.

Rather than use more of the returns for current spending, we should let the power of compounding returns do the work by re-investing the other 50% so as to grow the principal amount of the reserves and contribute to bigger value of the NIRC in the future.

Going forward, we actually need a bigger NIRC to keep our tax system competitive and, importantly, progressive as well.

So, what are the downsides of being more prudent or conservative?

Well, there may, indeed, be some years where we do collect more taxes than needed, such as in FY2017. There are many factors that can result in higher than forecasted surpluses ‒ better-than-expected economic performances, actual expenditure and revenue deviating from the forecast, better investment returns, among others. As the Government ‒ like most other governments in the world ‒ adopts a cash accounting approach, as opposed to accrual accounting like companies, the annual Budget position can be significantly affected when there are changes to payment timings for big ticket items.

Whenever there is a Budget surplus situation, the Government does have the practice of redistributing the surpluses, whether it is from the current Budget or past surpluses from the current term of Government, to Singaporeans. The payment of special GST Vouchers and the one-off SG Bonus are good examples where payouts are tilted in favour of the low and middle-income.

The Government has also used surpluses from each term of Government to top up endowment funds like ComCare, Pioneer Generation Package and, in this year's Budget, a further top-up to the GSTV Fund. This is to accumulate resources so that we can help more Singaporeans when the GST increase comes into effect after 2021.

Here, I hope the Minister for Finance can affirm this surplus redistribution arrangement as part of our social compact. Besides helping to mitigate the impact of GST and rising costs, it can also help manage the income disparity that we see widening in our society.

Of course, in the years ahead, we can never be sure of any surpluses or the extent at which our social expenditures rise and where the additional tax revenues are meant to be used for. However, in years where the country has done well, we should be targeted in distributing the surpluses to the low to middle-income. This would give Singaporeans a sense that everyone has a stake in this country and we are all aligned to work together for the betterment of Singapore.

This year’s Budget also sets out with great clarity the framework principles on how the Government would fund various spending and how, for some of the infrastructure projects, the share of funding can be distributed more equitably across generations.

I agree with the Minister for Finance 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 spending discipline as any further rise in recurring expenditures would have to be funded through more taxes. This in-built discipline will help to keep our operating budget sustainable and fairer as well.

For the longer term mega infrastructure projects with high capital investments, the Government will set aside surpluses where possible, and to use savings accumulated to pay part of the lumpy investment costs. 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 MRT Line.

I also welcome the new financing approach for projects that generate future economic returns to be undertaken by Statutory Boards or Government-owned companies where they can look to borrow to finance the projects and could potentially draw on the Government guarantee to lower the financing costs of these long-term borrowings.

The Government is a net creditor and does not need to borrow, other than the issuance of Singapore Government securities which are 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 risk. This could result in a negative situation from the Government's standpoint where borrowing rates may be higher than the returns derived from investing the reserves. Hence, it makes smart sense to tap on the Government guarantees to reduce the borrowing costs. I find this a refreshing approach.

Mr Speaker, it is timely that the Finance Minister sets out these funding principles clearly and the thinking behind it.

A recent Institute of Policy Studies (IPS) survey with regard to the use of reserves or taxation to pay for social spending suggests that Singaporeans do have an almost equal split view on this issue. We need to talk more on this issue and seek buy-in from Singaporeans on the approach that the Government is taking. Importantly, to expound on our value system about each generation – past, present and future – doing our part to shoulder the funding of a socially cohesive and economically vibrant future Singapore. To a certain extent, this Budget has brought to attention this issue and offers some clarity on how we intend to achieve this inter-generation equity. I urge that we continue this conversation.

Mr Speaker, overall, Budget 2018 exhibits traits which make Singapore exceptional – always plan and act for the long-term good of the country. And beyond just about living within our means, Budget 2018 acts to grow the means for better living in the future.

So, the most balanced way to look at this year's Budget is not just seeing it from today’s standpoint but imagining that we are in 2030 and looking back at the measures that we have put in place today. With that, Mr Speaker, I support the Budget.

11.48 am

Ms Foo Mee Har (West Coast): Mr Speaker, Budget 2018 is a far-sighted plan with targeted measures that build on the momentum to reform our economy and care for our people. It is prudent yet aspirational, as it plots a path to a visionary and sustainable future for our country.

It is also a bitter-sweet Budget. Singapore’s economy grew at a faster than expected pace, with encouraging growth in productivity, real wages and output. Last year’s Budget recorded a healthy surplus of $9.6 billion, thanks to exceptional items. Seven hundred million dollars was set aside to share with Singaporeans via SG Bonus.

When looking beyond short-term headline numbers into the longer-term outlook, Finance Minister Heng Swee Keat prescribed the bitter pill of a GST hike to come. This is to cater for expected expenditures in the next decade for infrastructure developments and an ageing population. Even though it would have been more convenient to do otherwise, I appreciate the Minister's courage to be upfront and begin the uncomfortable conversation of "money not enough" now, in order to give Singaporeans plenty of time to prepare.

It is understandable that no one likes a GST hike. We can take comfort that this increase is not immediate with the exact timing of between 2021 and 2025, depending on the state of the Singapore economy, how much expenditures grow and how buoyant existing taxes will be. As a principle, I urge the Minister to try and delay the need to raise the GST rate.

First, with the recovering Singapore and world economies and the shift in global economic weight towards Asia, these shifts represent significant opportunities for our firms and people. One optimistic scenario sees Singapore’s economy continuing to outperform our forecasts over the next few years, with recurring Budget surpluses. Under these happy circumstances, we should review the need for a GST rate hike.

Second, I would like to call on the Government to continue studying all other possible streams of revenue. For example, expanding the scope of GST to cover the rapidly growing e-commerce market will plug tax leakage to online sales and level the playing field for offline companies that have struggled to compete. Indeed, with cross-border transactions expected to account for more than half of online sales, the plan to levy GST on all imported digital services by 2020 represents a significant step in broadening the Government’s tax revenue streams.

I hope that the tax on imported digital services will pave the way for a broader e- commerce tax on goods and services when complexities of an effective tax collection mechanism for low-value imported goods can be resolved. Given the projected exponential growth of e-commerce, its potential for GST contribution must be worth the effort to get it right.

Sir, I would also ask that, in line with the announcement of increased tobacco taxes, the Government also consider reviewing taxes on liquor and gambling. By bringing Singapore's low gambling tax rates of 5% to 15% closer in line with Macau's rate of 39% and Australia’s rate of up to 45% in some states, the authorities can collect much of the $3 billion intended to be drawn from a two-percentage point GST hike. The Government should also consider introducing sugar tax in the light of growing concerns over diabetes. Other tax avenues could include introduction of a capital gains tax or increase in property tax for non-resident property owners, as imposed by countries, such as the UK, Australia and New Zealand.

When GST hike becomes inevitable, I call on the Government to offer more in the Offset Package, to help lower- and middle-income households and seniors cope with increases in the cost of living. The new package should help people understand how support provided actually "offsets" taxes they pay on their expenses. The Government must do a better job to assure Singaporeans that a GST increase will be implemented in a progressive manner and that the authorities will moderate the impact of this increase on those who struggle to make ends meet.

Mr Speaker, I support the Minister’s decision not to tap our reserves any more than we currently do. Under the existing NIRC framework, 50% of expected net investment returns is already contributing the single largest source of funds for Government expenditure. Its contribution has risen steadily over the years, such that $1 in $5 of Government spending now comes from NIRC. This high dependency on NIRC, I think, represents a significant vulnerability for Singapore, given the volatility that comes naturally with any investment portfolio. Even the best investment managers will admit that they can only manage risks, not returns. To ensure a sustainable fiscal position, there may be a need, some time in the future, to consider a limit upon which Government spending can tap NIRC to avoid over dependency, over and above the current NIRC framework.

Sir, Singapore's reserves were built up because our pioneering leaders were financially prudent and this has strengthened Singapore’s footing on many fronts. The latest being the Government's consideration of using reserves to provide guarantees against long-term borrowings to build critical national infrastructure at lower financing costs. This is a much better way to tap on the strength of our reserves without having to draw directly on them. While I support this approach, I would like to ask the Minister how these borrowings against reserves can be structured and operationalised. What is the expected difference in borrowing costs versus investment returns from the reserves?

Mr Speaker, the Wage Credit Scheme and corporate income tax rebate will help companies to overcome near-term challenges. I am pleased to see broad-based schemes such as the Productivity and Innovation (PIC) Scheme, replaced by targeted measures to foster innovation and R&D, go international, build capabilities and forge partnerships. There are, however, three critical areas we need to address.

First, companies are still very concerned that Government regulations have not kept up with the times. I spoke in the last Budget about the need for the Government to create enabling environments, within which companies can become nimbler and more innovative, in order to cope with the rapid pace of innovation and increasing competition, even from within the ASEAN region. Companies do recognise that selected agencies have tried to do things differently, but they often voice their frustration of being tripped up by "last-mile" regulations. A whole-of-Government approach is needed to create a dynamic ecosystem, with coordinated efforts across agencies to update related rules and regulations.

Second, the impact of the $4.5 billion Industry Transformation Programme announced in Budget 2016 has yet to be realised. The Industry Transformation Maps (ITMs) are still a work-in-progress. This effort will need to speed up, their implementation is urgent. ITMs were supposed to be a joint effort between industry partners, trade associations and public agencies, all coming together to support the sector’s transformation. The Government’s role was to bring industry stakeholders together to catalyse action, yet industry players feel that the private sector has not been adequately involved in the process. Given the pivotal role ITMs are meant to play in the future economy, all stakeholders, including the companies themselves, must start pulling its own weight for this important venture to succeed.

Third, the Budget does not address measures to deal with Singapore’s shrinking workforce nor offer guidance on foreign manpower policy, despite calls for help by businesses struggling to deal with manpower shortages. Many firms complain that they are not able to embrace the push for companies to go digital and adopt new technologies, amidst a severe tech talent crunch.

While we must continue our manpower-lean approach as the way for firms to grow and maintain the overall ratio of local-to-foreign talents in our workforce, I call on the Government to consider some adjustments to the mix of foreign manpower to support growth areas earmarked in the future economy, such as expertise in data analytics, artificial intelligence and cybersecurity. Shortage of skilled talent will constrain our efforts to transform our economy, with the problem becoming more acute as economic growth gains pace. In order to capitalise on the growth momentum, foreign manpower policies may need to evolve to include skill-based factors to prioritise types of foreign skills and expertise, like those adopted in other countries.

Mr Speaker, Budget 2018 addresses many issues, some of which confront us now and others which are on the horizon of the next decade, but all of them are of consequence. It lays out a roadmap for a fiscally sustainable and secure future for Singapore in the face of considerable challenges, including an ageing population and infrastructure. It calls on us to face down these challenges today, so that when we deal with them, we do so from a position of strength. As the old Chinese proverb goes, "The best time to plant a tree was 20 years ago. The second best time is now." Mr Speaker, I support the Budget.

12.00 pm

Mr Yee Chia Hsing (Chua Chu Kang): Mr Speaker, Sir, Finance Minister Heng Swee Keat and his team have presented a well-balanced plan that shows prudence in our fiscal policies and continues from last year’s theme of preparing Singapore for the future.

During the Budget debate last year, I mentioned that there is room to make our tax system more progressive and that those who can afford must contribute more. In particular, I suggested having an additional tier of Buyer's Stamp Duty for properties with transaction values above S$1 million.

I am glad that this has been introduced this year, although I must say that the Finance Minister is very kind to increase the marginal rate from 3% to 4%, as I had earlier suggested a much higher marginal rate of 10%.

Another progressive measure which I noticed is that the levy for foreign domestic workers (FDWs) has increased. In particular, the levy for a second FDW has increased from $265 to $450, representing almost a 70% increase. But I am sure households which can afford to hire two or more FDWs would be able to afford the increase.

I wish to reiterate that families who may need help in caring for young children, the elderly, or family members with disabilities will not be affected by this increase as they will continue to enjoy the concessionary levy rate of $60 a month which remains unchanged.

Mr Speaker, Sir, I would like to reiterate the call for more ways to raise revenues in a progressive and discretionary manner. During the Second Reading of the Stamp Duties Bill last year, I suggested setting up a special department to look at creative ways to raise more revenues and also look out for existing tax loopholes which should be closed. I hope the Ministry is looking at this proposal.

Mr Speaker, Sir, I would like to offer two suggestions today.

First, I would like to repeat my suggestion last year to introduce the tender of SG-series registration number plates for cars. I noted that the front page of the Straits Times Budget Special covering the Budget Speech by the Finance Minister also featured a white car with a SG2018 number plate! I am convinced that the tender of SG series registration car number plates would raise good revenues which will help boost our Government coffers.

Second, I would like to suggest altering the duties payable for dutiable luxury goods, such as cigars and high-end wines and alcohol.

According to the Singapore Customs website, for most wines, there is no customs duty payable and the excise duty is $88 per litre of alcohol. Tobacco products are charged by weight and its excise duty rate. I would like to suggest charging duties based on a percentage of its value as opposed to the current rate based on physical measure, such as volume or weight.

Under the current system, a bottle of wine which costs $50 is charged the same duty as another bottle which costs more than $1,000. Similarly, a top-end Cuban cigar is taxed at a rate of $427 per kilogramme, which is a similar rate to normal cigarettes, even though it may cost many times more.

Mr Speaker, Sir, I propose to change the calculation of duties on luxury goods such as wines and cigars to one which is based on customs value. Understandably, this may incur more work for the customs office. However, I am hopeful the Ministry can look into my proposal.

Mr Speaker, Sir, as our Government faces increasing expenditures for healthcare and social spending, we need to find ways to make our tax system even more progressive. Raising more revenues from luxury items, such as special car registration numbers, high-end wines and cigars, is not only progressive but also discretionary in nature as there is consumer choice.

Once again, I would like to thank the Finance Minister and his team at MOF for presenting a well-balanced and forward-looking Budget which prepares Singapore for the years ahead. Mr Speaker, Sir, I support the Budget.

12.05 pm

Mr Pritam Singh (Aljunied): In his Budget speech, the Finance Minister spoke of three major shifts in the coming decade. The rise of Asia was observed some years ago but the colossal scale of the change only became apparent to many with the conception of China's global One Belt One Road (OBOR) initiative.

Technological disruption is mind-blowing, if not downright terrifying for some. The sight of agile robots from Boston Dynamics on our Facebook feeds, driverless vehicles and news of medical initiatives in cloning herald a world that was considered to be fictional only one generation ago.

The prospect of an ageing society, however, was not sudden. Successive Governments have identified it, with the second generation PAP leadership establishing the Inter-Ministerial Committee on Ageing which published its report in 1999 and with at least four other high-level committees on ageing since 1982, putting the issue squarely in the public imagination.

The Workers’ Party notes that this year’s Budget is one that seeks to prepare Singapore and establish strong foundations for economic growth for the next 10 years. Singapore's situation is unique. Economic growth is at the centre of our existence and an economy that exhibits a certain verve and vitality is critical to the well-being of our people. While the Government has got the headline issues right, as it had with identifying ageing almost 20 years ago, what will matter most is how its vision of looking after Singapore and Singaporeans is translated operationally and executed on the ground. My speech will cover education, fiscal sustainability and taxes.

In his Budget speech, the Finance Minister spoke of Industry 4.0, a reference to the technological shift from computer systems to integrated cyber, physical, biological and intelligent systems.

Mr Speaker, as much as we seek to encourage workers of today to embrace the future economy through the Industry Transformation Programmes, the Tech Skills Accelerator and the Go Digital Programme, amongst other initiatives, there is another segment of our population for whom the new economy is one they must fit into seamlessly. They are our younger Singaporeans – many of whom are still in school today.

On 19 February 2018, The Straits Times carried a fictional article that sought to imagine what Singapore would look like in 2030 for one young Singaporean. It spoke of the story of Alex, whose life was transformed by the Committee of the Future Economy (CFE) report of 2017. Alex interpreted the report to mean that entrepreneurship was the way of the future. By 2023, his fictitious company was awarded a contract to supply MOH with mechanical parts for robot-assisted surgery. With a local foothold, he expanded his business into Southeast Asia.

Alex’s story was fascinating to me particularly when I contrasted it against the speech of the former Head of Civil Service, Mr Lim Siong Guan, who gave a series of lectures as part of the IPS-SR Nathan Lecture Series on Singapore late last year. Most striking was Mr Lim’s observation of how we in Singapore pile accolades on those who reach the pinnacle of success, with others often remaining unnoticed and unmentioned. The call for innovation, a central pillar in this year’s Budget, requires – in Mr Lim's view – for our people to try more and fail; and to be recognised not only for their success but their effort, and to be proud of trying their best in exercising their talents and abilities.

In a second equally compelling and parallel anecdote, Mr Lim spoke about how Israeli mothers in the past wished their children to be doctors and lawyers. Fast forward 20 years and this scenario has apparently changed completely, with Israeli mothers wishing their children to be CEOs of start-ups. The situation is similar in Estonia and Finland. In Mr Lim's words, "Singapore has to get there and be exceptional in our own way".

I have my doubts about whether Alex’s parents are ready for him to forget how they changed addresses to get him enrolled into a better school before he entered Primary 1 and how they spent thousands of dollars in tuition fees so that he would be streamed for the best outcomes to secure a stable and lucrative career. More pointedly, unless Alex comes from a rich family, I am not sure he would be in a position to give up an education in accountancy in favour of entrepreneurship, given our cultural biases to what qualifies as a good job, school, university or career.

Mr Speaker, ensuring the readiness of the education system to drive future economic growth is a critical strategy that we cannot afford to overlook. Only last month, the Minister for Education in charge of Higher Education shared that the Government is examining how it can better design the learning landscape so as to ensure that opportunities are available for Singaporeans to succeed in life. However, the Minister said that this endeavour may take a generation.

Without a doubt, the education system has progressively evolved for the better, but do we have the luxury of time to undertake its transformation for the new economy, a transformation that is arguably as urgent as the economic transformation we desire? With our people as the only natural resource, we must begin from the starting point that each and every one of our students, each and every one of them, regardless of race, language or religion, can not just succeed, but excel in the economy of tomorrow. The focus cannot be on acing examinations alone as a means of securing a child's future, as is overwhelmingly the case today. Even as our education system has correctly made adjustments to allow for a minority of students to benefit from aptitude-based entry points across the education system, this may not be enough.

In fact, we continue to have a tuition culture which is alleged to be a billion-dollar industry in Singapore. There are no evident signs of this tuition culture abating. Even PAP Members have raised questions in this House about stress and anxiety levels in our students. Parents naturally equate poor PSLE results with relatively poorer opportunities and outcomes for their children in Secondary school. They fear that poor PSLE results will evince a bleak future, with their children condemned to schools dominated by problematic students who, in their estimation, do not like to study or cannot communicate well, hence, setting their own children up for mediocrity. Such fears, amongst others, correct or not, drive the tuition industry and the stress both in parents and, by extension, in students.

Mr Speaker, it will take a radical move to energise the cultural shift needed to change mindsets about tuition and early streaming among all stakeholders, particularly parents. But there is another downside – and a very important one – that requires us to hasten educational transformation. Streaming and ranking serve to reinforce the inequality the Finance Minister warned about in his Budget speech. This is particularly since our educational culture is weighted in favour of parents with means, and naturally so, and those who can pile on enrichment classes and tuition, and even consider paying educational professionals to work out long-term strategies to game Direct School Admission exercises.

The Government has previously looked at broad-based schemes like the Productivity and Innovation Credit (PIC) to drive productivity, only to shift now to more targeted measures for specific industries through the ITMs. In similar vein, the Government should start identifying the specific policy changes needed to alter behaviour and drive cultural change in favour of learning. The time has come to squarely look at our tuition culture and, ironically, how it may actually be holding us back rather than spurring and motivating our students in a healthy manner.

The tuition industry is an important stakeholder in this undertaking. Rather than spend time and money on tuition, would our students not be better served by an education in various regional languages, more debates, better communication skills, financial literacy, problem-solving and negotiation, and on field trips rather than cramming model answers and methodologies for exam-based outcomes only for them to be forgotten very quickly thereafter? How critical is streaming and even the PSLE examinations for success in life in the future economy? If it is not critical, are there persuasive arguments that remain for their continued existence?

The need of the hour today is different from that of the past. A radical shift in direction needs to take place to set up our future generations of workers and employees for the future economy. Alex’s plans to become a successful entrepreneur with an appetite for risk – and for his story and Singapore’s economic future not to be a fictional one – depend on it.

Mr Speaker, from a citizen perspective, making deeper enquiries of the Government's Budget is no less important than acquiring deep skills for the future economy. Some very important and healthy conversations are taking place within our society about social protection and the size and use of our reserves, estimated in The Straits Times last week to be in excess of a trillion dollars – I will say that again in excess of a trillion dollars. How much of it do we need to protect the Singapore dollar from currency speculators is a valid question, given that yearly revenue from land sales alone ensures that our reserves continue to grow in size.

Some arguments have been made in public for the NIRC to be increased to 60% to stave off the GST hike. Similarly, there have been calls to consider only a temporary increase in NIRC to fund non-recurrent, lumpy infrastructure investments, such as the high-speed rail, new MRT lines and Changi T5 terminal. After such infrastructure has been completed, the NIRC can return to 50% and some portion of the revenue earned from such infrastructure can also be returned to the reserves.

Such proposals leave more scope for the Government to hold back from increasing regressive taxes like the GST, which also hit middle-income Singaporeans with young children and elderly parents the hardest, mainly because offset packages announced by the Government inherently target the low-income and needy more, and correctly so.

In his Budget speech, the Finance Minister made a fundamental distinction to set out the Government's thinking on recurrent spending which directly benefits current generations and that the responsible way to pay for such expenditure is through taxation. However, it is no secret that Singapore's approach to budgeting is highly conservative, with land sales excluded from the Government's income, even as more resources are required to take care of our elderly population through to 2030 and beyond. Reasonable Singaporeans take the view that there is scope to consider how elderly Singaporeans can be better protected in their twilight years, with the burden of additional taxes like the GST held off for as long as possible.

One novel, if not relatively radical approach in view of the current orthodoxy, is to reconsider the role land sales can play in recurrent spending. The Government is, by far and away, the largest landowner in Singapore. The majority of all land here comprises 99-year or less than 99-year leasehold properties. Seen in this light, should not the current generations be allowed to benefit from some percentage of today's land sales with the knowledge that such land regenerates itself in value for future generations, providing successive Governments with the recurring source of income? Should Singaporeans, who are now expected to live well into their 80s, reap more benefit from land sales so as to justify better social protection for them?

Even as land is scarce in Singapore, it is also highly valued, with land sales likely to be very healthy in the decades to come right until our HDB flats run down their leases and well into the second half of the century. As much as the development of the port in Tuas will cost money, the move of port facilities from Tanjong Pagar will free up prime and valuable waterfront land adjacent to Shenton Way. After 2035, a massive tract of land where the current Paya Lebar airport sits, massive by Singapore's standards at least, will be available for sale to the Government of the day. In between, the Government, as the largest landowner, has many sites open for development that will ensure steady growth of the reserves for the foreseeable future.

On the Government's "Factually" website, the argument against including land sales for budgetary spending is two-pronged, apart from constitutional restrictions.

Firstly, excluding land sales prevents the Government from unnecessarily selling land to meet expenditure needs. However, this argument can potentially be addressed with a cap on spending revenue from land sales, for example, not more than 20% of the value of average land sales over 20 years, or 20% of land sales for that year, whichever is lower. This would give no good reason for an ill-advised government to ramp up land sales when in government to increase its own income.

The second argument on the "Factually" website posits that income from land sales is invested and is already available to the Government for spending through the NIRC framework. While this is a stronger argument and certainly true, not co-mingling the income from land sales with other reserves for investment also brings with it the prospect of greater transparency to the public and of mitigating the consequences of poor investment decisions most dramatically highlighted by GIC's partial divestment of its stake in UBS and losing billions in the process, as reported last year.

Mr Speaker, the Workers' Party is open-minded about looking at different modalities of funding future Budgets with the view to strengthening social protection frameworks. This also promotes a healthier discussion of fiscal issues amongst our population. Of course, the money has to come from somewhere. But there are two ways of framing this conversation. One, is to say that proposals that seek to improve and suggest better social protection for Singaporeans are tantamount to raiding the reserves. The other is to take a strategic perspective of our reserves position – something only the Government can holistically do in view of the significant information asymmetries – look at how quickly the world is changing and always assess how Singaporeans can be better protected ahead of time.

To reiterate, allowing a portion of the revenue for land sales will also not stop the reserves from growing. They will continue to grow and disproportionately benefit future generations. But looking at using land sales also gives the Government of the day more flexibility to ensure that current generations of elderly Singaporeans' healthcare needs, for example, are adequately budgeted for, leaving more scope for the Government to strengthen social protection for the current generation of Singaporeans. Inter-generational equity is a subject that deserves greater discussion.

The importance and willingness to prepare for the future cannot be underestimated, especially since the very technological disruption the Finance Minister spoke of will, like globalisation in the past, have its discontents – those who cannot be readily retrained to assume higher-value jobs, those who may not be able to build new capabilities, those who, for example, cannot stand for too long and for whom job redesign is only a catchphrase, and those who may not be able to adapt to what they fear is a brave new world.

GST may not have to rise but Singaporeans could be more likely to accept it if the Government considers the pros and cons of moving from the established orthodoxy and considers new approaches that improve social protection thresholds for all, and elderly Singaporeans in particular.

As expected, the Budget drew much attention on the Government's plan to raise GST from 7% to 9% sometime in the future. However, there was inconsistency in the treatment of some additional taxes that will no doubt add to the Government's coffers before that. For example, the Government was able to confirm that the imposition of the carbon tax would bring an additional $1 billion a year of revenue after implementation. However, no estimates were provided on the likely additional revenue that would be added to the Government's income with the inclusion of the GST on imported services.

In addition, the journey to become a Smart Nation – another plank of this year's Budget – is likely to make Singapore more efficient in tax collection. There is also the question on the move to become a cashless society and the impact this will have on sectors which have traditionally been thought to under-declare their income, such as self-employed hawkers and taxi drivers. This prospect will become less probable with the advent of more electronic transactions and, in turn, is likely to have a positive effect on tax revenues.

Furthermore, with borrowing backed by Government guarantees proposed for large infrastructure projects, more spending for such projects can potentially be allocated elsewhere for recurrent spending.

In view of the absence of such details, the Workers' Party is unable to support the announcement of the GST hike at this moment in time. This is because of the lack of clarity surrounding projected expenditure when the Government raises GST in future and the relative lack of information on whether there is scope for the reserves to better support Singaporeans.

In addition, as the Prime Minister told the media some years ago when the GST was raised from 3% in response to initial objections from the Workers' Party, we would also need some understanding of the Government's offset package for the low-income and middle-income should the GST be raised ─ information which the Government has not released thus far.

In conclusion, Mr Speaker, the Government has made significant investments in placing Singapore to take advantage of initiatives like Belt and Road, and tapping on the potential of the ASEAN region. These are necessary investments to keep the Singapore economy humming along. However, the people who keep it humming must be equipped to succeed in tomorrow's economy. Equally, the security of elderly Singaporeans, each generation a pioneer generation of an improbable country in its own right, should not be made to feel insecure in their old age, particularly when it comes to healthcare. Instead, they should be respected for what they have done for Singapore and looked after in their golden years.

Mr Speaker, we must never be done making Singapore an even better home for all Singaporeans.

12.25 pm

Assoc Prof Randolph Tan (Nominated Member): Thank you, Sir, for allowing me to join this debate.

This Budget is of tremendous importance because it adds further strength and connectivity to the efforts that had already begun in previous Budgets to pave the way for Singapore to embark upon the future economy. In that sense, Budget 2018 cannot be looked at in isolation.

It is clear to anyone who has followed the sustained efforts of the last few Budgets that the determinants of where to apply the limited resources in order to maximise the benefits of the fiscal impulse are long-run social and economic objectives rather than short-term relief.

The economy’s transformation is based on ensuring greater efficiency in the use of resources, and a crude fiscal push with only short-term gains should be avoided. At best, such a move could crowd out the private sector in the competition for resources already in short supply, especially manpower. At worst, it could detract from the careful efforts already under way in each of the industry transformation maps and accompanying skills frameworks to deepen the push for future readiness.

