Debate on Annual Budget Statement

Order read for Resumption of Debate on Question [18 February 2022] [3rd Allotted Day],

"That Parliament approves the financial policy of the Government for the financial year 1 April 2022 to 31 March 2023." – [Minister for Finance].

Question again proposed.

11.30 am

Ms Carrie Tan (Nee Soon): Mr Speaker, I am thankful that Minister Lawrence Wong mentioned mental health in his Budget speech this year.

With COVID-19, the mental health of care workers, caregivers – and I shall refer to them as "carers" – has deteriorated significantly in the past two years. Many news articles have come out recently, documenting the stress that they have come under due to the disruptions brought about by the pandemic, whether they were social workers, teachers, healthcare workers, mental health workers or informal caregivers.

As my colleague, hon Member Mr Louis Ng, mentioned in his speech last evening, 56% of social workers had mild to severe anxiety during the past two years. Such statistics point to an increased risk of burnout amidst a lengthy pandemic and, in the longer term, of an increasingly unattractive care sector. It is not surprising that 1,500 medical workers resigned in the first half of 2021, when many of them worked too long hours, with inadequate manpower and support.

Burnout occurs when people feel overburdened and depleted of emotional and physical energy. Some effects of burnout include loss of motivation, negativity, a sense of failure, self-doubt and a cynical attitude towards others, as well as a loss of empathy. Empathy is the bedrock of caring professions and it runs short when people feel burnt out.

What quality of care can we reasonably expect when those who toil in our care professions and social services are stretched too thin? In charting a new way forward together, we need to protect the well-being of those who take on the work of caring for others, because people can only provide quality care to others when they themselves are well physically, mentally and emotionally.

Two things are vital to ensure quality care: adequate capacity and adequate recognition.

We need to provide sufficient resources and support to carers so that no one burns out. We also need adequate recognition through reasonable compensation and opportunities for advancement to boost morale and motivation and ensure that the care industry remains sustainable in the long term. Most people who chose the care professions are motivated by a strong desire to care for others and very few are calculative about monetary contributions and compensation. However, we should still take good care of them and ensure that they have the means to sustain themselves.

Hence, my first recommendation is to enhance financial support for informal caregivers. I urge the Government to increase the quantum of the Home Caregiving Grant (HCG) for informal caregivers and implement "Carefare".

Many caregivers shared with me in focus groups last year that they struggled to pay for outpatient expenses that are inadequately covered under MediSave. Such costs add to a family's financial burden, especially for those who had little choice but to give up their jobs and income to care for ageing parents, special needs children or mentally-afflicted family members.

The pandemic also made caregiving responsibilities and expenses heavier because care resources, like daycare centres and domestic workers, were short in supply, as shown in a survey done by the Singapore Alliance for Women in Ageing (SAWA) in 2020.

Enhancing HCG will go a long way to lighten their load because finances have shown to be the most significant source of stress for informal caregivers. I suggest that we tier the HCG according to the care recipient's needs and associated expenses. Care recipients who require assistance with more activities of daily living (ADLs) can and should be supported with higher amounts of HCG.

Carefare is what I proposed before as a scheme similar to Workfare, but for lower-income individuals who provide full-time care to their loved ones, not by choice, but by circumstance. Many caregivers who had to quit their jobs suffer a loss of self-identity, decreased self-worth and emotional stress. Often, the family members who are not personally involved in care work fail to understand how demanding it is. Carefare is one way we can provide crucial financial relief and offer recognition to informal caregivers for the labour of caregiving. I will now speak a few words in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] I recommend that the Government enhance financial support for informal caregivers. I urge the Government to increase the quantum of the Home Caregiving Grant for informal caregivers and implement "Carefare".

Many caregivers shared that they faced various challenges, including not being able to pay for outpatient expenses that are inadequately covered under MediSave. Such costs add to a family's financial burden, especially those who had little choice but to give up their jobs and income to care for their ageing parents, special needs children or mentally-inflicted family members.

According to a survey done by the Singapore Alliance for Women in Ageing in 2020, the pandemic made care resources like daycare centres and domestic workers short in supply, aggravating the financial burden and pressures faced by caregivers. Because finances are the most significant source of stress for caregivers, improving the Home Caregiving Grant will go a long way to lighten their load.

Carefare is what I propose as a scheme similar to Workfare, but for lower-income individuals who provide full-time care to their loved ones, not by choice, but by circumstance. Many caregivers who had to quit their jobs suffer a loss of self-identity, decreased self-worth and emotional stress. Family members who are not involved in the actual care work also often fail to understand how demanding it is. Carefare is a way to provide crucial financial relief and offer recognition for the labour of caregiving.

(In English): Second, we need to ensure adequate national resourcing for social work, social services, healthcare and mental health care to be adequately staffed and well-protected from work hazards. Beyond salaries, we can do more to enable them in their work and support them in their well-being.

In the healthcare sector, on top of burnout, cases of nurses being physically or verbally abused and even sexually harassed by patients are increasing. More preventive steps need to be taken to ensure that healthcare workers remain safe and supported at work. I encourage MOH to look into proactive policies in hospitals and other healthcare settings to protect our healthcare workers from abuse. We could also consider amending our laws to toughen punishments for those who abuse healthcare workers, to send a very clear signal that such behaviour will not be tolerated.

Beyond just improving salaries, we need to ensure safety, support and adequate staffing, to retain and develop individuals in the care sector for as long as possible to adequately meet the needs of our ageing population.

Similarly, we need to protect our teachers from burnout. The role and workload of teachers have expanded drastically over the years. Yet, teachers face more challenges as well as increased expectations of them, with home-based learning and the rising concern over our youths' mental health.

In October last year, there was a letter written from a Mr Ng Wei Yang to The Straits Times and his plea went, "My wife's a teacher. Can I have her back with my family please?" I have spoken about this before in Parliament and I caution again about putting dual responsibility on teachers to double up as counsellors amidst an already overwhelming workload. Although teacher-counsellors will have a reduced teaching load, I am concerned about whether they will have sufficient bandwidth and emotional capacity to do both effectively while maintaining their own mental health.

Some teachers shared with me that providing students with some form of basic counselling is already part of their role and they do it quite organically. However, I am concerned that formalising this role could create even more expectations by parents and the public towards teachers. The mental health of our teachers is next on the line if we continue to load them with too many expectations. I hope MOE will augment its efforts in this area with effective stakeholder communication towards parents.

On top of that, other than being trained in youth psychology, the Ministry could consider adding on training in family therapy for school counsellors. School counsellors need to be well-versed in the everyday struggles faced by youths, including those they may encounter within their families. Other skills, such as mediation, could be helpful to foster and bridge relationships between students and their parents, especially during the difficult adolescent years.

Within the wider community, I urge MOE, MSF and MOH to jointly resource and enable the training of mental health responders and volunteers from the grassroots to be empathic listeners.

Our People's Association (PA) grassroots network has been a formidable and dependable way to reach out to residents in times of need, from mask distribution to mobilisation for vaccination and, in pre-COVID-19 times, organising activities to bring people together. We can tap on this network further, provide targeted training to suitable members and build their capabilities in one-to-one care support to residents.

Social Service Agencies (SSAs) can partner PA to train and equip volunteers as befrienders in the community for anyone who needs a non-judgemental listening ear and guidance on further resources for help. Someone facing mental health struggles may not need to see a counsellor if they feel listened to early on in their difficulties. Those who require more attention and expertise can be advised by the befrienders on where to get more support.

This pool of volunteers serve to help distribute and mitigate the care load from the limited number of existing professional counsellors until we can train more to handle the needs in the system. I am piloting this in Nee Soon South with the support of Yishun Health and HPB this year, and I look forward to share our learnings to help build this care network model in Singapore.

Lastly, we need to enable SSAs to improve their capacity-building capabilities. Increasing funding from private, corporate and philanthropic donors can reduce SSAs' reliance on Government funding and the Government's administrative workload.

I am heartened by the Budget announcements that the Government will provide a $100 million top-up to continue the dollar-for-dollar matching to donations to charities until end 2024. We should use such support to encourage private philanthropists and corporate donors to finance capacity-building in Singapore's SSAs for roles and headcounts, such as volunteer management, marketing and communications and fundraising.

Getting multiple sectors to sponsor and support diverse and value-adding job roles to careers in SSAs will make the sector more attractive and vibrant for Singaporeans. This helps to increase the non-profit sector's capacity and bring three wins: one, it reduces the stress that SSAs often experience due to public funding limitations and large reporting and bureaucratic requirements; two, it allows for more experimental approaches to support vulnerable communities; and three, it frees up Government monies to be directed to the professional training of additional social workers and healthcare workers.

The Charities Capability Fund by MSF as well as the Community Capability Trust are steps in the right direction and I am glad for the $26 million top-up to these efforts. I look forward to the implementation details and hope it will be a simple process for SSAs in its execution.

Mr Speaker, a mentally healthy nation is a strong nation. The mental health of those who take on the brunt of care work in our country is an immediate priority. We need to help redistribute their care load. In the year ahead, I urge more attention and creative resourcing to look after the mental health of our carers. In Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] A mentally healthy nation is a strong nation. If we could provide better care for our caregivers, they will be able to better look after more people.

(In English): I look forward to coordinated plans by MOH, MOE and MSF to enhance their support and care of our care workers. If we take better care of our carers, they can care better for many more. Notwithstanding the above that begs further attention, I fully support the Budget.

Mr Speaker: Ms Rahayu Mahzam.

11.46 am

Ms Rahayu Mahzam (Jurong): Mr Speaker, the Budget announcements mean different things to different people. Many look out for what the Government is planning to do to address day-to-day cost of living issues. Some look out for whether the Government will do more to address their areas of concern and the matters they champion.

For the Members of this House, the Budget debate and the Committee of Supply debate provide the opportunity for us to talk about issues that are close to our hearts and to highlight areas for the Government to look at more deeply. For me, it is also an opportunity to share about everyday heroes who advocate for important issues in the community, who quietly work hard to improve their lives and those of others and, in their own ways, contribute to nation-building. There are two people I would like to speak about today.

I want to first introduce you to Dr Chen Shiling. Dr Chen is a medical doctor trained in internal medicine and who has special interests in dementia and intellectual disability (ID). When she was in Junior College, she had the opportunity to volunteer at MINDS, to provide support to individuals with ID. She shared candidly that, in the beginning, the experience was daunting and, after her first session, she was not certain if she would do it again. Despite her reservations, she continued to help out at MINDS over the years.

After graduating from medical school and becoming a doctor, she volunteered in her free time to give medical care to patients with ID. This is challenging because, typically, patients with ID also have multiple medical issues. Aside from that, what Dr Chen came to realise was that it was also necessary to track the health and well-being of their parents and caregivers. Patients with ID depend on their caregivers for many things, including, but not limited to, compliance with medication, nutrition and therapies. Their health, largely, depends on the ability of their caregivers to manage their care. This means that the health and well-being of the caregivers also needed to be addressed, especially as they age. Dr Chen, therefore, developed a holistic healthcare approach for ageing caregivers and their adult children with ID, addressing also social issues and bringing together multidisciplinary stakeholders on the same platform. This is a fairly niche area relating to healthcare and, although seemingly illogical, it is a refreshing and efficient approach to the issue. Only someone in the sector and familiar with working with such families would appreciate the specific challenges they face and curate the appropriate solutions.

I believe this area of work is very important. We have heard, in recent times, the call to provide more support for families with children with special needs. I will touch more on this in my speeches for the COS debate. I am happy that the Government has responded to this call. In particular, Minister Chan Chun Sing’s and Minister Masagos Zulkifli’s replies to recent Parliamentary Questions gave assurance that the Government will continue to strengthen efforts and will work with the community to provide this support and build an inclusive society.

Dr Chen has been championing this cause of caring for patients with ID and their caregivers as a family unit for many years. She has been working with Government agencies to see how this effort can be made accessible to more in Singapore. As a parent of a child with ID, I am heartened and glad that there are people like Dr Chen, who looks out for the needs of those with special needs and their caregivers. They do not only volunteer their time but seek to find solutions to make things better for others, especially for those who are vulnerable. Dr Chen shows how it is so important to walk the talk. She does not just give comments and expect the Government to come up with the solutions, but she has come up with substantive and constructive plans, tirelessly working with partners and taking effort to implement the ideas.

The other person I would like to talk about today is Mr Hafiz Kasman. Mr Hafiz is a graduate from Singapore Management University (SMU), who co-founded Kinobi Asia. Mr Hafiz was a consultant, and Kinobi initially started as a movement during COVID-19 to help prepare students for the working world. Mr Hafiz and his friends-turned-partners started conducting webinars on career role models and tips on how to get into different industries. They saw great success for a few months in a row. There would be an average of about 200 to 300 participants at each of these webinars, which they initially held for young people in Singapore but, subsequently, also organised for youths in the region. Mr Hafiz realised from there that there is a big under-served market of students preparing for jobs.

I believe this is also an area that the Government is keenly aware of. In the past year, career uncertainty has remained a top concern among two in five job-seeking youths, based on NYC’s youth sentiment polls, February to December 2021. The pandemic has reshaped the economy, made some sectors less desirable but also created new opportunities. Those who were about to enter the workforce had to adjust, like everyone else, and prepare for this new world. For several years, even before the pandemic, the Institutes of Higher Learning (IHLs) had developed their career guidance framework. When the pandemic hit, these services needed to be strengthened and updated to address current needs. There were efforts by NYC and Young NTUC to provide resources for the youths to learn about growth sectors and how to prepare themselves for the working world.

For example, the YouthTech Programme launched by NYC for youths to gain work insights in the increasingly important area of technology and digitalisation, creates pathways for young people to learn new skills and gain tangible experiences. Another example is the career symposium entitled LIT DISCOvery organised by Young NTUC as part of the SkillsFuture month in July last year. There were online webinars, workshops as well as virtual mentoring and masterclasses to equip youths and young working adults with the necessary technology and soft skills to pivot into new and evolving job roles in the growth sectors.

I think the provision of support for our youths remains acute and necessary. Aside from career guidance, mentoring should also be an area that the Government continues to develop.

In fact, Mr Hafiz, whom I was speaking about, is, himself, a champion of mentoring. He is the co-Chairman of the Mentoring AfA and also oversees Mara Mentoring, one of the M³ programmes, which aims to accelerate the career and personal progression of high-potential Malay/Muslim undergraduates, by connecting them to a dedicated community of successful early career professionals.

Mr Hafiz has also managed to turn his passion into a business opportunity. What started as a series of webinars during COVID-19 has, today, become a business set-up, with 51 university partners across Indonesia, Singapore and the Philippines using its services. Kinobi provides free career tools and services for all students, such as resume-builder and job preparation courses, augmented with a job portal. Kinobi sees itself as the technology partner for university career services, driving a systemic change. They create, replace and augment the institution’s career platforms, enabling career services staff to do more to serve their student population.

Mr Hafiz said that Kinobi is thriving with the support of the Government and the Singapore ecosystem. The SG StartUp Grant was a great catalyst in helping his team to do this full-time. They also had guidance from Enterprise SG as well as the Singapore Business Federation in getting them plugged into the regional ecosystem. His alma mater, SMU, has supported them via their incubator, by connecting them to the alumni based in Indonesia and by partnering with Kinobi across initiatives like SMU Fintech Symposium.

Dr Chen Shiling and Mr Hafiz Kasman, our people, are pieces of the puzzle in realising our vision of a fairer, more inclusive society. In renewing and strengthening our social compact, the Government needs to address areas of concern, especially of groups which are vulnerable and have been most affected by the pandemic. But part of the deal must be that of active participation of our people in augmenting Government efforts.

My ask is, therefore, as follows.

Firstly, I hope the Government continues to channel funds for better services and support for families with children with special needs. The needs are acute and varied and we need the Government to provide the framework for whole of society to come on board in this journey of making our society more inclusive.

Secondly, it is important that the Government builds on efforts to support young individuals to explore career opportunities. There is value in enhancing the resolution of this support through developing the framework for mentoring. Many of us have had the good fortune of meeting someone in our lives who has guided us, shown us what is possible and brought us to a completely different trajectory in our lives. Not everyone, or every young person, is as fortunate. We should build an ecosystem of support, a culture of mentoring, so that every young person, regardless of his or her background, has the chance to be guided to find and seize all the opportunities that come their way.

Thirdly, aside from the Government's efforts, Singaporeans also need to play their part. Many Members of this House have spoken about this, too. This should not just be a platitude. The Government needs to be responsible for providing the fiscal framework for the economy to thrive and provide the infrastructure for many dimensions of support for different demographics in the community. However, there are many opportunities for all of us to fill in the gaps and propel our community forward. Mr Speaker, in Malay.

(In Malay): [Please refer to Vernacular Speech.] In renewing and strengthening our social compact between the Government and society, the Government has the responsibility to address the issues faced by those who are in need or have been most affected by the pandemic. Nonetheless, all of us also have a role to participate actively in all efforts to help uplift the community.

My hope is that, firstly, the Government continues to channel funds to increase support for families with children who have special needs.

Their needs are varied and we need the Government to provide a framework for the whole of society to work hand in hand to build a more inclusive Singapore.

Second, the Government should continue to provide opportunities for our young people to explore career opportunities. It would be good to build on efforts to create a mentoring ecosystem, so that every young person gets the support they need to succeed.

Third, every Singaporean must participate in efforts to build the nation. The Government needs to think of ways to ensure that our economy continues to progress and provide support for various groups in society. However, there is much we can do to uplift our community. All of us have to play a part.

(In English): Mr Speaker, to me, the Budget goes beyond just fiscal considerations but reflects our priorities and shapes what we become as a nation. A Budget channels funds, creates opportunities and empowers individuals. However, it is not the be-all and end-all and should not be so. The Budget supports various areas of concern and initiatives that impact Singaporeans. But it is not omnipotent. We need more Dr Chens and Mr Hafizs, Singaporeans with the heart and grit to do their bit for the community and seize opportunities with the support from the Government.

This year’s Budget debate is carried out against the backdrop of many unsettling international developments. I hope we can find solace in the strength and unity of our people, to share the load and take advantage of the opportunities before us. The Budget is a significant driving force towards the creation of better prospects and empowerment of individuals, as we chart our new way forward together. Mr Speaker, I support the Budget.

Mr Speaker: Ms Joan Pereira.

11.58 am

Ms Joan Pereira (Tanjong Pagar): Mr Speaker, Sir, I am heartened by the Government’s continued commitment to do its utmost to provide the necessary assistance and support to help Singaporeans cope with the rise in the cost of living and the impending increase in GST, from food to utility bills, service and conservancy charges, and more. The monies set aside for the assistance packages are substantial. Though these can offset the GST increases for up to 10 years for the lowest income group, we should continue to look out for those among us who need more support.

However, faced with higher costs in their daily expenses, from the prices of food and drinks to other grocery bills, Singaporeans are feeling the pinch constantly. Every day, when people have to pay the extra 20 cents or 30 cents more for their beverages and 50 cents more for their food, they feel squeezed. The elderly and retired feel such financial pressures especially keenly. So, that adds an additional layer of stress and anxiety to their lives.

It is, therefore, important to remind worried Singaporeans that there is a package to help offset these increases, through this package, as well as other support schemes that are in place. The planned GST hike will also be delayed and staggered, which is welcome. However, it will be especially helpful to provide some reassurance that the Government is watching the inflation rate very closely and will consider additional support measures when necessary.

As for our elderly residents living in private estates, I have also received some feedback that they do not receive as much assistance. Yes, they do receive assistance but, understandably, it will be less than HDB dwellers. I urge MOF to consider highlighting the various payouts to all residents in both public and private housing estates through a letter or email to them or a mode of communication that they are comfortable with. Though this might alleviate some stress, I would still appeal for more consideration of some cases, as they do have genuine circumstances that do warrant more support.

