Debate on Annual Budget Statement

Order read for Resumption of Debate on Question [16 February 2021] [3rd Allotted Day],

"That Parliament approves the financial policy of the Government for the financial year 1 April 2021 to 31 March 2022." – [Deputy Prime Minister and Minister for Finance].

Question again proposed.

Mr Speaker: Mr Vikram Nair.

1.02 pm

Mr Vikram Nair (Sembawang): Mr Speaker, I will focus on two topics in my speech: climate change and COVID-19. One is the most important long-term threat the world faces; and the other, the most immediate threat that is on the minds of world leaders and people around the world. The one thing they have in common is that both address concerns that can only be addressed by concerted effort on the global scale. These problems must be addressed collectively and individual efforts are not going to be enough.

Climate change is getting more and more attention. There is broad consensus that climate change is caused by carbon emissions. As more carbon dioxide and greenhouse gasses are emitted, the faster global temperatures rise. The drivers of carbon emission include the industrial development and agriculture, which are in turn driven by consumption. On the other end of the equation, carbon sinks, which are largely forest and plants that absorb carbon dioxide and produce oxygen, are being increasingly destroyed as forests are cleared to make way for development.

The effects of climate change are going to be felt by everyone. As global temperatures rise, the arctic ice caps will start to melt and sea levels will rise. Singapore has already started to make plans for dealing with this in the previous Budgets. At the same time, there will be increased desertification as temperatures rise, and more and more eco-systems and species face the risk of dying out as temperatures rise. There will be extremes of weather, droughts and floods. While people may continue to make adjustments to survive, quality of life will definitely get more harsh and difficult.

Another casualty in this process is the natural world. I was very much moved by Sir David Attenborough’s documentary "A Life on Our Planet", which is really a sad reminder of what we have lost in the course of just one lifetime. Some of the frightening figures there include 15 billion trees are being cut down each year and that more than half our rainforests are gone. Coral reefs, which also absorb heat, are dying at an alarming rate because of rising water temperatures and pollution. There are also reports that 60% of invertebrates have been wiped out since 1970. There are large numbers of species going extinct and the current age is being referred to as the Sixth Great Extinction.

Yet, our journey down this path has been paved with good intentions. People want better quality lives and development generally entails clearing land and development. We had a microcosm of this discussion just earlier. This is also why the greatest carbon emitters are the biggest economies, namely the US and China. The greatest carbon sinks are in the developing world. The developing world wants to develop and be more like the developed world, and this entails clearing land.

One area where this is being very publicly debated is the clearing of the Amazon rainforests in Brazil, where land is being cleared at one of its fastest rates. President Jair Bolsanaro has publicly defended his country’s right to clear land for development, while the rest of the world insists it should not.

Brazil's view is understandable. Brazil does not see why it has to forgo its own development for the benefit of the rest of the world. On the flipside, it views the developed world, where countries already benefited from deforestation, are not being fair in telling the developing countries not to develop. Not only that, but the developed world still continues to have a significantly higher carbon footprint than the developing world.

In my view, the only sensible solution to this is that we have to pay countries to conserve their forests. And in order to make this payment, there must be a price on pollution and carbon emissions. These ideas are not new; they have been developed in various international treaties like the Paris Agreement and the Kyoto Protocol.

Ideally, if we can have a global carbon trading market, we may be able to have a fair system where countries that create carbon sinks to absorb carbon get payments for doing so, and countries that emit carbon pay for the same. This way, countries will be incentivised to reduce emissions, in which case they pay less. And countries that may be engaged in reforestation and absorb more carbon can get paid more. This will hopefully create a virtual cycle where countries can be incentivised to reduce emissions and, if possible, even to engage in reforestation.

Of course, this is ideal. In order for this to work, the countries emitting carbon have to acknowledge they have a problem.

So, what can Singapore do? Singapore is a small country. We cannot really move the meter very much on the global scale. Our own emissions are probably a drop in the ocean. But I think our Budget measures show a clear commitment to reduce our own carbon footprint and to maintain and manage our own development in a sustainable way.

We had a very long discussion earlier on on the clearing of land in Kranji. The fact that land clearing gets so much attention in this House, to me, is a good sign of how seriously we take this commitment. We recognise the need for development but we also recognise the need to do so sustainably.

I think what we also could do is to lend our voice and continue to do so on the international sphere, and to the extent we can aid in the assistance of working out global solutions.

The two most important players in this space are the US and China. While they are rivals on some fronts, hopefully, on this front, there is an opportunity for them to take the lead in unison. Both President Xi and President Biden have publicly voiced their commitments to reducing emissions, have taken measures, and the next step is to do so in the international scene.

If we reduce emissions and ideally, incentivise and promote reforestation, the effects of climate change may be reversible, but we must work collectively to take effort.

The second topic I will discuss is COVID-19. Just a little over a year ago, in the beginning of 2020, COVID-19 was a little known virus which had been spreading in China in the province of Wuhan, but had little footprint elsewhere. Singapore anticipated the seriousness of this threat and set up its Ministerial taskforce as early as January 2020 with both strategy and tactics coordinated at a high level. We have had our ups and downs in dealing with this virus, the most difficult stretch being the two-month circuit breaker, the period when the virus was spreading rapidly in our foreign worker dormitories.

Notwithstanding the challenges, we have generally managed well and kept our fatality rate amongst the lowest in the world. We have also managed to absorb a large part of the economic impact because of the emergency financial measures we put in place – companies were supported in their payroll, rentals were reduced and managed, and workers who lost jobs or lost income were given compensation.

Many people played a part in this process. Frontline workers kept essential services like hospitals, food supplies and transport running, parents and teachers played their part in helping with home-schooling and later the opening of schools. Today, the situation is under control again, and our journey here was enabled because of collective effort and cooperation. But the situation can change rapidly. All it takes is one or two clusters and it will spread again.

The most important next step in this battle is the vaccination. Happily, Singapore is in a position where we have adequate supply of the vaccines coming in the course of the year.

According to the BBC, vaccine efficacy based on data coming in is actually quite strong, with Pfizer, Modena, even Russia’s Sputnik V vaccine all having efficacy levels of above 90%, which is a measure of how much they reduce the risk of coming down with symptoms of COVID-19. Although no vaccine has 100% efficacy, even for those people who do come down with COVID-19 symptoms after taking the vaccine, it had generally not been fatal. So, the symptoms are usually more mild. So, what this means is there is close to 100% protection against serious effects of COVID-19.