Mr Speaker, Sir, since the launch of the Industry Transformation Programme in Budget 2016, the economy has displayed tentative but encouraging signs of change. These include evidence of fortified strength in the labour market situation, the continuing improvement in competitiveness in external-oriented sectors and the revival in productivity performance.

In the labour market for instance, redundancies have stabilised, unemployment continues to be low and re-employment is encouraging. In industry competition, what we find is that businesses are beginning to rationalise their dependence on foreign manpower. In productivity performance, the situation is certainly something we have to continue to watch out for, but the recent uptick in productivity performance is something that we should be able to link to the efforts over the last few Budgets to improve the productivity situation.

However, the situation remains tentative. The main question is: what have we to continue to do in order to sustain these gains? Hence, against these positive signs, there are accelerating effects of long-term challenges, especially demographic shifts and national security, which are continuing reminders of our vulnerabilities as a small, open economy.

In this Budget, the programmes that are already well-funded continue to be so, with increases in social spending and infrastructure expected to continue in the years to come. But in the longer term, as spending needs grow, we will have to decide how to meet those needs in a responsible manner. Depending on potentially volatile and unanticipated increases in Budget surpluses is not ideal.

The unusual Budget surplus that we saw in last year's Budget is a welcome surprise in this case because of currency movements that had gone unexpectedly in MAS’ favour. But market movements which present large upside surprises in one year could also contain the potential to do the opposite. With sufficient diversification and vigilance, the chances of a downside surprise can be minimised but not eliminated. This is not a reliable recipe for funding long-term national commitments.

Despite criticisms about the extent of social spending, the incontrovertible fact remains that Social Development expenditures in Singapore account for the largest share of the Budget and has done so with rare exception in recent years.

Sir, in 1997, expenditures on Social Development amounted to over $8.7 billion. Of the four main areas of spending, Social Development accounted for the largest share of 38%, above the other areas, namely Security and External Relations, Economic Development and Government Administration.

By 2017, its share had risen to nearly half of total Government spending, more than twice that of the share of expenditures on Economic Development.

I pointed out before that we should not ignore the fact that the pace of increase in social spending must be managed in order to ensure the competition with other areas of spending does not drive up costs of limited resources.

From 1997 to 2005, Social Development expenditures grew at an annual rate of 3.7% per annum, below that of expenditures of Security and External Relations. From 2005 to 2017, however, the rate of growth of Social Development expenditures jumped to 10% a year.

This is a rate of growth that will double spending every seven years or so and this is way in excess of the rates of growth that we see in economies, like Sweden, which have taken a long time to reach the point that they are at, at this point in time. Such spending increases are an improvement that have been made possible by Singapore's continuing economic progress. There are many areas of Social Development, no doubt, that require urgent attention. New areas of needs arise as society develops and the economy matures. Sustainable solutions to such challenges require a focused and targeted approach.

Even advanced economies, Sir, have to continue to defend their vulnerabilities against unforeseen national security threats as well as sudden external economic upheavals. The competition to prioritise certain areas of spending should not lead to a softening of emphasis on areas of basic necessity, such as defence spending and the shoring up of our economic defences.

At any point in time, there are security threats in various parts of the world which may have an impact on shipping lanes and flight routes vital to our trade linkages. As a sovereign developed nation, it is our responsibility to be prepared to bear the burden of maintaining these vital connections. The building of national defence capabilities is a fundamental priority that cannot be ignored. The experiences of other advanced economies show that the failure to maintain up-to-date defence capabilities could lead to a diminished capacity to play a full role in defence partnerships. Just as with our national infrastructure, ensuring that our defence capabilities are continually upgraded to meet future needs is critical.

In recent years, there has been growing criticism from a vocal minority about the growth in Singapore’s reserves and what the reserves are needed for. Sir, Singapore has achieved advanced economy status in the space of half a century. As demonstrated by the last crisis, however, developed economies could actually be more exposed to certain types of crises than less developed ones.

The cost of confronting that crisis, Sir, was a costly affair for many governments. But as the experiences of several countries have shown, a strong response with a decisive and sufficiently large package of measures meant that the cost of the responses could usually be recovered if the intervention successfully revived asset valuations that had been downgraded by the crisis. In order for this to occur, the resources needed to mount the rescue packages had to be available in the first place.

At a critical point of the crisis, for example, the United States mounted a massively expensive rescue programme for its financial sector by assigning US$700 billion, to what was then known as the Troubled Asset Relief Program or TARP. As it turned out, all the amounts spent in the purchase of what had been toxic assets were subsequently recovered in full as the assets regained values.

Singapore is much smaller. Our role in financial markets is not small and these examples are not irrelevant. Our own experience during that crisis was no less informative. The sums assigned to the Resilience Package of 2009 by then-Finance Minister Tharman Shanmugaratnam included an unprecedented withdrawal of $4.9 billion from the reserves. The full amount of that was returned as a result of the strong recovery. If those reserves had not been readily available, the consequences would have been unimaginable.

This is why there is a need to protect and grow the reserves through a disciplined fiscal approach that includes responsible taxation. This Budget is a cogent demonstration of these principles of forward thinking and responsible planning. It recognises, for example, that taxing undesirable behaviour is necessary, but not a constructive approach to funding long-term needs.

A secure economy will provide the foundation for strengthening social programmes, supporting the needy and expanding opportunities for future generations. Sir, in a world that is facing significant disruption, the early steps that this and previous Budgets represent in gaining early traction on the future economy will enable Singaporeans to anticipate a future with richer opportunities. Mr Speaker, Sir, I strongly support the Budget.

12.34 pm

Mr Lim Biow Chuan (Mountbatten): Mr Speaker, as a Member of Parliament, I receive frequent requests from residents asking the Government to do more for them. Residents ask for financial help, they want lower transport fares, they appeal for more bus services to bring them to their specific destination; they ask for low-cost rental flats, they ask for blue CHAS cards, for higher healthcare subsidies and they ask for less expensive medical treatment at clinics and hospitals and the list goes on.

For many of these requests, I am sympathetic as these residents are usually low-income. Any reduction of costs or living expenses would be greatly welcomed by them. However, what some people do not remember is that it is not the Government who just pays for the subsidies. The financial burden would be borne by other taxpayers.

Not all residents understand that the Government is a trustee of sort to manage the taxes paid by Singaporeans and Singapore companies. In doing so, the Government has to be prudent in its spending and judiciously decide how to allocate scarce resources. Many of us have unlimited wants but there is only so much resource available for distribution.

Singapore has no natural resources. We do not have oil reserves, no timber forest or coal or natural minerals at our disposal. Almost everything has to be imported. But despite the lack of natural resources, Singapore has remained successful with good economic growth and has accumulated respectable financial reserves. I attribute this to good government as well as a hardworking and intelligent citizenship who have helped built Singapore to what it is today.

Our Budget theme for this year is "Together – A Better Future". In the Budget Statement, the Finance Minister explained that the Budget is a strategic and integrated plan. He asked Singaporeans to take a longer-term view, and set out our strategic challenges clearly and plainly. He indicated that the Government will spend more on healthcare by building more hospitals, polyclinics, nursing homes and eldercare centres. The Government will also spend more on infrastructure projects like the rail network, construction of Terminal 5, Tuas Port as well as the High Speed Rail. More will also be spent on education and security.

These priorities of the Government resonate with me. Indeed, healthcare is always a concern for many Singaporeans as there will be more and more seniors as we live longer. Many elderly citizens whom I speak to worry about high healthcare costs, especially those who suffer from chronic diseases or had suffered stroke or require long-term medication for cancer. In my constituency walkabouts, I see more and more residents on wheelchair or needing help with their mobility. More spending on healthcare will make it affordable for those who need help in their retirement years.

Having improved infrastructure will also allow better accessibility and convenience for many people and create a better environment for all Singaporeans. Lower transport fare is welcomed because public transport is a necessity and public transport should be kept affordable. An increase in education spending is also welcomed as it will prepare our children for the future challenges in the world. Increasing the financial support for students from lower-income families will mitigate the gap between the well-off students and lower-income families.

With increased terrorist activities, security should also be an area of priority and, indeed, we should ensure that whatever we have today should be protected from those who wish Singapore to fail.

However, the devil is always in the details. In allocating more resources to these areas of priorities, I urge the Government to consider and to ensure that the lives of all Singaporeans would improve. I understand the need to take better care of the poor and needy and those with low-income. But I urge the Government not to forget the struggles and difficulties of the rising number of middle-class citizens who may feel sandwiched by Government policies. They perceive some of the policies as not helping them. Hence, I urge the Government to implement policies which would help those in need and, at the same time, be fair to citizens who have contributed to build Singapore.

Thus, for incentives like S&CC rebates or GST vouchers, please consider helping those who live in bigger flats but with lower-income. Please do not just assess based on house type. Review the income ceiling for those who apply for CHAS card or those who should receive Silver Support. Keep an eye on the retirees and the middle-income Singaporeans so that they, too, can share or enjoy the growth of the country. Schemes like the Housing Grant and Proximity Housing Grant are good schemes that help the middle-income own HDB flats with large subsidies from the Government.

The increase in GST was voted in November last year. When the idea was floated, I said that there is always a political cost if you cannot persuade the ground that a hike in taxes is necessary. Nobody likes a tax increase as it takes away disposable income from the citizen and transfers it to the Government to manage.

The GST increase is planned for 2021 to 2025. The Prime Minister had previously said that in this current term of Government, which ends in 2021, it has enough revenue. Thus, I am glad that the GST increase is not taking effect next year or the year after. Instead, the Government is giving three years' advance notice that in order to maintain the spending on healthcare, security and other social spending, they would need to raise revenue by increasing GST by 2%.

In my view, it is fair and prudent to take a longer term view of the needs of the country. It is not always possible to expect the Government to keep increasing the spending on healthcare, security and other social spending without thinking of how to fund such spending. In particular, if the increase in GST would help reduce the healthcare burden on all citizens, if it helps subsidise transport costs, if it provides more care for the lower-income, it should be something that we should all support as we are helping the majority of Singaporeans, for the lower-income, middle-income and seniors.

The Minister for Finance has committed to enhancing the permanent GST Voucher scheme and he has also committed to make a $2 billion top-up to the GST Voucher Fund. When the GST increase is implemented, there will also be an offset package later.

So, with respect to Mr Pritam Singh, I would not agree that GST in the Singapore context is regressive. In fact, I am surprised at the Workers' Party's reservations on GST increase. Because if the Workers' Party agrees to increase social spending for healthcare, education and security, where can the funds come from to pay for these recurrent expenditures?

Minister Heng had said, "In the next decade, between 2021 and 2030, if we do not take measures early, we will not have enough revenues to meet our growing needs." Thus, to me, it is clear that the Government is planning not just for a few years later but for the next decade!

For those who say that we should use the Budget surplus last year to fund the increase in expenditure, I respectfully disagree because it is fiscally unsustainable to rely on a surplus which is not a constant or a guaranteed source of revenue. Last year’s surplus was an extraordinary gain and Minister Heng had explained how the surplus came about. Details of the surplus were also published in the media yesterday. Surely, we cannot expect currency translation effects or increases in stamp duty to be always available in future Budgets.

For those who advocate that we use more than 50% of the expected NIR and keep less in the reserves, I would urge the Government to be cautious. It is always easy to say spend more today and save less for the future. What should be the right balance is a question that everyone has an opinion about. To me, we should exercise prudence and try to spend within our means, especially if our expenses are on recurrent spending on healthcare, security and other social spending.

We have been fortunate that our NIR has been increasing year after year. Last year was $14.61 billion and this year the Budget is $15.85 billion. What if the NIR falls in the future years? Would we then say take more from the NIR again?

As for using proceeds from land sales, as suggested by Mr Pritam Singh, I want to sound a word of caution: once land is sold, the asset is gone. If we to use any part of the sales proceeds to fund recurrent expenses, does that mean that we are taking the monies away from the reserves? So, I humbly submit that we should allow our reserves to grow in tandem with the economy.

Before I conclude, allow me to seek a few clarifications from the Minister.

In previous years, when GST was increased, a Committee Against Profiteering (CAP) was set up to combat any illegal profiteering due to a GST increase. Would there be a similar committee set up before the GST increase is implemented?

Secondly, the Minister had said, the "Government is looking at borrowing by Statutory Boards and Government-owned companies which build infrastructure. This will help spread the cost of certain large investments over more years." Can the Minister clarify why is it necessary to borrow, considering our large reserves? Can we not rely on our other resources or borrow from our reserves and pay interest on those loans? With that, Mr Speaker, Sir, I support the Budget.

12.44 pm

Ms Sylvia Lim (Aljunied): Sir, a clarification for the Member.

Mr Speaker: Yes, Ms Sylvia Lim.

Ms Sylvia Lim: Thank you, Sir. I would like to clarify with the Member Lim Biow Chuan. He made a statement to say that once the land is sold by the Government, it is gone. But does he not agree that actually the Government's definition of land sales includes leases. In fact, the cut-off period when you include a lease as a sale is actually a 10-year lease. So, it is not quite accurate to say that once the land is sold, it is gone.

Mr Lim Biow Chuan: In reply to Ms Sylvia Lim, when a land is sold, whether it is on a 99-year lease or otherwise, it is not sold in perpetuity. The funds, once they go back into the reserves, would be gone for that period. For you to get back the land, you have to wait 99 years for it to come back.

Ms Sylvia Lim: Mr Speaker, just a further clarification, I did file a Parliamentary Question to MOF to ask for the cut-off period for the definition of "land sales" under the Budget and the answer given to me was 10 years is the cut-off. So, again, I would like the Member to confirm that it is not accurate for him to say that once the land is sold, it is gone.

Mr Lim Biow Chuan: I am afraid I cannot understand what Ms Sylvia Lim is asking. When you sell a land for 99 years, then the proceeds of sale for that 99 years will be gone. You are going to wait 99 years for the monies to come back before it goes back into reserves. Then, you are spending funds that would be gone for 99 years. Yes, that is why, in this generation, you are spending money for the future generations.

Mr Speaker: A final clarification?

Ms Sylvia Lim: Mr Speaker, perhaps, I will wait for the Minister for Finance to clarify.

Mr Speaker: Mr Thomas Chua.

12.46 pm

Mr Thomas Chua Kee Seng (Nominated Member): Mr Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, Members of Parliament, good afternoon! Today, my topic is: a strategic and long-term Budget which helps businesses grow sustainably.

A key highlight of this year’s Budget is that it materialises the framework promulgated by the Committee on the Future Economy through the introduction of a series of targeted measures to assist businesses. Before announcing this year’s Budget, the Government had widely sought views and feedback from trade associations and chambers. The various measures now introduced by the Budget have matched the expectations of the business community.

This year’s Budget is very far-sighted, as it is making preparations for a better future. Going forward, Singapore will increase public expenditure in healthcare, security, long-term infrastructure and education. We believe our people and businesses will benefit from public spending in these areas.

When I listened to the Minister for Finance as he delivered the Budget Statement, what I thought about the most was the question of how we can increase our revenue sources while curbing our expenditure, 开源节流 in Chinese. I am glad that the Government will, hence, observe the principle of 开源节流 when constructing large-scale infrastructure. Because such investments are huge, the Government is looking at allowing Statutory Boards and GLCs, like LTA, to fund them by borrowing or issuance of bonds, in order to avoid tapping into the national reserves. The Government is also considering providing guarantees for long-term borrowings for such infrastructure.

As a country with no natural resources, our reserves are like a financial linchpin that provides the country stability and should not be tapped into so easily. Hence, mobilising resources from the society to continuously obtain funds to finance such construction is a wise decision.

The other manifestation is to moderate the pace of Ministries’ budget growth. From FY2019, the rate of growth for the block budgets of Ministries will be reduced from 0.4 times of GDP growth to 0.3 times. As Singapore is already an ageing society, there will be more and more areas that will require spending in the future. We need to stringently control Ministry spending, monitor closely the policy implementation processes, plug loopholes in the abuse of Government resources, raise the quality of public projects and avoid the vicious cycle of problems arising from Government spending and then having to spend more money to resolve problems – this is truly how 开源节流 could be meaningfully carried out.

As for the adjustment of the Goods and Services Tax, this has been widely speculated before. It turned out that the Government would not immediately raise the GST, but would do so at least three years later, giving sufficient time to businesses and consumers to adapt. I would like to convey the views of some smaller retailers, particularly those from the northern part of Singapore. They are worried that following the GST increase, many consumers will swarm into Malaysia, particularly Johor Baru, to shop for daily products. These retailers believe that this is very likely to happen because the Singapore-Johor Rapid Transit System Link will start operating in 2024. With the ease of travelling, more convenient customs clearance, easier conveyance of goods and the strength of the Singapore dollar vis-à-vis the Malaysian ringgit, the lure across the Causeway would only grow greater. Come 2026, the surge in north-bound traffic could be even higher, as the Singapore-Kuala Lumpur High Speed Rail is projected to be operational by then and there will be many convenient places to shop along the route.

The Government has also announced that in two years' time, businesses that purchase imported services from overseas would also have to pay GST. To local businesses that provide similar services, this is a long-awaited equitable measure. According to the Department of Statistics, Singapore imported close to S$225 billion worth of services in 2016. This is a significant figure. Such purchases include software applications and a variety of Business-to-Business (B2B) services, including accounting and IT. On the other hand, once this GST is levied, many purchasers, especially SMEs, will face pressure arising from an increase in their operating cost.

However, on-line transaction of services is a complex matter. Whether it is the provision of services through the B2B or B2C model, there is a likelihood that charges from both ends may exploit technical or policy loopholes to gain an advantage in areas, such as during the transaction, the computation of tax assessment and tax rebate. There is a need to strengthen supervision in theses aspects.

Mr Speaker, the best approach to achieve 开源节流 is to assist our enterprises to grow. Only when our companies thrive and develop, they could then contribute more to Government revenue. The Government has continuously been helping our companies to transform and upgrade. Next, companies themselves have to be more proactive to push the pace of transformation and innovation. Workers need to learn new knowledge, new skills, while bosses must use a new mindset to develop new markets. Transformation is like stretching the body, where periodic pains are unavoidable. There is no guarantee that transformation will definitely succeed, but not transforming means certainty of elimination.

There is another Budget measure that is welcomed by businesses. Businesses passionate about charity have always enjoyed support through Government policies. In the last two years, donations to Institutions of Public Character (IPCs) are entitled to enjoy 250% of tax deduction. This deduction was originally supposed to cease at the end of this year. It is now going to be extended for another three years to encourage more companies to give back to society. Some businesses hope the Government could take a further step to raise the deduction to 300%. This could encourage even more people to make generous donations, contributing both money and effort to build a more caring and united society.

At the start of a new year, the Government has introduced a Budget that is strategic and with a long-term vision. Following this, it will require all the stakeholders in the society to proactively take action to execute all the measures that have been introduced.

12.55 pm

Assoc Prof Daniel Goh Pei Siong (Non-Constituency Member): Mr Speaker, Sir, this Budget marks a significant progress from a wait-and-see posture to strategic and integrated planning to engage three major shifts affecting Singapore’s future. I focus on ageing here. I highlight that ageing is not uniformly experienced, and that men and women experience ageing and are affected by ageing very differently. There are, therefore, gender inequalities we need to tackle if we are to meet the challenges and opportunities of ageing successfully. Our policies targeted at ageing must factor in the gender differences for them to be effective. I focus on three sets of issues, namely, issues related to the gender income gap, issues with supporting caregivers and the economic and health security of seniors.

Let me start with issues related to the gender income gap. A study using data from MOM last year showed that the gender pay gap has not improved in the decade from 2006 to 2016. The gap in median monthly income between male and female has remained at around 18% to 19%, with women earning some $610 less than men.

It is unacceptable that we have not made any progress in closing the gender pay gap in 10 years. We need to tackle the gender pay gap because it will affect our future senior women and their retirement security. Already, women are living longer than men and CPF LIFE is structured in such a way that discriminates between gender, with women paying a higher premium and getting less payouts. The gender pay gap has, therefore, a compounding effect on the retirement security of women. Using the CPF LIFE Payout Estimator on the CPF Board website, my estimate is that, on the average, men will be getting 25% more income than women from CPF LIFE due to the gender pay gap.

The gender pay gap varies across sectors. There has been some attention on the gender pay gap in the finance sector and in senior management, but I think we should actually pay more attention to the majority of our women workers who are labouring in other sectors. Health and social service is still a sector that has one of the largest gender pay gaps, with women earning around $1,540 a month less than men. The health and social service sector impacts ageing and our seniors the most. It is also a sector that is, arguably, the most susceptible to what Minister Ong Ye Kung has noted as a key factor underpinning the gender pay gap, that is, the social norms and expectations placed on women. Minister Ong called for a mindset change. But this is also a structural issue.

The crux of the matter is nursing. Nursing makes up the bulk of the health and social service sector and most nurses are women. Nursing is also in high demand because of ageing. A strong professional body of local nurses is essential for us to successfully meet the challenges of ageing. For many decades, there has been an erosion of status and value attributed to nursing, which culminated in the 2013 Population White Paper footnote mistake in classifying nursing as a low-skilled job that is difficult to offshore. The apology and correction from Deputy Prime Minister Teo Chee Hean then was swift and right, and I believe there has been a narrowing of the prestige gap between nursing and other professions since 2013. But there are still two other associated issues.

First, while wages for nurses have been improving, there is still a lag. Based on mid-2016 data from MOM, the median gross monthly income from work of all full-time employed residents is $4,056, while the figure for nurses is $4,300. This is a ratio of 1.06. This is not too different from similar ratios for OECD countries.

However, when compared to small countries with a similar demand profile for nurses, we are behind. For example, the ratio in Israel is 1.4. In Australia, where ageing is also a major challenge for society, the ratio is 1.2. Given the high demand for nursing because of our ageing society, there is scope to further increase the wages of nurses.

Second, it has been a longstanding fact that most nurses are women, which has entrenched the perception that nursing is a female occupation. This gendered composition and perception of nursing will continue to exacerbate the supply shortage of trained nurses. Increasing the wages of nurses will kill several birds with one stone. As most nurses are currently women, increasing the wages of nurses will help close the gender pay gap.

It will also signal the increased social value and respect that is attached to nursing; that nursing is far from being a low-skilled job; that, on the contrary, nursing is an especially precious skillset for the ageing society.

We all know that nursing is a very demanding job. It is emotionally straining, time consuming, especially with the shift work and overtime, and is also physically draining. Increasing the wages of nurses will make the remuneration more commensurate with the passion that is demanded of nurses.

Increasing the wages of nurses will also help to shift the mindset over time, so that more men would take up the calling and not be put off by the opportunity cost of higher pay for men in other professions.

Another issue related to the gender pay gap is the income security and prospects of women who have become mothers. Part of the reason for the gender pay gap is linked to women returning to the workforce after taking a prolonged break due to pregnancies or childcare responsibilities. Little recognition is given by employers and the Government to the years women spent in service to the family and to the nation to bear and raise children, unlike men who are often given a salary premium for the two years spent in National Service.

The current emphasis on lifelong learning and continuous retraining exacerbates the issue. By the time women try to return to the workforce, they face the triple challenges of making sure their skills stay relevant, discrimination against older workers and wage stagnation compared to their male peers.

Last year, during COS 2017, I proposed the SkillsFuture Mommy Awards to make re-entry into the workforce for mothers less challenging. We have the social and policy infrastructure to resolve this issue. This is an area that SkillsFuture Singapore and Workforce Singapore should look into.

Let me move on now to the second set of issues related to caregivers, who, like nurses, are at the frontlines of the ageing society. Like nurses, most caregivers are women. So, again, we see gender closely connected to ageing. As with nurses, getting our policy right in supporting caregivers is essential for us to successfully meet the challenges of ageing. There are two issues associated with caregivers. If we can resolve these two issues, we will be able to support a strong body of caregivers who would form the bedrock of our silver care system, close the loop between healthcare and community care, and allow our seniors to successfully and actively age in place.

The first issue is recognition and reward for unpaid caregiving. It was estimated that there were over 210,000 caregivers in 2004. The numbers should have gone up by now. This is not a small number, as it represents around 10% of our resident workforce. In a national survey of informal caregiving of older adults aged 75 and above presented in 2013, only 55.6% of the caregivers reported that they were working full-time or part-time and the caregivers reported they spent an average of 38 hours a week in providing care.

Among the three problems of lack of family support, negative financial impact and negative impact on schedule and health, caregivers rated financial impact as the heaviest burden, followed closely by negative impact on schedule and health. This is despite the fact that 49% of caregivers in this survey had the support of foreign domestic workers.

The same survey shows that caregivers living in private property and, therefore, assumed to have better means, experienced lower stress, while caregivers who were working and who were facing more financial problems due to caregiving experienced higher stress. This is only one of the many surveys and studies that have shown consistent results. I think it is time we recognise that caregiving is full-time work, which prevents caregivers from realising their employment potential and affecting their financial security.

How can we better support caregivers in this respect? Two years ago, during COS 2016, I asked the Government to consider giving means-tested refundable tax credits to caregivers, so that caregivers who do not work or work part-time would get some cash refund. This would lessen their financial burden and improve their retirement adequacy. Senior Minister of State Sim Ann then replied that the Government’s approach focused on direct subsidies of services to lessen the costs borne by caregivers, rather than providing cash allowances to people looking after family members. I am of the view that the two do not have to be mutually exclusive. Cash allowances to caregivers suffering from extreme negative financial impact would allow them to access the subsidised services.

If we recognise full-time caregiving of seniors as unpaid work, then it is not far-fetched to consider them as low-wage employees who need income supplement. We should rethink the orthodoxy and provide income support to caregivers. There is already one scheme that is suited for this purpose – the Workfare Income Supplement (WIS) Scheme. WIS is means-tested and, with older workers receiving higher payments, it will ensure the benefit will go to needy caregivers. Also, since 40% of the payment is given out in cash and 60% in CPF contributions, this will help take care of the immediate financial needs and enhance the retirement needs of the eligible caregivers.

The second issue is the stress faced by caregivers of seniors, which, in the worst case, can lead to depression and anxiety. Studies of caregivers in Singapore have consistently shown high stress levels among caregivers. But, there are important differences. Caregivers of seniors with dementia experience higher stress. Female caregivers of seniors, namely wives and daughters, tend to experience a lot more stress than male caregivers. These female caregivers reported feeling rundown and exhausted and experienced restless sleepless nights. Many of them reported the desire to be involved in culturally relevant recreational activities, such as a game of mahjong, but they lack the social networks to get involved.

Our caregivers are a heroic bunch with strong Asian family values. Another study has shown that caregivers often report concerns about the caregiving and much less about the effect of caregiving on their own physical and mental well-being. What this means is that while they know and are driven to care for their loved ones, the caregivers do not know how to care for themselves and tended to neglect their own well-being.

Last year, during COS 2017, I asked the Government to provide better support to caregivers of seniors by setting up caregiver support centres at Senior Care Centres (SCCs). I was glad to hear from Senior Minister of State Amy Khor that the Agency for Integrated Care (AIC) has started a three-year pilot since September 2015 to embed caregiver support services in five SCCs, and that AIC had also started AICareLinks centres at five hospitals and its office at Maxwell Road for caregivers to receive advice on services and schemes. I think these are great initiatives, but we are starting from a very low baseline of no support for caregivers.

There is a lot more we can do, especially given the general reticence of caregivers to seek help for themselves. I suspect the caregivers are not too forthcoming in seeking caregiver support services at the SCCs and AICareLinks centres. It may well be that we would need to use the Social Service Offices (SSOs) and Family Service Centres (FSCs) infrastructure to bring the support to the caregivers to enhance their well-being.

I understand the logic to integrate health and social support for seniors under MOH and empowering AIC to be the central implementing agency to coordinate the services announced in the Budget Statement. But I hope this integration will not come at a cost to the cross-functional integration between MOH and MSF, and between AIC and the SSOs when it comes to needy seniors and vulnerable caregivers of seniors. In fact, with seniors ageing in place and in their communities, the delivery of services is most effectively achieved by leveraging the community networks of the SSOs and FSCs.

I turn now to the third and last set of issues, which are directly related to the retirement security of senior women. There are two issues here I would like to highlight: economic security and health security.