Our sandwich class. Singaporeans in the middle-income group have always felt that they are “sandwiched” as their incomes are not rising as fast as the inflation rate. On the other hand, they are not receiving as much help as the lower-income groups and, yet, they are contributing taxes and also have to grapple with increased prices.

They feel strongly that the incremental revenue needs to come from the affluent and not the middle-income sandwich class, considering that our taxes are still low, compared to countries we are competing against. Some have suggested taxing capital gains and dividends and increasing them progressively. However, I know that we are not taking that route today as it will not help to attract investors and companies coming to set up shop in Singapore. But I do sincerely hope that the Government watches this space carefully so that the sandwich class does not feel squeezed.

On the Employment Pass issue, I have also received feedback from some residents that foreigners’ salaries seem to be going up faster than local salaries. This is actually a misunderstanding of our EP policy. There is misinformation going around regarding this and the misperception has to be corrected.

They are referring to the minimum qualifying salary for new EP applicants which will be raised from $4,500 to $5,000 and, for the financial services sector, from $5,000 to $5,500. So, this change is, in fact, a higher barrier to foreigners and to get employers to hire locals for job functions at this salary level instead of foreigners.

Some Singaporeans have misunderstood this to be pushing employers of new EP applicants to give them a salary increment, instead of the intent of this change, which is to put up a higher barrier. I hope that MOM can continue to watch out for such employment trends in the months to come and to be ready to take firm action if employers are found to be abusing the system at the expense of local staff.

Turning to hawker trade heritage, a topic very close to many of us and our hearts, affordable food in our hawker centres has helped to keep the cost of living manageable. These delicious dishes are loved by all income groups. Unfortunately, many of our hawkers do not have successors for their trade. Their children are not interested, as many have jobs which do not require long hours on their feet over a hot stove. But I do know that many of our ageing hawkers do want to hand down their recipes and techniques so that their food can continue to be enjoyed by future generations.

I hope to hear about the progress of the Hawkers Succession Scheme (HSS), which facilitates the pairing up of a retiring veteran hawker with an apprentice, so as to pass down his or her culinary skills, recipes and hawker stall to the aspiring successor.

May I suggest that NEA facilitate the transition and pay the veteran hawker the appropriate compensation amount while the skills are taught to the apprentice? The compensation sum should reflect the value of the heritage recipe and technique. In turn, the apprentice could be bonded to the stall for a period of, say, three years, for example; if I may say so, similar to a Government scholarship with a bond. This will help to keep our hawker trade alive and ensure that our hawker culture stays on the UNESCO Representative List of the Intangible Cultural Heritage of Humanity.

We should also start reviewing how we can transform the hawker trade. How can we improve the work conditions so as to attract more younger hawkers? Is it possible to improve productivity in the hawker trade, ensure fair prices, rest and medical care? I have already seen some hawkers adopting machines to automate their cooking or other processes and we have seen how most of our hawkers have now adopted digital payments. We will, therefore, need to review all aspects and think out of the box to keep our hawker traditions alive. Singapore will, definitely, not be the same without our hawkers and we have to put in greater efforts to support the hardworking men and women who labour every day to fill our stomachs with delicious and affordable meals. Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Our hawker centres offer delicious and affordable dishes, which are loved by all the people from all income groups. Unfortunately, many hawkers have no successors and their children are not interested to take over their business. But our ageing hawkers do want their recipes and techniques to be passed on.

May I suggest to the authorities to consider setting up a special scheme for veteran hawkers with appropriate compensation for them to impart their recipes and skills to apprentices? Compensation can reflect the value of the recipes and culinary techniques.

After the apprentice has inherited the stall, he must work for a certain period of time, for example, three years, at the stall. This will help to keep our hawker traditions alive and ensure that our hawker culture will be preserved under the UNESCO Representative List of the Intangible Cultural Heritage of Humanity.

(In English): Sir, I conclude with my support for the Budget.

Mr Speaker: Mr Mark Chay.

12.06 pm

Mr Mark Chay (Nominated Member): Mr Speaker, like many Members of Parliament, I am deeply troubled by the conflict in Ukraine. I echo Minister Vivian Balakrishnan’s sentiments that Singapore cannot accept the unjustified attack by one country on another. This was a clear violation of the Olympic Truce.

Mr Speaker, I was on calls last night with, first, the Ukrainian Esports Federation and, second, the IOC Athletes Commission. Hearing the Ukrainian athletes and what Ukraine is going through is truly heartbreaking.

The sporting world is aligned with the Minister’s position that the sovereignty, political independence and territorial integrity of countries, big and small, must be respected. Sports will continue to stand for values. Sports will continue to stand for peace.

My thoughts and prayers are with the citizens of Ukraine today.

I now turn to speak on the Budget. I rise in support of this today and I consider that the Budget is a sensible one that balances the long- and short-term needs of the country. It also focuses on national development in a sustainable manner that addresses the challenges posed by climate change.

As some of you know, yesterday was Founders’ Day and as our motto goes, “The best is yet to be”. So, today, in keeping with this motto, I shall raise three issues which I believe can bring our society to new heights.

One, how do we, as a society, manage the rising cost of living? Two, how do we ensure a safe and sensible reopening of Singapore? And, three, as we look forward into the future, how do we create a better and more conducive space for the development of the sports in Singapore?

I speak, first, about managing the rising cost of living in Singapore. This is a concern which many hon Members and colleagues have raised, in particular, the effects of rising costs felt, primarily, by the sandwich class and youths in Singapore today.

On the GST hike, what is welcomed is the implementation of GST in stages which enables Singaporeans to plan and make provisions for the increase. I am comforted that the Government has considered cushioning measures to lessen the impact of the GST increase and fully support the top-up of $640 million to the Assurance Package.

I also note that low-wage workers and seniors are considered, with cash payouts to seniors, as well as the raising of the income threshold of the GST Voucher (GSTV) scheme.

Although the cushioning measures are generous, the rising cost of living is a concern and I raise three issues in this regard.

First, GST is expected to rise to 9% by 2024 and there is also going to be an increase in the carbon tax. Given additionally that the rising tensions in Europe are expected to bring an increase in energy prices, I am concerned daily living expenses will increase significantly.

Second, on manpower, I am also concerned about the adjustments to the foreign worker policies, in particular, the rise in minimum qualifying salaries for S-Pass holders and the impact of these adjustments on the hospitality, F&B and construction industries. Would such measures increase the costs of labour which would, ultimately, be borne by the end consumer?

The cost of living in Singapore will also impact Singapore’s competitiveness in being able to attract talent from overseas. We need to keep a close eye on this.

Finally, investing in our people is the right step forward. I wholeheartedly support a review of the programming at IHLs to not only provide quality continuing education and training, but also to prepare Singaporeans with skills to take up job opportunities in the market. But we must not forget our seniors and persons with disabilities (PWDs) in this endeavour. How would we enable PWDs to access job opportunities? Is there more that we can do in this endeavour?

I believe that addressing these concerns will not only lay the foundation for the successful implementation of these measures but also create a liveable and affordable Singapore.

I now move on to talk about my second point – ensuring a safe and sensible reopening of Singapore. As Singapore takes a positive posture to reopening and leans on the possibilities of a COVID-19-endemic world, I would like to take a moment to thank our frontliners and immigration officers for their hard work and dedication over the past two years in ensuring the health and safety of Singaporeans and its visitors.

Our airports, seaports and causeways are the first and last experience Singaporeans and tourists have of Singapore. I would like to suggest resources be allocated to our ports of entry to ensure safe, reliable and efficient transit of Singaporeans and visitors, thus, maintaining Singapore’s competitiveness as a hub for business and travel.

With events returning to Singapore, such as the Singapore Rugby 7s in April, the Singapore Grand Prix in October and many other MICE events on the calendar, I hope the MTF will consider not only safe management measures (SMMs) that balance the safety of participants, officials and spectators, but also the viability, practicality and experience of these events.

At the AFF Suzuki Cup in December 2021, a maximum of 10,000 fans were allowed into the 55,000-capacity National Stadium. The SMMs did not allow for food and drinks to be consumed at the venue. This was a start, nonetheless.

Many of the international events require minimum spectator numbers and ticket sales to break even. Enabling food and drinks to be consumed at these venues is also part of the experience of watching a live event. It would be good if distinctive SMMs as well as the administration of these SMMs can be considered for such events organised at venues, such as the Singapore Sports Hub.

The sports industry has been hit hard since the start of the pandemic. Productivity has been low because of the nature of the industry. Things are picking up; things are getting better. One group I would like to focus on are the operators that service children who are unvaccinated. Because of the SMMs, they are unable to operate productively. These operators perform an important function – introducing physical skills to toddlers and tweens. They feed our development and competitive programmes. If we do not help them, we will see the effects in our competitive sport pipeline in the future.

The fitness industry has also been affected since the start of the pandemic. Gyms have seen a steady decline in their memberships. And although SMMs have eased, what would really move the needle for the big box gyms would be to increase the maximum capacity of these facilities to over 50 if the minimum size requirements are met. Boutique gyms also are suffering. Reducing the physical distancing requirement between individuals from two metres to 1.5 metres would make a huge difference in terms of sustaining their businesses.

I am thankful for Minister Lawrence Wong’s continued support for the sports and arts sectors. The Sports and Arts Resilience Grants have helped the sector with some relief and I hope they will continue to be available for organisations that are still affected by the pandemic.

On my third point, I would like the Ministry to encourage the growth of sports in Singapore.

Before I move on to this point, I would like to declare that I am the Chairman of the SNOC Athletes’ Commission, a coach at the Singapore Disabilities Sports Council and a Director of the Global Esports Federation.

The year 2021 has been a terrific year for Singapore sports. We were all inspired by the fantastic performances of our athletes in Tokyo and sang the Majullah Singapura twice at the Tokyo Aquatics Centre. As an Olympian, I am very thankful to the Members of this House who supported the Motion to recognise Team Singapore’s performances at these Olympics and Paralympics. As Yip Pin Xiu’s coach, I am thankful that Pin Xiu’s achievements were recognised and she was awarded the President’s Award for Inspiring Achievement by President Halimah just two weeks ago.

Singapore had several athletes become world champions last year. Aloysius Yapp became Singapore's first number-one-ranked pool billiard player. In bowling, Shayna Ng won gold at the IBF Super World Championships. In e-sports, Singapore's DOTA-2 Women's Team comprising Sheng Ying "KazeL" Ho, Hui Chun "Merody" Tay, Amanda "bings" Lim, Joanne "Minkiey" Lim and Paula "xiaoma" Teo clinched the gold medal in a close final against Team Great Britain at the Global Esports Games. To cap off a fantastic year, shuttler Loh Kean Yew did us all proud by winning the 2021 Badminton World Federation World Championships title. These performances inspire us, ignite the competitive fire within us and redefine our definition of what is possible.

Mr Speaker, Team Singapore takes the international stage multiple times this year at the Southeast Asian Games, ASEAN Para Games, Commonwealth Games, Asian Games and Asian Para Games. This, as well as the various world and regional championships and qualifiers our athletes compete in.

I would like to ask for additional support for our Team Singapore athletes as they prepare to fly our flag high at these events.

Behind every athlete is an entourage that comprises our sports scientists, coaches and sports administrators. I would like to request for more resources to bolster up their capabilities and enable our athletes to achieve greater performances.

As many of our Team Singapore athletes are also National Servicemen, I would like to encourage greater collaboration between MINDEF and MCCY to enable our Team Singapore athletes to continue fulfilling their National Service obligations and requirements, whilst being able to train, compete and bring glory to Singapore.

National Sports Associations (NSAs), like many of our charities, were not able to conduct events. This will, no doubt, affect the national team performances downstream. Essentially, many of our youth and development athletes have lost two years of physical literacy and competitive experience. I would like to suggest additional resources be put into NSAs for community participation and development programmes.

Hosting and organising events are another vehicle for the sports industry to grow and develop.

In December 2021, Singapore hosted the inaugural Global Esports Games (GEG21). This event had a staggering 500 million accumulated views and a peak live viewership of 4.4 million. With the support of SportSG, Singapore Tourism Board and the National Youth Council and many others, the event was able to showcase Singapore as an e-sports and gaming hub and proved that Singapore had the capability to host such properties and do it well.

The GEG21 showcased how gaming and entertainment in the metaverse could look like as we look towards the future. When I speak of the metaverse, I mean the seamless merging of our physical and digital worlds. For example, the opening ceremony with Singaporean artist Shigga Shay performing live on stage in a motion capture suit being beamed into the metaverse as an avatar was a sight to behold. We should anticipate more Singaporeans spending time in the metaverse and draft parameters to govern it, its uses, potential hazards and protections for citizens, for example.

During GEG21, we also saw local technology firm, Refract, showcase "active e-sport" which it co-created with traditional sports body, World Taekwondo Federation. If you are wondering what e-sport is, it is using the entire body as a controller competing in virtual reality. This breaks down physical limitations, such as age, gender and physical size. Why do I raise these points? Because I think they will go a long way towards enhancing and cultivating the uniqueness and strength of Singapore. I urge you to consider them with an open mind and imagination. I look forward to more conversations on these topics to best position Singapore to continue leading and innovating globally.

Mr Speaker, that concludes the three issues that I wish to contribute to this session. I raise these issues because they will contribute towards enhancing and cultivating the fabric of Singapore's society. I believe the best is yet to be and I am excited about the possibilities in these aspects, strengthening our Singapore Core and identity.

Mr Speaker: Mr Leon Perera.

12.21 pm

Mr Leon Perera (Aljunied): Mr Speaker, Sir, I would like to start by referencing a memoir written by Ms Liyana Dhamirah called "Homeless". Ms Liyana's memoir traces her journey as a young mother sleeping rough in "crazy rich" Singapore. She, eventually, got back on track with the tenacity to fight stigma, with support from social workers and a spot of luck with generous friends. There are many people in Singapore like Liyana who have pulled themselves up to thrive.

But, Sir, my Budget speech this year is not about individual actions. It is about ensuring our policies are designed to substantially reduce poverty and decisively break the poverty cycle for all children born into poor families.

Sir, Budget 2022 does provide some benefits to lower-income groups. However, I will argue that we need to substantially improve access to support in three ways.

First, access to support for the well-being and dignity of the poor. Second, access to programmes that give a leg-up to children in poor homes. And third, access to employability support for those at risk of being stuck in low-income jobs or long-term unemployment. Such support should be provided in a holistic, results-oriented way.

NGOs, volunteers and ground-up charitable initiatives all have a role to play. But they should not be doing the heavy lifting when it comes to funding action against the root causes of poverty. They should be providing the "heartware" to help those who need it, while we maintain a strong baseline of state support, on top of which, NGOs and the community can layer personalised effort, expertise and passion.

As a country, we have stood up to national challenges like the threat to our water supply and the COVID-19 pandemic.

A major effort to wage war on poverty is not just something we can afford – it is something we must do. Our pledge to build a society based on "justice and equality" calls on us to act. But beyond that, investing in additional anti-poverty and early intervention action for poor children may reduce the incidence of persons needing social welfare support in future. Such investments may unlock talent for our economy, which would raise GDP and the tax base.

The World Economic Forum's inaugural Global Social Mobility Report 2020 estimates that if Singapore is able to increase its performance by 10 points on the index, the resulting growth would add S$3.2 billion to our economic output every year.

In this sense, investing in anti-poverty action is like making adult vaccines free – it may more than pay for itself in the longer term.

Last and most importantly of all, a war on poverty would strengthen the foundations of social solidarity in our nation and help realise the promise that we truly have everyone's back.

One response to what I have said thus far would be – well, we are already waging a war on poverty, we are already doing it. We have programmes like ComCare, KidSTART, Workfare, Silver Support, the work of bodies like MENDAKI, CDAC, SINDA and so on and so forth.

But let us take a look at some of the objective evidence.

In Food Bank Singapore's 2020 Hunger Report, 10% of Singaporean households experienced food insecurity at least once in the last year. Two in five experienced it at least once a month. I do meet some Singaporeans who experience food insecurity when we engage constituents, as, I am sure, do other Members of this House.

In a Parliamentary Question reply, I was told that even as Safe and Sound Sleeping Places run by community partners were scaled up in 2021, their utilisation rate was 93%. This is a rate our hotels would be envious of.

From another Parliamentary Question reply, I learnt that we have about 4,000 children living in 1-room rental flats and about 18,000 in 2-room rental flats. I estimate that this means that the average living space per child in such flats is just 10 square metres, 60% less than the average living space per person in Singapore.

Research by academics led by Prof Ng Kok Hoe and Prof Teo You Yenn concluded that a single elderly person realistically needs a minimum of around $1,400 per month for basic necessities and $6,400 per month for a family of four. Yet, 100,000 people in our local workforce earn a gross income of less than $1,300 per month. I do not have a figure for the families of four or more earning less than $6,400 per month but it must be significant.

The last Household Expenditure survey shows that, on average, households in the bottom 20% spent more than they earned.

On social mobility, the available data shows a worrying trend. A 2019 MOF study of intergenerational income mobility found a high degree of mobility for those aged 44 to 53 today. However, this generation came of age at a time of rapid expansion of the economy. Younger Singaporeans today face a completely different set of challenges, such as high housing prices and high income and wealth inequality.

One study by Prof Irene Ng, based on a 2002 survey dataset, concluded that 58% of the income advantage of Singapore parents was being handed down to their children, a level similar to the USA at that time. In 2015, the Principal of Raffles Institution said that the school enrolment was exhibiting a class skew that it did not have in the past.

Some baby boomers made a windfall from property and this shows in our parallel problem of wealth inequality. My colleague, Sengkang Member of Parliament Mr Louis Chua has spoken about wealth inequality and cited quite a few data points which I would not repeat here.

But we also need to look beyond statistics to the lived experiences of Singaporeans to fully understand why this matters. A 2018 CNA survey found that it was class and not race or religion that was the most divisive factor in Singapore. It also found that those identified as upper class were more likely to feel a greater sense of belonging and national pride than those identified as lower class.

In a 2018 poll by Blackbox Research, seven in 10 Singaporeans felt that income inequality in Singapore had worsened over the past five years, with youths and young working adults more likely to feel anxious about the unequal distribution of income.

Sir, let me now move to specific policy calls.

Before I begin, to set some context, the assistance that is provided to the poor is not always channelled through a one-stop shop. Assistance schemes and ad hoc help are available from different agencies and the process of navigating this ecosystem can be stressful and daunting.

In fact, the Government's "kueh lapis" approach of multiple lines of assistance may, in fact, levy an unnecessary bandwidth tax on the poor when they seek help. "Bandwidth tax" refers to the additional cognitive burden they face. To get support from multiple schemes, they personally have to fill up paperwork, produce documents, attend meetings and meet deadlines. And because they struggle, their cognitive functioning is impacted and they may make what many others see as "poor" decisions. As a result, they become entangled even more deeply in the poverty cycle. One study found that the bandwidth tax due to poverty can be the equivalent of 13 to 14 IQ points.

Poor families would benefit from having one window for state support and also to have that support scaled up and follow more of a results-driven, account management approach.

Sir, let me now expand on my recommendations for poverty alleviation and employability support.

Firstly, we should increase the accessibility of state schemes. I will suggest four ways to do this.

The first involves us currently having too many financial assistance schemes that confuse and overwhelm their applicants. These include CDC vouchers of various kinds, ComCare and the Pioneer Disability Fund, for example. We should aim instead to minimise the number of scheme distributors and not have applicants being referred from one organisation to the next.

What I propose is that all state schemes be funnelled through a central account manager, with one such manager paired to each poor family. Social workers at Family Service Centres (FSCs) seem to me to be best placed to play this role. These account managers should be empowered to channel and administer all state schemes. They should also have visibility on schemes that are automatically administered, like Silver Support and Workfare, so that they can also address issues or errors there and so that they can take a more holistic view of the family's situation.