The benefits are definitely there to the individual for taking the vaccine. But we have a slight problem in Singapore. The slight problem we have is that our community spread rates are low and most people are less afraid of getting the virus. So, a number of the people I have spoken to have suggested they would prefer to take a wait-and-see approach; there is no urgency to take it, so let other people take it first. Of course, if everyone does this, there will be a risk that our vaccination rates do not go up as quickly as we would like them to.

Other Members in this House have spoken on how we should incentivise people to take vaccines, with Dr Lim Wee Kiak suggesting that vouchers be given out, and Mr Alex Yam suggesting it be made mandatory.

My suggestion is a variation on the scheme but I would suggest that what we should do is give incentives to people who take the vaccine but not monetary incentives. We should give them more liberties. So, for example, if you have a group of people who are all vaccinated, they may be allowed to meet in groups of larger than eight. Workplaces may be allowed to operate at higher than 50% occupancy if everyone who is attending in the office has taken the vaccination. So, these are sort of gentle ways to, I think, nudge people into taking the vaccine, to give them very tangible, immediate benefits.

Ultimately, it is my hope that we will be able to get all people vaccinated as soon as possible. Vaccines can remain optional but I think if benefits are linked to it, liberties are linked to it, people will take it up more.

It is my hope that all eligible people will take the vaccine soonest, as this will probably have the greatest impact in getting back to as close to normal as possible. Mr Speaker, in Tamil.

(In Tamil): [Please refer to Vernacular Speech.] Mr Speaker, the past year has been a difficult one for all of us because of COVID-19. Some of you or your loved ones may have been infected by the virus. Many more would have experienced loss of income, loss of jobs and big changes in lifestyle.

The Government provided significant support last year, providing companies with help like JSS, which provided support for up to 75% of Singaporean’s salaries which helped keep many people in jobs. Those who lost jobs or had significant loss of income were given financial support. The self-employed were also supported, in particular, those in the affected transport sector like taxi drivers.

During the lockdown period, many of us were wishing for a vaccine. This vaccine is now here and being rolled out. I would thus strongly encourage everyone to take it. These vaccines have gone through extensive clinical testing and are generally safe to be taken.

For those with serious medical conditions or concerns, you may check with your doctors to be sure. If we are able to get a large part of our population vaccinated, then it will be harder for the virus to spread, protecting even those amongst us who are unable to take it.

We have put up with a lot of challenges in the last year – the next step, to take the vaccine, should be a lot easier and it is my hope that everyone who is able to will take it as soon as they can.

1.16 pm

Mr Lim Biow Chuan (Mountbatten): Mr Speaker, last year has been a difficult year for many Singaporeans due to COVID-19. Fortunately, due to Singapore’s strong fiscal position and our reserves, we were able to turn the situation around. The five Budgets announced by Finance Minister last year has helped many of our workers stay employed and helped many businesses stave off insolvency.

Many of my friends who are employers expressed their appreciation for the Jobs Support Scheme which has helped them to keep paying their staff. I also met many residents who were able to receive the Self-employed Income Relief Scheme or SIRS because this gave them much support for the leaner months due to the circuit breaker. There was also substantial support given by the Government for families to help build a caring and inclusive home and plans to transform and grow the economy. Compared with many other countries, Singapore has done relatively well in managing the negative impact on the economy.

For that, I think it is appropriate to give credit to Deputy Prime Minister and his colleagues from the Finance Ministry as well as to thank the Multi-Ministry Task Force and the many frontline workers for their efforts in keeping Singapore strong economically and for keeping Singapore safe.

The Deputy Prime Minister has said that the Government will enhance the salaries of nurses and other healthcare workers. I fully agree. Like several other Members of Parliament before me, I also urge the Government to consider enhancing the salaries of our other essential workers as well. The COVID-19 crisis has shown us that during a health crisis of this nature, our essential workers, like our cleaners and those who clear our rubbish on a regular basis, they play an important role in our daily lives.

I submit that we must also give credit to Singaporeans who gave their full-hearted support for the efforts of the Government. Singaporeans wore face masks when it was mandated, they used sanitisers regularly, stayed at home where necessary during the circuit breaker and coped with safe distancing measures. Our citizens did their part to help manage this pandemic.

Although the impact of the past five Budgets have made a great difference to many workers and businesses, the question is what next.

As a country with no natural resources, we must always be mindful of digging into our reserves which is finite. The last five Budgets with all the additional COVID-19 support measures have cost Singapore almost $100 billion. This year, our expenditure for Health has shot up to $18.8 billion. Defence will cost $15.4 billion and Education will cost $13.6 billion. Our deficit for this year is projected at $11 billion.

Members may also recall that during the National Day Rally in 2019, the Prime Minister said that it will cost $100 billion or more to protect Singapore against rising sea levels. Will we ever be able to put back the $100 billion withdrawn from our reserves for this COVID-19 support measures?

I recall in 2011 that the Government returned the $4 billion which was withdrawn from the reserves for Jobs Credit Scheme. How will we be able to pay for the huge expenditure required for future development projects?

Over the next week, during the Committee of Supply debate, we will hear many Members of Parliament asking the Government to do more and more for our citizens. And I hope that we will all exercise prudence and remember that the Government is but the trustee of all the taxes paid by all tax payers. Every additional tax relief or subsidy that Members ask for would mean that taxpayers would have to pay for those measures. No one likes to pay more taxes but yet, if we do not project for more tax revenue, we will not be able to fund those expenses which are necessary. We may not be able to help those who truly need additional help from the Government's measures.

Sir, Budget 2021 contains various measures to help Singapore to emerge stronger as a nation. I agree with the general direction set by this Government to emerge stronger together. I think it is important for the Government to help our businesses transform so that they can create good jobs for our citizens and opportunities for all the businesses. We must be ready for a post-COVID future and build a stronger Singapore.

Our citizens must also be equipped and upskilled to take up jobs which may be different from the current jobs that they are used to. We must never be complacent and think that our place in this world is guaranteed because Singapore had been successful in our earlier years. If our Singapore workers lose their desire to work hard, lose their hunger to be successful, other countries whose citizens are more hungry will step up to meet the challenge.