First, existing cohorts of elderly women and soon-to-be senior women cohorts are experiencing economic vulnerabilities. In 2016, it was reported that for those over 60 years of age, the average CPF balance for women is only 69% that of men. This gap is narrowing for younger cohorts as gender equality improves with better educational attainment by women in recent decades.

However, this problem will remain with us for at least another 20 years, as the gender CPF gap is similar for those aged 45 years and above. Back in 2008, HDB found that just over half of elderly residents living in HDB flats planned financially for retirement, with women much less likely to do so. Many elderly women, much more so than elderly men, are dependent on their spouses and children for financial support and many continued to work in low-paid jobs to supplement their meagre income.

One study in 2011 showed that 26% of those aged 55 years and above reported they perceived occasional or regular financial inadequacy, with more women reporting this than men. Another study estimated that the relative poverty rate among the working elderly had jumped from 13% in 1995 to 41% in 2011. This means that among the working elderly, 41% had income from work, family members and state assistance amounting to less than 40% of the median income in the workforce. This suggests that many seniors are working past retirement age not just because they want to, but because they had to, and many in this category are women.

It does not look like this issue is going to abate in the next decade. Instead, the scale of the economic insecurity problem will increase due to the doubling of the number of seniors to 2030. I would like to call on the Government to study this issue of the elderly working poor, especially involving women, more closely and adopt urgent measures to tackle the issue. One possible line of attack would be to look at how social service and community development agencies helping to place the elderly in jobs could also help the elderly draw up favourable contracts for service and provide advice and retraining opportunities to improve their income prospects.

In the meantime, the Silver Support Scheme could be enhanced to mitigate the problems faced by the elderly working poor. As many of the seniors are dependent on their spouse and children for their housing needs, we should make sure this housing dependence does not erode the efficacy of state assistance to support the needy seniors.

The Silver Support Scheme payouts to needy seniors are currently tiered according to the HDB housing types they are living in. This is unnecessary as the beneficiaries of the scheme are already means-tested. A needy senior living in a 5-room flat receiving $300 a quarter and a needy senior living in a 2-room flat receiving $750 a quarter are already means-tested to be facing low household support, with a monthly income per person in the household of not more than $1,100. One may be living in a bigger flat, but they are facing the same financial difficulties of meeting their everyday needs.

The 5-room flat is a long-term asset and cannot be simply unlocked to support their everyday needs. How is the size of the HDB flat related to the provision of household support to the elderly poor? Is the tiered payout signalling to the family that they should downsize the flat to better support their seniors? I believe needy seniors should receive $750 a quarter, regardless of the size of the HDB flat where they live.

The second issue is health security. Our seniors are now living longer, fruitful lives and receiving better healthcare. While women are living longer than men, women are also facing more downsides in health security than men. Senior women spend more years in disability than men, and women are two-and-a-half times more likely than men to report difficulties in carrying out typical activities of daily living. The gender-differentiated ElderShield premiums reflect this but, again, this means it compounds the gender income gap and greater financial insecurity faced by women.

Senior women are also more prone to suffering from dementia and higher rates of depression, which are more home-bound diseases that compound the caregiving burdens faced by female family members. The concern is that women are caught up in an inter-generational vicious circle of caregiving and deterioration of mental well-being. We need a more targeted approach to tackle dementia and mental well-being among seniors and the general population at the national level.

Mr Speaker, Sir, back in May last year, I asked a Parliamentary Question on whether the Government practises gender budgeting to determine the effect of policies on women. Gender budgeting involves analysing the Government’s annual Budget and programmes for their different impact on men and women, and then adjusting allocations and programme details to promote gender equality.

Minister Heng Swee Keat replied to the question saying that in the design, planning and delivery of programmes, the Government accounts for the impact of policies on different segments of society, including gender, and target benefits at those in need and that Government policies have, over the years, enabled the advancement of women in Singapore. Indeed, they have. I read this reply positively as the Government does do some form of gender budgeting for its programmes, though it is not formalised as such.

I especially like the part on targeting benefits at those in need. As I have made the case in this speech, gender equality is not just an aspiration, but a need. It is a need because, whether absolutely or relatively, the financial security of women through their career from young workers to would-be mothers to caregivers to seniors is paramount to the mitigation of neediness among our ageing population. It is a need because gender equality is one of the key upstream solutions to the downstream challenges of ageing and where opportunities for successful ageing of our seniors are shaped and forged. To promote gender equality is thus to be strategic and integrated, as this Budget seeks to be.

1.14 pm

The Senior Minister of State, Prime Minister's Office (Mr Heng Chee How): Mr Speaker, Sir, thank you very much for allowing me to join the debate. I wish to state right here that I fully support this year's Budget.

Sir, when Singapore became independent, some of its key domestic socioeconomic challenges were: low levels of education for the general population, a young and growing working-age population that faced frustration over uncertain prospects, low wages, high unemployment of around 10%, amid unstable industrial relations. And the workforce then was predominantly rank-and-file.

Fifty-three years on, our challenges are now different. Our education system prepares students for PMET jobs. PMET employees comprise more than half of our workforce. A gig economy element is also growing.

We now have a rapidly ageing population and local workforce partly due to the Baby Boom generation effect, while our unemployment rate of 2% to 3% is much lower than that of 1965 in Singapore, or when we compare with most other countries currently, and our industrial relations are stable. The rising impact of disruption caused by changing business models, technology and global competition has significantly increased our risk of job obsolescence or, as some people call it ,"jobsolescence", as well as job loss.

General wage levels have risen but there is a need to continue efforts to transform low-wage industries for better earnings and prospects.

For Singapore as a whole and for the Labour Movement, these changes and realities will dictate our priorities as we continue to pursue our mission to care for our population and to care and value all working persons.

For the Labour Movement, we continue to want to work closely with the Government and employers to develop that better future for Singaporeans. To that point, there are three key priority areas where the Labour Movement could help Singapore and Singaporeans do better.

First, in the area of "High Age", and this is shorthand for the unavoidable ageing of our local workforce and its implications. I will speak more on this later.

Second, low wage. Over the past several years, dedicated efforts by the Tripartite Partners have brought about hard-earned tangible improvement in the terms of work for lower wage workers. The road ahead remains long and arduous, as structural improvements require sustained transformation of mindsets, skills, technology and procurement practices on the part of employers, service buyers, workers and regulators.

Third, the "Double Middle". Just because a growing proportion of the workforce comprises PMET jobs does not mean that every PMET employee is secure in his job. With changing technology alone, for example, artificial intelligence (AI), Internet of Things (IoT), Manufacturing 4.0, Robotics and others, many longstanding routine PMET jobs will be redesigned or may be rendered redundant and be replaced by new roles and requirements. Add to that the continuing pressure to de-layer and flatten organisations and to outsource jobs and functions to more cost-competitive countries, we can see the need to help not only today's unemployed find jobs, but also to help those who may be more at risk of becoming "tomorrow's unemployed" manage their risks.

This will entail proactive Tripartite partnerships to spur transformation at the industry, company and job levels and to improve the conditions for prompt and seamless skills upgrading and conversion to take advantage of new income opportunities. It would also include enhancements to job-matching and job-switching machinery for both traditional and emerging ways to earn a living, as well as the corresponding safety nets to help the displaced find their feet again quickly.

Sir, my fellow Labour Members of Parliament will elaborate on these priorities in their Budget speeches that follow. Labour Member of Parliament, Mr Desmond Choo, will speak of the value that youth will bring to our nation and share how the NTUC is reaching out to them even before they join the workforce.

Touching on the issue concerning the "Double Middle" group, that is, middle-income and middle-age, and wherein there is a growing number of PMETs, my fellow Member of Parliament, Mr Patrick Tay, will share how we must value every such worker and how to keep them relevant.

Labour Nominated Member of Parliament, Ms Thanaletchimi, will call on all to value the family behind every worker, particularly for women, who often have to juggle between work and family commitments.

With the rise of the gig economy, Labour Member of Parliament, Mr Ang Hin Kee, will remind us not to underestimate the value that freelancers and the self-employed bring to our economy.

While fellow Labour Members of Parliament have touched on various worker groups, my Labour Member of Parliament colleague, Mr Zainal Sapari, will put the emphasis on the low-wage workers, whose contributions we must continue to value.

As we all spend our time at the workplace, Labour Member of Parliament, Mr Melvin Yong, will speak on the value of the life of every worker and how we can render every workplace safer and healthier.

Sir, let me now elaborate on the "High Age" area and argue why it is critical that we not allow ourselves to be blind-sided by this aspect.

Sir, Singapore quietly entered a new era in 2018. For the first time in our history, the proportion of our citizen population below 15 years old equaled that of our citizen population above 65 years old. In years to come, there will be more citizens above 65 than there are those below 15. By one estimate, by the year 2030, the below-15 segment might constitute, say, 11% of the population whereas the above-65 portion could be 27%. One might ask, so what? Well, that means that Singapore may be headed for a triple whammy, if we are not careful.

First, there will be the peaking of the citizen workforce around 2020 and thereafter plateau and then decline. That does not include attrition from the workforce due to skills obsolescence and mismatch. This shrinking of the citizen workforce will narrow the personal income tax base, adding strain to Government revenues.

Second, the shrinking citizen workforce and loss of relevant experience through retirement of older workers will impact the ability of companies to operate optimally, unless, of course, they are able to raise productivity or, perhaps, if they could increase the proportion of foreign manpower in their workforce, or profitably and sustainably retain the services of mature workers longer. The constraint on company growth will, in turn, lead to lower-than-potential corporate tax contributions to Government revenues. So, that is the second whammy.

The third one, the growing senior segment of the population, will lead to more social spending and support in healthcare and welfare, especially if structural unemployment or downward pressure on the income among seniors increases.

The combination of these three factors will mean that the shrinking working population and companies will shoulder an increasingly heavier tax burden to support the reducing tax contribution from the senior population as they leave employment and as they incur higher living expenses linked to ageing.

In short, the earlier the older segment of our population ceases to be able to contribute economically, the earlier and more painful we can expect the tax increases that the working population and companies would have to bear in support. Conversely, the longer our mature workers can remain employed and earning, the more they can help contribute towards Government revenues and also support their own needs and thus helping to delay and reduce the need for the general taxpayers and younger citizens and companies to have to chip in earlier than necessary.

It is also for this reason that the Tripartite Partners have agreed over the years to extend, first, the statutory Retirement Age, and then to introduce Re-employment and, most recently, to raise the Re-employment Age ceiling from 65 to 67 effective July 2017. The raising of re-employment age to 67 actually was contained in the recommendations of the Tripartite Committee on the Extension of the Retirement Age back in July 1997. It is very important but not something easy to do and it took us 20 years to move to 67.

Going forward, the question is what do we do and whether this broad tactic of prolonging employment across the board by law is going to be as doable as in the past 20 years or would it face additional challenges.

I would like to share that there are at least two specific considerations that we have to bear in mind, going forward.

Firstly, despite the improvement in the general health condition of our population over the years, across-the-board statutory re-employment age increase would more likely encounter different constraints for different industries and occupation types as we go into higher age brackets.

That said, investments in the use of assistive technology and age-universal process and job design and redesign must continue relentlessly, so that we are able to compensate for the physical declines of the workforce to the greatest extent possible. And in this, schemes like WorkPro should continue and be refined to produce more substantive and pervasive outcomes wherever such opportunities exist so that we maximise this benefit.

Secondly, and increasingly important, the threat to employability due to job obsolescence, skills obsolescence and skills mismatch. Hitherto, technology was used mainly to improve efficiency of work processes. Today, technology goes beyond that to drive Business Model revamps. What this means is that a person’s job may change or disappear much faster than before, not only because his company is not doing well, but because entire occupations, organisational layers and how value is created, delivered and captured in an industry may fundamentally change.

Some estimates say up to 25% of jobs in the current economy may be altered or displaced by technology in the coming 20 years. A person displaced for this reason will have a hard time finding a similar job because the job category itself may be fading. While this scenario may confront a worker of any age, the average older working person may face more and higher hurdles in the adaptation and switching process, on top of ageist attitudes among some employers, and may be displaced out of the workforce long before reaching the re-employment age. With such pervasive technology, rapid digitalisation and changing business models, how can companies stay competitive while tapping on mature workers who bring value, insights and experience to the table? Could we try harder in making the workplace more conducive for mature workers to contribute? How about training them to be more digitally aware and technologically competent, placing them in growth sectors?

When we travel to another country with a different plug and socket design for their appliances, we all know that it would be very troublesome if our appliance does not have the right plug design. Even if the appliance itself is functioning well, you cannot use it because you cannot connect to the power source. That is why we find the multi-adaptor plug so useful on trips. We also know that if we go to a country whose language we do not know, we will encounter many difficulties even to get very basic things done or to have ourselves understood. Conversely, if we understand and speak the language, we will be as a duck takes to water. This is the reality.

I say this as an analogy for the employment and employability of working people of all ages because, increasingly, it will be like becoming a multi-adaptor plug and being able to understand and use the language of a place. Workers who can learn and adapt repeatedly in their working lifespans will last longer and earn better, whilst those who cannot or will not do so will face increasing difficulties in employment and re-employment, regardless of whatever law you pass or wage subsidies that the Government may put in.

In this rapidly changing world of work, skills requirements change quickly with the flux of competitive business models, technology and innovation. Old areas of the economy fade away even as new opportunities emerge. Some growing job areas would be brought about by this very ageing of the population, such as in personal support services, healthcare and eldercare. That is why working persons must keep up with the changing requirements or else find themselves of the "wrong plug design" and become powerless.

In this context, workers need to and want to learn what are the skills at risk and what are the skills they need to pick up, and where they can do so efficiently and cost-effectively. This is where the expeditious implementation of the industry transformation Maps for key industries will be critical. Businesses and Industry Associations must take the lead, with the support of the Government and the Labour Movement, and to do this without delay.

Here, I want to remind everyone not to unconsciously fall into the mind trap of thinking that industry transformation involves only the younger working population or only the local population. A chain is only as strong as its weakest link. A company’s workforce is typically both young and mature, both local and foreign. If a company or industry focuses transformation only on one part of its workforce and neglects or dismisses the other parts, it is, actually, short-changing itself.

If Singapore, therefore, neglects the segment of its workforce that is growing the fastest – and here, for the local workforce, that is the mature segment – then it is downright counter-productive for these reasons that I have discussed earlier. From the perspective of the company, it would be both sacrificing its own potential capability as well as practically inviting higher corporate tax burdens on itself sooner.

For all the above reasons and given that the recommendation of the Tripartite Committee on the Extension of the Retirement Age to 67 has been fully implemented, there is, therefore, cause, in my view, for another Tripartite Committee to be convened to consider the road ahead, beyond 67. I, therefore, call for the forming of such a Tripartite Committee and would like to propose that its terms of reference could include the following.

Firstly, to assess the effective retirement age, which is not the same as the statutory retirement age, since 1993, and recommend measures to further raise the employment rate of older workers. This includes how the implementation of the Industry Transformation Maps must include the upgrading of mature workers and the speeding up of progress toward more age-universal workplaces.

Secondly, in light of the pervasive adoption of the performance-based employment model over the years, to consider whether there is still a need for a statutory retirement age or for a ceiling to be applied to the re-employment age band.

Thirdly, if the statutory age and re-employment age band are still assessed to be necessary, clarify the conditions under which the re-employment ceiling of 67 could be further raised and to what long-term targeted age.

I further call for a special focus on confidence building for mature workers in digital awareness and competencies in working with robotics and in using data smartly to finesse the supply of and demand for goods and services. This is the new language in the world of work. We should proactively and aggressively promote their learning and use, just as we had in promoting basic literacy and numeracy through BEST and WISE courses, and IT confidence through the National IT Literacy Programme (NITLP) in years past.

The newly introduced SkillsFuture for the Digital Workplace is a good example of what needs to be done in this regard, and I hope and call for more to be done. Facility and adeptness are not innate attributes or in-born. They come with exposure and usage.

Finally, I urge the Government to specifically work out recruitment plans and conversion programmes to induct mature workers into the growing areas of healthcare, eldercare and ageing in place. These are growing areas of job opportunities and they also allow our mature workers actually to play to their strengths.

The NTUC and Labour Movement stand ready to actively partner and support the Government and the business community in all these areas to build this critical dynamic employability in our older working persons. And we will do that with our network of unions, social enterprises and U-Associate partners.

The better we are at pursuing these objectives, the more we will avert that triple-whammy I described and, in fact, turn adversity into advantage and a concern into strength.

A better future is possible, but it never comes from just hoping for the best. That future must be invested in, slogged for and cherished together. Time is ticking away and the consequences of our actions or lack of actions will become clearer by the day and month. So, let us press on resolutely. Let us not drop the ball. We must succeed so that our mature workers and citizens' future in Singapore will remain one of hope and promise. Mr Speaker, Sir, I support the Budget.

1.33 pm

Mr Desmond Choo (Tampines): Mr Speaker, the Budget that we are debating about today is about the future of Singapore and, to a large extent, our ongoing economic transformation and the value that each and every worker brings to this ecosystem. Critical to this transformation are the social and career foundations that we are putting in place for the workforce. I will touch on how we can strengthen our social and career foundations further to help Singaporeans, especially younger Singaporean workers and families, to prepare for the changes.

Ever more rapid technological disruptions will continue to fundamentally change how work is done. Singapore's limited resources meant that we have ever narrower margins of error to prepare ourselves for the new economy. Our workforce, especially the workers of the future, must be able to take on future challenges quickly and adroitly. The Industry Transformation Maps (ITMs) are important guides to help companies and workers understand and prepare for this future. We have committed $4.5 billion for this effort. Ideally, employers and employees are aligned in the ITMs and work towards redesigning jobs for the future, promote innovation and seek and seize opportunities to go international, where possible.

Because this transformation requires fundamental structural changes, ITMs will, understandably, take time to be pervasive. Two recent surveys done, one on businesses and another on students at the Institutes of Higher Learning (IHLs) hinted that we need to intensify our transformation efforts.

In a survey done by the Singapore Business Federation (SBF), companies said that ITMs are a good initiative but about half of these companies are not so clear on what the transformation processes entail. One in four companies are slow to transform their businesses and some have not digitised any part of their businesses at all.

Clearly, these businesses lack transformation capacity. For example, many training programmes require time away from work. But in a tight labour market, workers are prioritised for operational purposes. The schemes announced in the Budget, such as Productivity Solutions Grant, will go in some way to aid companies to innovate and build deeper capabilities. However, there is still a missing link of a last mile connection of turning transformation plans into transformative actions.

Our future workers might also need to be primed for the transformation. Our younger Singaporeans are the future of Singapore’s workforce. They need to be part of this transformation.

In a recent survey done by Young NTUC in January 2018 on about 400 students in the universities and private educational institutions revealed that around 83% have not heard about the ITMs. Out of the 17% who said they have heard about ITMs, the level of understanding about them was only 6.5, out of a scale of one to 10, whereby 10 denotes that they fully understand the information.

This is a concern. It meant that, for most students, the industry that they are studying hard for would have changed in no small measure by the time they graduated. But they would not know this until they have entered the workforce.

Students in the IHLs who are poised to enter various industries need to understand these plans so that they can gear up for the changes in the sectors. While the roll-out of ITMs is not yet complete, the communication of the ITMs need to be stepped up so that businesses, workers and students are plugged into the plans and development within their sectors.

In both cases – for businesses and students – there is a "last mile gap" in connecting available schemes with the target groups and stakeholders. I would suggest that the Labour Movement could play a bigger role in bridging the gap for both businesses and students.

Recently, I visited the workers from the SATS Workers' Union (SATSWU) at their workplaces at the airport. They proudly showed me the new technologies, such as automated check-in and bag-drop. They could now attend to more passengers and guide them – adding value where they previously could not. There were important developments that would improve workers’ productivity and allow workers to work for longer in better jobs. So, I asked, "How is this possible?" They shared that because the industry changes were shared in advance, gaps were identified early and their skillsets were identified in advance. SATSWU also worked with the company to train its workers.

However, it was also noted that the operations also depended in part on sub-contractors. The passenger experience was dependent on the capabilities of these smaller companies. These smaller companies might lack the resources to train their workers and undertake productivity initiatives. The Labour Movement can coordinate with these companies and their bigger unionised counterparts on training needs. Then, the training modules can be placed on board NTUC’s ULEAP bite-sized training platforms, so that workers can be trained without significant downtime. This will eventually improve our transformation capacity.

Before I left the airport, I asked the workers, "Can we continue to do better?" They shared with me and said, "Of course, we can. Transformation is not new to us, changes at the airport are constant. As long as workers are involved early, productivity gains are shared, workers' value are unleashed to take advantage of transformation and workers' energies and ideas to make airport processes better".

For students, ITMs must be made accessible to them so that students can understand the key thrusts of our economic transformation for their desired industry or profession. NTUC, through its youth wing, can help the students navigate the ITMs through industry tie-ups and youth career networks. The latter peer-to-peer systems are more accessible and less top-down. It is shared from an industry peer to another student. Information is personalised, curated and more readily accepted by our millennials and younger generation.

Furthermore, to increase youth involvement in SMEs, we also call on the Government to try to help SMEs by providing seed funding to create internship opportunities, and these opportunities can be managed by intermediaries, such as NTUC or the trade associations. This would then give SMEs greater access to young talent.

The changes brought about by our economic transformation will require workers to be nimble and ready to take on new challenges. Thus, our social system must also be enhanced. More social support should be given to our workers to balance their work and home responsibilities better.

Young parents, for example, would require more support in the new economy as they can be considered as "double sandwiched" – middle-income and also having to take care of young children and older parents. As Singaporeans are marrying later, families are getting smaller and people have longer life expectancy, the responsibility of taking care of both young and older parents can converge at such a point in a young couple's life and for a prolonged period.

Such families would have to cope with the stresses and rising costs of looking after children and meet the needs of healthcare and other forms of care for their aged parents. Therefore, we need to review how our subsidies and support for childcare and student care are structured, especially for parents with more than one young child and also elderly parents to take care of.

As these responsibilities must be juggled and balanced with their careers, could the Government also consider making eldercare or family care leave mandatory in Singapore? This could provide some relief to Singaporeans who must take care of family members who are not covered by childcare leave or parental leave.

I am confident that as long as the Tripartite Partners work together, we can tackle the challenges and successfully transform our economy. We plug the gaps, we gear up our workers and students for these challenges and we provide greater support for them and their families. Together, we can create a better future for Singaporeans. Mr Speaker, I support the Budget.

1.42 pm

Mr Patrick Tay Teck Guan (West Coast): Mr Speaker, Sir, I rise in support of this year's Budget. If you ask me how I would describe this year's Budget, I would say it is a Budget with its "Feet on the ground, hand on the heart and eyes to the future”.

"Feet on the ground" because we ground ourselves on solid footing and fundamentals. We ensure our businesses and enterprises do well, so that our workers benefit through better jobs and pay, and stay employed and employable.

"Hand on the heart" because of it having the courage to confront the difficult fiscal challenges, share the fruits and to ensure no one is left behind.

"Eyes to the future" because of the clarity of focus to build our country, the curiosity to test new ideas and innovations and the conviction to stay the course and prepare for the future.

I am worried for a group of workers. My fellow Labour Member of Parliament, Senior Minister of State Heng Chee How mentioned it earlier – it is the double-middle group. They are our Professionals, Managers and Executives (PMEs) or what we often call the "sandwiched class". Why am I worried?

The latest labour market report, as well as the labour market trends, do not auger well for them. Seventy percent of those laid off in 2016 and 2017 were PMETs. The trend is that the more degrees you have and the older you are, the more difficult for you to find employment after you have been laid off, are terminated from or leave your employment. Structural unemployment, under-employment and unemployment are three challenges which confront our workers in Singapore, especially PMEs.

The three "Ds" – Digitalisation, Disruption and Demographics will transform or make redundant traditional jobs, while creating new specialised jobs. In the new normal, skills acquisition will have to increase in frequency, while working people will progressively experience more transitions in their employment life-cycles.

A working person may be in a multi-national corporation today, a small and medium enterprise tomorrow, and possibly opt to freelance in the near future. The future of work, workers and workplaces will transform. In the Labour Movement, we value every worker and we are, therefore, concerned about employment and employability of all, especially the PMEs.

First, jobs at risk. Are there jobs at risk? During our Labour Movement’s recent Future Jobs, Skills and Training Forum last month, Citibank shared that four years ago, they set up their first smart banking branch and started eliminating jobs. There was no longer a need for bank tellers, greeters, cash officers and service bankers in the branches. In their place were 130 multi-skilled, universal service bankers. Job roles requiring a single skill were eliminated. The new job role consolidated adjacent skills and role requirements into one role.

In two years' time, the Universal Service Bankers' role will also evolve and may also not exist as more digitisation and digitalisation are adopted. Sales jobs have also been impacted as people prefer to procure services via the Internet or through mobile apps. For example, chatbots are likely to eliminate telephone marketing and support jobs as people prefer not to wait to talk to a person when they have a query; they want to have their query keyed in online and receive an immediate response in their digital environment of choice, for example, in Facebook.

In the accountancy sector, the traditional maker and checker roles to assess compliance in assurance, audit and tax will be transformed. With adoption of technology, the process of consolidating and making sense of information will be made easier. Employees will need to possess broader skills in areas of understanding technology. An example is a Tax Technologist who must also understand fraud detection systems. The audit role has to shift to one which helps the client to manage the risk and compliance issues of the business.

If it is of any relief, many jobs will continue to require uniquely human skills that artificial intelligence and machines cannot replicate, such as creativity, collaboration, abstract and systems thinking, complex communication and the ability to work in diverse environments.

The companies that fare best in this new disruptive era will be those that embrace these changes rapidly and effectively. Put simply, new jobs and economic growth will accrue to those who embrace technology, not those who resist it.

Second, skills at risk. Are there skills at risk? At risk of becoming obsolete? At risk of not becoming acquired fast enough?

My short answer is yes. The half-life of skills is about five years. We need to not just skill our workers to be great at their jobs today but also skilled so as to be prepared for the jobs of tomorrow.

Our working people typically take about 15 years to prepare themselves for their first job with the expectation to progress to more challenging and better paying jobs thereafter. Paradoxically, people generally spend less time and effort to prepare and upskill themselves for their next job. Given the time pressures, financial and family commitments, it would not be practical to set aside another 15 years to upskill working people for their next job.

The adult learning model thus has to be reworked to enable working people to upskill and remain marketable and relevant and enhance their opportunities for career progression. We need to re-tool at a faster rate.

That is why, in NTUC, we are reworking the entire adult learning model. We want to develop modules which are bite-sized and just-in-time for continuous learning.

The speed of demand for new skills is faster than the speed of supply of new skills. For every company which has lost out in the digital race, such as Kodak and Borders, there are new companies which are flourishing, such as Carousell and Airbnb.

There is a need to make available bite-sized and just-in-time training so that our working people can keep abreast of the latest developments in their work domains. For example, a cybersecurity practitioner needs to keep up with the latest cybersecurity threats and such training should be delivered within 24 hours through bite-sized two-to three-minute updates on-the-go.

In the same manner, a safety professional in the construction industry would need to keep abreast of industrial accidents so that they can learn quickly from them and apply the learning at their workplaces. This is a challenge that the world is facing and if Singapore gets this right, our workers can be one step ahead.

The traditional mode of curriculum development in Institutes of Higher Learning (IHLs) is a long one. IHLs have to take time to figure out the market demand, design the curriculum and mobilise workers to be trained.

To shorten the development phase, the way forward is to work with companies to design bespoke training to be conducted in-company to upskill their workers. This can shorten the development phase of training substantially as the company knows what skills it wants its workers to be trained in and can mobilise the workers to take up the training.

The need to continually upskill applies to both employees and freelancers – all working people should take personal responsibility to prepare and upskill in relevant areas for future jobs. It is imperative that freelancers take on the responsibility to keep their skillsets relevant, too.

Increasingly, it is not just a question of encouraging people to learn new skills, but of finding new ways to help them acquire the skills they will need. The biggest challenges involve the creation of ways to help people learn new skills and then rethinking how the labour market operates to enable employers and employees to move in more agile ways to fill up new positions.