To mirror the one account manager for social welfare support, each poor family and low-income worker should have one account manager in charge of employability at WSG. That manager should be empowered and mandated to coach the worker to access the large array of work and training schemes. Their mandate should not merely be process-driven, meaning they should not be limited to training them on CV-writing techniques or asking them to sign up to passive job alerts. But they should also proactively work with their beneficiaries to assess different opportunities and find the right one, like a consultant and coach would do.

I have spoken in this House previously on how some state employability counsellors in some other countries take a results-driven approach.

An employability account manager for the disadvantaged would also be in a position to nudge their beneficiaries to upskill or reskill to move out of "at-risk" jobs before they are made obsolete. This recommendation is linked to my earlier call to expand the supply of such training and conversion places.

The second issue involves the current process of applying for financial assistance being too complex and exhausting. For example, the interviewing of family members by agencies, in some cases, is unnecessary. Some applicants are deterred from pursuing their Financial Assistance applications because of the humiliation that they would feel if agencies call their relatives. I repeat my call for Financial Assistance to be provided based on declarations as to whether family support is being obtained, without the need for interviewing family members, and with strong disincentives associated with making false statements.

Next, when seeking Financial Assistance, ComCare Short- to Medium-Term Assistance currently gives assistance for an average of only six months. To avoid the uncertainty and stress that comes with having to renew the support every few months, a longer-term grant can be given, albeit tied to conditions which I will touch on in a minute. This addresses the disruption of some beneficiaries having their Financial Assistance suddenly cut off when they find a job or increase their pay beyond a certain threshold. There should be a certain runway where the Financial Assistance continues after such events to enable the beneficiary to settle debts, to adapt to the new income structure and so on.

Next, on the Financial Assistance application process. Applicants are sometimes asked to produce various documents that they may no longer have. Some are asked to hold physical meetings at the SSO office, which can be very hard for them if they are taking care of young children or working. Can social workers visit beneficiaries more frequently at their homes, which would help them to better assess their living conditions? And this is a topic that I have raised before. Can we convince more beneficiaries also to grant the agency direct access to past records residing with banks or Government agencies so that the absence of documents does not become the impediment it often is?

Thirdly, let me address how we can increase the quantum of Financial Assistance available based on the beneficiary committing to positive actions that would help them and their family. More financial assistance can be provided beyond the current scheme caps, but tied to various conditions about which the welfare account manager is best placed to decide.

These may include, firstly, commitment to ensure attendance of children at early intervention programmes, such as KidSTART, or attendance at school for families where absenteeism is an issue. This follows the Bolsa Família principle of conditional cash transfers to poor families, which has had some success globally. And I note that in a Parliamentary Question reply that just came in, 2% of Secondary school students are tied up with absenteeism.

Secondly, commitment to taking action on the employability front with training, job seeking and so on and, here, the FSC and WSG account managers can coordinate.

Thirdly, commitment to healthy behaviour, such as going for health screening and adult vaccination.

Fourthly, commitment to attend personal life skills courses, for example, related to financial literacy.

In fact, some of the increased Financial Assistance can come in the form of digital currency that can only be spent on healthier food. At the Committee of Supply (COS), I shall elaborate on this and on child early intervention programmes to break the poverty cycle.

Sir, my final topic on the administration of poverty relief would be the quantum of relief. More can be given, with part of it being conditional, as I have argued. Long-term ComCare gives individuals about $600 monthly, short- to medium-term ComCare gives a mean of $600 per household per month in FY2020, which works out to just under $270 per person per month. There are other schemes like the Workfare Income Supplement and Silver Support, but these also number in the hundreds of dollars per month. And not every person who is vulnerable accesses multiple schemes.

I am sure other Members of this House have had the same experience as I often have, where persons approach me to plead for Financial Assistance and the case is referred to the SSO. A letter from the SSO sometimes follows, which states that, in their conversation, the residents agreed that they were receiving certain state benefits already and, hence, they have agreed to withdraw their application for Financial Assistance. However, the fact that they initially came to the Member of Parliament underlines that there is a difference of perspective on how much is enough.

In citing this, I want to be absolutely clear that our social workers and SSOs, generally, do their very best and do good work, but they operate within the policy parameters prescribed for them.

Sir, I cited research earlier showing that income levels of $1,400 and $6,400 per month have been suggested to provide a very basic standard of living for a single elder person aged 65 and above and a family of four respectively. For those aged between 55 and 64, that figure increases to $1,700 per month.

Sir, I would suggest that there is scope to revisit and significantly increase the quantum, duration and conditions of welfare assistance we provide to better protect the vulnerable, particularly the children and unemployable elderly. We should address the issue of poverty in a results-oriented fashion and in way that takes into consideration new research when it becomes available.

To be sure, I am not suggesting that welfare assistance should be unlimited and unconditional in all cases, or that the levels should be so high as to make it unattractive to work. But as we apply progressive wage laddering, the quantum that makes work unattractive will rise and this should be reflected in our welfare schemes.

Sir, another suggestion I have is to enable poorer individuals to contribute back to society in a manner that might most befit their abilities by empowering them to become micro-entrepreneurs. A state-backed facility should be set up to provide micro-loans to poorer individuals to set up microbusinesses, such as home-based catering businesses, for example. The financial services industry is, currently, not set up to do this.

Many poor Singaporeans I know are willing to work hard and may have a passion or talent for something that could become a source of stable income, pride and self-esteem. Micro-entrepreneurship, particularly among women, whom research has shown are more likely to share financial gains with their children, unfortunately, is a pathway to poverty alleviation that attracts a great deal of multilateral funding in other countries.

I would like to briefly repeat a call made by my colleague, Member of Parliament Mr Faisal Manap, to reintroduce the hardship scheme for hawker centre stalls. This could provide opportunities for the low-income and ex-offenders to pursue their aspiration to set up a hawker stall with subsidised rents.

Next, Sir, I would like to touch on the social work profession. Social workers are at the core phase of dealing with poverty. Many I have spoken to feel that many of our social workers feel overworked. And this was my sense, too, when I was an FSC volunteer in the 1990s. This is a subject that has been discussed in this House a number of times. We need to invest in more manpower and we need to ensure that compensation is well matched to the rigours of the job, which can be intellectually, socially and emotionally draining.

We can do more to set benchmarks for caseloads and increase headcount when these benchmarks are breached. Social workers will find it hard to help others if they are looking for help themselves. Social workers with sufficient capacity are the best people to provide advice and support on more complex issues and not just disburse money. They could be like venture capitalists, investing in people and also providing them with critical advice and coaching to help realise a return on that investment. In short, social workers can help people thrive.

The last subject I would like to address in my speech is to call for the release of better data to tackle the issues of poverty and social mobility. Better data helps public debate and helps us figure out what works and what does not. And in tackling a problem that is as complex and resistant to simple solutions as poverty is, such data is critical for performance management for the goals we have set. We need to invest in a rigorous measurement of intergenerational social mobility at least once every decade, a call I have made before. And a nationally recognised poverty line should be established, which could aid social workers in making decisions, a call made in this House by my colleague, then Non-Constituency Nominated Member Mr Yee Jenn Jong, in 2013.

We should also keep data on child poverty, which is key to intergenerational poverty and which many other countries do publish. I propose that we track the intergenerational rate of reliance on ComCare Financial Assistance and rental housing. One head of an FSC who had been in the field for over 20 years told me that he was receiving cases of young families that were the children of cases he had handled as a young social worker. This is a poverty cycle we must break.

Thirdly, I would like to call for in-depth studies to be done, directed, especially, at younger poor Singaporeans, to do deep root cause analysis of the reasons for poverty.

Lastly, we should aim to release more data by socioeconomic status, including on health outcomes, educational attainment, new business formation and so on. Any relevant public survey of studies that relate to this should, by default, be published.

Sir, in waging war on poverty, there are many other policy tools we need in our arsenal that I will not have time to expand on and hope the conversation will continue. For example, my colleagues, Members of Parliament Gerald Giam and Assoc Prof Jamus Lim, have tirelessly spoken about minimum wages in this House. Member of Parliament Louis Chua moved an Adjournment Motion about expanding the supply of rental housing, while Member of Parliament Faisal Manap did the same on motorcycle COEs. Workers' Party chair Ms Sylvia Lim has spoken passionately on social mobility. In this Budget debate, the Leader of the Opposition, Member of Parliament Ms He Ting Ru and other Workers' Party Members of Parliament have argued for other policies that will help the poor and the vulnerable, including why the Government's 28% GST hike is unhelpful and unnecessary, which is why the Workers' Party cannot support the Budget. A 28% hike refers to the increase in GST rate from 7% to 9% – that is, a 28% increase.

In conclusion, Mr Speaker, Sir, I would like to wrap up by asking a simple question. Is spending more and investing more effort in fighting poverty and breaking the poverty cycle really worth it? I understand that changing our mindset and paying to tackle poverty costs money. But we have done this before. In Year One of COVID-19, almost 200,000 self-employed people were given $1,000 a month.

There will be returns from investing in a war on poverty and breaking the poverty cycle. If the help is provided in a results-oriented, holistic way, with sufficient dollars, there is every reason to believe that that spending will diminish over time and yield broader social and economic and even sociopolitical benefits, as more people improve themselves in terms of health, life skills, employability and – that most precious commodity of all – self-belief and confidence in themselves.

We must not judge our success solely on how much GDP growth we have achieved each year, but also by how much poverty we have eliminated. In recent years, it is unclear if we are making success on this front, with no real downtrend in demand for ComCare, rental flats and other assistance schemes. We must break this cycle and make a substantial dent on poverty.

Then, and only then, can we truly claim to be living in a First World Country. Only then can we say that we live in a society that has everyone’s back.

Mr Speaker: Mr Vikram Nair.

12.41 pm

Mr Vikram Nair (Sembawang): Mr Speaker, I support this Budget. I will deal with three matters in my speech: first, the war in Ukraine and its implications for Singapore; second, our response to COVID-19; third, I have some suggestions in relation to public housing.

First, on the war in Ukraine. This war broke out after the Budget Statement, but before this debate. The Russian invasion of Ukraine is the largest conflict on the European continent since World War II. There remain risks that this conflict may escalate further. The eruption of conflict has already created turbulence in financial and commodity markets. It is anticipated that, in the long term, various commodities may rise in prices, adding to inflation.

I support the principled position that Singapore has taken in relation to this dispute. While we are not against any country, we stand firmly against this invasion as a violation of Ukraine’s territorial sovereignty. As at the time of this speech, it remains the case that despite the violation of international law, Ukraine is largely fighting alone against Russia. However, the international community has been swift in taking action, including tough economic sanctions, against Russia.

This raises a number of related issues for us to consider. The first is that defence spending is vital and we must ensure we have the capability and resources to survive in the event war is visited on us. While I expect we will have more details on the defence spending in MINDEF’s Committee of Supply – I have filed several cuts on that – I think we need to remain committed to defence spending and national defence even during times of peace. There will be many demands on our spending in the coming years and it is always tempting to say we should cut defence spending in times of peace. This would clearly be a mistake.

The second is we must continue to maintain and build good and deep relations as well as mutually beneficial economic ties with as many countries as possible. We hope never to go to war, but the stronger and deeper our ties with the world around us, the better our chances of avoiding war and also of getting support from the international community in the event we are drawn into a war. It is always a big ask for others to join our conflict, but they may help in other ways, which will be vital.

Third – and this is more short term – I would also like to ask the Minister for Finance whether he sees any significant economic turmoil from the war in Ukraine on us and whether any additional measures may need to be taken in the Budget to provide for this.

The second topic – and now coming to home more directly – is our response to COVID-19. Singapore has done an excellent job of handling this crisis. We have taken a generally cautious, science- and evidence-led approach that has enabled us to achieve a high vaccination rate amongst the population and kept fatalities at a relatively low rate. The main price we have paid is living with social restrictions, which have taken a toll both on the economy and on the mental health of some of our people.

Over the last few months, with Omicron spreading, COVID-19 has been affecting even many in our highly-vaccinated population. I, myself, came down with COVID-19 in December when I was with my family in the UK.

The UK's approach to COVID-19 was quite different from Singapore's and, while there were some restrictions in place, including requirements to wear masks indoors, many activities had resumed when we were there. These included football matches, dining at restaurants and eateries and watching plays and performances. Of course, this is probably part of the reason I came down with COVID-19, as did my daughter.

However, for both of us, the experience was not particularly bad. Although we had mild symptoms for a few days, we did not test positive until our pre-departure test, where my daughter and I tested positive. Thereafter, we isolated ourselves, in line with the UK's guidelines at the time. However, within about two days, we were testing negative again and our symptoms were relatively mild. In my case, just a slight sore throat and runny nose.

As we spoke to more people, we realised that almost everyone knew someone or had family or friends who had come down with COVID-19 and some had come down with it themselves. For most, it was not debilitating and life could go on.

Of course, this is not to trivialise the COVID-19 experience. My wife and I had three shots of the vaccine and this, probably, helped us in resisting and overcoming the virus. My daughter had the benefit of youth.

However, from what we understand, the immunocompromised and those with pre-existing ailments remain vulnerable to serious complications. Additionally, there are studies in the UK pointing to a group of people who suffer symptoms called "long COVID", which means they have different after-effects following a COVID-19 infection, some of which can be serious and debilitating.

My suggestion is that it may be better for us to proceed with plans to ease our restrictions and move closer to life as normal but, at the same time, remind and educate the more vulnerable to take extra precautions. We need to reiterate the message that, for those with COVID-19 who are either asymptomatic or who have mild symptoms, there is no need to visit the doctor or the hospital. If necessary, sceptical employers who are asking for medical certificates can ask employees to send photographs of their current ART test results for human resource (HR) record purposes.

I understand that even with the relatively large number of COVID-19 cases that are emerging every day, our hospitals remain able to cope with those who need urgent assistance. Our population is amongst the best vaccinated in the world. I think we are ready to open up.

The third topic I wish to discuss, quite different from the earlier two, relates to housing.

In my Meet-the-People session (MPS) cases, appeals in relation to housing are one of the common ones that come up. Housing affordability and availability are a concern for many residents.

One of the curious issues that has arisen during the pandemic is that the housing market has heated up, both in the public and private sector. I think this is a combination of both increased demand and tightening supply.

On the demand side, as more people are at home, the more people seek more personal space for themselves and family members. Thus, in large extended families, various members may wish to move out into houses of their own. New couples getting married want their own place as it may be difficult to move in with either of the parents. Appeals for new flats emerge regularly in my MPS.

On the supply side, Build-to-Order (BTO) development has slowed down somewhat because of delays in construction. Additionally, the resale market has been limited by the imposition of minimum occupation periods, or MOPs, for both resale and new flats. I had filed Parliamentary Questions on this previously and MND had indicated in its response that it did not believe removing MOP would increase housing supply and may encourage speculation because people who sell their flats may then look to buy new ones.

I do not agree with this view entirely and I would suggest, perhaps, initially, HDB may wish to consider removing the MOP for resale flats while retaining it for new flats. This was actually the state of affairs for many years before MOP was extended to resale flats as well. Even without MOP, there are other disincentives to flipping flats, including the seller's stamp duty, which is higher if a flat is sold within a shorter holding period.

In my view, one of the biggest drivers for new BTOs is that there is a huge price discrepancy between resale flats and new flats. A new flat is both brand new and has a fresh lease, and it comes at a lower price. So, as a result of this, there is almost no logical reason for anyone to buy a resale flat unless they feel they have no choice.

At the same time, people who buy resale flats also get a feeling they are getting a raw deal and are envious of those who get new flats at a lower price. This exaggerates the "lottery effect" of new flats and those who are eligible for it vis-a-vis those who are not or who are lower on the priority list start feeling more resentful.

My humble suggestion would be to take away the MOP for resale flats. This would, at least, create a greater supply of resale flats, which should ease their prices.

I also do not expect this to be a one-off effect because, if a resale flat is bought, it could still be put on the market again if needed, whereas now, if a resale flat is bought, it would be out of the market for at least five years, hence, constraining supply. So, in that sense, every transaction constrains the resale market further.

It would also give resale flat buyers the benefit of flexibility – at least, one tangible benefit for the huge premium they would otherwise be paying.

Currently, the two most common HDB appeals I get are either for new flats or to reduce the MOP because families need to change their living arrangements as a result of changing circumstances.

I think one of the reasons for the high demand for BTOs, in particular, is the disparity in prices between resale flats and BTO flats. And I would suggest that, ideally, the price of a BTO flat with the resale levy should be somewhat comparable to a resale flat so that they become easy options for buyers to choose from. I believe that if more buyers are prepared to go to the resale market to buy their flats and the resale market is accessible, this would reduce the heavy demand we have for BTO flats at the moment.

So, if this disparity falls enough, such that Government grants would make buying resale flats as attractive as new flats even for those who are house hunting, I think this would also further reduce the current pent-up demand for BTOs and the lottery effect people are feeling from this.

Mr Speaker, I have covered three different topics that are important, I believe, in different ways but I, generally, support this Budget.

Mr Speaker: Ms Hany Soh.

12.52 pm

Ms Hany Soh (Marsiling-Yew Tee): Mr Speaker, it is uplifting to learn that several of the schemes and support packages introduced in this year's Budget will go a long way towards softening the impact of rising costs for Singaporeans, particularly the lower-income group.

However, while the Government provides direct monetary aid to our citizens, I believe that we can go even further by ensuring that all Singaporeans have the knowledge and the tools to become financially self-sustainable.

As the saying goes, "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime."

One suggestion is that various Ministries should consider working with the People's Association to organise financial literacy workshops in the community. These workshops would cover essential topics, such as budgeting for necessities, planning for big ticket item purchases and the basics of investing, which can also include sharing of useful tips on scam prevention.

We can also pair these workshops along with estate planning and law awareness talks, which are also an extension of managing household finances. The law awareness talks should involve multiple agencies, including the Office of Public Guardian (OPG), the CPF Board and MinLaw to work hand in hand together with the Law Society of Singapore.

In conjunction with the talks covering estate planning, MinLaw can consider a further waiver of the $50 wills registration fees currently chargeable by the Singapore Academy of Law while encouraging inter-agencies to work closely together to promote the use of Smart Nation's MyLegacy portal for comprehensive estate planning services on matters, such as CPF nominations, advance medical directives, lasting power of attorney and wills.

In terms of investing in our children, another area which I hope we can consider is to defray the costs of preschool and after-school care services, such as exempting the GST for these monthly expenses. This would be a welcome relief for parents, especially single parents and families with special needs children, as this pandemic has caused many of our little ones to miss school for extended periods of time without compensation.

On the same note, I also hope that more support can be provided to families with autistic children. During the course of my thematic e-townhalls which focus on embracing parenthood, as well as my regular house visits, several of my residents with autistic children have shared with me that, notwithstanding the fact that they belonged to the middle-income group, they find themselves financially stretched due to the costs incurred for signing up their children into the early intervention programmes and speech therapy sessions, coupled with the expenses incurred by them every month for enrolling their children in a kindergarten or childcare centre. All of these expenses are subject to GST.

Lastly, we can further reduce our collective upkeep and progress towards our Singapore Green Plan 2030 goal by encouraging Singaporeans to practise not just the 3Rs but the full 5Rs: (a) reduce consumption of resources unless necessary; (b) reduce consumption of resources, such as water, electricity and food; (c) repair reparable items, such as electrical and electronic appliances; (d) reuse used items for different purposes, such as using reusable bags, bottles or food containers; and (e) segregate recyclable items and place them into recycling bins.

These 5Rs will not just enable us, as a community, to work towards our Singapore Green Plan 2030 but will also help fellow Singaporeans to reduce their day-to-day expenses.

To that end, the Government can contribute towards improving the "software" and the "hardware".

In terms of the "software", a few of my suggestions include setting up workshops in the community, sharing useful tips to practise the 5Rs and empowering residents with the knowledge to conserve water and energy as well as to reduce food waste.

One example would be the Singapore Institute of Building Limited (SIBL)'s ongoing SG Eco Fund project in Woodgrove aimed at raising awareness on environmental issues and encouraging more residents to adopt an eco-friendly lifestyle through community and education programmes, sustainable markets and an app with interactive games.