Sir, I wish to sound a word of caution to my fellow Singaporeans. Last year was described to be an unprecedented year in which Singapore suffered one of the worst recessions in our nation’s history. However, when I read the real estate statistics shared by URA in January this year, I was surprised to find that prices of private properties still managed to increase by 2.2% last year. Sale of private properties by developers and in the resale market did not slow down at all despite this recession. And despite the fact that there are many unsold properties in the market, URA tells me that there are 52,783 unsold units in the market which have already obtained planning approval. Despite so many unsold units, residential property prices remain high as developers did not reduce their prices. In fact, agents tell me that some new developments which were launched recently in my constituency are priced at between $2,100 and $2,800 per square foot.

Friends in the car industry also told me that there were visibly more people in the car showrooms looking to buy cars. It was as if there was no recession at all, much less the worst recession in Singapore’s history.

So, I urge the Government to continue to be fiscally prudent in its Budget. We need to save for another rainy day because we really have no other natural resources except our reserves. I also urge Singaporeans to be mindful that we must all exercise financial prudence to prepare for uncertain times ahead of us.

COVID-19 has changed the way many businesses operate and many businesses have realised that they can operate their business from anywhere in the world without having to come to Singapore. Thus, we must never take Singapore’s continued success for granted. Sir, I support the Budget Statement by the Finance Minister.

1.23 pm

Mr Ang Wei Neng (West Coast): Mr Speaker, Sir, I would like to first declare my interest as the CEO of ComfortDelGro Taxi.

In the first year of the COVID-19 pandemic, we were like A&E, quickly reacting to where the blood flowed. We had an unprecedented four Budgets, where we swiftly came up with ways to help people and businesses cope with the loss of jobs and livelihoods.

As we moved into our second year of the COVID-19, many of us learned to live in the new normal. It is no longer just an emergency. Instead of only viewing COVID as a crisis, we are now better able to re-orientate ourselves to seek out the opportunities, to boost Singapore’s future health status.

As someone who is involved in the transport sector, I feel that COVID-19 gives us the chance to put in a place a more environmentally friendly and sustainable model of public transport which is also a better use of public resources.

The key reason for this is how working from home has taken hold around the world, and in Singapore.

I must confess I was not a fan of working from home. I did not believe that people could be as productive when they are in the comfort of their home, and surrounded by distractions. But what I saw during the circuit breaker period made me a convert. More importantly, I observed that for the first time in my life, the roads were empty and public transport was not crowded during the usual morning and evening peak hours, which is what we call the devil horns of public transport. The morning/evening peaks are the devil horns of public transport.

Will working from home be a permanent feature of our working life?

Even though cases in the community are low and we have started our mass vaccination exercise, MOM still advises companies to adopt working from home policies as a default option. Meanwhile, Chinese newspaper Lianhe Zaobao reported that more than 40% of Singaporeans would like to continue working from home after the pandemic.

To get a sense from actual businesses on the ground whether working from home is here to stay, I conducted a survey of over 30 of my fellow CEOs in the private sector, ranging from large companies to SMEs. They include MNCs, law firms, architectural firms, financial institutions and manufacturing companies and so on. I asked them if working from home would be a permanent feature at their companies after the pandemic. About 58% said it would not and citing reasons such as lower productivity, majority of the staff are operational staff, lack of opportunities for building camaraderie, for not endorsing working from home. The bright spot is that the remaining 42% said they would embrace working from home in the long run and they said about 20% of their staff would likely be working from home at any one time.

If this is representative of the majority of companies in Singapore, we could take the opportunity to re-shape our public transport system.

I would go further and suggest that we actively work toward having about 40% of organisations in Singapore commit to having about 20% of their staff to work from home at any one time. One way we could go about this is for the Civil Service, which is the largest employer in Singapore, to weigh in and implement longer term working from home policies especially for the back-end and support staff.

I remember when all sorts of incentives, like free travel on certain peak hour periods, were introduced to try to change commuter travel patterns, it took months, if not years, to take effect. COVID-19 achieved that in a matter of days. Without the devil horns, everybody has a more comfortable ride and it also benefits the environment. We should work to stop the horns from growing back.

Indeed a report from the International Energy Agency states: “Research has shown that disruptions can be a catalyst for shifts towards more sustainable transport behaviours but avoiding a return to pre-crisis behaviours requires governments to take decisive action.”

In the same report, it notes that most people are shifting to cycling, in order to avoid potentially crowded buses and trains. The same is happening in Singapore, though to a lesser extent, as sales of personal bicycles go up and bike-sharing companies report an increase in ridership. An example of the Government taking decisive action would be to invest in new and improved cycling networks to make sustainable transport more attractive and safer.

On sustainability, I would like to move on to the topic of whether our bus services are sustainable. Currently, there are many bus services running alongside and duplicating MRT routes, which are costing too much money, according to Senior Minister of State Chee Hong Tat.

Senior Minister of State Chee Hong Tat also informed us that out of the 356 bus services in Singapore, only 11 services were profitable in 2019. The Government had to subsidise $1 billion to operate the remaining 345 services. In 2020, only two bus services were profitable as bus ridership plunged during the pandemic. I could not be sure how much subsidy was given out in 2020, but logically, it would be over $1 billion.

At the same time, we have made a huge investment into the MRT network. Our current MRT network is about 230 km and MOT plans to increase the network to 360 km by 2030. In the last Budget, it was already announced that the Government would be spending more than $60 billion this decade to expand and renew the rail network. After spending so much money, it is natural to encourage more people to use the MRT for longer distance travel, which are more comfortable and efficient, instead of taking buses running parallel to the MRT lines. What do I mean?

The three longest bus routes in Singapore are service numbers 30, 51 and 61. Let me us service number 61 to illustrate. For service 61, the bus ride from Bukit Batok takes more than two hours, calling on 19 MRT stations in between. If you take a train from Bukit Batok to Eunos, the travelling time is only 46 minutes – 120 minutes bus ride as compared to 46 minutes train ride.

The above example shows that it is better for bus services to connect people to the train stations within a town, and that is for the first and last mile connection. It is more efficient to travel between towns using MRT. Thus, I would like to propose a radical idea.