We have $500 of SkillsFuture credit for individuals to encourage individual-initiated training. Why not take the employer-supported training funding formula, like giving the employers a similar SkillsFuture credit, for them to send their workers for training and skills upgrading?

In this respect, I have three suggestions on what employers and employees need to do. I call it the three Cs ─ Change Mindsets, Communicate and Collaborate.

Mindset change is crucial. Employers' mindsets have to change. Employers tend to fear that the benefits of investing in training are lost when employees leave. It is a valid, albeit myopic, concern. Instead of viewing training as a short-term cost, employee development should be regarded as a long-term investment that allows staff to add value to their roles and take up expanded job scopes. The better employees become at their jobs, the easier it is for organisations to attain the level of productivity projected.

Employers, when hiring, need to do skills-based interviews to assess skills, experiences and fit with organisation's culture and values and not just look at paper qualifications and age. Be open to hiring mature and older workers.

Our Labour Movement's recent research reveal that employers prefer to hire skilled, trained and experienced staff instead of training their existing staff for these new jobs or hiring someone untrained and train him up. In short, they want "plug and play" employees. We have a tight labour market and an ageing workforce. Employers will find it tough to find the perfect match.

I, therefore, urge employers to change their mindsets on "plug and play" and adopt a "hire then train" approach. Best of all, re-train, up-skill and multi-skill their existing workers so that they, too, can take on these new roles. We have started this in the financial sector, with the three local banks embarking on training more than 1,000 of their local workers through the in-house professional conversion programme (PCP) as part of the industry transformation and Tripartite efforts of the financial sector.

Lastly, the responsibility for skills development and acquisition does not reside solely with the employer nor the Government. Individuals must have a learning mindset in the course of their careers so as to remain able, agile and adaptable.

We need to bring people together sector by sector to collaborate, transform our companies and then take proactive and concrete steps to train, re-skill and up-skill employees to match the in-demand skills and competencies.

Besides our Tripartite Partners, the Labour Movement has started working with industry partners, training providers and IHL, for example, the Labour Movement’s Multi-Union, Multi-U Associate alliance to uplift standards and improve the employability of workers in the OPEC industries by uplifting standards of process technicians and engineers. By doing so, this will create accreditation of the process technicians' trade and raise the standards whilst boosting transferability of their skillsets. The Labour Movement is also partnering the Institute of Engineers, Singapore, to raise engineering and technical competencies in the profession.

The 23 Industry Transformation Maps are developed by the sector, but they are merely blueprints. More importantly, the Industry Transformation Maps must be operationalised to benefit the workers on the ground, and stakeholders must join hands to make this happen. In this rapidly changing landscape, transformation is critical and requires strong partnerships between unions, our working people, enterprises, education and training providers, professional guilds and the Government to enable meaningful and mutually-reinforcing transformation for the benefit of all stakeholders and our economy.

In engagements with various stakeholders, we found that one of the underlying factors impeding future-skilling and job mismatches was information asymmetry. It is important to align all stakeholders and identify what the future jobs and skills are and communicate effectively to all. Besides just looking at job losses and gains, concerted action needs to be taken to identify jobs at-risk of displacement. This is what I urge every sector and every company to do. To proactively and pre-emptively identify the jobs at risk in their organisations and help their employees, our working people, to stay Ready, Relevant and Resilient – Ready with the new skills, Relevant for the new jobs and also Resilient to the new changes. Our workforce has to be Able and equipped with the skills to take on these new jobs, Agile to move across sectors and Adaptable to change.

This reminds me of the Wallet Ninja, I have it here. It is a multi-purpose pocket multi-tool, it reminds me of the importance of multi-skilling and making our skills work for us in a variety of scenarios and conditions as and when the situation and need arises. It is also made of four times' treated steel, to remind us to steel ourselves for changes ahead.

In conclusion, we have a Budget which values every worker but done by keeping our feet on the ground and staying ready, relevant and resilient. Putting our hand on heart and communicating the jobs and skills at risk. Focusing our eyes on the future by helping the unemployed land into future jobs.

We can never change the direction of the wind but we can adjust our sails to always reach the destination. Before I end my speech, I wanted to respond to what hon Member Assoc Prof Daniel Goh spoke on earlier. He spoke about the future of women, plight of nurses, caregivers and seniors. He suggested we spend more and more to help them.

I was Executive Secretary and Advisor of the Healthcare Service Union since 2006, more than a decade ago. For the past decade, the Union has been collectively bargaining on behalf of all healthcare workers whether they are workers in the nursing as well in the non-nursing areas in our various healthcare clusters. We have reviewed salary scales on several occasions and had many heated negotiations and collective bargaining with our employers and have done a lot of work to raise wages as well as salaries and improving career conditions and career progression for healthcare workers, both nursing and non-nursing.

In fact, we have set up a Tripartite Committee and they have been looking at this issue for the past decade, working very closely with the major employers, including MOH, in particular, looking at how we can upskill and raise the career prospects to attract more into this sector where we are in need of workers. Their collective agreements are publicly available documents which Members can refer to. We have since negotiated increases in salary scales and made good progress in terms of annual increments and bonuses.

So, it is not right to say that their futures and their careers have not been looked after, or neglected. Since a decade ago, from job redesign, then to a one-race to the top, and then now to the Industry Transformation Maps, we have been working very closely with Tripartite Partners, we have made significant headway. If you speak to any healthcare worker in the public healthcare institutions, they can share with you some of the initiatives and programmes that they have done and embarked very tenaciously on.

In Singapore, more than two decades ago, we have adopted, at a Tripartite level, a very flexible wage system and a competency-based hiring and progression structure and framework. Therefore, I am surprised to hear that, with these structures and systems in place, some people are short-changed. But I think it is a journey. Yes, maybe perhaps there may be some form of discrimination here and there in small pockets. Yes, we do encounter some of them. But I think it is important to work together as Tripartite Partners and also on all fronts to make sure that, not just pay and wages but also their interests, are not just fair and responsible but also progressive.

I also want to express a bit of my concern over Assoc Prof Daniel Goh's various suggestions to raise wages, Silver support, healthcare spending. He has made many suggestions on increasing our country's spending but did not really talk about where the money should come from and whether it will be sustainable. I think that is something very important ‒ it must be sustainable.

It is this very reason that we want to ensure our healthcare workers are looked after and our healthcare costs are managed that we have this year's Budget. We are concerned and we do not want anyone ‒ whether young or old, male or female ‒ to be left behind.

This Budget 2018 is very imperative and its focus is to help each and every one of our Singaporeans navigate a path and be future-ready, and to build up our resources and stay focused. On that note, I support Budget 2018.

2.00 pm

Ms K Thanaletchimi (Nominated Member): Mr Speaker, Sir, I rise in support of Budget 2018 presented by Minister Heng Swee Keat. I am heartened that the Budget is all-inclusive and it embraces both the short-term and long-term needs of Singapore.

Sir, I will be speaking on two broad areas, that is, Industry Transformation Maps and Women at Work.

On operationalising Industry Transformation Maps in our journey of economic transformation, I agree that the approach of Industry Transformation Maps (ITMs) for the 23 industries was a good start. We need to work on the strategies to operationalise them. The ITMs were a product of Tripartite efforts and should be treated beyond a paper exercise. All relevant stakeholders should continue to come together and implement the ideas on the ITMs. This should be an ongoing effort.

On 8 November 2017, Minister Gan Kim Yong, launched the Healthcare ITM which mapped out the key strategies to steer the healthcare industry and workforce towards better skills and better work, so that they can deliver better care for Singaporeans. The Singapore healthcare system is confronted with an ageing population with increasing chronic conditions, coupled with a slower workforce growth and rising healthcare costs.

Minister Gan presented three "beyonds", that is, beyond healthcare to health, beyond hospital to community and beyond quality to value to ensure our healthcare system meets the three core objectives of accessibility, quality and affordability. The future directions for the healthcare industry have been put forward clearly in the ITM. Therefore, it is important to operationalise the ideas effectively.

I shall now speak on national skills framework. First and foremost, there is a need to develop a national skills framework for current skills in demand and future skills. SkillsFuture Singapore has started its work on the development of the skills framework for six healthcare professions, namely, Physiotherapy, Speech Therapy, Occupational Therapy, Nursing, Patient Service Associate and Pharmacy Technician. We should continue to look at other healthcare professions, such as Therapy Assistant and Community Nurse, in view of the shift towards community care. We should also consider other job positions in the administrative job group to ensure that the relevant skills and training are mapped out for their career progression. There is fear amongst administrative and ancillary staff group, like the health attendants, that, with automation and robotics, will their job be redundant.

One way would be to embark on the progressive wage model (PWM) across all levels of healthcare professions. PWM will help to increase wages of healthcare employees through skills upgrading and productivity improvement. Another way would be to gradually move away from only recognising academic qualification to purely skill-based remuneration to break the glass ceiling. Hence, the shift towards modularised training is highly recommended. The Institutes of Higher Learning (IHL) should develop such modules to deepen the skills of healthcare employees. In return, the healthcare institutions, both public and private, should embrace and recognise these skills attained by the employees and remunerate them accordingly.

Let me share with you the plight of such a group of workers who felt their career is stagnant. These are the secretaries for the clinical department in the hospitals. They have no room for growth or career advancement unless they obtain higher academic qualifications, that is, diploma or degree. This should not be the case if we truly embark on skills-based PWM and elimination of the glass ceiling.

Next, it is also crucial to identify jobs at risk and work out feasible plans for affected employees to ensure smooth transition of employees from existing jobs to new jobs by engaging MOH, public healthcare clusters and various healthcare institutions. For example, the jobs in medical records departments in various healthcare institutions would be replaced by National Electronic Health Record (NEHR). Essentially, we need to engage the relevant stakeholders early to minimise disruption to employees’ livelihood. While we look at existing jobs at risk, it is equally important to identify future jobs to work out the skills and training required.

In addition, other support schemes, such as the Professional Conversion Programmes (PCPs), Career Support Programme and Work or Career Trial, would supplement the existing efforts in attracting local talents into the growing manpower demand in the healthcare industry. We need to find ways to shorten the PCP programmes and improve the quality and standards of healthcare professionals, especially for career switchers. In this aspect, we need to draw in the expertise and wisdom of the professional licensing body. It is critical for us to change so as to attract more locals into the healthcare profession.

It would also be worthwhile to conduct a study on the nearly 4,000 non-practising nurses to understand their reasons for exiting from this profession and what would make them return as a practising nurse. With the shift to community nursing and the focus on the Intermediate and Long-Term Care (ILTC) sector, we will need more nurses with the relevant skillsets and attributes. I would like to suggest three ways to embark on this.

First, provide opportunity for workers in other industries who are potentially in danger of retrenchment or whose industries are in the sunset industry. Work with the relevant stakeholders, licensing body, IHL and professional group to review the current training programme and provide them with bite-sized curriculum.

Two, invite non-practising nurses to return to nursing, especially in community nursing and the ILTC sector. Provide them with the specific skillsets required for community nursing and allow flexible work arrangements. Though the return-to-work programme has been fairly successful in healthcare, we can tweak it to make it more attractive for such groups of non-practising nurses who are mainly housewives.

Third, tap the mature workforce to create supporting roles, such as healthcare assistants or healthcare attendants. Provide training for them so they have the relevant skills. These are decent jobs that will allow our mature workers to join the healthcare sector.

Last but not least, I would like to put forward the idea of setting up a Healthcare Academy at the Tripartite level with the participation of relevant stakeholders. I mooted this suggestion at the last Budget debate. I would like to re-ignite this, especially after having gathered more ground feedback from various professional groups of workers and relevant stakeholders.

The two key objectives of the Healthcare Academy are: one, to provide enhanced skills training to all healthcare professionals identified in the Healthcare ITM; and two, to standardise the foundational core skills training for identified healthcare professionals, especially in the ILTC sector.

The verticals of the skillset training must be seen in parallel with the horizontals of the soft skillset. This is all the more important as we are seeing an increasing number of healthcare professionals bringing healthcare services to patients at home. As the home setting is an uncontrolled environment compared to a controlled hospital setting, we need to equip our healthcare professionals with the relevant skills to deal with unforeseen situations and in managing their emotional and mental well-being.

Let me now touch on the topic of Women at Work. As a society, we embrace inclusivity and, as corporations, we should embrace corporate social responsibility where human capital, regardless of gender, has to be nurtured and retained. I concur with Labour Member Desmond Choo that more can be done to help our young parents thrive in the new economy. It is particularly challenging for women who often have to juggle work and family commitments. I will be speaking mainly on family-friendly workplaces and the employment and employability of women.

Value the family behind every worker. The topic on family-friendly workplace has been a discussion point without much yield. The slow adoption of the Tripartite Standards on Flexi-work Arrangement is rather concerning. Singapore remains a rather conservative country when it comes to caring for and valuing the family that is behind every worker. The burden of caring for the young and elderly often fall on the shoulders of women. Companies in various sectors can do more to help female workers.

I would like to share a case where a nurse working in a healthcare setting had to give up her job because she was not granted flexible work arrangements as she had to look after her children. The relationship with her Reporting Officer (RO) became strained after her RO refused to grant her flexible work arrangement as she could not find any person to take up parts of her duties. She related her experience to the union but decided not to take it up with the human resource department as she did not want to cause any trouble. Sir, I shall speak in Tamil.

(In Tamil): [Please refer to Vernacular Speech.] At this juncture, I would like to share a case of a nurse whom I know working in a healthcare setting who had to give up her job because she was not granted flexible work arrangements as she had to look after her children. The relationship with her employer became bitter after her reporting officer refused to grant her flexible work arrangements as she could not find any other nurse to take up part of her duties. She related her experience to the union but decided not to take it up with the higher-ups as she did not want to cause any trouble.

(In English): Similarly, another female staff, who devoted most of her working life to one employer had requested for flexible work arrangements as she has to look after her school-going children and ailing mother-in-law. She, too, had had her request turned down.

What do these anecdotal stories tell us? While the top management of most companies are supportive of flexible work arrangements in principle, however, it does not seem that such support trickles down to every level within the organisation. Departments and supervisors do not know exactly how to implement flexible work arrangements successfully. They have KPIs to meet and, therefore, tend to take a hard stand with such requests. In both cases, they typically involve women who are burdened and who are financially strapped. These women will need support throughout their lifetime if they are not working or fall out of employment for such reasons.

On mandating the right to request for flexible work arrangements, I urge the Government to commission a study on the plight of these working women so as to better understand the issues faced by different industries. I agree there must be progressive efforts made to create awareness. There is also a pressing need for sharing best practices in a more pervasive manner. We must have a change agent, early adopter, amongst companies and industries that have successfully rolled out FWA to share with the rest of the sectors and be a catalyst for change. I also call upon the Government to consider mandating the right to request for flexible work arrangements if all efforts – I repeat – if all efforts to persuade employers in this aspect fail.

Time and tide wait for no man. Therefore, we must change before more women at child-bearing age fall out of employment. This will surely pose social problems as our population ages.

On caregiving leave. A young mother, whose child was admitted to hospital due to several bouts of epileptic attacks, had to take leave to care for her child. Her supervisor was unhappy that she took too many days of leave to care for her sick child. Having been bogged down with KPIs, such as waiting time, the supervisor gave the young mother an ultimatum to resign from the job if she failed to make other childcare arrangements. The young mother needed her job so that she could continue to support her family and her child’s medical expenses. She approached the union for help and managed to settle the issue amicably with the union’s intervention.

This brings me to my point about Government mandating caregiving leave. Not many employers are adopting such good practices where staff feel cared for and, in return, employers will get 100% loyalty and support from the staff when the company needs them during dire situations without counting hours worked. Generally, the behaviour of many staff will fall into the category of “good deeds beget good deeds”. As a developed country, while we are concerned about economic growth, it should not be at the expense of social needs.

About 50% of our population are women and, increasingly, men, too, are embracing caregiving roles. It is, hence, essential for the Government to look at this from a broader viewpoint.

The third issue which I would like to raise specifically for women is to mandate the allocation of lactation room in all new commercial buildings as well as industrial workplaces where offices are located. Can the Government consider calling on owners of the buildings to set aside a certain percentage of the gross floor area for lactation rooms, with some incentives given? For existing buildings, we should evaluate the possibility of creating space for this purpose. With lactation rooms, we are promoting breastfeeding and, inadvertently, branding the workplace as a baby-friendly workplace. We need the Government’s support in this area. Singapore has among the highest gestational diabetes rates globally. Women with gestational diabetes are up to seven times more likely to develop Type-2 diabetes. However, longer durations of breastfeeding showed a correlation with reduction in the risk of women developing Type-2 diabetes. Now, in Malay, Sir.

(In Malay): [Please refer to Vernacular Speech.] The third issue which I would like to raise specifically for women is to mandate the allocation of lactation rooms in all new commercial buildings, as well as industrial workplaces where offices are located. Can the Government consider calling on owners of the buildings to set aside a certain percentage of the gross floor area for a lactation room, as well as offering some incentives to building owners?

For existing buildings, we should evaluate and identify the possibility of creating a space for this purpose. By having lactation rooms, we are promoting the benefits of breastfeeding and, at the same time, branding such workplaces as workplaces that are conducive for female workers who are mothers with babies or infants.

We need the Government’s support on this issue. The rate of gestational diabetes mellitus in Singapore is among the highest in the world. Mothers with this condition are also seven times more likely to develop Type-2 diabetes. However, a longer period of breastfeeding showed a correlation with a reduction in the risk of women developing Type-2 diabetes.

(In English): We need companies to understand this. Studies have shown that a mother should breast feed her infant for the first six months and up to two years of the child's life for the benefit of the child and mother. With four months of maternity leave, mothers tend to give up breastfeeding and switch to baby formula because of the lack of lactation rooms at the workplace. We should not allow this to happen.

Currently, the WorkPro Work-Life Grant – Developmental Grant allows owners of post-1990 buildings to tap on the funding, capped at S$20,000, to put in publicly accessible lactation facilities. Office building owners, which have not used up the permissible gross floor area will be able to tap on the funding to put in place the facilities. However, the take-up rate is very slow. Can we do more to increase the take-up rate? Let us make Singapore a socially responsible society at all levels. Make every workplace a family-friendly workplace.

On women in the STEM or Science, Technology, Engineering and Mathematics industry. Lastly, the employment and employability of women, especially in the STEM industry is a major concern. With a shrinking workforce, the reliance on women to set foot in all industries becomes dire. I certainly would like to believe that there is no gender-specific or gender-biased industry at present in Singapore but more so the preference of women to be working in certain specific sectors. I urge the Government to do more to nurture the next generation of female students to be well-geared in STEM subjects and, at a later age, join the STEM industry. We must do all we can to change the mindset of parents, employers and workers. There is a growing need to grow the workforce in the STEM sector as future jobs are more likely to be generated in this sector.

While we embark on the Return-to-Work (RTW) Programme, especially for mature women, we need to be more targeted. I would like to suggest that we work on each of the 23 industry sectors to customise the approach of training and induction as well as work trial. Mentors are of great help in those identified professions as they can handhold the individual, providing them with confidence and assurance. There should be a longer work trial period for complex jobs. I hope the Government can do more for the Return-to-Work Programme so that it can be more pervasive. Let us embrace and employ "different strokes for different folks". Mr Speaker, Sir, with this, I conclude.

2.20 pm

Mr Ang Hin Kee (Ang Mo Kio): Mr Speaker, one of the major shifts mentioned in this year's Budget speech is new technologies. Indeed, among the 200,000 self-employed persons or freelancers, many operate by using new technologies that either disrupted traditional businesses or created new markets.

This new form of employment should not be confused with workers who have been wrongly classified. There are generally three types of self-employed persons: first group are those who chose this profession as the preferred choice; second group are those who chose it not as a preferred choice; and third, there may be those who may have been wrongly classified as freelancers.

In this last category, the workers may be deployed as freelancers at the workplace and not counted as the company's headcount. However, they report for work and comply with the company's guidelines which are no different from salaried employees. These companies may have infringed the Employment Act and should be flagged out to MOM for investigations. In fact, all allegations, including possible tax evasions by freelancers who under-declare income, should be made to the relevant authorities. This is the only responsible way of ensuring that the issues are properly dealt with. We should do all we can not to wedge a divide as to which self-employed file tax properly and who under-declare their income.

For hardworking cabbies, I hope we do not undermine their integrity by making unfounded, sweeping statements that they under-declare income or may have under-declared their income. On the contrary, Mr Speaker, Sir, we have been working with IRAS very closely to ensure that volunteer groups come into the taxi community to explain to the drivers how to file income tax returns and to do them properly. Fortunately, the majority of our self-employed persons ensure that they do the responsible thing and, in fact, we are glad that the majority of self-employed persons are in their preferred occupation.

Day to day, they face new platform intermediaries, such as Grab, IO Talents, Caregivers Asia, that are transforming the way businesses are run, making matching of services hassle-free. More consumers and self-employed persons now go to a common platform to find each other. For example, whether you need a cleaning service, photography service or chauffeured ride service.

Consumers now have easier access and more choices when it comes to selecting services. Freelancers, on the other hand, get to pitch and market their services to a bigger pool of prospective clients.

These intermediaries, however, are not obliged to perform the roles of an employer, such as making CPF contributions, or providing workplace insurance cover or medical leave for the freelancers. Some, however, do so voluntarily, contributing to the self-employed persons’ MediSave account or even providing insurance cover.

The majority do not do so. Instead, they can easily remove freelancers from their platforms, have huge control over payment and work arrangements, and freely set their own commission rates. Their impact will be more significant, now that the number of gig workers using such platforms may be increasing.

Mr Speaker, Sir, how do we ensure that the intermediaries are fair in their practices?

For example, before penalising or removing self-employed workers due to the fact that they receive poor service ratings from their customers, has there been enough thorough checks done to ensure that those allegations are properly investigated? Some freelancers shared with me that they are affected by delayed payment, unexpected cuts to the fees or the rates and changes in incentive payment at the last minute, without giving them due recognition and information ahead of time.

New technologies do bring dynamism to our economy. But with only vague and non-transparent guidelines, freelancers using such platforms are potentially at risk. As these intermediaries gain bigger market share, they also grow in power and, if left unchecked, they can dictate tougher terms over the self-employed persons and even consumers who use their platforms.

Having previously taken a light regulatory approach, perhaps it is more timely now for the Government agencies to review the operations of such platform intermediaries and consider getting them to take on more responsibilities. I hope to see more being done to support our self-employed persons.

Fortunately, there have been several good examples. A case in point is the Tripartite Standard on the procurement of services from media freelancers that was launched in November last year. This was jointly developed by Info-communications Media Development Authority with NTUC and stakeholders. It is an industry-specific Tripartite Standard that addresses the concerns of media freelancers.

Back in 2014, LTA, together with the National Taxi Association and taxi operators, also set up a mediation system to allow taxi drivers to resolve payment disputes with their taxi operators.

MOM also commissioned a survey on self-employed persons in 2016 to gather more information and understand their concerns. Following that survey, the Minister last year announced a Tripartite workgroup that was formed in March 2017 to study the issues faced by this group of workers. I was a member of this workgroup.

We have recently submitted our recommendations to the Minister and we look forward to more specific support and targeted assistance for self-employed persons. I will share more during the Committee of Supply when we debate on the MOM budget.

Mr Speaker, it suffices to say now that we need more support for self-employed persons, such as fair practices; a formalised structure for dispute resolution; workplace injury insurance; and also to ensure that all Industry Transformation Maps (ITMs) and SkillsFuture planning include self-employed persons into their thought process and their scheme of things so that self-employed persons can also access skills upgrading to stay relevant and future-ready.

Budget 2018 is a Budget that prepares us for the future. We should not underestimate the value that self-employed persons bring to the economy. I hope the support for self-employed persons can be widely adopted to help them sustain their career choice and thrive in this new economy. With that, Mr Speaker, I support the Budget.

2.27 pm

Mr Zainal Sapari (Pasir Ris-Punggol): Mr Speaker, thank you for giving me the opportunity to speak today on Singapore’s Budget 2018. My fellow Labour Members of Parliament have touched on various worker groups but we must not forget our more vulnerable low-wage workers. We must value their contributions, too. One of the core missions of every labour movement anywhere in the world is to look after its workers, particularly the more vulnerable workers in its midst. It is also a responsibility that our Government shoulders and commits to this mission in order to improve the livelihood of our people.

Low-wage workers will always be part of our labour landscape. Not by design but because there will always be those who form the lower tier in the income hierarchy. More importantly, the work they do forms an important part of our social fabric and contributes to our economy. Their struggles, hopes and aspirations give us reason to be their voice to pave a better future for them. Hence, for our Labour Movement, the Budget presents an opportunity for us to do good, do more and do right by them.

Indeed, I believe that with everyone's help – Government, union and employers – low-wage workers can have a sense of hope that their lives will be better year after year and, more importantly, that the future for their families and themselves are that much brighter.

To date, the efforts of the Labour Movement to help low-wage workers have paid off with the strong support provided by the Government and our Tripartite Partners. The long hours put in by policymakers, unions, companies and every one of us sitting here today have resulted in the implementation of many policies to better support and protect these workers’ wages and their employment rights.

Let me share some of these policies and initiatives.

The Progressive Wage Model (PWM) is one initiative that has improved the wages and skills of thousands of low-wage workers in the cleaning, security and landscape sectors. We believe that PWM has also caused a ripple effect that has led to the increase in wages of low-wage workers in other sectors as well. In fact, from 2012 to 2017, the wages of those in the 20th percentile have shown the largest increase. This has, hopefully, eased the ever-increasing cost of living for these workers.

Recently, the Tripartite Committees have made recommendations to have a built-in wage increase for workers in the cleaning and security sectors to ensure their real wages are not eroded by inflation or experience "down-waging" when their contracts are renewed.

Other schemes implemented over the years, such as Workfare Income Supplement (WIS), have also gone a fairly long way in making life easier for these low-wage workers. They have a better chance of bringing home higher salaries.

Under the Workfare Training Support Scheme, they also have better opportunities for upgrading their skills through available training programmes at heavily subsidised rates, giving them some confidence to be relevant to the workforce today.

Amendments to the Employment Act, such as requiring employers to issue pay slips and employment contracts, will go a long way to offer better protection to our vulnerable low-wage workers.

The road to improving the lives of low-wage workers cannot just end here. The sad reality is that many of the current lowest paying jobs in our country are held by elderly workers with little education and limited skills. During our engagement with our union leaders to arrow in on the plight of low-wage workers, the issue of ensuring workers' retirement adequacy, especially for low-wage workers, stood out prominently.

Of all the suggestions given on retirement adequacy for low-wage workers, there were some prominent ones that I would like to put up for the Government's consideration.

First, the union leaders felt strongly that it is about time for our Tripartite Partners to set up a committee to review the employer's CPF contribution for older workers. Currently, the employer's CPF contribution rate decreases progressively after the worker reaches 55 years of age.

The different CPF contribution rates tagged to different age bands were introduced in 1988 with good intentions to ensure our companies could remain competitive. However, the assumption to rationalise why older workers should have reduced employer's CPF contribution rates may no longer be valid today.

Many workers, regardless of their age, are already being paid based on the job value as we have moved away from a seniority-based wage structure. Moreover, given longer life expectancy, workers need to build on their retirement savings. There are also many who still need to service their mortgage loans, as well as take care of their aged parents who are living longer.

Hence, it may not be a bad idea to explore the possibility of working towards having one universal rate for employer's CPF contribution till the age of 65 years old. This would help workers build their retirement savings and would be especially beneficial for elderly low-wage workers.

It is also in our best interest to ensure that workers can meet their retirement sum as it would reduce the burden on social services in later years which would have to be shouldered by the current working population. Such a review would no doubt add cost for the companies, but I believe that we need to move away from the 1988 policy which has indirectly created a class of "cheaper, older" labour.

Employers must value our mature workers as an important resource who can still contribute to their businesses, especially in this tight labour market.

Secondly, the union leaders also call for Annual Wage Supplement (AWS) to be made mandatory for all workers. Many of us assume that all workers get the 13th-month bonus (AWS) at the end of the year. But the sad reality is that the very group that needs it the most is not receiving it.