Another suggestion would be in relation to developing new TV programmes to educate our younger generations about the 5Rs in an engaging manner.

Captain Green, an iconic green frog mascot was first introduced in the 1990s to encourage Singaporeans to adopt a clean and green lifestyle. In recent years, Captain Green has ventured into storybooks and quick teach cards used in preschools to inculcate our children with the habit of taking responsibility for their actions and to reflect on their choices towards a clean and green environment.

I believe these teachings can be further enhanced through a collaboration with Mediacorp to introduce a cartoon series involving mascots like Captain Green, Water Wally as well as the recently launched Bloobin, using rhythmic content akin to the popular "Baby Shark" song to attract our children and to encourage them to be our young budding green champions.

To tackle the "hardware" part of the equation, quite a number of my Woodgrove residents have expressed during our regular Green Living sustainability dialogues that the present design of the blue recycle bins poses many challenges for the community to recycle effectively.

While we note that NEA has been stepping up efforts to educate the public on how to recycle correctly, all we need is one irresponsible user to deposit food waste into the blue recycling bin to cause the rest of the recyclable items in the bin to become fully contaminated and attract rodents unnecessarily.

We should, therefore, not merely provide one bulk container for people to dispose all types of recyclables and waste. There needs to be more innovative solutions to encourage or incentivise single-type recyclables, such as having one specifically or specially for batteries, plastic bottles, paper or cans and so on.

In relation to the energy- and water-saving component, HDB can assist by considering green features in future housing projects and upgrading existing ones through Home Improvement Programme (HIP), such as adopting sustainable materials and designs. Many of our existing HDB flats incorporate full glass windows that emit a considerable amount of heat during the late afternoon. As an example, HDB can consider installing low heat transfer windows, such as double-glazed windows, as a solution.

Finding a suitable greener alternative that helps cool down our HDB flats will translate to less reliance on fans and air-conditioning, indirectly contributing towards reducing residents' utility bill costs each month.

Mr Speaker, allow me to conclude in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] In this Budget, the Government has listened to the voices of the people and delayed the increase in GST. It has also introduced several assistance packages, providing reassurance to Singaporeans whose livelihoods have been affected by the pandemic, and easing their financial burden.

Continuing support, such as S&CC rebates, GST vouchers, will continue to help Singaporeans cope with rising cost of living due to inflation.

While these assistance packages are substantial, responses vary from household to household. Take, for example, the $100 CDC vouchers previously given out by the Government to each household. Some residents from low-income families expressed their gratitude to the Government, while others told me that they hoped the Government could have given more.

In the long run, we should not rely too much on Government assistance to sustain our livelihood. Instead, we should carefully plan for our future and build our own financial foundations.

Starting a family, making a career, birth, ageing, sickness and death will definitely impose a heavy burden on us in different stages of our lives. Hence, I hope that the Government will provide professional guidance to Singaporeans in financial planning before they enter these stages.

Like our reserves, if we plan ahead and manage our finances and expenses well, we will be prepared for rainy days. I support this year's Budget.

Mr Speaker: Mr Darryl David.

1.02 pm

Mr Darryl David (Ang Mo Kio): Mr Speaker, Sir, there was anticipation and even some trepidation in the lead-up to Budget 2022. Not only was this Budget set against the backdrop of a COVID-19 year three, it was also set against rising global energy prices, increasing core inflation, the rising cost of living and Europe on the brink of open conflict between Russia and Ukraine, which, by now, has become a grim and sober reality. And added to all these, of course, was the impending increase in GST.

The issue of the GST increase has been debated quite extensively in this House and I understand that Members have opposing views on whether the GST should or should not be increased. I believe it is fair to say that almost all Members, if not all Members of the House, would agree that more can and should be done for the less privileged in society and those with more should contribute more. The fundamental question is, of course, how that more should be funded. Should we continue to draw more from the reserves? Should we significantly raise income tax and corporate tax? Should we base property taxes on property values? Should we tax the wealthy based on the value of their wealth portfolio? Should we use more of the NIRC and, if so, how much more – 60%, 70% and so on?

These might very well be decisions that could be taken by either this Government or governments of the future. But I would like to urge those governments to exercise caution because such decisions have to be part of a holistic, balanced and diversified taxation policy that strikes a careful balance by considering the impact on all the various groups and stakeholders in our society. Let us not use a sledgehammer and swing away wildly when perhaps a discerning use of a chisel might be more appropriate.

As such, I do understand the rationale behind the GST increase and commend the Government for being sensitive in implementing the GST increase in two stages, in 2023 and 2024, so that the immediate impact of the increase is not felt and this will give everyone, both consumers and companies, time to prepare for the hike.

To further soften the blow of the increase and to help Singaporean households cope with the increase in the cost of living, I am also heartened to see that the Government has rolled out many other schemes, such as the enhanced Assurance Package with additional CDC vouchers and cash payout to eligible Singaporeans; enhanced permanent GST Voucher scheme; U-Save rebates; MediSave top-ups; and the addition of S&CC into the GSTV scheme.

With these schemes, the net transference from the Government to lower-income families and those who need it will increase from the current sum and the impact of GST increase on lower-income families will not be felt for many years. I believe that this transference and these schemes are really quite seamless and the effort for many of those who need it is quite minimal to access these schemes and that would significantly thus reduce the impact of any bandwidth tax that was mentioned earlier by our colleague, Mr Leon Perera, in his speech.

As I have mentioned before, it is important to have a holistic taxation strategy and it is commendable that the Government is looking beyond GST as a revenue source and is also exploring other alternative sources of taxation revenue via other forms of progressive taxes, such as the increase in personal income tax for those with an annual income of more than $500,000 and an increase in property tax for non-owner-occupied property and owner-occupied property with an annual value of more than $30,000. The revisions in the rate of these progressive taxes will help to ensure that the overall tax regime in Singapore remains resilient, with those with more means contributing more than those with less. Notice I have said "those with more", not "those with a lot". So, as long as I have more than you, I should be happy and willing to contribute to you. That is what I think we all should be aiming for.

I would like to shift the focus now to the next topic of my speech, Mr Speaker, please, on healthcare and, specifically, men's mental health and well-being. I am personally glad to hear that there will be an increase in healthcare spending, and a specific area of healthcare that I am especially happy that the Government is focusing on is mental wellness. This has been raised before by other Members in this House.

Mr Speaker, COVID-19 has left an indelible mark on humanity and on our collective psyche. It has changed the way we utilise spaces, interact with one another and how we build social relationships. The stress of having to live with the pandemic, the need to face medical unknowns related to the disease, the increase in contestation for living and working spaces, job and income insecurity, and having to constantly navigate the ever-changing COVID-19 management measures, have left many of us physically exhausted, emotionally spent and mentally drained.

When we think about mental wellness, we have to understand that different groups of people have different mental wellness needs as they can be affected by the same stressors differently. We recognise this, of course, if we look at mental wellness for the youths, mental wellness that affects seniors, postpartum depression when it comes to women who have just given birth and so on. So, rather than to treat mental wellness as a collective term, it will thus be beneficial for us to recognise that, just like these other different segments of society, men are also affected very differently by stresses.

In many societies today, some patriarchal beliefs continue to be commonly held by the majority of the population and there are corresponding societal expectations of how men should behave in social settings. Men are still expected to be the head of the family, the dominant breadwinner, to have the "eye of the tiger" by demonstrating strength and confidence and to stare adversity in the face and to "man-up", take the fall when things go wrong.

These expectations have, inadvertently, caused men to experience stressors that are different from those from other segments of our society. Ms Porsche Poh is one of the leading mental advocates for mental health, having founded Silver Ribbon way back in 2006. One of the nominees for Singaporean of the Year in 2021, Ms Poh has done a lot to help those with mental illness in my Ang Mo Kio-Hougang constituency and she shares these strong views that more needs to be done for men's mental health.

I had a chat with Ms Poh lately and, according to her, men often tend to equate psychosomatic symptoms, such as racing heart, digestive issues or headaches, as health issues and seek help from physicians without realising that these are common symptoms of depression. More worryingly, when depressed, men are more likely to engage in negative coping techniques, such as alcoholism, which may, ironically, lead to other forms of health problems in the long run.

"During our sessions," says Ms Poh, "some male clients asked if it is okay for them to cry. We have to promote mental health among men more so that they feel comfortable to speak up about their struggles." And I thank Ms Poh for her valuable inputs in my speech.

Mr Speaker, I wholeheartedly agree with Ms Poh and have some suggestions that I hope the Government could consider to better promote mental health among men.

I believe that we should go upstream to educate men about the importance of mental wellness and let them know that there are sources available to them when they need help. Could our Secondary schools or tertiary institutions not develop dedicated resources and platforms to teach male students how to dispel traditionally toxic masculine stereotypes and encourage them to step forward and feel comfortable to speak up about their struggles and seek help?

Could MINDEF consider running programmes educating our NSFs and soldiers about the importance of mental wellness and promote the idea that it is okay to seek help? It is okay to be not okay. To help them move away from the stereotype that you should shed blood and not tears because "real men don't cry?" I believe that having such mental wellness programmes and demolishing archaic male stereotypes are not incompatible with training our soldiers to be tough and resilient.

Making our young men better soldiers by making them more aware of their mental wellness also prepares them to be better men for the rest of their lives. I would also hope that the Government can devote some resources to having more community-based platforms that specifically cater to men who are presently struggling with mental wellness. For example, one could start with mental well-being activities in community clubs and centres that cater to men and perhaps this could evolve into dedicated structured support group sessions that men could attend. The ultimate aim of this would be to destigmatise help-seeking behaviour from men as signs of weakness by creating a more gender-neutral society and providing platforms where men, and women, feel comfortable to discuss mental wellness issues.

Mr Speaker, Sir, there are those who have described this as a "Robin Hood" Budget; that is, "take from the rich to give to the poor". But to use that term is to draw lines of divisions between just "what or who" is rich and "what or who" is poor and dishes out unhelpful labels that can only be divisive in our society.

The heart of good governance is about creating a strong social compact, and the social compact is constantly evolving as our society progresses. And a key feature of our social compact is reflected in this Budget, which signals that those of us who are blessed to have more should contribute more, and those of us who need more help should get the help that they need. Rather than reducing it to a blunt tool about simply taking from one group and giving to another, I see this Budget more as reinforcing a uniquely Singaporean version of "noblesse oblige" where those who are in positions of relative privilege and wealth – and I use the word, "relative" again, Mr Speaker – have the social duty and obligation to take care of those who have less.

So, it is not just about implementing a particular fiscal policy; it is about strengthening a societal philosophy. It would be wonderful if this philosophy could permeate into every single Singaporean social consciousness, whereby, regardless of our income levels, we are willing to contribute not just our money, but also our time to those who need our help and assistance. Because that is what a family does, Mr Speaker: those who are stronger, take care of those who are not as strong; those who can, help those who are trying; those who have more, help those who have less. Everyone does their part. And it is only by staying strong as one united Singaporean family that we are going to get through the economic and societal challenges of the years ahead. And with that, I end my speech in firm support of the Budget.

Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 1.40 pm.

Sitting accordingly suspended

at 1.15 pm until 1.40 pm.

Sitting resumed at 1.40 pm.

[Mr Speaker in the Chair]

DEBATE ON ANNUAL BUDGET STATEMENT

Debate resumed.

Mr Speaker: Minister Lawrence Wong.

1.40 pm

The Minister for Finance (Mr Lawrence Wong): Mr Speaker, I thank all Members who have spoken and supported the Budget. Many suggestions have been raised and I cannot cover all of them in this round-up speech, but I assure everyone that we have listened to every view and will study your suggestions carefully.

Members have also raised many specific questions related to the programmes of the Ministries and these will be addressed at the Committee of Supply (COS).

Sir, this Budget sets out the roadmap for Singapore to adapt and thrive in a post-pandemic world. We are charting our way forward together – towards a fairer, greener and more inclusive society. From what I have heard during the debate, there is strong support for these key thrusts of the Budget and I thank everyone for the support.

The key issues raised during the debate can be summarised in three broad questions. Are we doing enough to sustain our recovery and position Singapore well for the future? Why do we need more revenues and, in particular, why raise GST and are there alternatives to this? And is the Budget fair to all Singaporeans? I will address these three issues in turn.

Let me start with our overall economic situation. Ensuring a strong and vibrant economy is of critical importance because it raises our standard of living, provides good jobs and opportunities for Singaporeans and generates revenues, so that we have the resources to do more, especially for the more vulnerable groups.

In my Budget speech, I shared our outlook for the year and some of the risks on the horizon, including the tensions in Eastern Europe. Since then, we all know that the situation has escalated sharply, following Russia’s invasion of Ukraine.

The Minister for Trade and Industry has provided an update of the economic outlook. Singapore’s direct trade linkages with Russia and Ukraine are relatively small. But the conflict will impact the global economy and global energy markets, which will, in turn, affect us.

So, we are taking actions to enhance the resilience of our energy supplies. We are coordinating actions across the whole-of-society as some Members have suggested. For example, extending the Temporary Electricity Contracting Support Scheme (TRECS) to help affected consumers, especially the SMEs. We are getting businesses to offer more value-for-money house brands to consumers so that consumers can stretch their dollars. We are extending Price Kaki to help consumers make better, more informed purchasing decisions. And we are standing up the Committee Against Profiteering to take action against unfair price hikes.

Where inflation risks are concerned, MAS had taken the pre-emptive step to tighten monetary policy in January. The appreciating exchange rate will moderate the impact of higher global inflation. MAS will continue to assess the appropriate steps to ensure medium-term stability.

In this Budget, we introduced the Jobs and Business Support Package to help businesses and workers, as well as the Household Support Package to help households with their daily needs.

Let me be clear: this Budget is expansionary, and our fiscal stance is appropriate. We are staggering the tax moves, with the first step of the GST increase taking effect only next year and with generous offsets for all Singaporean households.

We are monitoring the external situation and the risks for our economy closely. Risks in terms of both growth and inflation. If the situation worsens, we will not hesitate to take further actions to protect jobs and to help households and businesses deal with increased costs.

Notwithstanding these near-term uncertainties in the external environment, our overall prospects are good. We are operating from a position of strength and that is why we can make bold moves now, which will position us well to seize the opportunities ahead.

One decisive step is to accelerate the decarbonisation of our economy and achieve net-zero by or around the mid-century. All of us will have to adjust to the new levels of carbon tax to facilitate this green transition. But moving decisively will bring many benefits and open up new opportunities.

For example, after the Budget, Members may have read that EDP Renewables, a global leader in the renewable energy space, announced plans to invest up to $10 billion through a local firm Sunseap to establish a clean energy hub in Singapore for the Asia Pacific region.

As we attract more of such green investments, we will also step up training efforts to equip Singaporeans with the right skills to take on these new green jobs. As several Members, including Ms Poh Li San, Prof Koh Lian Pin and Ms Hany Soh highlighted, this will take a whole-of-society effort to achieve our climate ambition. We will, certainly, move forward in that direction.

At the same time, we will continue our R&D efforts in emerging technologies, such as carbon capture and hydrogen, as suggested by Dr Tan Wu Meng.

All of these moves will enhance and strengthen Singapore's position as a choice destination for new investments in the green economy and, ultimately, create many more good jobs for Singaporeans.

Several Members, I think Mr Seah Kian Peng and Ms Denise Phua, worry that we are making too many changes at the same time – foreign worker adjustments, progressive wages, CPF, carbon tax and so on – and that all these will add to cost pressures for businesses at a time when demand is still weak for certain segments of the economy.

I understand these concerns. That is why we are continuing to provide significant support to the harder-hit sectors, including through the Small Business Recovery Grant.

We are also phasing in the new requirements. For example, the carbon tax increase will be staggered over three phases from 2024 to 2030. The changes to the S Pass minimum qualifying salary will be implemented over three steps from this year to 2025.

What we are doing is to be upfront, clear and transparent to businesses. We are announcing these moves well ahead of time so that businesses can plan ahead and make the necessary adjustments.

Even as we make these policy moves over the coming years, we continue to pay very close attention to our SMEs, something which many Members spoke about.

We will continue to help our SMEs upgrade and maintain a vibrant SME sector in Singapore. This includes our heartland enterprises, as mentioned by Mr Melvin Yong. In fact, our support and grant schemes for companies are designed to benefit SMEs the most.

Prior to COVID-19, smaller firms were receiving about 12 times more grants from the Government on a grant per dollar of revenue basis, compared to larger firms. Twelve times more grants from the Government on a grant per dollar of revenue basis.

And throughout the past two years, SMEs continued to receive significant help through schemes like the Jobs Support Scheme, rental relief and financing schemes.

In this Budget, 80% of the payouts from the new and enhanced schemes will flow to SMEs.

Of course, not every SME will get the same support. That is because our strategy favours SMEs which are actively training their workers and increasing their productivity. If the SME is prepared to make the effort, it will enjoy very generous co-funding.

Under the Productivity Solutions Grant (PSG), firms that undertake productivity solutions this year will receive significant funding support. For a $10,000 productivity project, the Government will pay up to $7,000. With the SkillsFuture Enterprise Credit (SFEC), eligible firms can get additional funding for up to 90% of out-of-pocket expenses for their supported programmes.

You can stack both schemes together. If you do so, SMEs only need to pay as little as $300 for a $10,000 productivity project.

Mr Derrick Goh, Mr Edward Chia and several Members who have spoken passionately about SMEs will be heartened to know that we will intensify our outreach efforts to the SMEs to let them know about the support schemes and how to take advantage of them. We will proactively reach out to our SMEs through our Trade Associations and Chambers (TACs) and Enterprise Singapore. At the same time, we are making it easier for SMEs to access information on schemes and available support through the GoBusiness portal and SME Centres.

I recognise that the operating environment in Singapore can be challenging for businesses. We are no longer competing based on being a low-cost business location. Where we can, the Government will manage the pace of cost increases and make it easier to do business.

For example, through GoBusiness Licensing, we have streamlined the number of regulatory touchpoints for food business owners from 14 to one. This reduces the number of licence applications that firms have to fill up and saves up to 14 days of turnaround time.

Ms Janet Ang and Mr Edward Chia shared concerns from the business community on the availability of manpower. That is a key concern for many businesses and I fully understand.

The current shortage of Work Permit holders is partly due to our border restrictions. As we progressively open our borders, we are giving priority to bringing back workers that businesses urgently need, especially workers for the construction, marine and process sectors. We should be able to clear the shortages within the next few months.

At the same time, firms should continue to take full advantage of the various schemes that support job redesign and improve productivity to become more manpower-efficient.

In the near term, the Government will also help to offset some of the cost increases. For example, we have the Progressive Wage Credit Scheme to help co-fund wage increases for low-wage workers.

But we cannot offset wage and cost increases perpetually as that will not be viable nor desirable. Keeping the cost of employing foreigners low would also mean depressing the wages of local workers over time.

Our focus, therefore, is not to hold down labour costs indefinitely but to support efforts by our firms to be more productive and innovative so that they can be competitive and successful even as labour costs gradually increase. That is why we are redoubling our efforts to invest in new capabilities.

Mr Seah Kian Peng asked about support for our TACs. We are already doing this through the Local Enterprise and Association Development (LEAD) Programme, which provides funding support for TACs to drive capability development and internationalisation projects.

At the same time, as Mr Shawn Huang noted, we are continuing to invest heavily in R&D and technology to strengthen the overall competitiveness of our economy. Ms Sylvia Lim asked why we appear to be lagging behind in some of these knowledge and technology outcomes. In fact, we have been doing better over the years. These investments have a long gestation period. They take time to bear fruit but we are seeing positive results. I am confident we will continue to see more positive results in the years ahead.

As I shared in my Budget speech, one area of focus is to strengthen the linkage between research institutes and industry so that companies can readily access frontier technology and high-quality research.