Currently, many duplicate bus services ply through the Central Business District or CBD. And yet, the CBD is well-served by the MRT. Most buildings in the CBD are within 400 metres of an MRT station. Hence, I propose that LTA consider having bus services terminate at MRT station bus stops just outside the CBD and have dedicated feeder bus services to ply within CBD, connecting all the interchange MRT stations. There are many benefits associated with this proposal.

Firstly, we can drastically cut the number of duplicate bus services and number of buses plying within the CBD, without compromising the service level. We can even allow only electric buses to ply within CBD. This will help to reduce air pollution within the CBD and contribute to the Green Plan 2030.

Secondly, having all existing cross-town trunk services to terminate just outside the CBD will naturally cut short the trunk services, making bus services more reliable and cheaper to run. The resources saved can be used to improve bus connectivity within each HDB town.

I am sure many Members in this House have received feedback from their residents on the need to enhance bus connectivity within their respective divisions. The most common grouses among my Nanyang residents is the inconvenience of getting to the polyclinic and back home. It is not uncommon that residents have to walk a total of 700 metres plus a bus ride or change bus services to reach the polyclinic. When one is unwell, a 700-metre walk is not pleasant.

Reforming bus routes is not new. Seoul has done it successfully, by re-organising its bus system to create safer, more comfortable and efficient rides. I am not advocating we reduce the $1 billion subsidies for the bus services. I think it is necessary to subsidise public transport just like we subsidise healthcare. I am advocating making bus services more efficient, complementing the train network and adjust to changes in transport behaviour, including the trend of working from home. The worst option is to raise public transport fares significantly to cover costs if ridership remains low.

The COVID-19 pandemic has its perils but it has also provided us the golden opportunity to keep the devil horns away and create a more environmentally friendly and sustainable bus system that does not compete with the MRT, but is in synergy.

Mr Speaker, Sir, my last topic is pertaining to the Budget measures in relation to the incentives to promote electric cars. When similar measures were announced last year, it electrified the debate. This year, it has done the same trick again. Let me elaborate in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Many car owners are wondering, why is the Government so eager to raise the petrol tax this year while the new incentive measures for electric vehicles will only be implemented next year?

Moreover, there are few charging points for electric vehicles today and they can barely satisfy the existing 1,000 or so electric vehicles. This is not enough to encourage Singaporeans to buy electric vehicles. URA and LTA have already put up tenders to invite operators to install charging points to cater for 600-odd electric vehicles at more than 200 public carparks island wide. Most of the charging points will only be installed next year, in other words, water from afar cannot put out fires nearby.

For taxi drivers and private hire drivers, the pandemic has significantly reduced their income. The increase in petrol tax at this time is like adding frost to snow. As the Government has said, taxi and private car hire car owners will enjoy a 15% road tax rebate of up to one year and an additional $360 in a four-month period. The total rebate for these two types of rebates is about $513. For taxis that travel 400 km a day, the additional $1 per litre of petrol tax amounts to $663 additional cost a year. The rebate of $513 is not enough. Fortunately, the Government has heard the taxi drivers' appeal and announced yesterday that full-time relief taxi drivers will also enjoy the additional $360 petrol tax rebate to further reduce the impact of the petrol tax hike.

As far as taxi drivers and private hire drivers are concerned, I would also like to mention that it is unlikely that their income will improve before the end of this year. It is because it is unlikely that tourism will recover and nightclubs will reopen within this year. The trend of working from home will continue. Hence, I urge LTA to consider extending the COVID-19 Driver Relief Fund to the end of the year.

(In English): Mr Speaker, notwithstanding the issues raised above, I support the Budget.

Mr Speaker: Ms Poh Li San.

1.37 pm

Ms Poh Li San (Sembawang): Mr Speaker, Sir, the COVID-19 pandemic may have caused a huge impact on economies around the world but this crisis has provided us with an inescapable fortuity to reassess the way we work and play. We need to reset.

Before this pandemic, many of us were guilty of not exploiting digital technologies in our everyday life in purposeful ways.

The pandemic has forced us to take an extraordinary digital leap in our daily practices. In a flash, an entire generation started to grasp digital tools in order to adjust to the new norm. Despite social distancing and self-isolation, we are all finding ways to connect with one another. Twenty-twenty was a year of disruptions and we had to disconnect to reconnect.

COVID-19 is a game changer and has taught many of us about the importance of adapting and advancing. Just like a quote by Charles Darwin, "It is not the strongest species that survive, nor the most intelligent, but the ones who are most responsive to change."

The pandemic has impacted different businesses and industries very unevenly. Inevitably, the pandemic will bring about new rising enterprises while traditional big wigs may be brought down to their knees.

To help the new rising companies and try to avoid the downfall of some big wigs, the Government has announced four additional Budgets with a supplement of nearly $100 billion.

This Budget will: one, help certain sectors to retain, retrain and prepare workers to be ready to spring back right away after recovery; two, help companies transform themselves for the future digital economy; three, support the core and the worst hit sectors, such as aviation, land transport, arts and sports; four, co-fund new ventures in the areas of creative ideas; and five, help the high-growth enterprises and the startups to have continued access into financial capital.

The Government stands in solidarity with Singaporeans and will try to assist companies to adapt to the economic debacle that we are facing and there will be various assistance and grants. However, our workers and businesses must have the resilience to build their own muscles to innovate, have a creative mindset to reinvent themselves, be adaptable and be forward-thinking to compete against the best on the global stage. And we need to have the gumption and fortitude to succeed in spite of the risk of failure. In unity, we can emerge stronger.

Last month, together with several fellow members of the GPC for MSE, we filed a Motion to accelerate and deepen efforts to combat climate change. And I am heartened to read about the Singapore Green Plan 2030 and the goals outlined by the five Ministries.

The green bonds on selected public sector infrastructure projects is a welcomed financing tool to catalyse the flow of capital towards sustainable development and to anchor Singapore as a green finance hub. This will ensure that the access to capital for a large scale critical infrastructure is available to serve our next generations of Singaporeans.

Deputy Prime Minister Heng has announced that up to $19 billion of projects will be allocated towards developing our green economy. So I hope MOF and MSE will expand the scope for such green infrastructure projects so as to accelerate the pace of achieving the targets set out in the Singapore Green Plan 2030.

Budget 2021 is committed towards our long-term goals and sustainability and has given many Singaporeans renewed hopes after an uncertain 2020. Mr Speaker, Sir, I support Budget 2021.