Mandating AWS could bring about an increase of 8.3% to the salaries of low-wage workers ‒ and help reduce the widening income gap present in Singapore. I believe this 8.3% increase in salary will bring back much more than its worth in monetary value when it comes to making our vulnerable low-wage workers feel a sense of fairness, recognition and appreciation for the work they do. After all, this nation was also built on the backs of these toiling workers who had also played their part to pave the way for a better future ‒ a future that we, today, enjoy.

Third, the union leaders felt that more can be done to help low-wage workers cope with medical cost. The current provision of the Employment Act only requires employers to pay for the medical consultation fees when a worker sees a doctor for outpatient treatment.

Hence, the union leaders felt that the Tripartite Partners should consider amending the Employment Act to include better medical coverage for workers, by making employers pay for the full cost of non-chronic outpatient treatment at polyclinics or company-appointed clinics.

While a clear majority or 86% of employers do offer outpatient benefits beyond the required statutory requirements on a voluntary basis, it is the low-wage workers who are being hurt the most by the limited coverage under the Employment Act.

Mr Speaker, in this Budget, the Government is providing a lot of support for companies through all the various schemes and grants. Perhaps, the various Ministries may want to consider this as a leverage to incentivise companies to care more for their workers, particularly the low-wage workers. I am aware that the suggestions I am making may cause some pain not only to employers but also to us as final consumers. But, again, if there is no pain, there is no progress. Mr Speaker, please allow me to speak in Malay.

(In Malay): [Please refer to Vernacular Speech.] The rapidly changing current economic landscape and job situation can affect many workers. I am very concerned about the fate of low-wage workers who are mostly older and do not possess higher qualifications. Although many training opportunities have been made available to help them upgrade their skills, it is essential that the training is suitable to their age group and learning capabilities.

In order to ensure that low-wage workers have enough savings for their retirement, I would like to call on the Tripartite Partners to form a review committee on CPF to explore the possibility of having one universal rate for employer’s CPF contribution for all workers up to the age of 65 years old.

I would also like to suggest making the 13th month bonus or the Annual Wage Supplement mandatory, in order to boost the retirement savings of low-wage workers. Helping low-wage workers, by having employers pay for the costs of their outpatient treatment at polyclinics, can also relieve their burden.

(In English): In conclusion, in the past and also very recently, I have written several blogs to highlight the bread-and-butter issues of low-wage workers. I know that some of my entries might have caused some discomfort to some readers, particularly my most recent post entitled "Slavery of the poor". But there is nothing I would change about the message I intended to convey.

It was not a blog post I wanted people to scroll past, nor was it a post to exaggerate the struggles faced by these workers. It was a post that echoes the sentiments of our low-wage and elderly outsourced workers who exist in our society. These workers are real. Their families are real. The problems they face are real.

We must not fool ourselves to think that, as a society, we are doing enough in being fair to all our workers. While there are policies in place today to help our low-wage workers, many of them are still being taken advantage of. They struggle to make ends meet, let alone save for retirement, no matter how hard they work.

The stark realities faced by vulnerable workers do not have to persist year after year. We are not powerless to help them. We must have a bigger heart and mind to ease their livelihood. We must value their contributions and think more about them and less about us. Mr Speaker, I support the Budget.

2.39 pm

Mr Melvin Yong Yik Chye (Tanjong Pagar): Mr Speaker, Budget 2018 was presented as a strategic Budget that is meant to guide Singapore as we transit into the next decade. But while we continue in our quest to peer into the crystal ball and try to divine the future, we must not forget that the bedrock of our industries, present and future, are our workers.

My fellow Labour Members of Parliament have, in turn, argued for the various initiatives that the Government should embark on to enable workers to take on the jobs of the future – low-wage workers, high-age workers, middle-income, middle-aged workers, PMEs, including freelancers. They have also highlighted the value that each of our workers brings to the table. However, we will need a fit and healthy workforce in order to be able to take on these jobs in the first place.

Singapore is suffering from two worrying trends that will continue to have a profound impact on our labour force. First, we have a shrinking population. Our total fertility rate dipped to just 1.2 in 2016, despite having a relatively higher number of marriages and a slew of Government incentives to encourage parenthood. Second, we have a rapidly ageing population. A Business Times news report published late last year forecasted that 2018, this year, will see, for the first time in our history, the same percentage of those aged 65 years and above matching those younger than 15 years old.

Mr Speaker, if we place these two trends together, it becomes obvious that our labour force is set to shrink and each working adult will be expected to contribute more to support the older generation. Every worker is, therefore, a precious resource and we must value the life of each and every worker. As many of us spend most of our waking hours at the workplace, we need to do more in terms of workplace safety and health to keep our precious resource safe and healthy.

Let me first start with the need for safer workplaces. Earlier this month, the MOM reported that the number of workplace fatalities in 2017 had dropped to 42. This is the lowest figure in over a decade. This lowers our workplace fatality rate from 1.9 per 100,000 workers in 2014 to 1.2 in 2017. It is certainly encouraging to see that the sustained collective efforts by our Tripartite Partners to tackle workplace fatalities have borne some fruit.

However, every death is a tragedy and every accident is preventable. We must, and we should, do more to ensure that our workplaces are safer. One area that we can do better moving forward is to encourage better near-miss reporting, so that we can reduce the occurrence of accidents. While workplace fatalities have decreased in 2017, MOM’s report also showed that the number of workplace injury cases remains high. There were close to 12,500 workplace injury cases in 2017, with 574 workers sustaining serious injuries. This can be a worrying sign. Does it mean that the dip in fatal accidents was simply down to luck? A structured and well-participated near-miss reporting regime would help to better identify dangerous work conditions, and early interventions can help bring down the accident rate.

To make the next quantum leap in reducing workplace fatalities in the next decade, we will need bolder strategies to make Workplace Safety and Health (WSH) more pervasive in every workplace. During a recent Tripartite study visit to Finland, we learnt that Finland mandates that there must be one elected Occupational Safety and Health representative in workplaces where there are at least 10 employees working regularly. This has helped Finland achieve a workplace fatality rate of below 1.0 per 100,000 workers. Should Singapore, too, have a mandatory WSH officer in every company?

For a start, perhaps a more practical approach would be to make it compulsory for companies to appoint a WSH representative as part of the certification for BizSAFE Level 3. There is, currently, no such provision for companies applying for BizSAFE Level 3. For now, companies must appoint a Risk Management Champion (RMC) for BizSAFE Level 2. With proper training, the role of these RMCs can be expanded to serve as WSH representatives.

While it is important to have preventive measures to mitigate workplace injuries, it is also equally important to help workers return to work in the unfortunate event of an accident at the workplace. This is where we can do more to improve the Return-To-Work (RTW) Programme, which was recently started in November 2017. The RTW grant is currently restricted to Small and Medium Enterprises. To promote and deepen the RTW culture, the Government should consider extending the grant to large corporations, too. In the event an injured worker requires a change of employer and work scope due to a workplace accident, the current RTW grant does not cover vocational rehabilitation. The RTW grant should be extended to cover such cases.

Mr Speaker, much of our WSH efforts today focus on workplace safety. And "Health", as the final letter in "WSH", often gets neglected. Talks of occupational health issues, such as physical health and mental well-being, are often missing in our WSH conversations. But as our workforce ages faster than before, we will most certainly see more workplace health issues in the next decade. We must, therefore, act now.

Let me first start by talking about physical health. With many workers today doing desk-bound jobs and leading a sedentary lifestyle, it is important that we encourage regular exercise to prevent health problems, such as high cholesterol and high blood pressure, as we age. The Health Promotion Board (HPB) has a Healthy Workplace Ecosystem programme to encourage busy office workers to take part in physical activities and eat healthier options. To date, there are 30 participating Healthy Workplace Ecosystems. But more needs to be done to get more companies and employers on board to bring healthy lifestyle programmes to our workplaces.

It was announced recently that Singapore is one of the founding cities of the Active Citizens Worldwide project, which seeks to get people in cities to be more active. This is a good step forward and I encourage Sport Singapore to partner HPB to create more workplace healthy lifestyle programmes for our workers.

Of course, a big part of being healthy means eating healthy. As we continue in our war against diabetes, we must do more to help shape the eating habits of Singaporeans and lower the barriers to healthy eating. In many of my union visits, I have seen many staff canteens at the workplaces. A good place to start would be to encourage these staff canteens to sell healthier food. We check on what food and drinks are sold in school canteens to ensure that our children eat well in school. Perhaps it is time that we start a Healthy Canteen programme at our workplaces to ensure that there are healthier food options at our staff canteens.

One common complaint is that healthy food is often more expensive. To address that, the National Transport Workers' Union (NTWU), which operates 45 canteens islandwide, introduced brown rice at a subsidised rate. If you eat at our NTWU canteens, it is cheaper to buy brown rice than white rice. We also encourage our canteen operators to serve coffee and tea without sugar as the base drink. But if you want to add sugar, there is a sugar counter at the side. But of course, we also put up posters at the sugar counter to remind you of diabetes. So, please do not add too much sugar when you go to the sugar counter.

For individuals, one of the biggest push factors for them to embark on a healthy lifestyle comes from knowing their own health status. This is why health screenings are important. In a joint project with the HPB and our public transport operators, the union organised a free health screening for 1,000 of our bus captains, testing them for their blood pressure, blood sugar and cholesterol. Sadly, but not unexpected, 80% of the bus captains tested failed at least one of the three health indicators. And surprisingly, 80% of these bus captains who had issues with their health, were doing a health screening for their first time. What is heartening to note is that after going through a period of health coaching, a third of these bus captains managed to achieve a pass in all three health indicators after six months. This shows the importance of early detection and early intervention. I, therefore, urge all employers to make free annual health screening a norm in their staff welfare benefits.

The final big pillar of occupational health that is rarely broached in most of our WSH conversations is the issue of mental health. The stressors of everyday life can take a toll on even the most strong-willed individuals. Like physical health, we must focus our attention on the early detection and prevention of mental health issues. A study was recently launched by the Institute of Mental Health and the NUS School of Public Health to examine the association between physical health and mental health, with the results expected to be released in 2021. As we work on the major physical health pillars under the umbrella of occupational health, the benefits to mental health should also be examined in the coming years, as our workforce faces increasing stress, having to adapt constantly to the rapidly changing economy.

Mr Speaker, the foundation of our economy – past, present, and future – has always and will always be our workforce. Every worker is precious and more can be done to value the life of each and every worker. As we work on upskilling our workers and transitioning to the new economy, we must also not forget to ensure that we have safe workplaces and healthy workers. We should and must do more to provide safer workplaces and build an ecosystem for all our workers to stay healthy. With that, Mr Speaker, I support the Budget.

2.51 pm

Mr Seah Kian Peng (Marine Parade): Mr Speaker, Sir, I support Budget 2018. With the recent spike in en bloc activity and the general meteoric rise in asking prices of properties, what is the simplest way to make sure that such gains go towards the majority of Singaporeans, rather than the rich who buy and sell property? How do we ensure that we are able to stretch the value of every Budget dollar, every tax dollar, for all Singaporeans to lead better lives?

The stamp duty is a progressive, simple tax which allows the Government to reap about $400 million in tax revenues is just one such example. This is the sort of simple socialism which has informed Singapore policymaking since our Independence and still does much of the heavy lifting in the redistribution of wealth today. Our socialism is captured by one simple phrase ─ that all of us work together for the well-being of that individual Singaporean who needs help. There are two elements which I would like to speak on today that relates to this year’s Budget ─ the use of NIRC and the need for greater equality in Singapore today.

The heavy redistribution that our socialism demands takes place today, in the main, within one generation, that is, the rich of today are taxed to help the poor of today. There is also a sense in which the rich of today are taxed to help the poor of yesterday, that is, those a generation or two earlier than them. But by and large, our socialism does not leap over time. We make each generation pay its own way, as far as possible. This is the first characteristic of Singapore's socialism and that is why we resist the populist call to spend more of our NIRC.

Since 2008, we have seen an increasing reliance on the NIRC. This is, as we all now know, our number one source and contributor to our revenue base. My views and questions to our Finance Minister are as follows.

Is this sustainable? What if the investment climate takes a turn for the worse? Would we be able to continue to finance or do we need to draw down on some of our welfare programmes? And is it fair to deprive future generations of the wealth that they would have enjoyed had we allowed the interest to compound?

Since the 2008 amendment to our Constitution, we have taken a less conservative approach to the use of the income from our reserves. We have, since then, seen about 11 instances where the percentage of NIRC to be used has come up in Parliamentary debates. Members of Parliament from either side of the House have called for this percentage to be increased. Such an argument is, in a way, understandable because it is an easy and popular course of action.

Why keep saving? Why not start spending? I think our socialism commits us to raising the percentage at some point but we do not know when or by how much. That is to say, it does not commit us to holding steadfast to a certain percentage, only to a certain way of spending.

Which brings me to the second characteristic of our simple socialism – the striving towards a more equal society. I have spoken before about how complete equality is an impossibility because human beings are not widgets and we are irreducible into one another. What we can do, however, is to strive towards equality in basic human experiences – a safe home, a good and meaningful job, a chance for our children to prosper and find their purpose in life; to value each and every one of our Singaporeans and ensure that, for generations to come, they are able to build better lives in this garden city we call home.

And this means that we need to put flesh on what it means to have a collective destiny. This means we need to address the challenges of poverty, the lack of opportunity; we need to compensate for the poor luck that fate might have dealt on any Singaporean – whether an illness or an abusive spouse, or even with an addiction to gambling. As a society, we help those who are most vulnerable.

It may be true that Singapore as a whole is so affluent that a family with a five-figure income may still feel deprived and feel entitled to even more subsidies. Our simple socialism, however, requires us to address not just felt deprivation relative to others, but real social needs.

Let me tell you a story about a friend of mine, Peter. He is 52 years old and earns less than $2,700 a month. He has two boys: one in Primary school and the other a teenage – in Secondary school. His wife does not work.

He has an HDB flat, just $60,000 shy of full payment. But he has to pay the financial institution 4% in finance costs for his loan. This is very high, because the current housing loan interest is around 2%. He went to all the major banks to try and refinance but there were no takers because his is a 2-room flat and the amount is less than $100,000.

Peter had originally taken this private loan over an HDB loan because, at that point in time, the starting interest rate offered by the financial institution was 1.17% and the housing agent then had told him that it was a better deal. Of course, over time, the interest rate went up. Incidentally, I should add here that although I would consider Peter a savvy man about finance, it is well-known that the cognitive tax on the lower-income is higher.

When Peter tried to refinance with HDB, unfortunately it was not approved. Peter has never taken a loan from HDB but our current rules are such that if you have taken a housing loan from a bank, you will not be allowed to refinance your flat with a housing loan from HDB.

While I understand the need for some of our policies to follow the principles of efficiency of the market, our commitment to equality demands that we change this rule to bring about greater equality. The financial institution is a commercial profit-making entity, but I think HDB can perhaps take a different goal as its guiding objective.

I also understand that one cannot pick and choose; that if you enjoy low interest when the market is flushed with capital, you cannot decline when the rate is hiked. The choice is between stability and perhaps a slightly higher rate with HDB and the ups and downs of the private market. Or is it?

There is an easy way to break this false choice. We could, for example, allow a means-tested way to facilitate the shift of private loans back to HDB, especially when their interest rates are so high above HDB rates. To do so does not require us to incur more expenditure ─ it merely shifts the interest profits from the bank and puts half of this in Peter’s pocket and, the other half, in a sense, in the Government.

This, of course, may over simplify the process, and I do oversimplify the process. Of course, this shifting of loans will mean messier policy implementation. I merely sound this out as a possibility for the Ministers here to consider. It is something that will be of great help to some lower-income families, like Peter, struggling to pay the monthly loans they had taken with commercial financial institutions.

Second, Peter usually pays $40 a month for his boy's school bus. He also enjoys a few other benefits under the MOE financial assistance scheme ─ free text books, a waiver for fees and 50% subsidies for buses. He is very appreciative and grateful for all these help from the Government. This year, however, he has to pay $166.50 a month, and he has lost all the other benefits. Why? Because he earned $75 dollars a month too much last year due to overtime pay.

The means test is at $675 per capita a month ─ Peter came in at $750 a month. He won but he also lost.

Mr Speaker, Sir, this is not a man who has a maid or a car. This is a man who has bought health insurance for both his wife and his sons. In fact, he has planned carefully so that when he is 65, he can count on an endowment policy maturing. Peter ha,s in a way, planned, has prospered slowly and carefully. But he has also laboured under some rules that weigh a bit more heavily on him.

He pays more in interest than his rich neighbour – we can change this. He loses benefits by a whisker of overtime pay – we can change this, too. This requires a new way, possibly a whole-of-Government approach to dealing with such specific instances.

There is much that remains to be done in Singapore to make our society more equal. Our simple socialism demands that we make difficult choices. We must recognise that even relatively well-off people can have a legitimate experience of relative deprivation, when compared to the very wealthy. At the same time, we must see the need to allocate resources more urgently to men like Peter. It is only when we do not have enough to cater to men like Peter that I feel we should consider raising the percentage – not as a means of populist hot air balloon for everyone who demands a specious equality with their neighbour.

Herman Daly wrote that there should be a moral limit to growth. So too, should there be a moral limit to the consumptive nature of man.

In the 52 years since the founding of Singapore, our socialism has evolved, with our welfare net cast a lot wider and deeper than before. This is as it should be, as our resources and wealth have grown over time. At the same time, we must recognise that the NIRC is already called into service to a very large extent. In this, we ought to be more generous to men like Peter and find ever more ways in the name of equality and justice to bring him and his family along with us and ensure his two boys fight for a land they believe in. If we do, indeed, collectively care for his family, all for one, and value the contributions that they have contributed to this country; then, in return, they will feel that they are Singaporean and work for our collective future. Sir, I support Budget 2018.

3.02 pm

Mr Leon Perera (Non-Constituency Member): Mr Speaker, Sir, we live in interesting times. Of course, human beings in every era view their era as a time of modernity and change. But the era we are living through is seeing many fundamental economic and geopolitical changes to the post-World War II status quo, changes that are making the past a less and less reliable guide to the future, changes that underline ever more strongly that the strategies that brought us here today will not be the same ones that enable us to navigate successfully tomorrow.

The world is seeing the emergence of disruptive industries using new technology or new business models, like the sharing economy, industries that may reshape the economy – destroying old jobs and stodgy companies, but also creating new ones.

Geopolitical and economic weight is shifting towards Asia, particularly China, and to a lesser extent, India; while Japan and Korea remain major economies. Regional powers, including ASEAN, have the potential to carry much more weight.

Meanwhile, inequality, both within and between countries, is adding to the unpredictability, triggering political shifts like what happened in the US with the election of President Trump and, in the UK, with Brexit.

And climate change marches on, even as the world struggles to cope, using the Paris accords that the US abandoned.

The first broad point I would like to make in my speech is, while we pay special attention to Asia – and I agree that we should do this – as our home region and the world's fastest growing major economic region, let us not write off the West.

In spite of the structural issues faced by some western countries – which range from fiscal deficits and state debt to low productivity growth to inequality-fuelled populism and chronic crime in some cities – western countries still have unmatched soft power. In fields, such as R&D, entertainment, academia and information and communications technology (ICT), not to mention military technology and diplomatic clout, the West still leads the world, even if the size of that lead is diminishing.

We should ensure that our efforts to engage North America and Europe are well-maintained, so as to draw learnings and forge partnerships, whether in the public or private sector realms. We should not assume that Asia will continue to outgrow the West in a linear fashion. Some western countries have shown a tremendous resilience, an ability to rebound from setbacks. The recent victory of President Macron in France underlines that ability to self-correct and renew.

Next, Mr Speaker, Sir, I would like to talk about industry disruption but, specifically, in the context of Asia and, in particular, ASEAN.

The world economy is teeming with disruption, which both destroys and creates anew. Some emerging technologies and business models that are disrupting the world include big data analytics, the Internet of Things (iOT) which collects big data, artificial intelligence (AI) which is fed by big data, drones, autonomous vehicles, robotics including social robotics, 3D printing, virtual and augmented reality, cloud computing, crypto-currencies, genetic editing and renewable energy technologies like cutting-edge solar cells coupled with cutting-edge battery technology.

Many of these are coming together in interesting ways. For example, iOT could generate vast quantities of data for AI to work on so as to improve processes. And this is not even mentioning sharing economy industries like private car-hire, whose disruptive effect is already quite mature in some cities. As these technologies become increasingly mainstream, they will transform the economies of Asia. Indeed, that is already happening, in both mature and emerging Asian economies.

How can Singapore be relevant to this process of the unfolding of disruption in Asia? There are a number of ways.

Firstly, as a hub for R&D and localisation; secondly, as a test-bed to trial new products; thirdly, as a management headquarters for regional companies; fourthly, as a manufacturing base for high-tech, high-value added exports; fifthly, as a service export hub for things like analytics, professional and business services; and, lastly, as a financing centre.

Our economic agencies have, for a long time, conceived and implemented initiatives to help Singapore develop a role vis-à-vis the Asian region in these respects. These initiatives have helped to create and sustain many good-quality jobs and high value-added economic activities.

How could Singapore position itself to play such roles vis-à-vis the unfolding of disruptive industries in Asia?

For a start – and this is the second broad point in my speech – we could focus on ASEAN above all. I was glad to note some ASEAN-related initiatives in the Budget speech.

ASEAN has over 600 million people, about 8% of the world’s population. It is our region and our destiny is inextricably linked to its. It is also the region where our efforts to make Singapore’s economy relevant are pushing on an open door, given the vast size, presence of strong domestic industry players and market barriers that exist in other regions of Asia, such as China, India, Japan and Korea.

A Singapore that is deeply engaged and co-prospering with ASEAN will help ensure that ASEAN will be a fruitful intersection point between the great powers of China, India and Japan, rather than becoming in the future their battleground at some point in the decades to come.

How can Singapore be relevant to the rise of disruptive industries in ASEAN? The example of Grab may hold a lesson.

Grab is a Singapore-based firm, with Singapore being its largest R&D centre. Grab has embarked on growth initiatives in the region. Along the way, it launched a new business model in Indonesia which is uniquely suited to that vast market – motorcycle-hire, which competes with local firm GO-JEK and others. Today, Grab operates in over 50 cities across Indonesia. It also acquired Indonesian shopping app firm Kudo.

Mr Speaker, Sir, Singapore could be a hub for disruptive industry players as they plan and execute ASEAN-wide penetration strategies. As such, Singapore could host data centres, management teams, R&D labs, financing hubs and so on. Singapore could also produce and supply to the region the most advanced, high value-added and IP-sensitive components, materials and services. Singapore, with its multi-ethnic make-up, could also be a test-bed to trial products.

For a start – and this brings me to my third broad point – Singapore could galvanise our base of Autonomous Universities, think-tanks, private consultancies, research agencies and so on, to focus on mapping out the paths which disruption could take in ASEAN. At this point, I declare that I am the CEO of a research and consulting firm which operates in the Asia Pacific region and global emerging markets.

We could cultivate the soft power of working in a multi-disciplinary fashion to collect and analyse all relevant data on how disruptive industries could rise in ASEAN countries. ASEAN has 10 states of which only two have more than 15% of the total population, meaning it is a rather fragmented region, population-wise. Each ASEAN state has a different economic, business, financial, technology, governmental and cultural landscape. Such studies could indicate the alternative pathways down which disruptive industries could evolve in ASEAN countries – leading to outcomes like Grab and GO-JEK’s motorcycle private-hire in Indonesia.

My fourth point is that Singapore could consider suggesting a bold, visionary project that aims to transform the ASEAN region itself into a test-bed for innovation.

The thing about big projects is that they can serve to galvanise a people and boost the economy. President Kennedy’s goal of sending a man to the moon helped galvanise a massive scientific and organisational effort in the US. While the goal, by itself, served a symbolic, nationalistic purpose, along the way, it helped seed an aerospace industry in the US that has, over the decades, yielded many new technologies that US industry has made use of, like the business of launching commercial satellites today and the current US private sector space industry.

In Europe, 22 member countries have come together to create the European Space Agency (ESA) for researching and exploring space, which has registered 82 successful commercial satellite launches till 2018. The Europeans also established the world’s largest particle accelerator in 2008, the 27-km long Large Hadron Collider, as well as other particle accelerators in a complex known as CERN. CERN focuses on high-end physics research. More recently, CERN has become a pioneer in grid computing or distributed computing.

Mr Speaker, Sir, I am not suggesting that we launch an ASEAN space effort or particle collider and I hope my speech will not be caricaturised as calling for that. But the examples of NASA, ESA and CERN show us what ingredients can go into a bold project that has broad economic spin-off benefits.

We could propose a project that would enable Singapore to serve as a test-bed and hub as the project is rolled out across ASEAN. I know that it is never easy or fast to get things off the ground in ASEAN. But such a proposal could build on the precedents that have been set and the learning curve that has been gained from pioneering the ASEAN Innovation Network, the ASEAN Financial Information Network and the ASEAN Agreement on E-commerce.

Some ideas for such an ASEAN-wide initiative that Singapore could champion are as follows.

Firstly, an ASEAN autonomous vehicles initiative, some or all of which could be electric vehicles. Singapore could help to test-bed autonomous vehicles, pioneering the establishment and maintenance of refuelling stations as well as the associated regulatory framework. The financing for such an ASEAN-wide project could be raised in Singapore. The know-how and supply of parts and services for refuelling or, perhaps, I should say, recharging stations as well as manufacture of critical components for the vehicles could be undertaken in Singapore. One of Singapore’s core competencies seems to be design, project management and servicing of urban infrastructure, a point I have alluded to in earlier speeches in this House.

Secondly, we could propose an ASEAN urban solar panel initiative where Singapore test-beds new technologies for solar power generation in dense urban environments – I made a similar though not identical argument in this House in 2016. We could pioneer new technologies and processes in manufacturing, deployment and maintenance of solar panels.

For example, though it need not take this particular form, such an initiative could use perovskite technology, which some scientists believe has major advantages over traditional silicon-based solar cells. Some scientists hold that perovskite cells can generate more energy from sunlight on low-light days, which may be helpful, given Southeast Asia's weather patterns. Though there are also disadvantages of perovskite, like a greater susceptibility to temperature- and humidity-induced instability, which scientists are in the process of overcoming.

The point is Singapore could pioneer best practices in the manufacture, deployment and maintenance of solar panels in dense, urban environments in ASEAN's largely tropical weather conditions. These could be used as a model for deployment in major cities across ASEAN.

I offer these suggestions in the spirit of demonstrating the contours that a major ASEAN-wide initiative could take, without asserting that these are necessarily the only or best candidates for such an initiative.

Lastly, and in conclusion ‒ in moving away from the main theme of my speech, Sir ‒ I would like to pose two questions for the Minister for Finance.

Firstly, why the need to lower the tax exemption for start-ups now from 100% on the first $100,000 to 75%? Is there evidence that we have passed a certain threshold in terms of our effort to cultivate a vibrant start-up landscape? It would be helpful to understand the background to this change, coming at this time.

Secondly, the Minister for Finance did not mention the gig economy in his speech. Could he touch on how the Government views the gig economy and what would be the broad thrust of Government policy towards this sector?

3.17 pm

Mr Lee Yi Shyan (East Coast): Mr Speaker, Sir, on 13 February, The Straits Times headline reads: "China tourists top arrivals here, surpassing Indonesia". It went on to say: "The world's most populous country has become the biggest source of visitors to Singapore for the very first time, while its tourists remain the biggest spenders here".

With the rising affluence of its middle-class, Chinese outbound tourism is rising rapidly. In this Chinese New year alone, an estimated 6.5 million will leave China. This number will rise for a long time, given that only 5% of the Chinese population currently holds international passports, compared to 40% in the US.

In the broader context, China’s economic heft has been felt around the world. For instance, it became the largest trading partner to 120 countries in 2014. In 2015, it exported more capital than it received. HSBC projected that China's Belt and Road Initiative will further change the face of global trade, with 900 planned projects, $4 trillion of investments, $8 trillion of infrastructure and $2.5 trillion of trade annually. We are entering a new era of global economy, anchored by two juggernauts across the Pacific – China and the US ‒ which will be of the same size in economic terms by 2030.

For Singapore, we will have to make adjustments swiftly and decisively to leverage China’s rise. For a long period after WWII, the US, Western Europe and Japan were the main sources of capital and know-how. A good command of English connected us to the advanced economies. As a result, we industrialised and developed our workforce skills in a relatively short time.