We are also paying closer attention to the more promising SMEs to help them scale up faster and expand overseas.

Take the example of Cheng Yew Heng, a food manufacturer and food ingredients supplier.

It started out as a small family business in 1947, producing candies and preserved fruits. It is now run by the third generation and has embarked on a journey of production innovation, automation and has expanded into overseas markets. Today, it is a leading sugar manufacturer and ingredients supplier and operates its own e-commerce platform. It even launched a food accelerator recently to help startups commercialise food technology, scale up and access new markets.

We now have about 800 local enterprises with annual revenues above $100 million. They include many household names like BreadTalk, Koufu and SK Jewellery.

Through the new Singapore Global Enterprises initiative, we will provide customised support to help promising businesses scale up and better access the three areas of capital, talent and networks that Ms Janet Ang had mentioned so eloquently in her speech.

With all of these efforts, we look forward to celebrating many more homegrown success stories in the years to come.

Another critical aspect of competitiveness is to stay open and connected to the world, something which many Members like Senior Minister of State Chee Hong Tat, Mr Cheng Hsing Yao and Mr Patrick Tay have emphasised.

This is not just an option. This is essential, even existential, for us. We must never let anti-foreigner sentiments take root here or give the impression that we are becoming more inward-looking.

I caution some in the House who have been shrill on this subject. Take a look at some of the articles that have appeared in the international media recently, wondering if Singapore is closing itself and Singaporeans are becoming less welcoming of foreigners. If global investors conclude that this is so, Singapore will become less attractive to them and it will be ordinary Singaporeans who suffer the most. My colleague, Dr Tan See Leng, the Minister for Manpower, had also sounded a similar warning yesterday.

In this Budget, we are adjusting some aspects of our foreign worker policies. This is not a sudden change in policy. We made our intentions very clear in the Economic Strategies Committee report in 2010.

Since then, we have been making careful, calibrated adjustments to our foreign worker policies. We recognise that tightening too quickly will hurt our SMEs, but moving too slowly will lessen the incentive for firms to upgrade. So, it is really about maintaining that careful balance.

The latest moves we have made in this Budget will help to ensure that the workers coming in are of the right calibre and in areas where we need them and further strengthen the complementarity of our local and foreign workforce.

But I want to be very clear about one thing: we are not closing ourselves to the inflow of foreign workers and professionals. They are, and will remain, integral to our economy and our competitiveness. They are a valuable complement to our Singaporean Core at all levels of the workforce.

We continue to welcome all who contribute to us having the strongest teams here, to give Singaporeans, ourselves, the best chance of success amidst intense global competition. And we welcome those with the capabilities and the commitment, who share our values and our way of life, to stay on and help us build the next phase of our Singapore story.

I also recognise that certain segments of the economy may need more help. And Members have provided many useful suggestions in this debate. For example, Mr Don Wee and Ms Yeo Wan Ling spoke about self-employed persons (SEPs) who are vulnerable and in need of support.

The Government has rolled out several schemes to support self-employed persons through this difficult period. We have also set up the Advisory Committee on Platform Workers, which comprises multiple stakeholders, including our tripartite representatives. The Committee is deliberating on ways to further strengthen protections for these gig workers and will give an update when they are ready.

More generally, we will continue to review our social safety nets to ensure that they meet the needs of our workers in a rapidly changing economy and labour market.

As I mentioned in the Budget, this is a multi-year agenda. This Budget is just one step among many that we have taken before and will take in the future to renew and strengthen our social compact for a post-pandemic world.

In this regard, I am heartened by the various suggestions of Members in this House. Many have offered good ideas. They include Mr Cheng Hsing Yao, Mr Henry Kwek, Mr Patrick Tay, Ms Denise Phua, Mr Louis Ng and, just now, Mr Leon Pereira, around social workers and our social safety support schemes, all suggesting for us to do more and to do better for Singaporeans.

This is, indeed, what drives every Budget. We will continue to study these suggestions carefully and review all of our schemes. But to do more, we will also need to ensure that we have sufficient revenue. That is what I will move on to very shortly.

Sir, on raising revenue, I believe there is broad agreement in this House that additional revenues are needed for the Government to do more. Some have suggested that before we raise revenues, we should put in more effort to slow down expenditure growth. I agree with that. Government spending is about 18% of GDP today. We already run an extremely tight and lean ship, compared to other developed economies, and yet, we have been able to achieve consistently good outcomes.

Ms Hazel Poa asked about the effect of the planned 1% budget cuts – let me clarify that the savings from these budget cuts are reallocated towards new priorities, because the Government is always seeking to embark on new initiatives for the benefit of Singaporeans. So, by making these cuts and reallocating to new initiatives, we are able to moderate the increase in our spending.

I am glad that several Members, like Mr Yip Hon Weng, recognise that Government spending and revenue are two sides of the same coin. But in every Parliamentary session, I must say that I hear many requests for the Government to do more and much fewer requests for the Government to do less. Because we are raising revenues now, I think Mr Leong Mun Wai and Ms Hazel Poa say we should cut back spending further, but they have conveniently neglected to mention that they and the PSP have made requests on multiple other occasions for the Government to spend more, for example, funding of insurance premiums for MediShield Life and CareShield Life; hiring more teachers, reducing class sizes, all of which cost a lot of money.

So, you cannot have it both ways. If we want the Government to do more, then let us be upfront and explain to Singaporeans why additional revenues and tax increases are needed. In many countries, the tendency is for politicians to focus only on the spending side, because it is inconvenient to talk about taxes. As a result, these governments spend beyond their means. They run up unfunded obligations and debt, and they kick the fiscal can down the road.

We are not immune to such pressures. Some of the increase in Government spending is necessary and unavoidable. For example, healthcare spending will be the main driver of the increase in social spending. And the key reason why healthcare spending will rise is our rapidly ageing population, as everyone in this House understands. We are living longer.

Take the number of people who are aged 90 and above. In 2010, we had about 10,000, aged 90 and above. Now, they have more than doubled to 22,000. Or take the number of centenarians, aged 100 and above. In 2010, we had 700; now, around 1,500. By 2030, the numbers will increase much more.

Our seniors will require more medical services – they are more likely to be hospitalised and their length of stay in hospital tends to be longer, compared to younger folks. They also need elective procedures like cataract operations that help them lead more fulfilling lives. But these, too, require more healthcare spending.

So, just the demographic effect of having more seniors alone will already push up healthcare spending significantly. Further increases will happen as better and more costly treatments become available and with the medical inflation that is inevitable, even with the best organised healthcare system.

Another reason for more spending is that our social needs are getting more complex, something which several Members have recognised and highlighted, including Senior Minister of State Heng Chee How, Mr Desmond Choo, Dr Wan Rizal and Ms Nadia Ahmad Samdin. These issues are not so easy to resolve through standardised schemes alone.

Often, we will need to customise approaches to suit the circumstances and needs of individuals and families facing complex and multiple challenges. We also need strong coordination, which our agencies are continuing to do, not just across public sector agencies, but with social service agencies on the ground, to take a family-centred approach. And to do this well, we need trained counsellors and social workers to befriend, mentor and journey along, handhold the individuals and families and journey along with them, like what we are doing with ComLink and KidSTART.

This is important work, it likely to produce better outcomes, but it is also highly resource-intensive and will, invariably, cost more.

Over the last decade, Government expenditures rose from 15% to 18% of GDP. This was mainly due to higher spending on healthcare, public transport and significant enhancements to Workfare and the introduction of Silver Support, to name a few. All meritorious programmes, but all requiring significant funding.

Now, if we are able to keep Government expenditures at 20% of GDP in 2030 – so, from 15% to 18% over the last decade, but in 2030, if we can keep it to 20% of GDP – that would already mean a slowing of the rate of increase, compared to a decade ago. I think that would be a good achievement.

The Government will do its part by using its fiscal resources prudently and judiciously and ensuring value-for-money in public spending. We will continue to streamline coordination across the whole-of-Government to reap synergies, as Mr Zhulkarnain Abdul Rahim suggested. But there is only so much the Government can do on its own. We also require cooperation from all parties, as Miss Cheryl Chan rightly said – to moderate our own expectations for the Government to keep doing more and to consider how community groups and individuals can also come together to contribute solutions.

And I am glad that there are, indeed, many ground-up initiatives taking off, like the #EastCoastBeachPlan started by Ms Samantha Thian. She started cleaning the beach herself when she noticed large amounts of trash piling up there. Then, she started a Telegram group for like-minded individuals to join and undertake clean-ups together. Now the group has grown to 3,300 members and they have conducted more than 400 beach clean-ups.

There are many more ground-up projects all over Singapore. They self-organise to tackle issues and solve problems, sometimes even before the Government gets a chance to respond. We will continue to support and encourage such initiatives and find new ways to partner them and work in collaboration together. This will reinforce the spirit of mutual support in our community and will go a long way in strengthening our social compact.

Both the WP and PSP have suggested spending more from reserves to meet our rising expenditure. It is tempting to turn to our reserves each time we need more funds. But is this the right thing to do?

The Leader of the Opposition, Mr Pritam Singh, has highlighted that the reserves' rules were amended in the past, so, we can easily amend them again now, for example, to adjust the percentage we use from the NIRC. Sir, we have enshrined the fiscal rules in our Constitution to instil discipline in the Government – to spend within our means and maintain a fair and equitable balance between taking care of our needs today and saving for the future needs of today's generation as well as for generations to come.

As we have explained before, we last amended the Net Investment Returns (NIR) framework in 2015. That was to include Temasek into the framework and this was done after a robust and thorough debate in this House. We should not, at the first sign of need, push for changes in the rules, just to take the easy way out and to avoid having to raise taxes to meet our growing recurring expenditure needs. That would not be the responsible thing to do.

Some argue that they have insufficient information about the reserves or about our fiscal projections to make an informed decision about our fiscal options. In fact, there is already a lot of information published, on the reserves, for example. What we do not disclose is the size of funds managed by GIC, so as not to reveal the full size of our financial reserves.

It is not in our national interest to do so. Our reserves are our strategic defence against threats. If we disclose this information, we will be making it easier for potential adversaries to use it against us. Why would we want to do that?

Where fiscal projections are concerned, the Government will continue to put out as much information as possible. We have released data on our key expenditure drivers, I have mentioned several times our demographic projections and explained why our healthcare and social spending will increase in the coming years as a percentage of GDP and included the expenditure growth figures.

On taxes, we expect them to keep pace broadly with GDP, so, there is clearly a structural funding gap as our spending needs rise. We have shared extensively about our needs and plans and will continue to put out more information, where necessary. But I cannot help but feel that the persistent requests for more information are red herrings – they are distractions from the key problem at hand.

At some point, we need to make decisions, including difficult and critical ones, like what we have done in this Budget, to better prepare Singapore for the future. So, the question is whether all Members are prepared to come back to the real issue – on the need to strengthen our revenues through our various tax measures, to meet the structural growth in our expenditure in the coming years.

Unfortunately, both the WP and PSP paint a false, distorted and misleading picture about our reserves, that these are being accumulated at the expense of the current generation. That is not so. They have assumed that the present rules result in an accumulation of more reserves than is necessary, but that is not the case. Our reserves are growing, but the size of our economy, the challenges we face and the complexity of needs are growing even faster.

I have already explained that the NIRC has provided about 3.5% of GDP to the annual Budget, on average, in the last five years. And that going forward, we expect this NIRC stream to continue to keep pace with economic growth. Even to achieve that is, by no means, a sure thing. We would have done very well if we can do so, given that our investment returns are subject to significant headwinds in the global investment environment, for example, due to ageing populations in the developed countries, lacklustre productivity growth, rising government debt levels and geopolitical tensions.

Both the WP and PSP have also suggested different ways to spend from our land sale proceeds. These are variations of what they have put out before and they still do not recognise that land is a scarce asset that is protected as Past Reserves. We have said it before and we will say it again, when we sell land, we are not creating new wealth. We are merely converting the land from a physical to a financial asset.

Therefore, we invest the land sale proceeds back with the rest of the reserves and we spend 50% of the expected long-term real return through the NIR framework. In this way, our land sale proceeds provide a stable and sustainable stream of income for our Budget over time.

So, to be clear, that means we are already spending from our land sale proceeds. We are doing so. But our approach avoids the pitfalls that we will face if we were to spend on land sale proceeds more directly. What are some of these pitfalls?

First, land prices will move in cycles and can be volatile. We know that, for a fact, there are property market cycles. It will not be a static "$100", as Ms Hazel Poa has assumed in her proposal. And we do not want Government revenues to fluctuate with the market because it makes Government spending itself procyclical and creates too much uncertainty for the Government to plan long term.

Second, once a government gets used to relying on land sales to fund spending, it will have a vested interest to keep land prices high to maximise revenues. This will, ultimately, hurt the economy and will hurt Singaporeans. Why would we want to do that? So, the more prudent approach is to treat our land as a finite asset, as what we have done today. We sell the land that we need for urban development and invest the proceeds, as we are doing, to generate a steady income over time. This is a sound approach and it has served us well.

Members need to understand that the risks for our reserves are tilted on the downside. We have already drawn about $37 billion in Past Reserves over the past two years and are continuing to draw on them this year to keep up our public health defences.

Dr Lim Wee Kiak and Ms Tin Pei Ling asked about returning the sums drawn from our reserves. While we are in a better position now, but we are not out of the woods yet. And, I would say, we will not be able to put back what we have drawn down from the Past Reserves anytime soon.

Ms Foo Mee Har also asked whether we would be able to get back to a balanced Budget position. We are, certainly, committed to doing so, as we exit the crisis. This is the basis of our planning. But if there continues to be an extraordinary need, we will have to go through the due process of seeking the President's agreement to a Budget that results in a draw on Past Reserves. This is an appropriate move for managing shocks, as Prof Hoon Hian Teck has noted, and that is how our framework is designed.

Ms He Ting Ru suggested that by saving for the future, we are discounting the needs of the current generation. This is not so. Our fiscal policy, including our Reserves Protection Framework, keeps faith with all generations – current and future. We have drawn on Past Reserves to protect the lives and livelihoods of the current generation, throughout crises. We are also tapping on the NIRC to fund many programmes for the current generation, from the young to the old and, especially for the Merdeka and Pioneer Generations.

At the same time, we need to consider the needs of the future generation. Do we really want to leave our next generation with fewer resources in a more uncertain and volatile world?

To illustrate, if we were to have just 20% less NIRC than today's levels – which could easily have happened if our predecessors had focused on their own spending and did not think it necessary to have a carefully designed Reserves Protection Framework – our GST would now need to increase to 11% instead of 9%, to make up for the funding gap. So, drawing more NIRC now means that our children and the next generation will end up paying more taxes.

Furthermore, no one can tell what the world will be like in 30 years' time. But it is very likely to be a more dangerous world. Our children and the generations after them will have more, not fewer, emergencies to contend with.

The recent conflict in Ukraine reminds us that we are living in an increasingly divided and troubled world. We will encounter more episodes, where size matters, where might is assumed to be right even though that is not a stand we can accept, and where international rules are blatantly ignored by major powers. Let us be very clear. This is a world that will be less hospitable for small countries, let alone a small city-state like Singapore. We will always be at the mercy of these external forces and we must ensure we have sufficient resources to defend and protect ourselves.

And in the years to come, we will need to deal with many other major and pressing challenges, including global warming and rising sea levels, as well as future public health emergencies, which public health experts are predicting will happen with increasing frequency.

We are all thankful that our forefathers did not take the easy way out. Instead, they were disciplined, they considered our needs and chose to keep faith with future generations, meaning us today. So, we benefit from the reserves that they have built up painstakingly. They cared for their future generations, which is us. So, what about us now? What should our attitude be? I say we continue to husband our reserves, keep faith with the generations after us and ensure that they, too, will always have access to this "rainy days" fund to meet any emergencies and, importantly, a steady stream of income for their future needs.

My biggest concern with these requests to use more of the reserves is that it reflects a certain cavalier mindset, one of spending whatever we can today and not caring sufficiently about tomorrow. And we see this happening throughout history and around the world. As countries become more affluent, they feel they have arrived and they get tempted by easy money. It begins with something small – allow standards to slide a little; just tweak the parameters a little. What harm does it do? But, over time, these small things add up. Then, it becomes politically very challenging to roll back any benefit and to raise taxes, or even to talk about it, and the country ends up quickly in a downward fiscal spiral.

Sir, despite our small size, we can face the challenges ahead of us with confidence, in large part, because of our fiscal strength. Very few countries are in the same position as us. In fact, intergenerational equity is better preserved in our system than in other places.

But we must never take what we have for granted, for it can unravel very quickly. So, I strongly appeal to all Members in this House, let us all do our part to uphold the ethos of fiscal responsibility, discipline and stewardship that is so vital to our success.

Next, let me turn to other revenue options. Several Members touched on this. They asked if we could do more on other revenue options, especially income and wealth taxes. And, in particular, the Workers' Party offered a range of revenue options as alternatives to the GST increase.

The short answer is we cannot just ignore consumption taxes and put the entire burden on income and wealth taxes. We need a good mix of all three types of taxes: income-based, asset-based and consumption-based. This is how we ensure that our revenue base remains diversified and resilient, while achieving its objectives of being fair and progressive.

In fact, all jurisdictions rely on these three forms of taxation and the OECD jurisdictions have much higher VAT rates or, our GST, than Singapore. Much higher, all in double digits. But let me go through the revenue options one by one.

Let me touch first on corporate income taxes, or CIT. As I Have said in the Budget speech, it is hard to be definitive at this juncture about the overall tax revenue impact from both Pillars 1 and 2 of BEPS 2.0. International discussions are still ongoing on the reallocation formula for Pillar 1.

But before we have reached an agreement, Mr Louis Chua has already concluded that the impact of Pillar 1 will be limited, because it only covers 100 multinational enterprise groups, or MNE groups.

I think that is premature. I must clarify that although the number of in-scope MNEs affected is small, these are the largest and most profitable MNEs. Any reallocation of profits away from Singapore will have a significant impact.

Mr Louis Chua then projected that the CIT revenue could be as high as $71.5 billion. Mr Louis Chua should have paused at this huge number for a reality check. He says it is "purely hypothetical". But he should have said it is wishful thinking.

Seventy-one-and-a-half billion dollars, that is the total amount of revenue we collect from all taxes. Does Mr Chua really believe that CIT revenue from the profitable non-SMEs, the larger companies, will jump by seven times, from $10 billion to $70 billion? Really?

Will the implementation of the Minimum Effective Tax Rate, or METR, bring us more tax revenue? Yes, the short answer is yes. Mathematically, it has to be so, if nothing else changes. In other words, if we have the same volume of investments and business activities in Singapore, even as taxes go up with the METR, yes, we will collect. But that is a very big "if". It is hard to estimate with any confidence whether or how much more net tax revenue we can collect from both Pillars 1 and 2.

The eventual impact cannot be ascertained by a simple static analysis, as it also depends on how governments and companies will respond, post-BEPS 2.0.

BEPS 2.0 represents a fundamental change in the competitive environment for Singapore. Hitherto, smaller economies like us could rely on tax incentives, not just non-tax factors, to make up for our inherent disadvantages, like limited land and labour force. But this is no longer as effective, post-BEPS 2.0. Companies will review their existing and new investments. Governments will also seek to compete via non-tax investment promotion in order to recover from the pandemic and to make up for what they can no longer do through tax incentives. Our engagement with investors is already revealing this.

So, likewise, Singapore will need to find other ways to stay competitive, from investing even more in our workers to building new infrastructure and incentivising R&D. All these will mean more Government spending. So, even if we can generate additional revenue from Pillars 1 and 2, these will have to be reinvested towards ensuring Singapore remains competitive and attracts our fair share of investments to create good jobs for our people.

I would, therefore, caution against jumping to conclusions or believing wild guesses on how much more revenue we can get from changes in global tax rules and use that as a reason to avoid raising the GST.