Mr Speaker: Mr Chong Kee Hiong.

1.42 pm

Mr Chong Kee Hiong (Bishan-Toa Payoh): Mr Speaker, Sir, after a year of combating COVID-19 and dealing with its unprecedented impact on so many aspects of our country, it is time for us to embark on the road to recovery.

The world has been profoundly changed by this pandemic. It has pushed us to re-assess our priorities and forced us to adapt to new ways of doing things. For example, this crisis has accelerated digitalisation and flexible work arrangements.

The crisis also presents opportunities in certain sectors and provides the impetus for new approaches.

This Budget has some bold initiatives, particularly green ones, which I am delighted will be implemented.

Like water, food security is a critical national issue. I have always felt strongly about ensuring food security for Singapore, so much so that I had urged the Government for more sector support in this House a few times in the past.

Hence, I welcome the decision to commit $60 million to a new Agri-Food Cluster Transformation Fund. The Fund will help us move towards the 30-by-30 goal of producing 30% of our food through local farms by 2030. This will be no mean feat, considering that we are at less than 10% today.

I understand the COVID-19 crisis has placed an enormous strain on our financial resources. Nonetheless, I seek the Minister's assurance that funding will be increased when our economy recovers.

I would also like to ask the Minister if the Agri-Food Cluster Transformation Fund is in addition to the $63 million Agriculture Productivity Fund (APF) launched in 2014. Would the Minister share with us how much of the APF has been utilised to-date and provide a summary of the projects it supported, such as the type of farming projects and food production?

It is important that we continue to develop this sector and ensure its viability, as this industry is perceived to be less profitable than other industries, such as manufacturing and financial services.

The COVID-19 pandemic has highlighted the importance of locally produced food. We are fortunate to have adequate national food reserves and have been able to work well with our regional and global partners to keep borders open for goods to flow between countries so far. However, we should not take these arrangements for granted.

We must be prepared for other crises in the future and the more local food production sources we have, the less vulnerable we are to supply disruptions.

I am heartened to note that we are exploring and tapping upon available technologies to overcome our land constraints for food production, whether these are for fruits, plants, livestock, or new types of production, such as lab-grown meat. These are capital intensive but necessary for food security.

To strengthen food security, besides sector-friendly Government policies and financial support, we need to develop a whole eco-system to make the agri-food sector a significant economic sector. We need to nurture a new generation of local expertise, while consulting with leading agri-food practitioners and researchers locally and internationally. We need new faculties in our ITEs, Polytechnics and Universities to prepare our people for jobs and careers in this sector.

We should continue to support small local household and community farming endeavors too. The output from household and community farms may be small but every effort to contribute to our food security and resilience is important. As the saying goes, many little drops make an ocean.

In his Budget speech, Deputy Prime Minister Heng mentioned, we need a whole-of-society approach to succeed in realising our sustainability goals.

As the efforts to support supply side factors continue to strengthen, it is also important to increase consumer awareness and confidence in local produce to build up demand from our local population.

As I have raised in one of my previous speeches, we should encourage a "Buy Singapore" mentality where Singaporeans choose local brands and products in an informed manner. "Buy Singapore" will not only help ensure the sustainability of producing local food but also reduce our carbon footprint, as transportation and refrigeration required to move and store food over long distances are reduced.

In fact, "Buy Singapore" can also be expanded to include goods and services beyond the agri-food sector. There are other local industries that may potentially have an advantage in serving our domestic market. These should be supported and better funded to help them grow. Buying products using materials that are preferably locally sourced and made here is another way of reducing one's carbon footprint.

I full-heartedly support the Ministry's decision to issue green bonds to fund select public infrastructure projects.

Three years ago, I had suggested that we designate a proportion of our borrowings for green projects to be in green bonds issuance. Not only will this support the Monetary Authority of Singapore's aim of growing the green bond market in Singapore, Government issues will help develop a green bond market of a significant size. As ASEAN's largest green finance market, we account for about half of the cumulative ASEAN green bond and loan issuances. We can look forward to a more dynamic bond market with a greater variety of products to offer different investors.

The bonds are expected to finance a wide range of green projects and I hope that the Government will include agri-food developments in these issues and its distribution can be sized such that even small investors can participate and do their part to support the growth of Singapore's agri-food sector.

Many green and sustainability-linked projects will be pioneering initiatives and do not have track records. To enable current and new enterprises in these endeavours, I hope the Government will consider more risk co-sharing with investors and banks so that green start-ups will have higher chances of bringing their visions to fruition.

Lastly, I would like to appeal on behalf of motorcyclists, taxi and private-hire-car drivers for more support to defray their increased cost of operations due to the increase in petrol duty rates.

While there are various measures to ease the transition, such as road tax rebates, cash handouts and petrol duty rebates, many of the users who depend on their vehicles for their livelihoods have shared with me their hardships and made their calculations. The rebates will not be enough to offset the higher duty rates.

The intention of the rate hikes is to encourage more green behaviour and reduce the purchase and use of vehicles using internal combustion engines.

However, at this point in time, these users have no other alternatives but to use their current vehicles to earn a living. Many of them deliver goods with the proliferation of online orders. They are not able yet to switch to electric vehicles due to sunk costs or infrastructural constraints. They, however, are faced with the immediate reality that the hike will increase their costs and cut their take-home pay.

I appeal to the Minister to consider providing more financial subsidies or rebates to help them tide over this difficult period or until they have time to switch over to electric vehicles.

With this, I would like to conclude with my support for the Budget.

1.52 pm

Ms Mariam Jaafar (Sembawang): Mr Speaker, Sir, first, Happy Chap Goh Meh! Second, I would like to declare my interest as managing director and partner of a management consulting firm that does work in the area of sustainability and climate change consulting.

COVID-19 has given us a unique opportunity – to "build back better".

Mr Speaker, I am proud of the public commitments in the Green Plan, from planting one million trees to phasing out internal combustion engines by 2030. Climate change is absolutely the biggest existential problem of the 21st century, for the world, for Singapore.

I am particularly proud that we are forging a brave new green economy, with new green jobs in green technology, including agri-tech, alternative fuels, the circular economy and also green financing and carbon markets and services. This is the big unlock. The idea that we can grow our environmental sustainability and our economy, both together.