Unlike the West, which is at least 12 hours' flight time away, the Chinese economy is merely 3.5 hours away. Such proximity gives us immediate access to the market. As China exports its capital to the region, Singapore will also benefit. Of course, this presumes we know how to add value in this two-way process.

In a 2016 Government survey, it was found that less than 35% of Singaporeans spoke Mandarin at home. While this percentage remained stable over the years, many observed that our standard of Applied Chinese had declined sharply. The same observation was also made of the usage of Malay at home. Is this trend good for Singapore? Perhaps, we could consider the comments from the Low brothers. Mr Speaker, Sir, in Mandarin please.

(In Mandarin): [Please refer to Vernacular Speech.] Lianhe Zaobao published an interview on 23 February titled "Worries for Singaporeans: the Loss of Hunger". It said: "China is growing ever stronger. The Low brothers were lucky enough to be able to board this gigantic ship sailing into the world. While working in China, they were amazed to see how fast China had progressed over the years. At the same time, they were worried for Singaporeans."

Low Er Wei said, "In the old days, when we went to China, we felt superior because we felt we were better educated, could speak English and lived in a good environment. The situation now is totally different. China is overtaking us in every aspect of life. Speaking English? There are many people who can speak English better than we can, not to mention Mandarin. We have lost the advantage we once possessed."

Low Mi Lun said frankly that when they first set up the company in China, they only wanted to employ Singaporeans because they felt the cost of communication would be low. However, in the past seven or eight years, the learning capability of the Chinese people has made a great leap. Compelled by tough competition, the Chinese people have demonstrated stunning learning abilities and surpassed Singaporeans very quickly.

Low Er Wei said: "Singaporeans find it increasingly difficult to adapt to local conditions. They are used to comfort and cannot take hardships. Now I don't want to hire Singaporeans at all. They are complacent and have become a stumbling block for progress. Furthermore, Singaporeans have been comfortable for too long and lost the sense of hunger. This is our biggest worry."

Low Mi Lun also lamented that, currently, there are still many Singaporeans who believed that they were great and even take pride in not being able to speak Chinese. He said, when you compare China with Singapore, you will see how differently people see and do things, showing up Singapore's weaknesses.

(In English): I do not know the two brothers. I thought they perhaps could have established a stronger link with Singapore. However, the Lows' rather forthright and uncomplimentary comments were rather similar to some of the feedback I received from Singaporean businessmen doing business in China. Their messages to me are: "China is developing faster than we care to know"; "Singapore faces very keen competition"; "Complacency will set us back"; and "We do not know what we do not know".

These blind spots, perceived or real, have serious implications for us in Singapore. It affects our ability to engage effectively with a fast-rising economy. Our ability to value-add as a knowledge-, investment- and trade-hub to the rising trade and investment flows in the region is not a given, and can be challenged or replaced.

In fact, the late Minister Mentor Lee Kuan Yew made this comment in his book "My Lifelong Challenge" more than 10 years ago: "While Singaporeans are more bilingual than before, we do not have enough who understand the Chinese at a deep enough level to deal effectively with them. Knowing the language is insufficient; it is equally important to know how the other side thinks and negotiates. The Suzhou Industrial Park project taught us this".

To shore up our shortcomings, I propose that the Government consider three broad measures.

One, to support the use of mother tongues outside classrooms and in the larger society. In Chinese, I will call it "活学活用, 学以致用". We have succeeded in adopting English as the lingua franca among all races. English is now established and a given. Our next phase of development will require us to level up our second language proficiency beyond a textbook subject to a live tool used in commerce and business.

Obviously, mastering Chinese will help us connect to its 1.3 billion population. Mastering Malay will help connect us with 300 million population in Southeast Asia. Likewise, Tamil for southern India.

At the strategic level, it is enhancing our ability to connect with the steadily growing markets of Asia. Being bilingual or trilingual has to be a key component of our overall competitiveness. Many successful small nations speak multiple languages and thrive. Some examples are Luxembourg, Switzerland and the Netherlands.

For a start, we should promote the use of mother tongues at Government service counters and public places. With programmable signboards, we can easily require multiple language displays without space constraints. Frequent practice in translation from English to our three other official languages, or even selected international languages at some places, will also help people broaden their mindset and promote inter-racial harmony. Our public sector will also make less, at times, embarrassing translation errors with constant practice.

In the public broadcast and media space, we should also encourage the correct use of mother tongues. Funding of Public Service Broadcast (PBS) should not be based on viewership alone. On the contrary, investing in good programming to promote correct language usage will multiply the effectiveness of our bilingual programmes in schools.

Two, encourage learning by immersion and internship (鼓励浸濡, 就地实习). For decades, we have sent our best and brightest students to the top universities in the west. This has helped us build up a pool of talents familiar with the West which is synonymous with entrepreneurial capital, advanced technology and know-how. Going forward, we need to systematically develop our pool of talents, both in public and private sectors, who would study and understand Chinese ways of doing things.

I would go further to suggest that our three G-to-G projects – Singapore Suzhou Industrial Park (SIP), Tianjin Eco-City and Chongqing Connectivity Initiative – offer ready platforms for our Public Service Leadership Officers for a meaningful period of internship and exchange. All multinationals I know make it a requirement for their top talents to have overseas tours of duty. There is no reason why we cannot know Shenzhen as well as we know the Bay Area, and Beijing as well as we know Boston.

Three, invest in infrastructure to access world news, business information and global affairs, especially business news from the region and China, 掌握资讯 帷幄千里.

While it is true that news consumption is mostly local, Singaporeans, as a people, must not suffer from a myopic view of the world. The more we know about the vastness of the world, the larger our ambition. The more we know about competition, the faster we run and make changes.

As a trading hub for centuries, Singapore thrives on making continual adjustments to external market signal stimuli. Staying open and connected to the world has become our lifeline. As soon as we turn inward and insular, we will stagnate and decline.

The question is: how can we read the world as it is, without subconscious "filtering" or "selective reading"? Could we create a media environment where our population watches the news, documentaries and business analyses as if we were part of some larger markets? Besides Channel NewsAsia, could we access Caixin Global, 财新传媒, Bloomberg or CNBC for free and on a daily basis? Our news source shapes our worldview and our biases. Could we invest more in our local media for analytical programming of China and the regional businesses to promote widespread learning?

Mr Speaker, Sir, what I have proposed might sound like a departure from a long-held policy on language use. But, in reality, they are, in essence, extensions of our bilingual policy beyond the classrooms into society. Constructing a multilingual environment can only be an advantage for Singapore. After 50 years of bilingual education, I think we are ready to introduce the next phase of language application.

Singapore will soon celebrate its 200 years of founding. In the past two centuries, Singapore raced ahead of the region to be an oasis of investments and trade. Now that the region has caught up, China has risen, we need to make continual and further adjustments to our strategy to sharpen our competitiveness. Being multilingual and deeply connected to the regional hinterlands must be our strategic priority. I support the Budget.

Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 3.50 pm.

Sitting accordingly suspended

at 3.30 pm until 3.50 pm.

Sitting resumed at 3.50 pm

[Mr Speaker in the Chair]

Debate on Annual Budget Statement

Debate resumed.

Mr Kok Heng Leun (Nominated Member): Thank you, Mr Speaker, for giving me this opportunity to speak. This is probably my last Budget speech. I thank Minister Heng for preparing a comprehensive Budget for the year ahead.

Mr Speaker, Sir, I was really appreciative when during his speech, the Minister for Finance said that "A strong economy is not an end in itself". Usually, the emphasis on "economy" and "economics" is so overwhelming. We hear it on the news, we talk about it with our colleagues, and even the Government tends to use economic benchmarks as a marker for Singapore's success.

But if "a strong economy is not an end in itself", then what is the end? Why work so hard to attain a strong, robust economy? The answer comes in the Minister's next line, which I quote: “It is a means to build a better home and provide a better quality of life for all our people.”

So, there is a certain social contract, forged between the people of Singapore and the Government. In this social contract, when the economy is strong, the fruits of our labour must be shared with everyone, so that we can all achieve a better quality of life.

Let me emphasise that point – it is for "all our people", not "some", not "a privileged group", not "our supporters". It is not conditional. As a nation, we progress with everyone hand in hand. We each have a role to play in society, in building our economy. Some provide capital, some contribute labour, some succeed and some fail. But, as we move ahead, no one should be left behind.

When we benefit from this system, we should give back to the society, to give a leg up to those who are less privileged. Our social contract recognises that we are all part of a larger whole. As such, we need to take care of those who fall between the cracks. Only then can we say, true to our pledge, that there is justice and equality.

Yet, the fact is, we are some ways away from achieving this ideal. We pride ourselves for building a "compassionate meritocracy", one which is kinder, more inclusive and more redistributive. If I may quote Deputy Prime Minister Tharman Shanmugaratnam's Budget Speech back in 2015, we seek to "complement a culture of personal effort and responsibility with stronger collective responsibility".

Yes, we hold meritocracy as an important tenet of the society. But our meritocracy rewards only those who have made achievements – those who have done well in school, those who have succeeded in their jobs. What about those who continue to fail in school? What about those who work two jobs and still cannot earn enough to feed their family?

There is no guarantee of equal opportunity when there is no guarantee of an equal starting point. There is no level playing field. Those who are better off can and will use their privilege to go to better schools, live in better neighbourhoods, get better internships and job opportunities. Where does that leave those who begin their journeys on more rocky ground? Those who cannot rise above their circumstances despite their hard work? Those who never achieve because the odds are perpetually stacked against them?

Let us not forget that privilege comes in myriad forms — socioeconomic status, family history, gender, race, class, sexual orientation, political affiliation and so on. How do we honour our social compact where meritocracy fails? Now is the time to examine our social compact, to see how meritocracy benefits or fails it.

What is the quality of life lower-income families have at the moment? They are squeezed in tiny rental flats. The children are deprived of privacy and a conducive environment to study. Some do not even have a meal to come home to after school. How do you tell these children that meritocracy will help them succeed?

There are various Government schemes which low-income families can qualify for based on their income level. Yet, these families bear a heavy burden on their shoulders. They worry that when they get salary increments they may no longer qualify for financial aid and other assistance. They worry that despite their hard work, their incomes do not match the increasing costs of living.

How do we tell them that our meritocratic system benefits them, when it does nothing to improve their current living conditions and, ironically, adds to their insecurity?

With our greying population, we also encounter more elderly people, particularly seniors who are alone and living in poverty. Some of them share a home with another elderly person because they cannot afford to buy their own property. Others may realise that escalating healthcare costs have to be financed by the sale of their greatest assets – their homes.

The sense of displacement that these seniors face can be extremely detrimental to their mental health. In some cases, they take on manual low-paying labour to make a living.

How do we explain to these senior citizens that despite all their years of work, they are now left on the margins, because they are simply not as productive or competitive as others? Have our social support structures been developed to cater for these seniors? Or do our meritocratic convictions in self-reliance and responsibility mean that they should find solutions to their own problems?

Currently, the Government has adopted the "many helping hands" approach to plug the gaps where Government schemes are less able to deliver. That is to say, funding and activation of manpower are provided for self-help community groups to address these areas. Encouraging community engagement and volunteerism is important. But we need to provide care and support in a sustained and meaningful way. More importantly, how can we provide assistance without making those who need help feel that they have to prove that “they have worked hard but not achieved enough and hence, is worthy of support?”

We have been inculcated with the values of meritocracy: hard work will be rewarded, self-reliance and personal achievement are key to our success. Have we also then made those who have failed to achieve believe in the narrative that it was because of personal failing that one cannot do better and accept this narrative that it is not a dignified existence? How then do we tell those who do not succeed by society’s standards that they have not failed? How do we tell them there should be no shame in seeking help? Or do we look at them, and say, "You are not working hard enough, so you do not deserve support"?

My point is that there are people in our midst who do not succeed despite their best efforts. Maybe they grew up in a poor household, unable to afford books, educational toys and enrichment classes. Maybe they grew up in a broken home, with little parental supervision, so they spend their days and nights at the playground. By the time these people go to school, by the time they leave school, by the time they enter the workforce, I do not have to say it. We know what the outcome is. For every one person who says, "I came from a poor upbringing but now I am a success", there are many others who did not succeed.

To use an analogy, we are, each of us, individual parts of a machine that has been working well in the course of our history. Each of us has a different function and capability. If this machine is successful, it is because of all the parts, not just the shiny parts, not just the big parts, not just the loud parts. Every single person plays a role in making an economy successful – from the CEOs to the coffeeshop cleaners, from the highly salaried to the hourly-paid labourers.

Let us not sweeten meritocracy by adding a descriptive word like "compassionate". While we want to uphold meritocracy to promote growth, we should also then look at systematic approaches to eradicate inequality, so that meritocracy can be more equitable, so that we can help achieve a better quality of life for all people.

How do we then achieve a better quality of life for all whilst we grapple with growing inequality? Is universal coverage of essential services to certain groups the answer to these problems? I believe it should be one amongst other options that Singaporeans should start considering and we should be having conversations on these, deeply.

We should not just ask what we want for ourselves. I hope this conversation will start with us looking around us. Looking at what, besides ourselves, is needed to bring a better quality of life, to all people.

The reserves we have accumulated belong to Singaporeans, especially when they are contributions from the older generations. We work hard now, hoping to save for the future. The Government has said that there will be more expenditure and even have plans for 100 years ahead. Where is the assurance that the hard work of Singaporeans will contribute to their well-being in the future?

This larger conversation must be one that involves all Singaporeans across all demographics of society. It should also be one that is open to difference. The different ethnic groups, the different religions and beliefs, the different genders, the different sexual orientations and the different political ideology. No one should feel or be made to feel left out.

This conversation must also not exclude foreigners. The construction workers who build our homes and roads, the domestic workers who tend to our children and seniors. Singapore has a diverse make-up. It is this diversity that enriches our humanity. It is this diversity that powers our innovation. When we support one another regardless of our differences, we all benefit by becoming collectively stronger.

This diversity is what will make or break Singapore. We are a land-scarce nation, with no natural resources. But what we do have is our people. We need to create a conducive space for them to be creative and innovative, for people to take risks and be applauded for failures as much as successes.

Innovation should not just happen in the workforce in the economy. We need to be innovative in life, in the social sector and in dealing with our social and political problems. To think critically, to ask the right questions, to break rules and challenge the status quo, if necessary. Do we have such an environment? Are we able to ask the hard questions?

Here, I would like to cite what Minister Ong Ye Kung shared in his keynote speech at the last Public Service Conference. I quote, "The main obstacle is ourselves – our organisation and all our entrenched processes, bureaucracy and a culture of being afraid to fail because all these years we have succeeded."

Indeed, our biggest stumbling blocks are ourselves. An innovative culture is one that does not shy away from asking difficult questions. Innovators often demonstrate different points of views from the conventional or the establishment. As a functioning democratic system, we need to safeguard spaces for such discourses, not only because we should respect differences, not only because it is politically expedient to do so, but because we can learn from differing views, widen our perspective and become stronger in the process.

Here, I would like to highlight the work of an important group of people, the NGOs and the activists on the ground. They have worked incredibly hard against all odds, over many years, to find means of addressing the plights of the less privileged or accepted groups of people amongst us – the poor, disabled, LGBT people, foreign workers, inmates facing the death penalty and so on. Some of them have been working at this for more than 30, 40 or 50 years. Sometimes, their work, while not in opposition to the Government, can confront the Government's position.

So, why do they do it? Are they agitators who are just concerned about themselves? No. They do this because they have the same vision that Minister Heng had mentioned: to "build a better home and provide for a better quality of life for our people". They raise issues to highlight hidden problems, make the invisible visible. They are concerned about solving problems and eradicating prejudice and injustice.

Activists by and large do not want to incite trouble. They do not want to be at loggerheads with the state. In fact, they want to get the state on their side, so that policies can be changed. They ask questions because they are patriotic. At the core of their activism lies the deep belief in achieving happiness, prosperity and progress for our nation, through a system that is just and equal to all.

Sometimes, when activists feel that they are not heard, they appeal for support from the public, hoping that the public will hear them out. This is what a functioning democracy is all about. Democracy is not just about votes and electorates, but a system that allows different groups of people to pose their questions and opinions, to start a discourse, hoping more people will be more aware of our social problems, get involved and make a difference.

This is patriotism. Patriotism is not always convenient or comfortable. Patriotism can sometimes come in the form of thorns in our sides. But patriotism comes from a good place and demands that we all do better – not only for ourselves, but for our fellowmen and, most importantly, for our country.

So, what then is the role of the Government in this? How can the state encourage constructive questioning?

This is where my experience as an artist comes in useful. Asking hard questions always begins with messiness. We first need to acknowledge the mess. Then, together, we wade through the messiness, sort things out and listen to different views. Soon, we will find and agree on one brilliant idea. But we need more than just one brilliant idea. We need many ideas, working together, serving as many people as possible.

Patriotism is not just about flag-waving and National Day celebrations; patriotism is not about the pursuit to be the best, the richest, the fastest, the smartest or the most advanced. There are many patriotic people like that in Singapore.

But this country also needs patriotic people of a different kind. Those who try to grapple with the increasing inequalities in our midst, those who are compassionate, innovative, fearless in their questioning. Those who embrace the mess. Those who want to improve our system for one and all Singaporeans.

And, lastly, I would like to appeal to this Government to participate in this dialogue; let yourself be a vulnerable observer, a vulnerable listener. Listen to the voices, to the stories and narratives by first acknowledging your vulnerability as a human being. Allow your values to be challenged, be confronted and to invest into the emotional truths of the activists and the underserved, before making judgement and proposing solutions. Only with vulnerable listening, then the policies formulated can be more humane, more just, more equal.

4.07 pm

Dr Tan Wu Meng (Jurong): Mr Speaker, growth still matters because it creates opportunities for young Singaporeans to rise; the means to maintain our defence and infrastructure; resources for fiscal redistribution – for the poor, the lost, the least – to build a more inclusive society.

And growth itself can shape inequality. As I shared two years ago in the Budget debate, "When a society is low on opportunity, it is the rent-seekers and owners of old capital who extract profits."

But how we grow also shapes how equal a society we become. For example, economist César Hidalgo at MIT has found that countries with higher economic complexity tend to have lower inequality. Some of this is because complex industries need skilled workers and supporting enterprises – which means the workers and SMEs have more stake in a more equitable economic structure. This also contrasts with less complex economies, simpler economies where the income distribution may follow the controlling interests of resource ownership – who owns an oil well, who owns farmland, who owns production facilities.

Another finding from Hidalgo's team is that when you study economic structure, you can see how the pattern of exports evolves over time – usually along what they call adjacencies, which means it diversifies towards products which are similar to the existing exports.

But what are the lessons for Singapore? Firstly, good quality growth can reduce income inequality. When you have a diverse economy, more paths for people to rise, more paths for workers and students to do well. Everyone building deep skills, everyone having a stake in the workplace, in industry and in the economy. Secondly, we can also see that, left to the market alone, the structure of an economy evolves bit by bit, stepwise along adjacencies – which means, to transform, there has to be bold efforts by industry and Government.

And Mr Speaker, we do need to transform. Because, today, all around, there is disruption and also opportunity.

So, how do we get ready for the next 50 years? Looking back, for two centuries, Singapore benefited from geography. Gateway – East and West. Trading port, trans-shipment hub, air hub.

But supply chains are being disrupted. Trade routes, many more point-to-point these days. Bespoke and distributed manufacturing 3-D printing where you can build parts next to where they are going to be assembled. In many Western countries, the mood is not so good about trade. And technology continues to disrupt jobs every day.

Furthermore, the very idea of economic geography is also being disrupted.

Digital data flow is going to create a parallel world economic order, a world economic order that is digital in parallel to existing geography – whether it is collaboration, competition or opportunity. Not just digitising today's businesses, but creating new business models. For example, if you look at life sciences: data science is what turned DNA sequencing into genomics and is what drives personalised medicine, helping patients around the world. E-commerce and retail are more than just going cashless. It is about knowing your customers even better than they know themselves. Artificial intelligence and the Internet of Things will change factories – assembly lines that adapt, maintenance that predicts what parts are going to fail and better quality control.

So, Mr Speaker, how do we ride the wave? We must ensure that Singapore has a strong position in this new digital economic world order. This means good external connectivity, good pipelines for data. That means when we spend on digital infrastructure, we must see it as an investment and not consumption – the same way we invest in the Tuas Port and growing Changi Airport.

Obvious next steps for a data hub include machine learning and artificial intelligence (AI). In 2015, the New York Times reported the US Federal Government spent US$1 billion on AI research. South Korea, a similar amount. China, even more. AI can empower many sectors: drug discovery, factory design, service innovation.

I propose that the Government invest in an AI technology hub, in the same way that we invested many years ago in building the Biopolis. Because there is strategic value in Singapore maintaining public-sector ownership in AI research, whether it is intellectual property or the insights.

Trust and rule of law still matter. So, we must maintain our reputation as a trusted jurisdiction for intellectual property and data protection. Because in the future, when someone sequences all three billion base pairs of his personal genome, who will they trust, where will they trust that data with? This means legislation that is up to date or even one step ahead.

It also means investing in better communication security because communication is being disrupted, too. Traditional public key encryption which your "https" and other forms of online secured socket layers depend on – all that presumes that factorising large numbers into individual prime numbers takes a long time, even with a fast computer. But quantum computing is promising to disrupt this, by doing that factorising faster than was thought possible. On the flip side, quantum-secured communications are also on the rise – sharing information such that eavesdropping can be detected.

So, can the Government tell us if we will continue funding research like what the NRF is doing at the Centre for Quantum Technologies? This may seem like "blue skies research", but I see some of this as what I call "blue ocean research" – practical applications and a big harvest for those who can catch the dividends early enough.

Mr Speaker, all these elements of a world-class digital data hub are already within our grasp. Firstly, it does not need much land, compared to traditional industry. Our fiscal position is better than many other developed economies.

So, the next step is to invest and converge investments, technology, talent, infrastructure, to create that critical mass of opportunities for Singaporeans and for Singapore.

Furthermore, by being a trusted, neutral party, a trusted first mover, we can establish common standards in ASEAN with our ASEAN partners, whether it is e-payments, data protection across jurisdictions and so on. Collaborating, learning from each other, working together.

We may be a little red dot, but we can help build an ecosystem of inter-operable systems to benefit all stakeholders in the region. You might even call it: "One dot, one web: One shining little red dot, one web of partnerships and networks". Mr Speaker, I would like to continue in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, Sir, today, the digital economy is developing rapidly. We should respond appropriately to the situation and prepare early so that we can become a world-class digital centre. We should increase investment in digital infrastructure and legislate in advance so that Singapore can sustain its reputation of being a safe and reliable hub, hence, becoming the top choice in the region for data storage. With this, Singapore can continuously increase its prestige and influence.

At the same time, Singapore should also take advantage of being a first mover and work with neighbouring countries to establish common standards in ASEAN and to establish an ecosystem of inter-operable systems.

You can call it One Dot, One Web: "One shining little red dot, One Web of partnerships and networks". Please allow me to continue in English.

(In English): The Government has a dual role: minimise risk, maximise opportunity. Both of these help prevent market failure.

When we minimise risk, we prevent a race to the bottom. But, if there is too much bureaucracy, too many administrative barriers, it gets in the way of people and businesses racing to the top.

So, today, more than ever, the Government can and must be an enabler of opportunity, innovation and growth. That means the speed of decision-making matters. We need to be fast and we need to be able to act fast, especially when speed matters because, in the private sector, in Industry 4.0, a "slow decision" is often the same as "no decision". And if there is "no decision", after a while, it becomes a "no" decision when people take their business and opportunities elsewhere.

Mr Speaker, our civil servants and Statutory Board staff work very hard and try their best. So, we must keep on finding ways to empower that Team Singapore to do even better. Can we be better at nurturing and promoting our own unicorns – start-ups that are valued at $1 billion or more? How can we be more competitive on this?

As a first step, I propose that we establish an expedited fast-track pathway, so that potential unicorns can quickly negotiate an initial public offering (IPO) in Singapore, especially if the IPO brings strategic value with the company, whether it is the valuation, stimulating the local ecosystem, or growing our national prestige, reputation and position.

Financial overheads matter. How easy is it for SMEs and start-ups to access credit and funding, especially during the early years of the so-called "valley of death", when many enterprises do not quite make it before taking flight? Can we reduce land cost and rental overheads for businesses? Land has to be priced appropriately, but we can be innovative as well.

I call upon the Government to diversify the approach to industrial-commercial land use and leasing. We can have a market for different kinds of leasing models. There is traditional upfront capital expenditure, but there can also be models with discounted upfront costs in return for profit sharing, or even some extent of equity ownership, and that equity could even be conventional or preferred stock. We can have a market of different models to see what works.

Mr Speaker, we also need to keep Singapore open to world-class talent. We must be a home – a home where the brightest talent of tomorrow will want to settle down and raise children in, while creating jobs, wealth and opportunities for Singaporeans. It starts upstream. Because when a bright young spark grows up in Singapore, there is that emotional attachment to the little red dot.

Sometimes, it is home ‒ home ties ‒ more than any financial incentive that decides whether a company founder keeps that Singapore footprint, even after the start-up goes regional or global.

Mr Speaker, let us look at Razer – world-class gaming hardware company. As disclosure, I should mention that I do use a Razer mouse. Razer, a world-class gaming hardware company bought THX, the audio company founded by George Lucas. Razer's founder, Tan Min-Liang, grew up in Singapore. If he had grown up elsewhere, we would have one fewer star in our constellation of entrepreneurs.

Mr Speaker, entrepreneurship is also about equality because when there is innovation and entrepreneurship together, it creates value, wealth and opportunities, not just for the owners, but the employees and the whole ecosystem.

But entrepreneurship is a skillset as well. The World Management Survey by John Van Reenen at the London School of Economics studied 12,000 organisations, 34 countries. They found that basic management skills account for large differences in productivity and output per worker.

But we also know that children from less well-off families do not get the same access to parental support, to parental experience of having run a business, to other forms of social capital. Fewer chances to learn how to run a business or get an apprenticeship at an SME through networks. Our school system can help bridge that gap.

So, I call upon the Government to study how we can nurture entrepreneurship and skills in our schools, how our education system can facilitate the sharing of skills, the sharing of experiences, so that young Singaporeans have a less steep learning curve on that journey to entrepreneurship because such skills should not just be the domain of those with prior experience or pre-existing social networks. This is another way we can reduce inequality, grow entrepreneurship, help young Singaporeans to rise up and do well.

Mr Speaker, once upon a time, when Independence was thrust upon us, we dared, as a matter of survival. Today, the economy is being transformed, many policies, many transformations. But beyond this Budget, we all must have the audacity to dream big. To dream big and boldly go where we can position ourselves to ride new trends and new journeys over the next 50 years. And so, I stand in support of this Budget.

4.24 pm

Mr Darryl David (Ang Mo Kio): Mr Speaker, Sir, this year's Budget is set against the backdrop of shifting global economic dynamics, emerging technologies and an ageing population. With these challenges in mind, the Budget has laid out specific initiatives targeted at ensuring that Singapore will continue to have a robust and vibrant economy, as well as a healthy stream of tax revenue that we could tap on to support our long-term social objectives. In this regard, this year's Budget is fiscally prudent, measured and well-balanced, with emphasis given to address both immediate concerns and long-term needs.

Two initiatives, in particular, have created much talk on the ground ─ the SG Bonus and the impending rise in GST. Some chatter has likened these two initiatives to the well-worn analogy of giving a chicken wing and taking back a chicken. While this analogy may draw a few chuckles, I think that it is a somewhat facile one.

[Deputy Speaker (Mr Charles Chong) in the Chair]

The Singapore Government has always been committed to sharing the fruits of the country’s development with Singaporeans and the SG Bonus is yet another instance of this commitment. Linking the SG Bonus with the proposed rise in GST, however, gives an inaccurate perception of a relationship between the two issues.

The adjustments in GST is important and necessary to help Singapore secure a robust tax revenue to support our future social spending. However, I believe that while the lower-income and middle-income group will pay more of this consumption tax when GST is eventually increased, the Government must continue its current policy, such that they receive a corresponding increase in tax transfers and subsidies, so that the increase in GST will result in a positive net transfer to this group.