Next, personal income tax or PIT. Currently, the top 10% of taxpayers who pay PIT already account for about 80% of our total PIT revenue. With the top marginal personal income tax rate at 24%, we will be higher than the 17% top tax rate of Hong Kong and closer to the Asian average top marginal personal income tax rate of 28%.

There is a limit to how much we can increase PIT rates for the top income brackets, without touching the PIT rates for the income brackets below it.

If we were to keep the GST at 7% and raise the same amount of revenue through PIT, the top marginal rate would have to go up from 22% to 42%. And that would apply to everyone with chargeable income of at least $320,000 or more. And that is assuming the tax base remains unchanged.

But we all know this sharp increase is untenable and will badly damage our competitiveness. Investments and jobs for everyone, including lower- and middle-income earners, will be impacted, not just taxes.

So, to raise the same amount as a GST increase through higher PIT, in reality, we would have to raise the PIT rates for a broader group of income earners, including the middle- and upper-middle income earners. And that was what Dr Tan See Leng was trying to explain yesterday.

In fact, Prof Hoon Hian Teck had correctly observed that as our economy matures and population ages, a bigger share of the population will become economically inactive. This will, in turn, shrink the tax base for income-based taxation. So, we cannot rely only on income-based taxes alone, if we want to maintain a resilient and future-proof revenue base.

So, I have covered corporate and personal income taxes. Next, wealth taxes.

Mr Louis Chua also said we should do more on this front, especially on property taxes. On the other hand, several Members, like Mr Chong Kee Hiong, raised concerns that increased property taxes will impact many retirees and senior owners of private residential properties. So, again, we have to find the balance.

In fact, the changes we have made to property taxes this time around, are not insignificant at all. But we have structured it in a highly progressive manner. Together, our property tax moves raise $380 million more per year from a base of only 7% of all owner-occupied residential properties and all non-owner-occupied residential properties.

For the owner-occupied residential properties, the increased tax rates affect only those with Annual Value (AV) above $30,000. That means that all owner-occupied HDB flats are not affected. Two-thirds of private residential properties, like condominiums in the suburban areas and lower-value landed properties, are also not affected. The remaining one-third of private residential properties which are affected are higher-end condominiums, as well as most landed properties.

And then, all non-owner-occupied residential properties will also face higher property taxes. The tax rates for these are higher because these properties include second homes and those held for investment. And the increases are also more significant for the higher-end non-owner-occupied residential properties.

If we want to raise enough tax revenue from property tax to eliminate the need for a GST rate increase, what would we have to do? Well, we would have to tax all non-owner-occupied residential properties at a significantly higher rate. Let us, say, we taxed all non-owner-occupied residential properties at a flat 36%. This would still not be enough, because the number of non-owner-occupied residential properties is considerably less than that of owner-occupied residential properties. So, we would need to raise property tax rates significantly for owner-occupied residential properties, including for HDB flats.

In fact, I am somewhat surprised that Mr Louis Chua characterised our moves on property tax rates as tokenism. Three hundred and eighty million dollars more per year; and he says it is tokenism.

Currently, our total property tax revenue from all residential properties is about $1 billion. To raise another $1 billion from just property tax alone, property tax rates may very well need to be doubled across the board. I suppose that is what the Workers' Party is proposing.

There were other suggestions for wealth-related taxes. For example, Mr Saktiandi Supaat suggested estate duty. We did away with this in 2008 because it did not achieve the social equity outcomes we had hoped for. In the end, middle- and upper-middle-income individuals were disproportionately affected by estate duties, compared to the wealthy, who were able to find ways to avoid through tax planning. Besides us, the jurisdictions that have repealed their estate duties, like Hong Kong, Malaysia and New Zealand, have not reinstated it either. There were also suggestions to tax capital gains or dividend income. But remember, jurisdictions in the region do not tax capital gains or dividends. And if we were to do so, that can very easily hurt our competitiveness. It will impact jobs and Singaporeans.

Assoc Prof Jamus Lim and Mr Louis Chua suggested we introduce a net wealth tax; and they estimated that it could yield about $1.2 billion annually. As much as we would like to tax the net wealth of individuals in theory, I have explained, it is very challenging to do this in practice. What happened with estate duties could very well happen here. Many forms of wealth are mobile. And as long as there are differences in wealth taxes across jurisdictions, wealth can and will move. That is why many jurisdictions have already abolished their net wealth taxes. In fact, only three OECD jurisdictions now have a net wealth tax.

We will continue to study the experiences of other jurisdictions and explore other options to tax wealth effectively. We also welcome feedback on how to make a suggested net wealth tax work in practice in our context, when almost all our competitors in this region and worldwide do not levy such a tax.

Then, what about the so-called “externalities taxes”, such as sin taxes and carbon tax, as suggested by Assoc Prof Jamus Lim?

I am surprised that he raised this, in the first place, as a means of generating revenue. Tobacco taxes, for example, are a regressive tax – the lower-income groups pay a bigger share of it. The Workers' Party had expressed such strong concerns about the regressivity of the GST, but does not appear to be the least concerned about regressivity here. Why the double standards? In any case, we do not levy sin taxes for purposes of generating revenue, but for deterring consumption, and we will review and adjust these taxes from time to time. For carbon tax, as I have already highlighted, we will channel the revenue to help with the green transition. So, this will not help to meet our structural funding gap.

I have explained how we cannot rely on reserves or these different revenue options to close the funding gap. But let me now address the key issues pertaining to GST.

First, the timing of the GST increase. I had considered this matter very carefully, before deciding to start on 1 January 2023, to delay the start and to stagger the increase over two steps.

Some ask: what happens if inflation turns out to be more persistent or higher? Would it not be better to wait until we are sure that inflation has come down before raising GST?

As I have mentioned before, I fully understand the concerns about inflation and cost of living, but we cannot keep delaying the GST increase, given our pressing revenue needs. If inflation turns out to be persistent and higher than expected, we will deal with this separately through other tools, like I mentioned at the start of my speech.

Besides managing inflation, we also share the concerns raised by Mr Chong Kee Hiong and Mr Saktiandi Supaat, which is that we want to see local wages rising faster than prices.

In fact, we have done well on this front in the last 10 years. Median Singaporean wages, in real terms, have risen by about 3% per year, faster than many other developed jurisdictions, such as the US, the UK, Japan and Hong Kong. We will continue to work hard to ensure such real wage increases are sustained in the coming years across all segments of our workforce.

Meanwhile, we are helping Singaporeans with the Household Support Package this year and we are cushioning the impact of the GST through the enhanced Assurance Package and the permanent GST Voucher scheme.

The Household Support Package will provide a household with two children up to $785 of assistance this year. The enhanced Assurance Package and GST Voucher will be rolled out together, starting from this year, even before the GST rate goes up. Combining the two, households will receive a very significant package of benefits.

Let me illustrate this with an example. But before I proceed, I should say that I have noted Ms Sylvia Lim's suggestions on our household archetypes. We do, in fact, take into account different household formations in studying the effects of our policies and we adjust our policies where necessary. And I am conscious, personally, that there are other kinds of household formations besides the traditional, and we will bear Ms Sylvia Lim's points in mind in our future illustrations.

But for now, take the example of a family with two young children, earning about $2,500 a month and living in a 3-room flat. Over the next five years, they will receive, on average, around $1,000 per year from the enhanced Assurance Package and around $1,400 per year from the enhanced GST Voucher – altogether, $2,400 per year of benefits over the next five years. This is more than their annual total GST expenses – not the increase – more than their total annual GST expenses of around $2,000 per year over this same period. In fact, over the next five years, most low-income families will receive more benefits than what they will pay in GST.

Middle-income families have not been left out and will also enjoy significant benefits from the Assurance Package and the GST Voucher. We know that some are caring for both elderly and young dependents. That is why we have designed our measures to help them.

Again, take the example of a household of five persons living in a 5-room flat, but, this time, with two young children and a retired grandparent, and they have a combined monthly income of $9,000. Over the next five years, they will receive, on average, around $1,300 per year from the enhanced Assurance Package and around $1,100 per year from the enhanced GST Voucher scheme. Again, altogether, $2,400 per year of benefits over the five-year period. Not a small sum at all, and this is for a three-generation household with a combined income of $9,000 a month.

Ms Jessica Tan, Mr Chong Kee Hiong, Dr Shahira Abdullah and Mr Dennis Tan have commented on the criteria we use for our GST Voucher scheme. We have used Assessable Income combined with Annual Value as a measure of an individual’s means and access to family support. They are not perfect, but I think they are quite reasonable. We will continue to review and see if there are better criteria for our schemes. Meanwhile, where there are challenging or unique circumstances, we will carefully consider the appeals.

Ms He Ting Ru asked if we can make the GST less regressive, such as through a multi-tiered GST system for different items, or if we can exempt certain essential items from GST.

From the outset, the Government has always cushioned the impact of the GST on the less well-off Singaporean families. This is how we have been implementing the GST since 1994, with offset packages and, eventually, the permanent GST Voucher scheme. The question is: what is the fairest and most effective way to achieve this objective?

Exempting or lowering the GST on a basket of essential goods sounds like a good idea. But there are two problems with this.

The first is that a multi-rated GST system leads, in practice, to highly arbitrary distinctions between products and lots of creative effort by businesses to get their products classified into the lower tiers. It is administratively costly and onerous to implement. Ms He Ting Ru said that these costs can be easily overcomed. But that has not been the experience of other jurisdictions. If we were to go down this path, it will significantly and unnecessarily complicate the GST system. That is the first reason.

But the second and bigger problem with this suggestion is that, in fact, it does not effectively target support to those with greater needs. So, aside from the administration of it, it is not effective. In fact, such an exemption for a basket of goods tends to benefit the well-to-do, because they spend more on everything, not just luxury items, but basic necessities as well.

We did an exercise. We looked at four categories of items: uncooked food; basic food serving services that include hawker centres, food courts and coffee shops; telecommunication services; and utilities. If we were to exempt these four categories from GST, we expect to lose about $1.2 billion in tax revenue, of which only $185 million, or 15% of GST not collected, will benefit the bottom 20% of resident households. That is it.

So, this is ineffective as a redistributive tool to make our system fairer. This is not just MOF's conclusion, mind you. This conclusion has also been reached by studies by numerous governments as well as organisations like the OECD.

This is why, in fact, it is fairer and more effective for us to have a single GST rate across the board and to directly help lower-income and middle-income Singaporean families through the GST Voucher scheme, which is what we are doing.

Mr Speaker, Sir, with your permission, let me explain this with some slides on the screen.

Mr Speaker: Yes. [Slides were shown to hon Members.]

Mr Lawrence Wong: This chart shows the existing effective GST rate, across different income deciles, after subtracting the GST-V and the GST that is absorbed for publicly-subsidised healthcare and education. [Please refer to Annex 1.]

And you can see that the lower-income households pay a much lower effective GST rate than the higher-income households. In fact, on average, the households at the bottom 10% do not pay any GST at all, after offsets. This includes many retiree households without income.

For the second decile, the effective rate is very low. Even for the middle-income households, the effective rate is well below the headline 7% rate, because of how their GST expenses are being offset on a continuing basis.

Essentially, we already have a highly-tiered GST system in Singapore. But it is not tiered by the different types of goods or services, which Ms He Ting Ru had asked for. Instead, it is tiered by the impact of our GST, such that the well-to-do pay more GST and the lower-income are impacted the least. That is a fairer and far more effective way of taxing consumption.

Many Members of the Opposition – in fact, both the Workers' Party and the Progress Singapore Party – object to the very idea of raising GST, claiming that the payouts are temporary and that the GST is regressive and disproportionately impacts the poor. But, again, such misguided claims ignore the way we have implemented GST in Singapore.

What happens when the GST rate is raised to 9%? Together with the enhanced permanent GST Voucher scheme, you can see from this chart, the effective GST rate for the first three deciles remains unchanged. [Please refer to Annex 2.] So, for them, the enhanced permanent GST Voucher neutralises the impact of the increase in GST.

So, it is not true that the GST increase hurts the poor. Not in the way we have designed it.

Even for the middle-income, you can see they continue to pay an effective rate which is well below the headline 9% rate.

There is another effect of the GST which causes it to bear more heavily on the well-off.

A consumption tax also allows us to tax those who may not be earning income in Singapore but are, in fact, well-off. They may be investors or persons of means. They may not be paying much in income tax today even though they have the means to contribute because their income is not easily ascertained. That could be, for example, if they are self-employed.

But they will certainly be consuming more and the GST ensures that such people, those with greater means, will contribute their fair share of taxes.

Mr Leong Mun Wai had made some calculations and he concluded that the middle-income will bear a disproportionate burden of the GST increase. But that is not so.

After the GST rate increase, it is the top 20% of citizen households who will pay a greater share of GST and that is after GST Vouchers and the absorbed GST, netted off. You can see from the chart. Top 20%, the share goes up from 40% to 42%. For the middle 20% of households, they will pay a slightly smaller share of GST. [Please refer to Annex 3.]

Sir, I have covered the issues around GST and the various revenue options.

I would like to assure Members that we have studied and carefully considered every tax option. I appreciate that the Workers' Party offered suggestions on alternatives to the GST. In fact, we have studied every tax option even before the Budget in order to design what we have put together as part of a package of tax changes in this Budget. We have looked at all the options again. As I have explained, there are limitations to all these different proposals and, in some cases, the sums just do not add up.

Every tax move we make is carefully considered so that we have, in the end, a balanced, effective and fair set of tax measures in the Budget.

More importantly, a progressive fiscal system does not and should not mean that each and every tax is progressive, let alone highly progressive. What ultimately matters is the overall system of taxes and transfers, to ensure that the overall system is progressive, and that is what we have done.

If we were to take a revenue-by-revenue approach, we will end up with less revenues and you will also undermine the broader need for everyone to contribute, as part of a durable social compact.

In this regard, I should say that there is a fundamental difference between the measures we have put forward in the Budget and the Workers' Party's alternative proposals or, for that matter, the position taken by the Progress Singapore Party.

From what I have heard in this debate, the basic position of the Workers' Party and the Progress Singapore Party is that we can close the funding gap without having to raise the GST. How? By making various groups pay more. Make the wealthy pay more. Make large companies pay more. Let future generations pay more. Anything but GST increase – even though I have already explained the GST increase in Singapore does not hurt the poor.

I can understand why they think these alternatives are politically more attractive options to offer, but I am afraid they are too simplistic and divisive and will end up creating more problems for our society. Let me explain.

The bottom line is that we cannot sustain a tax system where the bulk or all of the burden is borne by a small group of people at the top end. It will not be possible to hold our society together if only a small group of people is required to pay more taxes all the time, while the rest simply get to piggy-back on their contributions to enjoy more benefits.

That is why having a broad-based tax like the GST is so vital. It makes a direct link between our demands as voters and our responsibilities as citizens. Break that link and we encourage irresponsible lobbying and playing to the gallery. Someone else will pay for the good things in life. Why not demand more?

That is how we have designed our system – on the principle of collective responsibility.

Everyone contributes. Everyone contributes towards the cost of delivering services and everyone benefits from these services, but to different degrees. Those with greater means bear a higher burden and they draw less on Government support but they still enjoy some benefits from the Government. Those with fewer means carry a lighter share but they still contribute something and, in return, they receive more benefits from the Government – more than they put in and more than the better-off.

In this way, we all do our part to help ourselves and one another and we strengthen the trust that binds us together as a society. This is a fair and inclusive system. [Applause.]

We should also remember that the well-to-do contribute in many other ways and not just through income or wealth taxes.

For example, many have set up businesses in Singapore, creating good jobs for Singaporeans and helping to develop new capabilities in our economy. While these individuals are here in Singapore, they consume more and pay more in GST.

Some also set up philanthropic foundations, contributing to our charities and other worthy causes. Ms Foo Mee Har and Ms Denise Phua spoke about this, about enhancing our framework for philanthropy. And we will, certainly, do so.

I want to make it very clear, too, that we have no issue with people doing well, earning more and achieving success in their careers. Our tax system must never discourage hard work, effort and enterprise.

At the same time, we want to avoid in Singapore the emergence of stark income inequalities or social stratifications, which will undermine social cohesion and pull us apart.

So, we will continually review and update our system of taxes and transfers to achieve this balance: to reward enterprise, innovation and work and to mitigate the pressures of social inequalities. We will continue to ensure a fairer and more resilient fiscal structure to underpin our social compact and to strengthen our social solidarity. Many Members in this House – Mr Liang Eng Hwa, Miss Rachel Ong, Mr Xie Yao Quan – have affirmed this and I thank everyone for your strong support.

Finally, let me address the third major question: is the Budget fair to all Singaporeans?

The Budget has something for everyone. It is designed to provide opportunities for all to succeed – the young and the old, the lower-income, the middle-income and even the higher-income.

In fact, a significant part of our social spending goes towards ensuring broad access to affordable and quality housing, healthcare, education and lifelong learning. These are important social provisions and they support the aspirations of all Singaporeans.

But we have also been careful to design our schemes so that those who come from less well-off backgrounds will get more support. I assure Members like Dr Shahira Binte Abdullah and Mr Abdul Samad that we will continue to review our eligibility criteria and schemes so that support is sufficient and targeted towards those in need.

We are continuing with this emphasis in the Budget to provide, generally, for all but to tilt the support towards those who need them more.

Over the last decade, our policy moves have helped to reduce income inequalities and steadily brought down the Gini coefficient. As Mr Mohd Fahmi Aliman and Mr Raj Joshua Thomas said, we are determined to continue reducing wage disparities despite the global economic pressures that are pulling incomes apart and making it harder to hold our society together. That is why we are setting aside significant resources in this Budget for both Progressive Wage and Workfare. This reflects our shared commitment for a fairer and more equal Singapore.

I assure everyone that we are moving as fast as we can to uplift the wages of these lower-wage workers. The new Local Qualifying Salary (LQS) will take effect soon, from 1 April this year. [Please refer to “Clarification by Minister for Finance”, Official Report, 2 March 2022, Vol 95, Issue No 52, Correction by Written Statement section.] We will work with our tripartite partners to get the employers to come on board quickly, even before the mandatory progressive wage requirements kick in.

Overall, our system of taxes and benefits continues to be fair and highly progressive. I will show a chart to reflect this. [Please refer to Annex 4.]

It depicts the overall net benefits, including grants and subsidies, that Singaporeans receive in a year from the Government, after subtracting the taxes they pay. You can see here our seniors are well taken care of. Retirees, on average, receive $6,900 in net benefits per person.

Among Singaporean employed households, the benefits, net of taxes, are significant, at $5,900 per member for the bottom decile. When you add that up for a typical household, the benefits work out to be about 90% of their household income. Put another way, Government benefits will nearly double the amount of resources for these households. It is a significant and tangible form of support.

Of course, as incomes go up, the net benefits are correspondingly reduced. The higher-income are net contributors – they contribute more than they receive. But they, too, benefit. They benefit from the political stability, social cohesion and overall environment that we provide in Singapore.

Some Members have asked if we are doing enough for the sandwich middle-income group. If you look at the chart, for those in the 40th to 60th percentiles of household income, they continue to receive more benefits than the taxes they pay. For those in the 60th to 90th percentiles of household incomes, they pay some taxes, after netting off the subsidies and transfers they receive.

I understand the pressures faced by this group. Some are caregivers who bear a heavy burden financially and emotionally, even physically.

This is why we have been mindful to make sure we expand our suite of broad-based support in areas like education and healthcare. We have also increased healthcare and caregiving-related subsidies and support to relieve the load on these families, especially for those who care for young ones and elderly parents.

Importantly, we have taken extra care to keep the tax burden for this group low. In fact, their tax burden is significantly lower than what it is for their equivalent in most other cities. For the relatively low amount of taxes paid, they enjoy many benefits in Singapore: affordable public housing and healthcare, beautiful parks, excellent infrastructure, quality preschools, schools and tertiary institutions with highly-subsidised fees.