So, I was perturbed when a young resident, Brian, said to me that he was ashamed to be Singaporean, because we are not doing enough; that Singapore's emissions are still rising at 2% to 3%; that we are among the worst in the world in terms of emissions per capita; that on the Climate Action Tracker website, we are squarely in the Red zone, indicating that our policies and commitments are, I quote, "outside of (a country's) fair-share range and are not at all consistent with holding warming to below two degrees Celsius, let alone with the Paris Agreement's stronger 1.5 degree Celsius".

Mr Speaker, I am not an activist. I am a consultant who works with businesses and Government. But I am also a lover of Nature and a global citizen who is deeply concerned about the world we leave behind for our future generations. And I think, it is important to look at things from all sides so that we can carve the best pathway to fit our needs and our aspirations and bring everyone along.

Where do we stand today? Singapore accounts for only 0.1% of global emissions. In reducing emissions, we face constraints in our size and our geography. A complete shift to renewables is probably not on the cards. While in our CBD, the "urban canyon" effect affects temperatures at the micro level.

It is true Singapore ranks 27th highest out of 142 countries in emissions per capita. But it is not surprising; we are a hub economy. Our status as a manufacturing hub, a trade hub, is the envy of the world. Take Jurong Island – home to more than 100 oil and gas companies, and petrochemical companies, and investments of more than $50 billion.

Mr Speaker, you and I, and I am sure every one of our colleagues in this House, have residents who work on Jurong Island, or Changi Airport, or the Port of Singapore. Oil and gas, petrochemicals, aviation and shipping – these are all hard-to-abate sectors where direct electrification or shift to renewables is technically not yet viable or too expensive, but they are also a significant share of our GDP.

For a hub like us, a better metric is emissions per GDP dollar, or emissions intensity, where we are in the best 20. As a hub, we provide goods and services to the world, and as a hub, we are already doing this more cleanly than most.

Mr Speaker, the climate change space is fast developing. According to the International Energy Agency, 50% of global emissions reduction to reach net zero needs to come from technology that is still in the demo stage. Yet, we cannot underestimate the progress of technology, nor the power of the people, especially young people. There is a gathering momentum on carbon reductions from the demand side, from businesses, investors and government. I know because my clients are asking for advice.

What if our trading partners introduce carbon border taxes – which Europe is already planning? What if pressure on net zero shipping cripples long distance shipping? Now, if that is not an existential crisis of epic proportions for Singapore, I do not know what is! In some sectors, a wait-and-see approach could be more risky than getting ahead of the curve.

Mr Speaker, it does not look likely that we will meet the two-degree goal. We are unlikely to get to carbon negative by 2030 which is what it would take.

But let us not be discouraged. Singapore has the potential to lead the technological innovations, the business model innovation, the necessary eco-system collaborations in order to push the techno-commercial limits around decarbonisation, and then turn all of it into our new exports. We did it before with water. We can do it again.

Our economy will be more competitive, more resilient and we will be enabling, empowering the rest of the world to reach the two-degree goal. In short, we can lead the world. Surely, that is something to be proud of.

Pragmatic problem-solving, innovation, execution – that has always been the Singapore way. We aim for best in class, but we know that this will evolve over time, so our approach must be a humble, learning approach – learning from the past, learning from others – as we position ourselves to lead in policy, technology, collaboration and advocacy.

As we build and learn, I call for the Government to stay open to revisit our commitments and put in more aggressive targets over time because a bigger ambition drives the pace of innovation, gives businesses and investors the confidence to invest, and gives us the licence to engage more broadly – to lead the world.

Mr Speaker, I would like to propose three ideas where I think there is scope for us to invest more so that we might lead the world. I will focus on decarbonisation, leaving the also important restoration of our natural habitats and nature-based solutions to others.

First, double down on the sectors for which Singapore can be the world's most sustainable hub; in doing so, increase our value-add and our competitiveness. There are sectors where because we are a hub, Singapore has an opportunity, and indeed, some might say, an obligation to define the 21st century vision for the sector. I highlight two today: petrochemicals and shipping.

There are more than 100 petrochemical companies with major operations in Singapore, mostly on Jurong Island. This manufacturing base and our position as a trade and logistics hub for petrochemicals make us uniquely positioned to incubate and scale technology, solutions and services to enable a green petrochemical supply chain. With best-in-class sustainable assets, and symbiotic relationships across the eco-system to unlock collective benefits and drive resilience in the face of externality pricing.

Now shipping. Normally shipping generates 2% of global greenhouse emissions. As a country it will be the sixth largest. There is growing policy and social pressure to decarbonise shipping. The Maersk Mc-Kinney Moller Center for Zero Carbon Shipping is a coalition that has been established to drive the maturity of decarbonisation technologies in shipping, with seven founding partners. But it is European-centric. An Asian platform is lacking. Singapore can set up or enable a similar coalition in Asia.

Mr Speaker, many green economy jobs will be technical and engineering work. Thanks to our development history, we have a strong local core in areas like process engineering, energy management, control systems, from the vocational level to advanced engineering. We can be optimistic that this time, with some training, it is our Singaporean workforce who will benefit most from the transition.

My second proposal is to push forward on international and regional engagement, coordination and leadership, starting with ASEAN. The 10 ASEAN economies contribute 7.5% of global emissions. Four of them are in the top 10 countries in the world most at risk from climate change. Singapore is not one of the four. The countries have very different carbon intensities, with Indonesia accounting for more than 60%. Indonesia emissions from land use, land use change and forestry – or what we call LULUCF in the industry – are higher than their forest carbon sinks while Malaysia and the Philippines have net negative emissions from their carbon sinks. There is scope for collaboration – things that can be done at scale.

Carbon capture, utilisation and storage (CCUS), expensive in Singapore, but, with cross-border carbon sinks, we may be able to get the economics to work. Singapore could tap on regional renewable energy grids while providing carbon offset markets and green financing to complement our neigbours’ green efforts. We can lead the region down a collective 2-degree path; an ASEAN 2-degree path that plays to our individual strengths.