As this proposed increase will not take place for a few years, I would like to now shift my focus to the present and to look at three specific aspects of the Budget in my speech.

First of all, a vibrant and innovative economy. Digital technologies have disrupted traditional business models, changed the ways business decisions are made and have transformed how goods and services are delivered and consumed. Many businesses are struggling to keep up with these transformative changes and it is crucial that our firms, especially our SMEs, develop digital capabilities and competencies to compete in this digital era.

The SMEs Go Digital programme has been a timely shot-in-the-arm to help our businesses ramp up their digital capabilities. This is especially important for our SMEs that might not have the same corporate resources and knowledge as MNCs to initiate large-scale upgrading and transformation. I hope that the scale of this programme can be ramped up to go beyond supporting the 650 companies that it is already benefiting.

While we help businesses transform, we also need to ensure that we have the talent base with the right skills to support that transformation. I believe that we need to focus on two areas: to up-skill and re-skill our workforce.

Firstly, we need to put in place a robust continuous education framework to benefit employees working in industries where jobs are increasingly being automated. These employees need to be up-skilled and re-skilled to take on technologically-enhanced roles so that they can continue to add value to their employers.

We also need to help employees who are displaced by technological changes and innovations to learn new skills. The Industry Transformation Maps (ITMs) have been developed to help 23 industries reinvent themselves. Can the Government use the ITMs to identify jobs that will be made obsolete and redundant in these industries and help employees in those jobs transit into new roles in other sectors where demand for manpower is growing?

As Singapore moves into its next phase of growth, we must ensure that we have the right mix of human capital to support that growth. The development of human capital is imperative and should also be done in tandem with the development of digital skills.

The second area is to focus on the benefits for families in the area of education. As an educator, I strongly believe that education is an important leveller that enables social mobility. While the increase in Edusave contributions will benefit all students, it would also be ideal if we could provide targeted help in larger quantums to those in our community who need an additional leg-up. For example, can we consider an enhanced financial assistance scheme where there are different tiers of Edusave grants and top-ups, depending on family income?

Other initiatives that we could consider would include making student care more accessible and affordable by giving higher levels of subsidies to lower-income families and prioritising student care services for children of single working-parents because these families typically do not have the same level of social support that dual-parent families have.

The final area I would like to focus on is that of the enhanced Proximity Housing Grant (PHG) designed to benefit families. I welcome the different enhancements that the Budget has made to the PHG. I believe that these enhancements will, in the long run, promote family ties and encourage family members to live near one another.

Having an extended family living close to one another will provide a much-needed social support network. This is especially important in Singapore’s ageing society where dual-income families are norms rather than exceptions. As such, grandparents are great sources of support for grandchildren when parents are out at work and the daily interaction between grandchildren and grandparents are wonderful ways to keep the elderly mentally and physically active and engaged.

Singles, too, can also play their part in an extended family network. One of the new initiatives in the PHG is the introduction of the $10,000 subsidy for singles who are buying resale flats to live near their parents. While this will no doubt encourage singles to live in proximity to their parents, the impact of the subsidy on actual purchases will be different, depending on the differing prices of the estate where the parents live.

For example, someone whose parents live in a mature estate could expect to pay a lot more for a basic flat to live near their parents, as compared to someone who is buying an equivalent flat to live near their parents in a non-mature estate. The difference could be in the tens of thousands, which is quite substantial for a single individual.

Instead of a fixed amount, could the Government consider having a PHG that is based on the percentage of the selling price of the resale flat, subject to a minimum of the original base of $10,000 and a maximum ceiling? This would be helpful for those who have little choice but to buy flats in more mature estates because their parents happen to be living in those estates. Ideally, this principle can eventually be applied to other proximity-based housing grants as well in the future.

Mr Deputy Speaker, Sir, the unexpected Budget surplus that we have this year is exceptional and we must not assume that we will have a surplus of this quantum again. Indeed, the next decade will see Singapore undertake several major projects to upgrade our healthcare systems, transportation network, infrastructure and to beef up various aspects of our security.

I understand that the only way for us to ensure that we do not overly burden our future generation is to ensure that we have a fiscally sustainable and prudent Budget now. Having said that, it is important that the Government also remembers to temper any future tax increases with the appropriate measures and schemes to help those who need assistance and help when that day comes.

With that, Mr Deputy Speaker, I conclude my speech in support of the Budget.

4.32 pm

Mr Kwek Hian Chuan Henry (Nee Soon): Mr Deputy Speaker, I rise in support of the Budget.

I would like to talk about shifting our youths' mindset towards ASEAN. But before that, I would like to make three brief points about the Budget.

One, we must be wary about dipping more into our reserve income. We can argue about the precise percentage of NIRC to use, but the important thing is we must continue to grow our reserves. If our reserves do not grow, it may not continue to anchor the stability of our growing economy. As a small city-state, Singapore has been described as a small boat in a large ocean. During the last big storm, the 2008 Global Financial Crisis, our reserves served as an anchor, thereby providing us with much-needed stability.

Recently, some have commented that our reserves have already gotten too much and we can afford to spend a little bit more of our reserve income. However, I feel that many commentators did not talk about the fact that Singapore's economy is still growing and we are actually a small ship that is continuing to grow in size.

With geographical uncertainty and the rolling back of financial regulations in US, the only certainty is that bigger and larger financial storms will eventually come to our shores. So, if our reserves fail to keep up with our growing economy, maybe not at the next crisis, but a few crises down the road, our reserves may not be of a sufficient size to anchor the bigger Singapore economy then. And if Singapore flounders, who will save us? The International Monetary Fund (IMF) or World Bank? Even if they do, at what cost, especially for the average Singaporean? Therefore, we must be wary of the serious implications of not growing our reserves.

My second point is that our Government must actively help our seniors to monetise their assets to pay for their retirement. Because retirees have no income, they are more impacted by the GST, compared to other Singaporeans. Some retirees, even those living in private estates, are asset-rich and cash-poor. To help them manage the cost of living, I hope our Government can help put some urgency in helping them monetise their assets. I have spoken about this issue in depth during the recent February Parliamentary Motion on "Support for Senior Citizens". Therefore, I hope the Government can continue to actively ensure that such options exist in Singapore, either through reverse mortgage of larger flats in private estates, or through specialised reverse mortgage funds like those done in France.

Third, I hope we can all recognise that ITMs are a long-term economic transformation plan and not push for immediate results, especially in terms of economic output numbers. Recently, some commentators have spoken about the effectiveness of the ITMs. I would like to point out that any major economic transformation needs at least three to five years before it is fully illustrated and flows into the economic numbers, especially economic output numbers.

Let me illustrate. For example, the Government can launch a new programme to encourage businesses to use Artificial Intelligence in, let us say, year one. Major businesses, with their budgetary process, will need up to a year to make major shifts to take advantage of that programme. The efforts of the business will also take time to impact the bottom line.

After the bottom line is made, it would still take many more months, even one to two years, before the improvements are reflected in any company’s audited accounts. And then, more time is needed before the numbers are finally submitted to ACRA and to our Department of Statistics. That is why we need three to five years before we can fully comment on the effectiveness of programmes, in terms of economic output numbers – whether it is GDP, Value Added per worker or productivity numbers.

In the meantime, I feel that our debate should focus on input indicators of economic transformation, by which I mean the quality and the accessibility of transformation programmes for our businesses and workers. And let us not get fixed on immediate economic output numbers.

Let me now touch on my main point on the speech today, which is getting Singaporeans to "think ASEAN". I agree with Minister Heng that Singapore should be a Global-Asia Node of technology, innovation and enterprise. By and large, I think we are making good progress. However, I think we can do more to tap a rising ASEAN.

I am glad that our economic policies are keeping up with a rising ASEAN. Beyond the ASEAN Economic Community (AEC), we are also setting up the Infrastructure Office, which is contributing to more infrastructure development within ASEAN. We are expanding our Global Innovative Alliance into ASEAN's Innovation Network and we are pushing for the creation of an ASEAN e-Commerce platform.

Beyond the announced measures, I would like to further suggest, as ASEAN Chair this year, that Singapore encourage other major ASEAN economies to increase funding for the ASEAN Secretariat. A stronger secretariat will improve ASEAN's ability to track and execute various commitments, so as to unlock the full potential of agreed measures.

For example, a stronger secretariat will be able to help us better coordinate action in response to non-tariff protectionist measures within the AEC. I am also heartened to see the strengthening of talent development programmes. This includes Professional Conversion Programme (PCP) for Southeast Asian Ready Talent, SkillsFuture ASEAN Leadership Programme, GOASEAN Award, Young Talent Programme, and Infrastructure Development Internship. I hope that should these programmes prove successful, the Government can quickly scale them up.

The creation of Enterprise Singapore, as well as the rollout of more programmes to support companies to internationalise, will strengthen our efforts. However, I feel that much more work is needed for Singaporeans to "Think ASEAN".

Today, there is a dichotomy between the tremendous opportunities offered by ASEAN and the perception of ASEAN by everyday Singaporeans. Many Singaporeans I speak to, associate our neighbouring countries with affordable holiday destinations or places where we go abroad to do community service.

In fact, many Singaporeans assume that many parts of ASEAN are backward regions and will stay so for a long time. But many parts of ASEAN are growing quickly, and these assumptions are no longer true. As such, it is very important for us to change the mindset, especially among our youths. After all, while our Government and our companies are more involved in ASEAN, the full benefits can truly be realised if our Singaporeans are personally involved in the opportunities.

So, I would like to propose five ways we can encourage our people, especially our youths and PMETS, to see the possibilities in ASEAN.

One, we could shift the balance of tertiary education internships, study trips and exchange programmes towards developing countries, especially ASEAN. And when they go abroad, we should ensure that our youths see the bright spots and centre of innovations within ASEAN.

Two, we can promote exchanges between student leaders. As a young Singaporean studying in the US many years ago, I was deeply involved in the largest student leader exchange between the US and China. That allowed me to understand that lifelong friendships can be forged over time, if the programme is executed well. There is scope to do such a programme, linking the future leaders of Singapore with those of our neighbouring ASEAN countries.

Three, we should encourage more interactions between our students and officials from ASEAN countries who are currently studying in Singapore. Today, many ASEAN officials spend short training stints in Singapore and they are here because they are slated for greater things back in their home country. Therefore, there is scope for us to network our students with them, so that we can benefit from their in-depth insights that are not frequently covered publicly.

Four, we should encourage the teaching of ASEAN-specific knowledge. By that, I mean getting our tertiary institutions to teach ASEAN languages, business cultures and political culture through both formal courses and guest speaker series.

Singapore has deep expertise in the region through many excellent institutions, such as the Lee Kuan Yew School of Public Policy, Rajaratnam School of International Studies (RSIS), Asia Competitiveness Institute (ACI) and Institute of Southeast Asian Studies (ISEAS). We also have multilateral institutes, such as World Bank, which has a deep presence in Singapore. Our leading bankers, lawyers and management consultants have tremendous experience working in ASEAN. Therefore, we can tap on these institutions and our experts to open up courses and talks to our students and young entrepreneurs.

My last recommendation is to create an annual Business ASEAN conference, much like the successful Business China Conference series, which put an annual spotlight on the exciting developments in ASEAN.

The goal of all of these is to get our people to "Think ASEAN". If we can use our year as ASEAN Chair to start this mindset shift, the opportunities for Singapore and Singaporeans will naturally follow. With that, Mr Deputy Speaker, I support the Budget.

Mr Deputy Speaker: Ms Sylvia Lim, not present. All right, Mr Chong Kee Hiong.

4.43 pm

Mr Chong Kee Hiong (Bishan-Toa Payoh): Mr Deputy Speaker, Sir, this is a well-considered and strategic Budget which positions Singapore for the medium and long term.

I am in agreement with the Budget, which has been carefully calibrated and aligned with our key goals. While we enable innovation and support our enterprises to seize future opportunities, we are also preparing to deal with increasing expenditures in healthcare, national security and infrastructure.

Indeed, as the Minister had emphasised, we are at a transition point which will present unprecedented opportunities and challenges. Some hard choices, such as raising the GST, will have to be made to ensure that we stay in the black and continue to build up our fiscal fitness. Mr Deputy Speaker, Sir, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] The Minister for Finance has announced that the GST will have to be raised in the next few years. GST is one of our key sources of revenue. This advance notice will help investors, businesses and residents to plan expected expenditures.

The Minister has mentioned that the exact timing of the increase has not been confirmed and will depend on the state of our economy, our future expenditures and the revenue from existing taxes. Is the Government considering the possibility of postponing the GST increase beyond the projected timeframe if our future economic performance is better than expected?

The GST was introduced in 1994 at the rate of 3%. It was increased nine years later in 2003 to 4% and, subsequently, in quick succession, to 5% the next year in 2004 and 7% another three years later in 2007. It will be over 10 years by the time it will be raised again. Under what circumstances can the Government use other combinations of income instruments to replace the tax contribution from the GST increase?

Also, what is the expected GDP contribution arising from the large-scale infrastructure projects, such as Changi Airport Terminal 5, Tuas mega port and the Kuala Lumpur-Singapore High Speed Rail (HSR)? How would these go to reduce our reliance on future GST increases?

In addition, will the Government consider a cap on the proportion of GST contribution to total revenue, since there will be future returns on investments made with our current reserves and the infrastructure investments we are embarking on?

We also have to consider if we should set a ceiling on our GST rate in the future. For now, even after increasing it to 9%, our GST is at the low end of the spectrum, compared to many other developed countries. European countries’ GST or Value-Added Tax (VAT) is between 10% and 20%. The standard rates in Denmark and Sweden are 25%. While Denmark's VAT is set at one rate, other countries, such as Sweden, Germany and France, have reduced rates applied to essential goods, such as food. I agree with our Government’s decision to keep our GST at one flat rate to minimise administrative and compliance costs. However, going forward, should our GST continue to increase, we should review and examine other GST models with lower rates on essential goods and services to reduce the burden on the lower-income groups.

In planning for GST increases, we have to take into account both the pace of wage increases that can be attained and the projected inflation rate, so as to reduce the impact of the increase in the cost of living on our citizens.

(In English): I am heartened to note that our labour productivity grew 4.5% last year, a seven-year high. We must continue our investments in innovation and our efforts in structural reforms to boost productivity growth for the long term. Wage increases and productivity gains must grow in tandem. Does the Ministry have details of how much of the wage increases in the past year can be attributed to the 4.5% increase in productivity?

I fully support the decision to extend the Wage Credit Scheme which co-funds salary increases for Singaporean employees, up to a gross monthly wage of $4,000. The scheme aims to encourage employers to share productivity gains with staff. The gradual reduction in co-funding by the Government, from 20% this year to 10% in 2020, will ease cost pressures on companies while they undergo transformation to raise productivity.

Another important scheme is the Progressive Wage Model (PWM). I hope the Government will consider expanding this productivity-based wage progression pathway to sectors beyond cleaning, security and landscape sectors. Doing so will help the low-wage workers in other sectors who are vulnerable and not equipped to negotiate for training, upgrading, better or more productive work designs.

Next, the plan to both save and borrow for future infrastructural projects is a sound one. I agree that the plan to borrow by our Statutory Boards and Government-owned companies involved in infrastructure will achieve twin benefits. Firstly, spreading out the costs to better match the timing of the accrual of investment benefits; and secondly, developing our bond market.

Providing Government guarantees backed by our reserves would certainly kill two birds with one stone – providing assurance to investors while preserving our reserves to generate future returns. How will the Government decide which entities and projects will receive these guarantees, the amounts and the timeframes for repayments? In addition, will there be a cap on the total amount of guarantees to be provided?

As infrastructure projects are supposed to be utilised well into the future, it is important to also apply our vision of building a Smart, Green and Liveable City on such projects as they will certainly impact how we live, work and play.

I would like to suggest that we consider designating a proportion of the borrowings for such projects to be in Green Bonds issuance which, in turn, supports the Monetary Authority of Singapore's initiative to grow the green bond market in Singapore. This would help develop a green bond market of a significant size and add to the vibrancy of the bond market with greater variety of products attracting different investors.

Finally, I would like to ask the Minister about the necessity of growing our Ministries' Budgets at 0.3 times gross domestic product (GDP) growth. Is it necessary to expand Budgets every year, as long as they are pegged to inflation rates? Is it not possible for each Ministry to continue its operations within the allocated Budget to strive for cost-effectiveness through work design improvements and taking advantage of technological innovations? Instead of pegging departments' budgets to GDP growth, it may be better to review and justify investments and expenditures annually, even in years when there is GDP growth. I would like to conclude with my support for the Budget.

4.52 pm

Er Dr Lee Bee Wah (Nee Soon): Mr Deputy Speaker, Sir, I thank the Minister for this strategic Budget plan, which is a practical and far-sighted approach at preparing Singapore to continue to do well in the future. Young Singaporeans, in particular, will be excited about building their careers, businesses, fulfilling their dreams in the innovative and vibrant economy which the Minister is planning for. A greener and cleaner living environment will certainly be a significant boost to our living standards. In the face of increasing costs of living and a challenging economy, I am heartened that the Government plans to set aside more resources for those in need. This is a Budget that is forward-looking and filled with optimism. Let me start by discussing some of the plans in relation to the economy.

I share the Minister's opinion that regional and international partnerships will certainly help to open doors to new opportunities. I am pleased to see that he is implementing some schemes to achieve this. Collaborations on infrastructure development is good news for our construction industry, that is, if there are plans to have local engineering and other consultants as well as construction firms to be actively involved. I note that an Infrastructure Office will be established to bring together local and international firms from across the value chain. I would like to ask the Minister: who will this Office serve – Government-linked companies? Temasek-linked companies like Surbana Jurong? Or our private sector? How will local consultants and contractors benefit?

Next, even before the Budget, the Government has shared plans to transform industries through the development of Industry Transformation Maps (ITMs). These are aimed at addressing issues within each industry and fostering deeper partnerships between the Government, firms, industries, trade associations and chambers. This is good in principle, but implementation would not be so straightforward, given that every industry, every business, every individual has different levels of expectations and commitment. Communication and engagement between the different bodies will always pose challenges. It is unrealistic to put together a plan on paper and expect everybody to go through with it and resolve the problems by themselves. Thus, I propose there should be a full-time secretariat for each industry's ITM, to visit the trade associations and speak with the ground, to help resolve differences and administrative issues and ensure that each partnership is as effective and efficient as possible.

SkillsFuture will remain a crucial component to help Singaporeans adjust and adapt to the Future Economy. Thus far, those who have utilised their SkillsFuture credits have found the scheme to be encouraging and, more importantly, they have gained useful skills that will help them in their careers, or even just to enrich their lives and learn something new. I hope the Government will consider investing more resources in SkillsFuture, such as giving more credits to those who have already used theirs.

I would now like to move on to social issues. First of all, housing, an integral part of our lives and an asset that supposedly gives us financial security in old age. I am disappointed that there is no new commitment to a Home Improvement Programme for HDB flats built after 1986. Some of these flats are now at least 30 years old and prone to defects and safety issues. Can the Minister share future plans for HIP for ageing flats?

Nee Soon South is in a very unique situation. Half of my flats are built in 1986 and the other half in 1987. So, half are enjoying the HIP while the other half are still waiting, 还痴痴地在等.

I am also concerned about those who have a house but are cash-tight and have little options to right size. This is becoming increasingly common in the older private estates, where the land lease is expiring and it is difficult to sell their house. There are also people who live in older HDB flats with a lease of less than 60 years and they find it very challenging to sell their flats. This is not about monetising the house but getting some money from the sales to cover the cost for the next house. As more housing estates start to age, this problem will become more rampant. While there is Silver Housing Scheme (SHS) for residents who are 55 years old and above, this scheme requires most of the proceeds to be topped up into the CPF and may not meet the needs of all elderly. How does the Government intend to address these issues?

Next, I would like to ask how the decision to raise the Buyer's Stamp Duty for residential properties above $1 million was derived. What were the factors that were taken into consideration? The perception from the public is that this is just an exercise to take a cut from all the en bloc homeowners. It is likely that these en bloc owners have to buy another apartment to move to and they will end up being penalised if they buy above $1 million.

Rising living costs and inflation are persistent concerns for every country. During my interaction with residents, by and large, residents understand the need for the Government to raise the GST. However, they worry about businesses profiteering by raising prices excessively and, in some cases, in advance. Back when it was announced that prices of water would be increased, residents said some businesses took the opportunity to raise prices even before the increase kicked in. I hope the Government can look into a taskforce to ensure commercial entities do not use the GST increase as an excuse to exploit consumers.

The Government is enhancing various financial support and grants which would help mitigate the GST increase in some ways. I would like to propose that when deciding on the income eligibility of applicants, we do not be so fixated on the applicant’s household income. An applicant may have obtained a new job or wage increase which results in disqualification from a scheme, but he or she may have only obtained that income increase recently and still has many outstanding bills to pay off.

I think we should also look at other criteria, such as minimum working period. Ultimately, we do not want to end up penalising people for getting a job or a better paying one. Our end-goal is to ensure that children in these low-income families have a conducive environment where they can focus on their studies and self-development without being affected by their parents’ worries. Beneficiaries should thus be encouraged to find better means to support their family and not feel worried that they will be cut off from much-needed financial support once they do so. Mr Deputy Speaker, Sir, Malay, please.

(In Malay): [Please refer to Vernacular Speech.] The Government has just recently announced that the GST increase will be implemented between 2021 and 2025, but I am concerned that businesses will take the opportunity to increase prices in advance and engage in profiteering. This happened last year when the water price increases were announced. I hope that the Government can monitor this situation to ensure that commercial entities do not use the GST increases as an excuse to exploit consumers.

The Government will also increase various financial support and assistance, which can help mitigate the impact of the GST increase.

I would like to suggest that Government agencies be more compassionate when assessing applications for assistance. Please do not use household income solely as the benchmark, because our fixation on the household income resulted in some applicants becoming ineligible. For example, a person who may have just obtained a new job or wage increase could become ineligible.

But we should look deeper whether the person has to settle any outstanding bills that came about when the person was retrenched. I propose that, apart from the household income, we should look at the person’s period of employment. Ultimately, we do not wish to penalise someone who manages to secure a better job. Mr Deputy Speaker, Sir, Chinese, please.

(In Mandarin): [Please refer to Vernacular Speech.] This Budget pays attention to the ageing issue. Hence, I would like to raise a few related points.

Firstly, I would like to talk about seniors who live in old houses. Old houses tend to have shorter leases and are difficult to fetch a good price, no matter whether it is a private property or an HDB flat. Hence, it is a challenge for their owners to downsize to a smaller unit and get additional cash. Even though we have the Silver Housing Bonus, the scheme requires that most of the proceeds be topped up into the CPF and may not meet the needs of all the elderly.

Old HDB units built between 1987 and 1990 face a special problem. As HIP is only applicable to units built before 1986, units built after 1987, although very old, they have not been renovated with low costs. This has affected the quality of life and safety of the owners and that is why I said that old flats face a special problem. But the flats are located in Nee Soon South, half built in 1986 and half in 1987. One-half is qualified for HIP but the other half will not qualify.

In addition, some illnesses troubling the seniors are not covered by the Government's medical subsidies. For example, many seniors suffer incontinence and need long-term treatment. Otherwise, it may cause other health problems. I hope the Government can pay attention to this and provide some subsidies.

After the Government announced the plan to raise GST, some unscrupulous businesses may increase their prices even before the actual GST hike. This happened when the water prices increased last year. Can the Government consider establishing a task force to study this problem?

I would like to share a story with you. This is a conversation between a husband and a housewife. The wife said to the husband, "Dear, dear my mother is ageing and my mother has to visit doctors very frequently. Our children are growing up in their developing age. I need to buy more fish and meat for their development. I need to have more money from you."

Husband looked at the wife with a smile and he said, "No problem. Sure. I have a piece of good news to share with you. Last Saturday, early in the morning, as I was at the Community Club, I met our Member of Parliament. Our Member of Parliament came to visit us before 8 o'clock. The licence plate wrote '4188'. It was quite a beautiful number. So, I decided to follow that number. I went to buy the 4D and the number came out as 8481. I felt that I had hit the jackpot."

The wife looked at the husband and she said, "Dear, what I want is the current expenses, I am not talking about one-off type of expenses. So, are you telling me that if you do not win the lottery, my mother does not need to see the doctor? Are you telling me that if you do not hit the jackpot, my children do not need to eat extra protein?"

And the husband said, "That is not a problem. We still have a house, an asset we can sell."

I think this is the problem that one of our Members has described that is worrying. The understanding is: not a problem; if we do need to finance expenses, we can just utilise the proceeds from the land sale.

The population's age and Government costs are always rising, but no problem! The Government can solve them by just selling land. One of my residents seems to have seen this coming. Last Saturday, when I was visiting the coffeeshop, he told me, "Sister Wah, you must remember, even a mountain of gold can be depleted. People shouldn't keep thinking about using the savings our grandfather left us. Don't let us become the unfilial sons who squander the family wealth!"

5.08 pm

Mr Ong Teng Koon (Marsiling-Yew Tee): Mr Deputy Speaker, I wish to speak in support of the Budget. It is vital that we are discussing this Budget from a position of strength, with a large surplus. We are unique among developed economies. Prudent policies have enabled us to continue to accrue surpluses even as the economy and population mature. This gives us vital breathing room to manoeuvre as future challenges loom.

This is especially critical as one mega-trend is likely to fundamentally change our world. In the words of Mr Masayoshi Son of Softbank: AI is coming, and it is coming Big Time! And it will combine with robotics and automation to change how we work. AI will change our world.

While technology is always creating new jobs and destroying old ones, there is reason to believe that the current phase of development is different. AI is developing at an accelerating pace. With machine learning, computers can teach themselves faster than humans can teach them. DeepBlue, which beat the chess grandmaster Garry Kasparov in 1996, was rule-based and human programmers taught it how to win at chess. In contrast, AlphaGo beat the world champion at Go after teaching itself the game. AlphaGo Zero taught itself how to beat AlphaGo in 40 days without using a single data from a single human game.

It is clear that the impact of technology on the economy and the labour market will be broader, deeper and more rapid than previous technological advances. Broad – because it will affect many sectors simultaneously. Deep – because it will affect many different job functions within each industry. And Rapid – because the rate of adoption of software or cloud solutions is not hindered by the need for physical rollout.

What will result is not just traditional structural or cyclical unemployment. We will experience a permanent secular shift in the economy, which will change what jobs are available and what skills are in demand. History has shown that technological progress has always led to new jobs and an overall improvement in our lives in the long run. But all of us are going to be there in the long run. And in the meantime, the transitional pain is going to be very, very real.

Consider an area, such as manufacturing. According to research by The Boston Consulting Group, jobs will be lost in roles such as machine operator, production planner, while new roles will be created, such as data scientist and robot coordinator.

But therein lies the challenge. Many of those displaced will struggle to take on the new emerging roles. For others, a series of part-time or freelance gigs will become their permanent reality.

Let us take a specific example. We have around 75,000 taxi and private hire drivers in Singapore. The recently-emerged private hire car industry has served as a refuge for those who have been displaced from other lines of work. This has allowed them to continue to earn an income. This has helped mitigate the pressure of job losses from sectors that have been struggling, such as marine and offshore.

However, we are not far from the day when all cars will be able to drive themselves. The move towards Autonomous Vehicles (AV) will have a profound impact on the labour force it will displace. What happens to the drivers then? Is there another industry that can absorb so many jobseekers who may not have any specific marketable skills?

The gig economy – freelance or part-time work – can help cushion the impact, but it is not a long-term solution for many. According to a 2016 study by McKinsey, 30% of gig economy workers were in the gig economy out of necessity; they had no choice and they were not happy about it. They are individuals who are trapped in an endless hamster wheel with no hope of advancement. This then becomes very fertile ground for radicalisation.

We can, therefore, expect to see a displaced underclass who will struggle to make ends meet.

This Government has had the foresight to put in place SkillsFuture and emphasise training and reskilling. We are leading the world in this area. But we need to recognise that a large segment of the population will struggle to learn and apply these new skills.

Out of our 2.2 million labour force, around 700,000 workers are over 50 years old or have less than Secondary school education. Many of them will struggle to learn. And when you factor in their families and dependants, the number of people affected gets really, really big.