So, when you put it altogether, this is how we have designed our fiscal system: one, a fair revenue structure with everyone contributing, but those with greater means contribute more; two, a fair system of subsidies and transfers where all benefit but those who are less well-off benefit more; three, a system where we keep taxes on middle-income households low by targeting our social safety nets at the more vulnerable households who really need the support, while ensuring universal access to high-quality public housing, education and healthcare.

When you put all three together, we have a highly progressive system of taxes and transfers where the better-off contribute more and receive less in tax-funded benefits while the less well-off still contribute, but a smaller amount, and receive much more in benefits.

This is reflected in our benefit-to-tax ratios, something which many Members are familiar with but which is worth reiterating. [Please refer to Annex 5.]

The bottom 20% of Singaporean households receive about $4 in benefits for every tax dollar paid, the middle 20% of Singaporean households receive about $2 in benefits for every tax dollar paid and the top 20% of Singaporean households are net contributors receiving about $0.30 in benefits for every tax dollar paid.

These ratios that we have achieved for the lower- and middle-income households are no mean feat at all. And we will have to continue working hard to maintain this in the coming years.

Sir, I started work more than 25 years ago as an economist in MOF. So, in that sense, I have been through many Budgets, even though this is my first time delivering one.

Over the years, I have had the chance to study the fiscal systems of many other jurisdictions. I can confidently say that Singapore is unique in having such a highly progressive system of taxes and transfers, while keeping the overall tax burden low for everyone and especially for the middle-income. We have a system that is fair, progressive and effective. It reflects our values: what we stand for and who we are as a people, and it provides a strong foundation for us to build our economy and our society.

That does not mean that we have a perfect system. We are continually reviewing and improving it. We are continually adapting and adjusting our approach, as circumstances change and as our society evolves. Typically, after a Budget, we get two types of responses: "too much" and "too little".

On the one hand, some say that the Government is doing too much – making costs higher for SMEs and for consumers. On the other hand, there are voices that say we are doing too little – not enough taxes for certain groups, more is better.

After 25 years of public service, I know it is almost impossible for the Government to do anything that pleases everyone all of the time. But I want to assure everyone that every move we make is considered very carefully. We weigh the costs and benefits and the implications. We discuss extensively with all stakeholders, especially our tripartite partners. And that is what the team and I in MOF have worked very hard to do in this Budget – to ensure a balanced and fair package of measures, adjusting what is necessary to meet our evolving needs, while bearing in mind our economic and social imperatives and, above all, upholding the principles of fiscal prudence and sustainability.

That is the approach we will continue to take in reviewing and updating our policies – never compromising on our principles and values, and always doing what is in the best interests of Singapore and Singaporeans. [Applause.]

Sir, with your permission, let me say a few words in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] The Budget has something for everyone and will provide opportunities for all to succeed.

I understand the concerns that Singaporeans have about rising prices and the cost of living.

That is precisely why I had decided to defer the GST to 2023 and to stagger the increase over two steps.

Meanwhile, we are extending significant help to Singaporeans through the Household Support Package – we will double the U-Save rebates this year for households, help them with their children’s education and also their daily essentials through the CDC vouchers.

I know many are concerned about the impact of the Ukraine crisis. The Government is closely monitoring the situation. I assure you that we will do more to help Singaporeans and businesses cope with cost of living and business costs should the situation worsen.

Some are worried that even with the delay and staggering of GST, there will still be an impact on prices.

That is why we have the enhanced Assurance Package (AP) and the GST Vouchers (GSTV) to offset the GST expenses of households. Both will be implemented starting from later this year before the GST increase takes effect.

Combining the two, households will receive significant benefits.

For example, a family of four earning $2,500, living in a 3-room HDB flat, will receive around $2,400 a year over the next five years from both the AP and GSTV. This should more than cover their GST expenses during this period.

We have also not forgotten the middle-income or "sandwich" group who are taking care of both old and young. They, too, will enjoy significant benefits from the AP and GSTV.

The GST system that we have here in Singapore is unique. Low-income families pay less GST than high-income families.

Besides the GST, we have also made other tax changes in this Budget, like the income and property taxes, so that those with higher incomes and who own properties with an annual value over $30,000 pay more taxes.

These tax changes will generate additional revenue which we urgently need to fund our rising Government expenditures, especially in the area of healthcare, so that we can take better care of our seniors.

But we are doing this in a way that is fair and progressive. That means everyone pays something in taxes. The less well-off contribute a smaller amount of taxes and receive much more in benefits. On the other hand, the well-to-do contribute more in taxes and receive less in benefits.

Some Members of Parliament have suggested that we should draw more from our reserves to cover our funding gap. But that would mean leaving behind less and less for our children and grandchildren. If we keep doing this, one day, we will deplete our reserves.

Like our forefathers, we must exercise stewardship and responsibility over our hard-earned money. We must not only be fiscally prudent, but also plan for the future. This is how we ensure that Singapore’s wealth can pass down the generations.

I believe the changes to the tax structure we introduced this Budget will help to strengthen our social compact and social cohesion because we are all chipping in and doing our part to tackle our challenges and build a better Singapore together.

Ultimately, that is how we can build a fairer and more inclusive society, where no one gets left behind and all can enjoy the fruits of Singapore’s success.

(In English): Mr Speaker, Sir, in every Budget, we discuss and debate the design of policy parameters or schemes in monetary terms. But the Budget is much more than that. It reflects something deeper: our ethos and our values. It is an expression of our shared compact to tackle our challenges together, to never stop thinking of tomorrow and to never cease building a better Singapore.

All this boils down to trust, something the Prime Minister spoke about recently in this House – trust between the Government and the people; the trust we have in one another and trust across the generations.

Trust is fragile and precious. It takes effort and time to build up, but it can be destroyed very quickly. When there is trust, we can achieve great things together, we can make the impossible possible. But when we lose faith in one another, even simple things become impossible.

So, whatever views we may have about the Budget, whatever differences we may have on policy issues, let us always work to strengthen trust in our institutions and in one another.

That means debating the issues based on facts and not biased soundbites, or worse, half-truths and lies. It means being honest and upfront with Singaporeans about what we need to do together; not sugar-coating realities or pretending that there are quick and painless remedies available.

In this Budget, I have set out plainly the challenges and also the opportunities ahead of us and explained why we need to move on difficult measures like the GST increase. It is not the popular thing for me to do: certainly, not for my first Budget as Finance Minister.

But I have a responsibility to do what is right and what is in the best interests of all Singaporeans; not what is politically expedient now but will store up problems for the future.

I am convinced that the measures in the Budget are necessary and will put us in a stronger position to strengthen the self-reinforcing system of trust we now have and to ensure that every citizen contributes their fair share to building our common enterprise, which is Singapore.

A lot has been said about the redistributive aspects of the Budget. But, in fact, to deepen the trust in one another, we must also engage the human spirit and involve every Singaporean. We must strengthen the culture of responsibility for one another, so we all feel a renewed sense of duty towards one another and not just a right to the benefits of citizenship.

Singapore must always remain an open and egalitarian society, one without rigid hierarchies and class distinctions, but with a big heart and a generosity of spirit. We do not begrudge those who do well. Instead, we celebrate them and we take pride in their achievements. At the same time, for those who have succeeded, there is no need to flaunt one’s wealth or be ostentatious about it. Instead, keep a modest and unassuming approach and do your part to give back to society, so that wealth can be recycled and invested back into society to expand opportunities for others.

Sir, I have confidence that Singaporeans can instinctively sense if any Budget is not worthy of them and fails to renew their trust in the Government, in one another and in the future. They can decipher whether the Budget reflects our shared vision of a fair and just society, whether this Government is one they can trust to manage our resources in a way that is in line with our values and whether this Government is keeping faith with them and their children.

In the weekend immediately after the Budget, I had several engagement sessions. As someone shared with me, his wife asked him: "Why are you so happy to pay more taxes?" This is by no means a well-to-do individual, just an ordinary person. But his wife asked him: "Why are you so happy to pay more taxes?" His reply: "It's the right thing to do."

In a dialogue organised by the CDCs, including their community and corporate partners, a participant said she did not need the cash payout from the Assurance Package and would like to donate it to families with greater needs. I was cheered by this and I am glad to share that we will have an online portal set up in the coming months, where Singaporeans can indicate their preferred charities for the Government to directly channel the payout to, if they wish.

In the end, the Budget is about all of us as Singaporeans, driven by our compassion and our conviction to build a better society for all; strengthening our trust in one another and keeping faith with future generations, as our forefathers kept faith with us.

And Sir, as one united people, we can be confident in charting our new way forward together and in building a fairer, greener and more inclusive Singapore together. [Applause.]

Mr Speaker: Leader of the Opposition.

3.15 pm

Mr Pritam Singh (Aljunied): Thank you, Mr Speaker. I would also like to thank the Finance Minister, particularly for the acknowledgement towards the Workers' Party for coming up with alternative revenue proposals for the Government's consideration. And we did so, of course, knowing that since the decision to raise GST was announced a few years ago, circumstances have changed.

COVID-19 was unanticipated, of course. And core inflation right now is at its highest level in nine years. I think the prices of goods and services are not a point I need to repeat. Minister would know, thanks to CPI information from MAS and MTI, that price pressures will impact Singaporeans, particularly at the low- and middle-income levels.

This is even as the question is important with respect to raising the GST at this time. The Minister made some brief points about it. He had thought about it carefully. But I think the question remains: is this a reasonable thing to do in these circumstances? That is the first question.

And I think the point arises more acutely when you take into account what market watchers have said about the OECD Base Erosion and Profit Shifting (BEPS) 2.0, which may well result in corporate tax revenue gains for Singapore. And I think this is a point that has been raised at the start of the week, coinciding with this Budget debate.

To that end, my question is: can I ask what are the Government's current estimates, given that there is an implementation deadline of 2023 for BEPS? What is the range of estimates of the net impact of Pillar 1 and Pillar 2 on our corporate income tax revenues? Surely, MOF would have prepared itself for these various scenarios. And can I confirm that MOF does not have these various scenarios planned out?

This really brings up the other point the Minister raised about red herrings, that, somehow, when the Opposition asks for revenue and expenditure projections, these are red herrings. But it cannot be so. Because, as I have mentioned in my Budget speech, it is something that many jurisdictions do. Hong Kong has a medium range forecast right up to fiscal year 2026/2027. They have got assumptions, of course. You are projecting into the future, so, it cannot be perfect and I think people will give the Government buffer and leeway for that. But that is incredibly important and that is precisely why the Workers' Party put forward different revenue streams.

The Minister rounded off at the end about the importance of information, facts. I completely agree with him. But would not this approach not to make a call for information, characterising it as a red herring, but actually just producing that information lead to the outcome that the Minister himself speaks of and reduces the prospect of individuals mischaracterising positions which, one could argue, has also been done in the course of this debate? I think there were arguments made in the extreme which were not put forward by Workers' Party (WP) Members of Parliament. I do not think anybody suggested raising personal income tax for the upper tier up to 42% to make up for the GST hole. That was not done. But it was, nonetheless, characterised as an Opposition idea. So, I think it is a case of what is good for the goose must be good for the gander. And this is something I hope can actually be alleviated through more projections of what the Government needs, how much it is going to collect, because this will result in a more fruitful debate.

In the course of my Budget speech, I did make a point about the revenue that the carbon tax will bring in. I hear the Minister's point. He said it in the beginning, when he opened the debate. He is saying it now. He does not expect carbon tax to bring in new sources of revenue. But still a debate has to be had. What are those numbers? Particularly, when you look at utility prices, utility bills for average Singaporeans, which the Minister says in his speech are going up. I believe he used a 25-year timeline. But if you follow it in a linear fashion, that is $12 by 2030 – an increase.

So, those numbers should really be brought forward by the Government so that we can debate these and talk about how people, both at the lower- and middle-income levels, can be supported in a better way.

I think the Minister raised a number of other points. We spoke about the various levers. The other WP Members, of course, will chip in and make those clarifications with the Minister. But Mr Louis Chua is not here today. He will be happy to come into this debate, I can assure you, but he is self-isolating, just to be on the safe side. I think he was COVID-19-positive yesterday but it was a false positive. So, I think better for him to stay away. But he will definitely come back to this in the course of what happens with BEPS and actually what are those projections that the Government is working with vis-a-vis its impact.

A number of other points, like I said, I will let the other WP Members come in. But I think there is a useful question to ask about the reserves. We have had this exchange in this House a number of times on our position on the reserves. I do not think it is an accurate reflection to say that, first instance, you look at and turn to the reserves. That is not true.

And we have really made the Government's own approach informed in this House as to how it also takes a certain approach to change how it deals with the reserves mechanism, at quite short intervals – 2008, 2015. We are entering a decade where circumstances are changing quite significantly. The Minister himself recognised in his Budget speech that, I believe, there is a review of even healthcare resourcing at paragraph 239: "We are thinking through this healthier SG strategy carefully. It will entail a review of our resourcing approach and healthcare financing schemes as well as the need for upstream investments and preventive healthcare."

So, clearly, the other numbers that were in his speech about potentially where we could be with healthcare expenditure if we do not keep it in check, may not really be what will, eventually, be the outcome, because there is a review going on.

Mr Speaker: Mr Pritam Singh, this part is really for clarification. So, I will allow preamble and, as Leader of Opposition, I am prepared to allow you some leeway. But let us keep to the point.

Mr Pritam Singh: Mr Speaker, I take the point.

Mr Speaker: And before I end, just a reminder to the rest of the Members, this is meant for clarification. So, if you have some preamble, I would allow it, but please limit that time.

Mr Pritam Singh: Obliged. Speaker, I will not abuse this.

Let me just then come to the point before I hand it over to the other colleagues of mine to make clarifications. It was previously said that we have drawn on our reserves equivalent to 20 years of past Budget surpluses. This was the Government position vis-a-vis COVID-19. "We have used a generation's worth of savings to combat a crisis of a generation."

My colleague, Mr Louis Chua, asked Deputy Prime Minister Heng, in his capacity as Finance Minister previously, after accounting for the draw, where would our reserves be, compared to five years ago and 10 years ago? And he made the point that this really was not answered and he put the question to Finance Minister Lawrence Wong. After having a better fix on the number, $42.9 billion drawn on Past Reserves, where would our reserves be today, as compared to five years ago? Is it higher or is it lower? I think that is a question that can be answered in one word.

Mr Lawrence Wong: Sir, I thank the Leader of the Opposition for these comments and questions. There are few of them and I will take them in turn.

First, on the increase of GST. It was a very difficult decision for all the reasons I have explained: recognising, on the one hand, the concerns that Singaporeans have about higher prices but, on the other hand, the urgent and very pressing revenue needs we have to address. That is why I highlighted that I decided, eventually, to delay the GST and to stagger the increase over two years.

I suppose Mr Singh's point is that even that is not enough.

And I can understand that some people might feel and be concerned that even that delay and that staggering are not sufficient to address concerns, especially in light of the recent developments in the external environment. And that is why I mentioned just now that the best way to deal with this is: firstly, if, indeed, inflation turns out to be more persistent and higher than expected – which may happen – we will deal with that decisively and separately, and we have the tools and resources to do so. How? Well, we have monetary policy to deal with inflation; secondly, we are able to take a series of actions to better secure our energy supplies; and, thirdly, we can help households and businesses directly. We have the resources to do so. And, if the need arises, we will not hesitate to take all of these actions. So, that is the first assurance we have for everyone.

The second assurance is that, even setting aside additional measures and actions, we have already done a lot. And I have been trying to explain that. Look at the significant help that is on the table today: household support package this year, plus Assurance Package and the GST Vouchers, both of which have been enhanced, combined together, and both being rolled out this year before the GST goes up. A lot of help, which will, for most households, delay the impact of the GST increase by five years or more.

So, the two, taken together, I think should assure everyone that we are not doing this in a cavalier manner at all. We considered it very, very carefully before we decided to proceed. And making sure that we are taking all the necessary actions and steps and have contingency measures in place to take care of the concerns of every Singaporean. That is number one.

Second, on projections, numbers and data, I accept Mr Singh's point. I was not attempting to characterise it unfairly. I was sharing my feelings about these repeated requests for information as perhaps distracting us from the real issues. But I accept Mr Singh's clarification and I assure him that he has my commitment that we will continue to put out more information, as much as possible, in order to provide for more informed debates.

And I hope he also takes what he said seriously, that the Opposition will also exercise leeway in recognising that these projections in the outer years are inherently fraught with a great deal of uncertainty, especially for a small, little, open economy like Singapore, where so many external events can never be predicted with any degree of certainty. So, very often, we do not even project GDP beyond the year. So, when you talk about outer year projections for the economy, for fiscal projections, there will be a very high cone of uncertainty around these numbers. And we, therefore, want to make sure that if we were to provide any figures, we do not inadvertently mislead people, cause people to have the wrong impression. And I seek the Leader of the Opposition's understanding, too, that, in putting out such figures in the future, we may very well get it wrong, because there is a lot of uncertainty when we project into the outer years. But he has my commitment that we will continue to see how we can improve the data and information that we put out.

Third, on the reserves, I have explained our position and why changes in the rules, done hastily, we think, are not wise, are not prudent and will come at the detriment of the next generation. If we have to change any rules, we will have to seriously consider them very, very carefully. But if we make any tweaks in parameters – more land sales, more NIRC – what it basically means at the end of the day is that our future generations will be the ones to have to carry the burden. They will have to pay more in taxes in the future. That is what it comes down to. And they will have that much less to deal with any future emergencies, which we all know, will come at a more frequent rate in the coming years.

So, all I say is, let us have a care about this. And I do not think it is prudent to make this change now, in place of raising the GST or other tax changes, which we can and should do.

As for the quantum of reserves, I have actually mentioned that in my speech. I said that our reserves are growing. We would not be able to tell you what the actual figure is, for the reasons I have explained. It is not in our national interest. But as I have said in my speech, our reserves are growing.

But our economy, our needs, the complexity of our needs and the magnitude of the challenges we face are growing even faster. What is more important when you drill it down is, are we accumulating more than necessary?

And the answer is no. How do we know that this is the case? Because our NIRC, as I mentioned before, we project will continue to grow at a rate that keeps pace with economic growth. That is how we know that we are not over-accumulating. Whatever we are getting from NIRC today at 3.5% of GDP, on average, over the past few years, we do not expect that to continue rising as a share of GDP. It will keep pace with economic growth.

And as I mentioned in my speech, even that, we cannot be sure that we can achieve that. But if we are able to do so, it will already be a significant achievement because of all the headwinds that we are facing in the global investment environment.

I think I have answered all the questions from Mr Singh, Sir.

Oh, sorry. One more question – BEPS. For BEPS, again, this is one of those things. We have been studying this very carefully. And, as I mentioned just now on Pillar 1, the rules are still being finetuned. It is not over yet. It is still being discussed.

Yes, there is the pronouncement of 2023, but I do not know for a fact that this will happen in 2023 because many details are still being worked out. So, that is one of the reasons why I mentioned I hesitate to put out any figures at this stage.

But taking the earlier point about putting out more information for a more informed debate, we will go back and think about whether we might provide a range of estimates about what the impact of BEPS 2.0 might be for both Pillars 1 and 2. I would say it would range from neutral to perhaps some increase, but we will have to look at the figures. We will provide some figures, hopefully, to help everyone get a better sense of what it might be.

What is more important, especially the point I mentioned, which is that even if Pillars 1 and 2, combined, yield us additional revenue, we will very likely have to reinvest that revenue back into ensuring we remain competitive and attract our fair share of investments.

Why? Because the reality is competition for investments is not going to go away just because of BEPS 2.0. In fact, it will get even more intense, and it will intensify in other non-tax areas, which we will, therefore, have to fund and have resources ready for. So, even if there is a plus from BEPS 2.0, I am, in fact, not confident that that additional revenue will help us with our social spending needs, and, especially not for our healthcare spending needs, which will continue to rise very sharply.

Mr Speaker: Mr Singh.