My third proposal is to be innovative in encouraging individual actions. Many of us in this House have made our green resolutions – from metal straws to collecting rainwater to planting trees. In the Budget, the Government will partner Singaporeans and support ground-up projects. I hope, I know, our wonderful youths will pick up the baton and push the boundaries. But we cannot just preach to the converted. For the ambivalent or the sceptical, it can be hard to make climate change relevant. It can be harder still to get Singaporeans and Singapore companies to pay more to go green. We cannot simply tout statistics. We cannot simply tell people they must pay more, we cannot simply tell them to stop doing something. But we can provide a vision of a sustainable Singapore in a way that appeals to both reason and emotion. I believe that one way is through stories, poetry and literature. So, let us bring our creative arts community into this campaign. Then let us encourage all who have a stake in Singapore – individuals, families, communities, SMEs, corporates, to commit to climate change action.

An inclusive transition. We all hope for an inclusive transition, one where the disadvantaged are not further left behind. One that is free from the hypocrisy and power plays that, I hate to say, are often thinly veiled in their space.

An inclusive transition means advocating to support developing countries to mitigate and adapt to climate change. Developing countries suffer the brunt of the impact of climate change, physically through flash floods, the destruction of flora and fauna, disease outbreaks and whole islands sinking, as well as economically through lower crop yields, for example. At the same time, many emerging countries exhibit high emissions intensities.

The developed nations are reducing their emissions, but it is a case of been there, done that. Many developing countries, especially in Asia, are still industrialising – iron, steel, cement will be needed for years to come. Developed countries have been able to mitigate their emissions partly because global manufacturing has migrated to emerging markets that have invested heavily in energy, in particular, coal. The average age of coal plants in Asia is only 12 years versus a useful life of 50 years. The cost to transition is, therefore, huge. China, perhaps, can do it. But many emerging markets will need help – aid, debt assistance, technical assistance. Singapore can advocate for their voices to be heard, not to give them excuses, but to get them help from the advanced economies. We ourselves must be happy to help, happy to share our expertise and platforms in technical and financing aspects because that is leadership.

An inclusive transition also means considering and mitigating the impact on the most vulnerable people, including lower income groups whose livelihoods depend on the carbon economy, for example, taxi and private car drivers and delivery riders. Many of my colleagues have talked about them today. The petrol duty hike is an immediate hit to their pockets when many are already struggling. One resident told me that he needed to drive the equivalent of an extra day to make up for it. The rebates help but, may I ask, for how long will this be extended for this particular segment? The duty hike comes when alternatives do not yet really exist, certainly not for this segment. Actually, I take that back. There is one alternative – e-bikes that many switched to after the PMD ban. But Mr Speaker, it was with despair that I learnt that e-bikes are being financed in the market at exorbitant interest rates. We have got to stop these predatory behaviours. It is just not fair. Further, as technology continues to accelerate, driverless cars will become a reality. An inclusive transition must, therefore, create new green jobs, with training and reskilling, so that the most vulnerable will directly benefit.

Mr Speaker, I would like to continue in Malay.

(In Malay): [Please refer to Vernacular Speech.] Climate change is going to affect all us, and more importantly, our children and our children’s children. It is a matter of life and death. Technology will play a big role, but we also need to change how we produce, consume and dispose.

The government’s Green Plan articulates a compelling vision where taking care of the environment is no longer seen as at odds with economic growth. New jobs will be created in the new Green Economy, in fields like engineering, carbon services and green financing. Many of these jobs will require a good foundation in Science, Technology and Engineering (STEM).

Although our Malay community has made progress overall in tertiary education, we remain underrepresented in STEM fields. It is already hurting us in the digital economy. Let us not miss the boat in the green economy. Instead, let us identify the root causes, the key steps where Malays fall out – be it when they choose what to study in school, or when they choose their first job, and address those.

The Government, schools and M3 must help Malay youths and Malays in the workforce to get an equal chance at developing interest, knowledge and skills in STEM, including green technologies. This exposure must come early. It means creating an environment that is attractive and conducive for Malay students to choose STEM courses and careers, for example, by ensuring that Malays are part of the faculty, providing better support systems and building confidence.

I have spoken to a Malay youth in Woodlands. Despite qualifying for Junior College, he decided to take the Polytechnic route. I found out that he had shown promise in Science and Math, but ultimately chose to go into another field. The reason was, the youth was uncomfortable, felt that he did not belong, there were few Malays. He also believed that the STEM fields will be harder and yet the returns he might get or the levels he might get to will be commensurate. Mentorship and role models are key.

Malays in the workforce should have access to and take advantage of the training and reskilling required to support the transition to the new green economy and further their careers there, as part of a broad-based workforce transition or as part of a commitment to diversity and inclusion among our companies.

At the same time our young Malays and their parents must be proactive to position themselves in the new green economy. They must hone their skills and learn, from Malays and non Malays, in the STEM fields. M3 must provide the platforms and the outreach.

Mr Speaker, as a community, we Malays love nature, which is an important element of sustainable development. We must ensure that all in our community join in this climate change discussion – not just the fortunate few.

(In English): We are all in this together. The Green Plan outlines a whole-of-nation approach to climate change. And that is what it takes, the whole nation and our partners, to unite in this fight. We are all in this together.

Mr Speaker, the world lauds our Government’s exceptional handling of the COVID-19 crisis. But good governance is only part of it. Our success has been because our people trusted that we are doing our best to keep us safe during this crisis.

Devastating as the COVID-19 crisis has been, climate change is an even bigger crisis, with even higher stakes. I hope that, again, our people, our businesses, our partners will trust that we are doing our best, not only to keep us safe, but to keep the world safe; not only today but for future generations. And that they will push together with us to lead the world.

If we do this, Mr Speaker, I am sure Brian will feel proud that we are, indeed, doing our best. I am sure he will feel proud to be Singaporean.

Mr Speaker, thank you for the opportunity. I support the Budget. [Applause.]

Mr Speaker: Mr Zhulkarnain Abdul Rahim.

2.11 pm

Mr Zhulkarnain Abdul Rahim (Chua Chu Kang): Mr Speaker, we are at an important part of our nation’s recovery from one of the deepest economic downturns ever experienced, due to COVID-19.

While we have steadied the ship, this storm is far from over. Although the wind is still not behind our sails, we are making headway. However, we face significant headwinds when, all around us, the pandemic is still raging. Turbulent times still lay ahead on the horizon.

In my maiden speech last year, I spoke about strengthening connections and the building blocks of our society in these uncertain times. Hence, I welcome this Budget which focuses on strengthening our people, our businesses and our reserves for the future as we emerge stronger together.