What do we do for them? This raises vital questions around the whole approach to social spending. Short-term cushioning may not be enough, since we cannot trampoline them back into economic health. Any support would need to be sustained as well. Current trend is towards a broad spread of small subsidies. Is this still the right prioritisation going forward?

Do we need to consider alternative revenue sources, such as a wealth tax? As technology advances, wages will likely fall as a share of GDP. Then, it becomes only right that the owners of land and capital pay a greater share of the burden. What steps are we taking to prepare for this, in terms of fiscal policy and of preparing the ground and the rhetoric for this possibility? And what are we doing to prepare the next generation for this new reality?

Our education system has served us well, but can it equip the young for the new challenges? If you believe that things are changing more quickly, then what is needed is not specific knowledge, but imagination and the ability to learn. How do we inculcate the values needed for the future, such as curiosity, imagination, critical thinking and persistence?

Mr Deputy Speaker, Sir, we, may disagree on how many people will be displaced or how quickly. But the advent of AI is inevitable and there will be consequences. We cannot be complacent and assume that new jobs will automatically be created. In many cases, AI will supplement and augment our capabilities. There will be many cases where humans will struggle to compete. We need to ensure that the displaced have meaningful roles that will allow them to retain their dignity.

I feel truly that we need to tackle this problem head on and decide as a nation on how to respond. I do not have the answers, but we need to have a serious conversation and not just repeat comforting platitudes.

It is imperative that we do this from a position of strength. So, now is the time to talk about AI. Mr Deputy Speaker, Sir, I support the Budget.

5.15 pm

Mr Vikram Nair (Sembawang): Thank you, Mr Deputy Speaker. I rise in support of the Budget. This Budget is unique in a few respects. The most important is that this is a Budget not just for the year ahead but one which deals with the next 10 years. And not only that, but which is quite upfront about some of the bad news for the next 10 years. So, it is a very straightforward Budget but the most important part of it is the message. The message is one of optimism, that Singapore is ready for the decade ahead, notwithstanding the challenges we face.

I also think there is a risk that in this Budget, people may take, sometimes, perhaps, too much comfort. It is also important for people to realise what some of the important changes mean and what impact these will have on them.

The Minister rightfully identified the three megatrends that will shape the future, including the move towards Asia, automation. I think herein lies opportunities but the biggest challenge is the third – our demographic challenge.

So, how do all these things interplay? First of all, of course, if this vision succeeds, we will have a vibrant innovative economy and a smart, green and liveable city, which sounds very nice. But that is the picture of success. If we fail, of course, the consequences could be dire. The opportunities could move to other parts of Asia. In fact, what you see in places like the European Union, for example, is that opportunities move to the developing parts of that Union. So, there is a chance that even though there is a move towards Asia, we may lose those opportunities because we are less competitive than other parts of Asia. We may lose opportunities to countries that are cheaper but which can still produce better value than us. If we fail, there is a chance that Singapore could be irrelevant. We have to succeed. We have to find the way to succeed.

But even if we succeed, the path will not always be smooth-sailing and I think it is important for individuals and companies to recognise that they have an important part themselves in this process.

The Government can lay the foundation, it can create opportunities for workers to improve their skills. It can also create opportunities for businesses to improve and digitise. These are all gentle nudges. But, ultimately, the people who will benefit from doing so are the workers and the businesses themselves.

Even if a business succeeds in digitising and a worker succeeds in picking up skills, it is important for both businesses and workers to realise that this success is not permanent, nor is it guaranteed to last. Business cycles are very short. So, the business that may be successful today may not be successful in a few years' time.

Even if we look at just the last 15 years. Fifteen years ago, at the turn of this new millennium, some of the more successful companies were, indeed, tech sector, and everyone thought back then in 1999 and 2000 that tech was the way to go. The Nasdaq valuations of many companies exceeded even the mainboard-listed New York Stock Exchange companies. But that was a very short cycle at that time. It lasted maybe two or three years before the dot-com bubble burst and many people who had invested in picking up the skills to succeed in that environment were, all of a sudden, jobless.

This is the reality of the new market and this cycle has repeated itself many times over, even in the last 10 years. Shortly after that, from 2004 onwards, a commodity megacycle started, and suddenly, oil and commodity prices started rising and everyone thought that commodity, oil and gas were the way to go. Massive investments took place in this sector. But in the last three or four years, this sector has had a big pullback as well. A lot of the investments in that sector will be wasted. There will be distressed assets going out and this is the reality of the future economy.

Even if workers pick up the skills, even if businesses adapt, they must understand that success is not permanent. What works this year may not even work in the next year. Therefore, it is very important to be nimble. The fact that you have picked up a skill and that skill has paid off for a few years is a good thing. The fact that it does not pay off for a lifetime is to be expected.

This is the reality of the future that we are going to live with. This is what will happen even if we succeed in having a vibrant and innovative economy. The nuts and bolts of being vibrant and innovative are the reality that you or your business could become irrelevant very soon because someone else has come up with an innovation that makes you irrelevant.

For countries and big economies that have invested heavily in one area, one sector, for example, the Scandinavian countries back in the days of Nokia and Ericsson, they have also paid a heavy price when those sectors subsequently pulled back when the iPhone, for example, came and took the mobile phone market away.

The reality about the globalised economy is that no matter how hard you work, your rice bowl can be stolen at any time. So, even if we succeed, it is important for individuals and businesses to know that things may happen beyond your control that will change the playing field dynamically. While the Government can enable you to pick up new skills even in that situation, it is normal for this to happen and you have to be able to adapt to that.

Related to this is the second important thing that I think Government can do, and this is part of the Budget – Being a Caring and Cohesive Society. There are two underlying threads in this.

On the one hand, of course, the Government is saying that we will try and be there as a safety net. For those who have low-income, there will be social transfers to help. Education is still of fundamental importance. Education is now being provided at an even earlier stage, even extending to the preschool sector. If we start enabling education at an earlier age, that will, hopefully, reduce the risk of inequalities, even at the time people enter Primary 1. All this is necessary.

If one studied the Greek wisdom, Plato's Republic is said to be the ideal republic, all children will be taken away from their parents and put into institutions, so that everyone has an equal footing. Of course, that is theoretical; it is unlikely to happen in practice. I do not think any parent would want their children taken away.

But the reality is the more you equalise the education playing field, the better you are to have at least equality at the starting point. This Budget is making important steps in that respect. Accessible Primary 1 education was the best way to do it 30, 40 years ago. Now, we have gone even further.

More than that, the second part that is important is also the sense of social responsibility. There are gentle nudges in this respect in terms of encouraging charitable and community work and participation.

It is important for people who succeed to also realise that their success is not just because of their own efforts or abilities, but also because of the environment they lived in and also because of luck. The dynamism in the modern economy, the line between success and failure is sometimes not easy to identify. Good people may fail, notwithstanding the best of efforts. People may succeed one year and fail the next.

It is important for people to realise when they succeed that that is a time to be generous and to give back. This sense of responsibility is something the successful have to understand and accept. That is probably going to be the key to being a truly caring society. When you succeed, you must understand that it was not you alone and "It is time for me to give back". And when that success disappears, maybe someone else will be kind to you at a time when you need it. This is the core of a caring and cohesive society. But we must realise that our success is not our own and our misery is not always someone else's fault. So, we must take responsibility for our success while, at the same time, be gracious when we succeed.

Let me also address the final aspect of the Budget which I am heartened by and that is fiscal sustainability which is one of the things that many of us are worried about. With the ageing population, with a shrinking workforce, how were we going to actually fund the increasing social spending needs.

We have been blessed to have had a very generous amount in reserves and we have been able to use a fair bit of this through the Net Investment Returns Framework.

The big question is: will this be sustainable and, if so, for how long? I am grateful the Finance Minister has put forward a plan – to me a fairly reasonable plan – to explain how this can be made sustainable.

Many of us were anticipating a rise in taxes and it is good to know upfront that the anticipated rise is 2% in GST plus a few other taxes on cigarettes, carbon and other areas. It is good for us to understand that this is going to be the cost to be sustainable for, say, the next 10 years, at least up to 2025. These things are dynamic but it is good to know that this is what we have to prepare for.

A tax increase is never popular. It is never an easy thing to do. Of course, it is natural for there to be some push-back, for people to say, "Why do we not look at some alternatives?" The Workers' Party has suggested using land sale revenues upfront. I think my colleague Lim Biow Chuan has addressed this. I should add, I would not laugh this suggestion off because, previously, I had considered this myself at one point. But I agree fundamentally that it is wrong in principle to sell land and spend that capital upfront. Some other countries do it but I do not think that is a reason for us to follow suit. It is more responsible for us to put the revenue from land sales or anything we get into the reserves and use any income we have from that. Because, ultimately, land is an asset, and, I think as some speakers have said, it is our most finite asset. The best we can do is treat that as an asset even after it is sold, and if there is income, then we can use that as part of the NIR Framework.

So, in that sense, all this goes towards making sure that we have a financially sustainable Budget. All our expenses should be paid for with our annual operating revenues. If there are investments in long-term infrastructure, then, of course, for this, we can use hybrid models, including, perhaps, borrowing to be paid for with future income from that investment.

All these are financially sustainable ways and that is probably what the next generation will be most comforted by, that we will do our best to improve Singapore, to create opportunities in Singapore, to make it a place where they and their children will have opportunities.

Even if we succeed, there will be people who will have difficulties and it is important for us to be generous in that respect, with both ourselves as well as the Government, and to make sure that these people have a chance to get back up again. That is the best we can do. We have had many analogies from different people on pushing the car, so that it runs on its own as well as a trampoline. But I think these are all important analogies to let our people know what the real message is, that, ultimately, it is for you to be self-sufficient and to sustain yourself, but there are people there to give you a hand when you are down. Mr Deputy Speaker, I will conclude with a few words in Tamil.

(In Tamil): [Please refer to Vernacular Speech.] This is an important Budget because it plans not only for the next year, but for beyond the next decade. The world is changing rapidly and Singapore is changing, too. The rise of automation is going to change the nature of work and, if our businesses and workers do not adapt, the jobs and opportunities will go elsewhere. It is, therefore, important for both our businesses and workers to take advantage of the opportunities available to keep up and keep ahead of the times.

Singapore, too, is changing, the biggest being the demographic change. As our population ages, we will have a much higher demand for healthcare needs at a time when our working population will fall. There will also be a much greater need for infrastructure spending, both to renew ageing infrastructure as well as to build new ones, so Singapore can continue to stay ahead of the curve. These are big financial demands.

However, this Budget gives us hope for optimism because it shows the Government’s plan for dealing with these demographic changes. This includes rises in taxes, including GST, and looking for other new forms of income to pay for infrastructure. This Budget sets out a roadmap for dealing with our long-term challenges in the decade ahead and to help Singapore not only overcome these challenges, but to remain a special place. Mr Deputy Speaker, I support this Budget.

5.30 pm

Mr Louis Ng Kok Kwang (Nee Soon): Sir, I am thankful for a Budget which is forward-looking and focuses not only on the dollars and cents but, very importantly, also on the heartware of this nation, about caring for others, about looking after those who have helped to build Singapore.

This year, I have 18 specific recommendations for the Government and have filed 18 cuts. These recommendations, however, are not mine but those of members of the public and civil society organisations. Together, we have brainstormed, edited and edited and edited and crystalised them into these 18 recommendations.

My heartfelt thanks to members of the public and groups, such as Architects of Life, Autoimmune Illness Support Group Singapore, Singapore Youth for Climate Action, AWARE and TWC2. I thank them wholeheartedly for being a part of this.

Sir, in my speech last year, I spoke about the Public Service. The Public Service is the heart of our entire system; they play a crucial role. The success of this Budget and Singapore relies heavily on them and, this year, I will again focus my speech on how we can strengthen our Public Service.

In the past year, I have reached out to public servants through closed door dialogue sessions to better understand their concerns, the difficulties they face and their aspirations. I am grateful that they have shared their views with me very honestly and candidly.

Almost without fail, I will be asked two questions: the first is, "Will I get into trouble if I speak up and share my thoughts with you?" And for those we met, there is a general consensus that people will get into trouble if they speak up in the Public Service. They fear that they will be labelled as troublemakers, that their bosses will get angry; they fear that it will affect their appraisal and their promotion.

This fear is troubling, extremely troubling. In fact, Sir, after I delivered my Budget speech about the Public Service last year, there were Facebook comments and I received messages telling me to be careful, I will get into trouble for speaking up too much. My sister was also passing me messages from her friends, telling me to be careful.

I made it a point to publicly say that I did not get into trouble for speaking up, that this fear is mythical. Having said that, this fear of speaking up, whether we want to acknowledge it or accept it, is very real.

A panel of academics and former senior civil servants echoed the same sentiments at a forum last year, "that Singapore needs more people to speak up and challenge authority. They lamented the reluctance of civil servants to pose contrarian views when facing political office holders".

But Prime Minister's wish for Singapore is that we "be blessed with a 'divine discontent' ─ always not quite satisfied with what we have, always driven to do better".

We do have this "divine discontent" but what we need to work on is ensuring we are able to hear it and that people are not afraid to speak up, that they do not accept the status quo and that they will fight for changes that will lead to an even better Singapore.

This fear of showing this "divine discontent" was also present in my meetings with the public servants. I remember one sharing his views during the meeting, which was contrary to mine and halfway through he stopped and said, "Actually, I’m feeling quite afraid of opposing your views, as you are a Member of Parliament. And I realise that, subconsciously, I started my sentence by saying 'With all due respect, Sir', in the hope that you will be less offended with what I was about to say".

This culture of being afraid, of keeping quiet, of not rocking the boat, is detrimental to the Public Service, to any organisation and, most of all, detrimental to Singapore. This culture results in the loss of good ideas, of better ways of doing things and the loss of good public servants.

As the Prime Minister has so rightly said, "I try not to surround myself with 'yes, Sir' men. That is important because if all you have are people who say, 'three bags full, Sir', then, soon, you start to believe them and that is disastrous. You need people who have their own views, whose views you respect, whom you can have a productive disagreement with and work on ideas which you might not have come up with, or who improve on ideas you had".

We need to make sure we do not have a Public Service filled with "yes, Sir" men and women. To demolish this culture, we need to break our entrenched processes and bureaucracy – the same entrenched processes and bureaucracy Minister Ong Ye Kung spoke about at the Public Service Conference in 2017. We urgently need to cut the extremely long red tape that may be frustrating not just for members of the public but also our public servants.

One suggestion from the public servants is a revamp of the appraisal system, which, they feel, prevents them from speaking up. I suggest that we redesign the Public Service appraisal system by studying the 360-degree appraisal review used by the private sector in MNCs like Google and Alibaba.

This will allow employees to review and grade their direct managers, resulting in a holistic 360-degree review, instead of just a one-way top-down appraisal system.

We do have some 360-degree appraisals currently but I understand that this is not regular and does not seem to include all public servants. Deputy Prime Minister Teo had said that "leaders receive 360-degree feedback on their leadership qualities when they attend milestone leadership development programmes".

Again, many public servants I have spoken to fear a bad appraisal if they speak up, oppose their bosses' views and challenge the status quo. Hence, they do not speak up although their suggestions may, in fact, improve the lives of their fellow countrymen. This current appraisal system does not incentivise risk-taking and innovation, and I suggest we change it. Urgently.

So, that is first question I am asked, "Will I get into trouble if I speak up and share my thoughts with you".

The second question is, "Even if I meet you and share my thoughts, nothing will change. So, what’s the point?"

The second question to be honest is much more troubling than the first. It shows that these public servants have given up. They are thinking: why care? Why try, then get frustrated and then get upset for nothing?

We are in danger of becoming what Calvin, in the comic book Calvin and Hobbes, said, "If you care, you just get disappointed all the time. If you don’t care, nothing matters, so you are never upset".

We need to make sure that, one, we make it easier for public servants to voice their concerns and, two, make sure that we follow up on the concerns they raise. We need to ensure they feel empowered.

Some public servants I met also told me directly that it is almost impossible to feel motivated to do more because mediocrity is rewarded. Status quo is a prized possession. They want to make a difference, which is why they joined the Public Service, but they do not feel empowered to do so.

Through these meetings, I also learnt that each Ministry or Statutory Board functions differently. Some public servants shared that they have regular dialogues with their CEO and Permanent Secretaries. They have pigeonhole sessions where they can share their views openly.

Moving forward, we should continue this open and transparent practice of having all-hands staff meetings frequently, where all levels of public servants have direct communication channels with senior management. This should also be made available to all public servants, not just in some Ministries or Statutory Boards. I also suggest that we have an internal Quality Service Manager (QSM) within Ministries and Statutory Boards.

We are all aware of the existing roles QSMs play. They focus on external feedback from members of the public. I suggest we put in place internal QSMs to follow up on feedback given by public servants and, similar to how we handle public feedback, they ensure that the feedback is looked into and the loop is closed.

They will help give our public servants a voice and ensure that their views, feedback and suggestions are looked into so that the Public Service is strengthened.

Sir, whatever I have shared here is what I have heard directly from the public servants themselves and is perhaps not new. These sentiments are already in the public domain and let me share parts of what Joanne Poh wrote a few weeks ago, in a post entitled "Civil Service: The Ins and Outs of the Iron Rice Bowl", where she provided advice on whether a career in the civil service is for you. She said:

"While there are many perks of working in the civil service, be prepared to work in an environment that some find stifling. There tends to be a very strict top-down hierarchy where things are done 100% by-the-book. So, if you’re a young upstart who is dreaming of doing great things, be prepared to know your place, shut up and just do what your bosses tell you to."

"Some people are happy just to be quiet and do as they’re told in exchange for a stable job with good pay and perks. But if you’re the type who wants to be a superhero and change the world, you won’t find the outlet you seek in the service. It’s ironic that MPs are calling for civil servants to be 'less rigid' and to 'think outside the box'. Recently, MP Er Dr Lee Bee Wah, in an interview, even suggested that civil servants give 'cut and paste' answers. Ask any young civil servant and they’ll tell you that their superiors frown upon those who speak up or try to introduce fresh ideas."

Sir, we urgently need to change this perception, change this system, recognise that we need to empower our public servants and ensure that the Public Service attracts superheroes and people who want to change the world.

We have called for the Public Service to innovate. And Minister Ong Ye Kung told public servants that, "The main obstacle is ourselves".

It is, indeed. We, and by "we", I mean us in this House and the senior management in the Public Service – need to make sure that our public servants work in a system where everyone can speak up and where everyone can be heard.

Sir, let me end with a quote, as always. In the words of Napoleon, "The world suffers a lot, not because of the violence of bad people, but because of the silence of good people".

Our public servants are good people. As I had shared in my Budget speech last year, "These are a rare breed who devote their lives towards serving Singapore".

But we now need to make sure that they do not work in a system where they feel they need to be silent, where they feel they need to be "Yes, Sir" men or women and where they feel that nothing will change even if they speak up. Sir, I support this Budget.

5.39 pm

Dr Lily Neo (Jalan Besar): Mr Deputy Speaker, Sir, I stand in support of the Motion raised by Finance Minister, Mr Heng Swee Keat.

Today, I would like to speak on the Finance Minister’s announcements on the overall national effort to better support our ageing population.

MOH will take on policy ownership of the spectrum of aged-care services across both the health and social domains from April this year. I agree with this new approach, provided the agendas and the targeted outcomes are spelt out clearly from the beginning and the execution details are adhered to in order to achieve the desired aim. I shall elaborate.

I would like to request the relevant Ministries to use this new approach to enable our seniors to have healthier and happier lives. Lives where seniors, with increasing years, can still enjoy active, healthy and fulfilling days, live in their own homes and environment within the community and have little or no dependence on institutional care. Many seniors prefer such independent living with their loved ones and friends in the community. This is achievable by advocating preventive healthcare. The ideal outcome will be a happy populace living well and gracefully. I want to share my observations and experience in such care.

MSF will transfer its functions under the Senior Cluster Network (SCN), which include the policies and planning of Senior Activity Centres (SACs), Cluster Support and Caring Assistance from Neighbours (CAN), Carers and other programmes, such as befriending services, to MOH.

In Kreta Ayer-Kim Seng (KAKS) constituency my grassroots leaders and I started Senior Activity Centres with the concept of promoting physical, mental and social well-being of our residents. The first one was started 20 years ago with the help of Thye Hua Kwan Moral Care. Three more SACs, run by grassroots leaders using the same concept, were added over the years at different precincts of our constituency.

I have always been an advocate of preventive healthcare because I am a medical doctor. Hence, we have applied this concept at our SACs from the very beginning and have practised it till today.

The concept of physical, mental and social well-being is to facilitate our seniors to stay healthy through having daily balanced nutrition, getting physical activity and receiving cognitive stimulation. So, daily meals and programmes are provided with this aim in mind. Balanced nutrition wards off diseases. Physical exercise keeps the bones and muscles strong to minimise falls and fractures and to facilitate good mobility and independence. Social and mental well-being prevents isolation and depression. Together, all these will enable mobile seniors to be active, healthy and happy and to remain in the community by warding off frailty and dependency.

Sir, whilst growing in age is a norm, becoming frail with age is not necessarily so. Frailty is a geriatric syndrome where organ function drops below a healthy level. When key organs, such as the heart, kidneys, lungs, muscles and brains, start to function below optimal levels, there will be reduced resistance to diseases, with increased incidence of incapacity and dependency.

The Singapore Longitudinal Ageing Studies (SLAS) by NUS examined 250 seniors above 65. Those who adopted a regimen of good nutrition, physical activity and cognitive stimulation were less frail than those who did not. In mild cases, their frailty could even be reversed. Those who fulfilled only one factor, such as eating well but not exercising regularly, did not fare as well as those who managed all three. Assoc Prof Ng Tze Pin, who led the studies, said, "Frailty is not an inevitable part of ageing and, with the right intervention, we can reduce the number of elderly who need to seek treatment for this syndrome".

The SLAS, which was conducted from 2010 to 2013 and was first published in 2015 in the American Journal of Medicine, determined that a healthy diet for seniors is one that has sufficient calories and protein. Assoc Prof Ng Tze Pin explained that, with old age, the body becomes less effective in converting amino acids into muscle, causing the seniors to be more susceptible to muscle degeneration. One way to slow down this degeneration would be to consume enough protein.

Through my observations over the years, I noted many of our seniors do not consume enough protein. One of the reasons is that protein is more costly. This nutritional deficit is even more pronounced with those seniors living in 1- or 2-room rental flats.

SLAS followed 3,000 Singaporean residents aged 55 and above and found that older adults from lower-income groups, who are single and have no formal education, tend to suffer from physical frailty. And 41.1% of the frail subjects lived in 1- or 2-room public housing. In contrast, 16.7% of the robust ones were living in other housing types.

Since Kreta Ayer-Kim Seng SACs have been catering to seniors living alone in the 1- or 2-room rental flats all these years, it will be interesting to find out the incidence of frailty for the seniors living at Indus, Chin Swee and Kreta Ayer precincts. Perhaps, Prof Ng can be persuaded to send his team there for a comparison study.

Now that MOH will be taking ownership of the Senior Cluster Network (SCN), I hope MOH will promote this concept of promoting physical, mental and social well-being of our seniors and keeping them healthy, active and happy. This will need the concerted efforts of SCN staff and stakeholders coming on board with a shared mission.

Execution of the programmes daily can run into many challenges as seniors may have their own preferences. For instance, one of our difficulties in our SACs is to get our seniors to do more exercises daily. They prefer more sedentary and fun activities. Some just want to only pick and choose the subsidised daily meals and outings, but are reluctant to participate in daily exercises.

Hence, SAC staff must adhere to the concept of physical, mental and social well-being through coupling the exercise programmes with meals, outings and fun activities to achieve this mission. Incentives had to be introduced over the years to cajole more to take part in the daily exercises. Activity, especially in exercise, is much reduced after retirement for many seniors to the detriment of their well-being.

Getting the involvement of grassroots, VWOs, volunteers and befrienders will add value to the SCNs. Community involvement, especially grassroots assistance, will add a human touch and care to the seniors, especially those in need. Taking them to festive activities organised by grassroots organisations can bring cheer to many, especially those living alone. Visiting them, especially by familiar grassroots leaders or befrienders, at their homes when they fail to show up at the centres and giving them medical or social assistance quickly if they are ill are very useful. Occasionally, sprucing up or eradicating bed bugs from their homes by volunteers can help in home-care.

I am very glad that the Finance Minister has mentioned setting up Community Networks for Seniors (CNS) programmes nationwide by 2020. CNS was piloted in 2016 with the aim of connecting different stakeholders in a community to jointly engage and support our seniors.

SACs are the choice centres for coordinating befrienders with the seniors and will be a one-stop centre for a targeted approach, preventing duplication for the best outcome. I hope to see MOH expanding preventive healthcare and community care by setting up more SACs islandwide, especially at 1- or 2-room housing precincts.

The Minister for Finance also said that the Agency for Integrated Care (AIC) will be the central implementation agency to reach out to seniors and their caregivers as well as coordinate the social and health-related services to them. Aged-care providers can now work with AIC as the single agency on the delivery of holistic aged-care services to seniors across both the health and social domains. Sir, this is, indeed, a welcome boon for holistic care services and will enable many, who may otherwise need institutional care, to remain in their own homes for as long as possible, even despite illnesses or mobility difficulties. Let me elaborate.

Preventive healthcare means to prevent getting diseases or disability. Preventive healthcare also means a better chance of partial or even full recovery if treatment is provided quickly should one get sick.

Mr Tan, not his real name, is aged 88 and a member of Chin Swee SAC. He suddenly stopped turning up and was missed at the centre some 10 years ago. On visiting him, he was found to have suffered a stroke. He was in bed and could not walk. He lived alone. Social help was arranged for his daily living and food was sent to him daily. A physiotherapist visited regularly for his rehabilitation. Within six months, from being immobile, he could slowly walk again. Today, 10 years later, after his stroke, he is attending his SAC and other events organised by the Kreta Ayer-Kim Seng grassroots. My appreciation to all my Kreta Ayer-Kim Seng grassroots volunteers here. Best of all, Mr Tan could continue to live independently by himself, albeit walking with a limp from the stroke episode. I attribute his achieving partial recovery and independence to the appropriate assistance and support given to him at the very early stage of his illness. I have other stories similar to Mr Tan’s but, due to time constraint, I can only mention just this one.

With AIC under MOH being the agency in charge of SACs, seniors like Mr Tan can be referred quickly from the SACs for the assistance required to achieve better outcomes. This is vital to prevent irreversible conditions resulting in permanent immobility.

Our ageing demographic profile will increase the number of seniors who require assistance in their own homes. This is inevitable, especially in precincts with many seniors, such as Chin Swee precinct. Over the years, many more residents have become “housebound” due to medical conditions and chronic diseases like diabetes and hypertension. Thus, the need for homecare that enables these seniors to remain in their homes.

Mr Heng Swee Keat launched Ageing Gracefully@Home (AGH) programme at Chin Swee in 2014 − I notice that the Finance Minister is nodding, that means you remember, thank you − with Temasek Care supporting it for three years and AIC since then. I want to register my thanks to both Temasek Care and AIC here. Ageing Gracefully@Home (AGH) is a grassroots initiative of Kreta Ayer-Kim Seng Constituency that is intended to benefit weak seniors living alone in HDB rental flats in Chin Swee, Kreta Ayer and Jalan Kukoh precincts. It is a holistic care programme for seniors who are staying alone and are unable to take care of themselves. AGH provides, where required, one or more of the following services: daily meals, daily supervision, including daily home visits, befriender services, blood pressure checks, medicine intake checks, home counselling, nursing and homecare, transportation to and from hospital and physical improvements in the home.

We paired an active elderly, or AGH Befriender, with a frail or immobile one, or AGH Beneficiary, so that the Befriender will visit and socialise with his or her Beneficiary each day. We also have a team of full-time healthcare aides and nurses to look after these residents.

This programme enables seniors, who would otherwise be hospitalised or be given some institutional care, to remain in their own homes. This programme makes seniors happy with graceful ageing in place. I hope AIC will be duplicating this at other precincts, especially those with 1- or 2-room flats.

In conclusion, Sir, let us make Singapore the best place for all our seniors to live in their silver years.

Mr Deputy Speaker: Leader of the House.