Mr Pritam Singh: I thank the Minister for the reply. I think it just reinforces the point that I have been trying to make about the alternative revenue streams that the Workers' Party came up with in the course of this debate, knowing that there are quite fundamental changes taking place worldwide where we need a better fix on what the revenue situation will be.

I think the Minister missed out one question that I also put in my speech about the carbon tax and the estimates that the Government has with its increase at the tiers up to 2030. I think those numbers would be appreciated. Even though I take Minister's point, as I mentioned in my earlier clarification, that he does not foresee this to be a revenue generator, if I can put it that way. But I think this is something that we should have a debate about, in good time.

Mr Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai (Non-Constituency Member): Thank you, Speaker. We will not be having such a difficult debate, if Singaporeans, especially the middle-class Singaporeans are not asked to pay more taxes. Sir, I have two questions first, for clarification. I have a total of six questions. I hope the Speaker will allow me to ask all the six questions, but let me ask two questions first.

I have given a number of the tax burden of the GST on the middle class to be $1.2 billion. Take away all the compensating packages that you are going to give them, divide the taxpayers into three groups. Top 20%, the middle class who will not get permanent vouchers, and those taxpayers who will get permanent vouchers. How is the $3 billion or $3.5 billion additional GST going to spread over these three groups? That is question one.

Question two: PSP has not been talking a lot about alternative sources of revenue because we think there is a lot of justification to make use of the unutilised revenues. But if you look at alternative avenues, actually, it is very easy from our point of view. The second question: if you have to choose between a 2% GST hike and a 3% to 4% personal income tax hike on the top 10%, they will yield about the same amount of revenue, would you still choose the GST 2% hike?

Mr Lawrence Wong: Mr Speaker, let me answer the second question first because it is quite straightforward. The sums do not add up, Mr Leong. The sums do not add up. A 2-percentage point to 3-percentage point increase in the top personal income tax rate will never get anywhere close to the revenue we get from a 2% increase in GST. It will not.

So, there is no choice here. In fact, we are already raising the personal income tax rates in this Budget. We will get some money from it, but it is not enough and that is why the GST increase is needed.

But as I have repeatedly said, the objections to GST on the basis that it hurts the poor are completely unfounded. You may disagree with the GST, fine. But do not use that as a reason for disagreeing with GST. There is no basis for that in Singapore. So, stop pretending that this is the reason.

On the first question, impact on the middle class. I know what you are trying to do with your computations, but I have shown in my chart and in my speech a different way of showing it, which is the share of GST paid by the different groups. And you can see from that, the chart is self-explanatory, the middle 20%, the share burden that they pay for GST, the increase in GST comes down.

Effectively, what it means is that the increase in GST, the $3.5 billion of revenues that the 2% of GST generates, will be borne by the upper-middle and the top income earners. That is what it comes down to. It shows in the effective rate chart, where you saw, when we stacked up the effective GST rates and we showed the increase in GST to 9%, that extra burden is all borne by the upper-income deciles. Upper-middle and top-end.

And that is exactly how we have designed the system. It is that group that will bear the burden of the GST increase, while the rest of the population pay the GST rate, but the impact of GST expenses is offset on a continuing basis. And that is why we can have the confidence of implementing a consumption tax in Singapore that is fair, effective and does not hurt the poor.

Mr Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai: Speaker, thank you. I think the Minister did not answer my question. After all, someone has to pay for the $3 billion or $3.5 billion GST. So, I am asking the Minister what is the tax burden on the different groups of Singaporeans? You cannot say there is no increase in tax burden.

Secondly, on the income tax. Can I ask the Minister then, what is the total taxable income attributable to the top 10%? I can tell you that a 3% increase in the income tax on the top 10% will yield $3 billion. What is the total taxable income?

Mr Lawrence Wong: Mr Speaker, I have to differ with Mr Leong Mun Wai. I do not intend to get into a debate on figures with him. If he thinks that me and all my MOF officers know less about revenues than him, he is entitled to take that view. I do not wish to entertain or continue the debate further when we are not even able to — if the Member is unable to accept facts which I have put out and says that that is wrong, I do not know how to debate any further.

Because then what are we debating about? The Member is unable even to accept an authoritative fact from the Minister for Finance and say it is wrong, so, what is the point of continuing the debate on facts and data if the Member does not accept the figures which I have put out on personal income tax?

I have already explained that it does not yield that figure. Just look at the revenue generated from the tax change we have just introduced in this Budget. It is nowhere in the region of billions. Nowhere!

So, I can only say the facts that the Member has are wrong and it should not form the basis for public policy.

On the first question, I have, in fact, answered it. I did not say that there is no increase in burden. Please do not distort what I said. Listen to what I said carefully. I said the burden is borne by the upper-middle and top-end. And it is reflected in the chart and we will be able to circulate the chart after this, put it out on the website and Mr Leong Mun Wai can have all the time in the world to analyse the figures and internalise them. Thank you, Sir.

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): Thank you, Speaker. I thank the Minister for his stout and robust defence of the need to raise GST.

I have three clarification questions with regard to three separate areas. The first has to do with corporate taxation. And the question is whether the Government plans to subscribe to the spirit of the BEPS agreement as a signatory and to roll out, broadly speaking, the framework as prescribed. I mentioned this, in part, because the Workers' Party's proposal for corporate taxation is quite different from the hypothetical.

Mr Speaker: Assoc Prof Jamus Lim, if we can just keep it to largely clarifications. Sure, I will allow some preamble, but not another speech again.

Assoc Prof Jamus Jerome Lim: Fair enough. So, that was my first question. My second question has to do with wealth taxation and the question is whether the Minister believes that the modest increase in wealth taxation that is set forth in our proposal, which is broadly consistent with – in fact, it significantly is lower than some other neutral analysts have had, our estimate is $1.2 billion – whether he thinks that this modest increase in wealth taxation will be such that it will make Singapore so unattractive that high net worth individuals would relocate and be footloose in that sense.

My third question has to do with land sales. I accept the position that this Government has that they treat land sales as part of reserves, but then I am wondering if the Minister is able to reconcile the treatment of land sales that are less than 10 years. So, land leases that are of one to nine years, with the broad argument that land sales must all immediately go into reserves, rather than take the first nine years as part of recurrent revenue.

Mr Lawrence Wong: Sir, on the three questions, first, on BEPS 2.0. We are, certainly, committed to implementing the spirit of BEPS 2.0. We will do so while ensuring that this is, indeed, implemented around the world. Because our bigger concern is that it must be a level playing field. It cannot be that some countries do it and others do not; and then, there are revenue leakages that will undermine Singapore.

So, we are watching. Yes, countries have signed up to it. But countries have to go through their own domestic processes to roll out BEPS 2.0. It is not a certainty that this will get through their respective parliaments.

Signing the declaration is one thing; 2023, but will it get through all the countries' parliaments, legislation and implemented in law? Not so sure yet. So, we do want to make sure that there is a level playing field and we will do our part as a signatory, as a responsible member of the international community, to likewise implement, when there is that global consensus and global implementation.

On wealth taxes, I recognise a proposal from Assoc Prof Jamus Lim and the Workers' Party for a net wealth tax that will yield revenue of $1.2 billion. I have explained that, yes, in theory, you could design a scheme like that. You could. But in practice, it will be much more complicated and it is not just about the fears of people leaving, but the fact that there are so many ways for high net worth individuals to circumvent whatever taxation rules you have in place and to plan away the burden of the wealth tax on themselves.

The ones who do, are usually the ones with better means and higher wealth. And this is why, even in Switzerland, for example, if you look at the net wealth tax they have there, the burden of tax falls on a much broader base of the population. The so-called "net wealth tax" in Switzerland is not a wealth tax for the top-end only. Many middle-class, many middle-income people pay for that net wealth tax. This was our experience in estate duty, mind you. As I mentioned, the top-end, the very wealthy, knew how to plan it away. But the burden ended up falling on the middle-income and the upper middle-income. That is our bigger concern, on top of the concern that, yes, there will be some competitiveness reasons. That is also a relevant concern.

And that is why we have to study this very carefully. We have to think through, look at the experiences of other jurisdictions. Not very many left to study because, as I have said, many of them have dropped the idea of doing a net wealth tax. We will have to consider what is suitable for Singapore. So, we will not rule it out. But at this stage, we do not have something that we are confident can be effectively implemented, suited to Singapore's circumstances.

On land sales, the easy answer is, for these shorter duration leases, we have decided for flexibility and, because there are more transactions like that, there is no need to regard them as assets and, therefore, we take them in as current revenue. But for the ones with longer leases, we treat them as assets and then, therefore, we take them into our reserves framework and accord the treatment accordingly.

It is a judgement call. We could have said everything, regardless of the duration of the lease. But we have worked out what we think is a reasonable balance and that has been decided and agreed with the President's Office.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): Sir, the Minister accused Workers' Party of double standards by calling for higher taxes on tobacco, because that is regressive. But would he not agree that more taxes on tobacco and gambling are acceptable, if they can help discourage that behaviour because the effects of that behaviour have far higher health and family costs on the lower-income and, therefore, are more regressive?

Secondly, the Minister said that those with fewer means will bear a lighter share of the GST increase, but they get more benefits from the Government and more than what they put in. That was what he said just now in his speech. He said this makes a fair and inclusive system and he repeated that point in his Chinese speech as well. And he just said just now that the burden is all borne by the upper-middle and the top deciles of income earners.

Sir, if those with fewer means really get back more than what they pay, by the Minister's logic, how will they feel that they are contributing?

And to be clear, Workers' Party is not against the lower-income getting back more, if this is, indeed, the case. But can the Minister clarify whether or not the GST hike will make the lower- and middle-income pay more in net taxes over a 20- or 30-year period?

Mr Lawrence Wong: Sir, I did not say that I was opposed to sin taxes or to tobacco taxes. I was simply highlighting that the Workers' Party made a big issue of regressivity in one case, but not in another case. So, I did not understand why there was inconsistency there. But we have never made a big issue of it and, in fact, we do not look at fiscal systems like that. As I have said, it is not appropriate to consider item by item. We look at the system as a whole. And where sin taxes are concerned, externality tax, we do it not for revenue-generating purposes. Yes, it generates some but not a lot. But really more for curbing consumption, which we think is necessary. And that is why we will continue to review these taxes from time to time, as we have been doing.

On the second point, the burden of GST increase and how our system works, I think Mr Gerald Giam is saying, well, you want everyone to contribute, but, with GST, the low-income do not end up paying. Net-net, they do not have to pay. So, how do they contribute? But the point is this. With the GST, yes, they may get back something in terms of continuing offsets, but they do pay. There is a price. If there were no price to pay, we will not be having this debate. Everyone will happily say, "GST goes up and there is no opposition to it".

But I think the Workers' Party and the PSP know that this is something not very popular on the ground and, therefore, they are objecting to it. But because people have to pay for it, then they feel that they are contributing to the system. Everyone contributes. With GST, we bring that about. It is a broad-based consumption tax which impacts everyone and everyone feels it, but it is also the way they can contribute and chip in to the system.

But what we have done is do it in a fair way by offsetting the impact. And because the GST Vouchers are permanent, they are conjoined with our GST system. It is together, permanent. Therefore, we have confidence to say that, on a continuing basis, the charts that I have described, how we can offset the impact on the low-income groups. That is something we can do, not just today and not just five years, but on a continuing basis.

Mr Speaker: Just a reminder to Members. You do know that we have a Committee of Supply coming up, where the specific and technical questions can be asked. So, if we could keep our focus on the overall fiscal policy of the Government. Mr Leon Perera.

Mr Leon Perera: Thank you, Mr Speaker, Sir. I thank the Finance Minister for his wrap-up speech. There are three clarifications. Before that, just a very short sort of response or preamble.

I think the Minister talked about how much the personal income tax and property tax would have to rise to fill the hole if GST was not hiked. I want to clarify that when my colleague Assoc Prof Jamus Lim outlined different proposals for revenue generation, there was never the intent that the entire burden of plugging that hole falls onto personal income tax or property tax.

So, with respect, Sir, I think the view that we are putting forth proposals that soak the rich is a mischaracterisation. In fact, it is a caricaturisation of what we have put forward. The bulk of revenue generation in those proposals actually fell on the changes to the land sales, the changes to NIRC and also the net effect on corporate tax's take from compliance with the BEPS regime. Not a discretionary increase in corporate tax, but how that would impact the overall corporate tax taken. I think our point there is that —

Mr Speaker: Mr Leon Perera, if you can come to your clarifications and questions, please.

Mr Leon Perera: Alright. Let me move to my first clarification, which is: I had an exchange with the hon Minister Lawrence Wong in this House in 2018. I asked the Minister at that time what would be a reasonable time interval when we review these rules governing the reserves. They were amended in 2008, they were amended again in 2015. So, what is reasonable time? Are we saying that it is set in stone and we will never amend it? And the hon Minister's reply to me at that time was, "you never say never" and these things do have to be reviewed at a certain point. So, my question is, what does the Minister think is a reasonable point in time when we review these rules, as we have suggested?

The second clarification is on the concept of an optimal level of reserves. I would invite the Minister to agree with me that as the absolute level of reserves increases in dollar terms as a proportion of GDP, we must accept that it is legitimate to bring into place policies that slow the growth of that reserve without depleting it. On that note, would it be the case that the Minister rejects altogether any notion that there is an optimal level of reserves and we keep adding to the reserves, ad infinitum, without any regard to the absolute level and its relation to GDP?

The last clarification is, the Minister alluded to the fact that when we make suggestions about the reserves, land sales, NIRC, there is a certain cavalier mindset involved in doing so. I would like to ask him, the PAP Government in this House did exactly that, in 2008 and they did it again in 2015. Was that cavalier? And if that was not cavalier, why is it cavalier when the Workers' Party now suggests doing that?

Mr Lawrence Wong: Mr Speaker, on the three points. On the first, I recognise that the Workers' Party's suggestions for revenue alternatives could entail mix and matches as they have highlighted, a bit from here, a bit from there. But I still say, as I have highlighted, the sums will not add up. Why? Basically, you are asking to tax more from three possible groups as an alternative to GST: the wealthy and the better-off, large companies and future generations. So, that is what it comes down to.

The future generations would mean land sales and NIRC, these sorts of changes. And I have explained why we do not think it is financially prudent to make those changes.

Large companies, I have highlighted. This is contingent on the evolving rules around BEPS 2.0 and, even if we were to get some additional revenue, we are very likely to have to reinvest back to strengthen our competitiveness.

This leaves me with the third group – the wealthy. And that means wealth taxes, which, I have explained, can be difficult to do, or property tax or personal income tax. And, if you were to home in on property tax, I have explained, if you want to get another billion dollars of revenue from property tax, you probably would have to double property tax rates across the board.

That is just $1 billion. GST is $3.5 billion. So, where does the money come from? And that is why I highlighted the sums still do not add up.

I appreciate and I take these in good faith that there are these different options that the Workers' Party has offered as alternatives. We have studied all of them before the Budget. During the Budget debate, when these options were raised, we went into them again with my team, but we still are not able to make the sums add up.

The next two questions I will take them together – when is the next reasonable interval when we might review our reserves' rules and is there an optimal level of reserves? It is very hard to answer these questions, because I do not have a crystal ball. Really, who knows what will happen to the world in the next 30 years or more? Really. Can anybody predict? It is almost impossible.

So, what would trigger us to change? I think it will have to be something really very disruptive. Not just once off, but on a permanent basis, and we will have to study the options very, very carefully at that point in time. Because there are deep, deep implications if we were to change anything on the reserves' rules. Deep implications for intergenerational equity, essentially, resulting in our next generation having to pay more taxes, as I have said, and having less to deal with any emergencies in the future.

That is why I would say not something we will do today because we have other options. We have the GST, which we can implement in a fair way. We have other tax options.

That is the reason why I ask, well, I wonder, maybe this is taking it a little bit too lightly. Because why turn to the Reserves when we have all these options and why make the GST into the last resort? But reserves – okay. Future generations – never mind, let us do it. But GST – cannot touch.

Why? Why take that approach? Especially when the way we have implemented the GST is not the way the Workers' Party has characterised it. It is not, and you know it, too. I have shown the charts. I have explained it. We have explained it before multiple times and we have reiterated our explanation.

So, if you understand this, then why are your proposals anything but GST increase? Even Reserves can be touched, but not GST increase. That part, honestly, I cannot understand. It makes me wonder why.

The Workers' Party cites that the GST will hurt the poor. It does not. I have explained it. And on that basis, they cannot support the Budget. Really? Do you know what you are saying then? You do not want to support all the things we have in this Budget? To uplift the wages of lower-income workers, Workfare, progressive wages, to help vulnerable families with KidSTART. You are rejecting all of that?

I find it hard to understand, frankly, on the misguided view that GST hurts the poor, which it does not. I can only, therefore, ask whether you are taking things too lightly. Or whether you are raising opposition because of other reasons, political reasons? Or other things? As opposed to seriously looking at the facts and doing what is right for Singapore.

The Workers' Party is entitled to their views and to not supporting the Budget. But it will not stop me as the Minister for Finance from doing what is right and it will not stop this Government from continuing with all our efforts to build a better Singapore. [Applause.]

Mr Speaker: Ms Hazel Poa. There is time for one clarification from you.

Ms Hazel Poa (Non-Constituency Member): Just now, the Minister for Finance responded to my question about the Budget cut. I did not just ask about the 1% cut, which is meant to start next year but also the 2% Budget cut that was supposed to have been implemented from FY2017.

Can I take it that the same reason applies? That it was not really a cut but was reallocated to new initiatives and that therefore this is a reallocation, not strictly a Budget cut? Do the new initiatives, therefore, include subsidies to F1 as well as the transfer to SPH Media Trust?

Mr Lawrence Wong: Mr Speaker, yes, Ms Poa is right. When we talk about these Budget cuts, they are in the context of a budgetary framework that allows us to reduce – so, the cuts are real, mind you. The cuts are real and actually applied to Ministry expenditures. But Singapore also has new priorities. And, therefore, this allows us to reallocate expenditure from existing to new, without having to just top up more monies. In this way, we can moderate the increases in expenditures.

On how or what are the areas these reallocated monies go to and whether the SPH Media Trust and F1 are part of it, I think we can discuss all these in the respective Ministries' Committee of Supply debates when they come up. Thank you, Sir.

Question put, "That Parliament approves the financial policy of the Government for the financial year 1 April 2022 to 31 March 2023."

Hon Members say "Aye".

Mr Speaker: To the contrary, say no. Leader of the Opposition.

Mr Pritam Singh: Thank you, Mr Speaker. The Workers' Party would like to record its dissent. Thank you. No off-set package lasts forever.

Mr Speaker: The Members who would like to record dissent, please stand up for record.

Mr Leong Mun Wai: Mr Speaker, Sir.

Mr Speaker: Mr Leong, we are taking a record of the dissent.

Mr Leong Mun Wai: Before we do that —

Mr Speaker: Mr Leong, we are taking a record of the dissent. If you have other clarifications, you can raise them during the Committee of Supply. Thank you.

Hon Members Mr Gerald Giam Yean Song, Mr Leong Mun Wai, Assoc Prof Jamus Jerome Lim, Mr Muhamad Faisal Bin Abdul Manap, Mr Leon Perera, Ms Hazel Poa, Mr Pritam Singh and Mr Dennis Tan Lip Fong rose in their place for their dissent to be recorded.

Mr Speaker: Members may sit down. Leader of the Opposition.

Mr Pritam Singh: Thank you, Mr Speaker. Our Chair Ms Sylvia Lim, Members of Parliament He Ting Ru and Louis Chua are not here because they are self-isolating. I just want to state that they take the same position as well.

Mr Speaker: Understand. But they need to be in person to record their dissent.

Mr Pritam Singh: I understand.

Mr Speaker: Let me repeat.

Resolved, "That Parliament approves the financial policy of the Government for the financial year 1 April 2022 to 31 March 2023."