I will be elaborating in the Committee of Supply debates but, for now, I will broadly outline three areas that we should strengthen: first, our relations with neighbouring countries; second, our social fabric as one united Singapore; and third, sustainability for our future generations.

The first part. The Council of Foreign Relations stated in April 2020: “Singapore, one of the world’s wealthiest and most trade-dependent countries, punches above its weight in regional and global affairs”. This does not happen overnight or by chance, but by deliberate design, decisive actions and purposeful policies over the years.

Singapore’s economy depends heavily on trade. In times of crisis, however, some nations tend to look inwards, preferring protectionism over partnerships, sheer competition over collaborations. We cannot afford to do that. COVID-19 has reinforced how important it is for Singapore to continue to play an active role internationally and deepen our interactions with key stakeholders and other countries.

I think that maintaining and strengthening relations with our immediate neighbours will be more critical than ever to overcome the socio-economic impact of COVID-19, particularly in ASEAN. I have two proposals here.

First, we should look and work towards having more travel bubbles with strategic countries as the situation improves. This promotes not only more business travels and encourage more Singaporeans to take advantage of overseas opportunities, but it would also allow the flow of people and reconnection of families who have been kept apart in this pandemic.

Second, we have to invest in Singapore’s long-term infrastructure to prepare ourselves against future pandemics even after we see the end of this one, which may be another four to five years away. For instance, with Connect@Changi, quarantine-free business travel is made possible. It is hoped that aviation, tourism and retail businesses can benefit from it, thereby enabling gradual economic recovery.

The second part – strengthening our social fabric. We have started living life more normally with less restrictions, at an earlier time compared to other countries. And as we recover and adapt ourselves to a post-COVID-19 world, we have to engage and empower Singaporeans to play an even greater role in our Total Defence.

We should tap on our strengths as a multi-racial society. An SMU study had found that people living in more racially diverse neighbourhoods are more likely to lend a helping hand to others in need. Their surroundings made them appreciate that they are all members of a collective and broadened their sense of identity, enabling them to see others as their own.

I am thus happy that Budget 2021 focuses on strengthening our social compact, with the expansion of ComLink, greater support for children with special needs and assistance to lower income households through various schemes.

There are some groups, however, that still require more targeted assistance than others.

First, ex-offenders, upon prison release, face not only social stigma but real struggle to obtain and retain jobs in this already harsh economic climate.

Second, our youths are now exposed to more radicalised views and deliberate efforts of disinformation around the world. We need to actively engage them and have them invested in their stake here in Singapore.

And third, families, due to significant economic pressures, are more exposed to domestic violence. We must do what we can to protect vulnerable groups, like children under the age of 12 or those with mental and physical disabilities.

I welcome the greater resources for these vulnerable groups and those facing domestic violence. Rehabilitation and reintegration efforts for ex-offenders, especially those with drug offences, must be done in concert with their families and strategic social and business partners. We can also adopt technology to tackle recidivism. For instance, a US-based app called Pokket SM, facilitates information sharing and coordination among case workers, probation officers and ex-offenders. Through connecting justice agencies and human service providers, it encourages and sustains self-sufficiency and accountability.

The third part of my speech is on sustainability for future generations. If COVID-19 is a crisis of a generation, then climate change is a crisis for all generations. I applaud the Government’s Green Plan 2030, particularly on agri-food technology, green financing and electric vehicles.

Keat Hong is home to many of our local farms in Lim Chu Kang and Kranji. Hence, the $60 million fund to boost production in the agri-food sector is welcomed. I hope that this will spur adoption of technology and make our food security more resilient.

Next, the plan to support green financing with up to $19 billion of public sector green projects is a good start.

The green bond market is a growing and innovative market, which has grown from US$1.5 billion in 2007 to surpassing US$100 billion in 2019. Green bonds attract a new base of investors and it can advance adoption of innovative new technologies and finance projects that provide green jobs.

Last year, Keat Hong CC played host to a Sustainable Job Fair organised by South West CDC, SembCorp Industries and e2i. It was the first-of-its kind sustainable jobs discovery in the heartlands and part of the South West CDC’s efforts to aggregate jobs in the growing sustainability sector, such as the solar and clean energy. Many thanks to Mayor Low Yen Ling for this.

On green financing, I propose a public awareness campaign on the Singapore Green Plan and building strong partnerships with banks and investors in the region. Green bonds in our region, also extend to non-conventional bonds, like Green Sukuk as well.

Lastly, on electric vehicles or EVs, as stated in my previous filed Parliamentary Question, we should not only look at the infrastructure, but also the legislation and regulatory framework to mandate possibly the installation of more EV charging stations in private residential and commercial carparks. Other possible incentives can be to lower ERP rates for EVs and, with future technology, there can be a "progressive" road tax model that charges vehicles not only on time spent on the roads but also on actual carbon emission.

On adoption of EVs, I suggest the Public Service should lead the way by having more EVs and EV charging stations in its premises.

Mr Speaker, Sir, allow me to say a few words in Malay before I conclude my speech.

(In Malay): [Please refer to Vernacular Speech.] This Budget aims to build on last year’s efforts. We are not yet free from this pandemic. In fact, without last year's budget and support schemes, our economic situation and employment rates this year would have been much worse, unlike the current situation. So, we are not only grateful for the effort, toil and sweat of our frontline workers, but we should also thank all segments of society who have come together to pool their energies and ideas with the Government, to face and combat this pandemic together.

One of the focus areas of this Budget is to further strengthen the social compact of our country. This cannot be achieved without the help of all communities. Each of us plays an important role. Here, I share a quatrain:

This quatrain depicts a highly regarded Malay warrior who is seen as a beacon for those who are struggling to stay afloat or need support to survive.

So, let us all help those in need to stay afloat and give them support.

(In English): Mr Speaker, Sir, in summary, we cannot let the difficulties faced by businesses to spiral downwards. Hence, I am glad that there are targeted schemes to help them. We cannot allow disappointment of laid off workers to turn to despair. Hence, we should work to reskill them. We cannot stand for vulnerable groups in our society to be devoid of hope. Hence, we should speak up for them. We cannot kick the can down the road for our children to tackle climate change. Hence, we should tackle it now for them.

I am glad that this is the spirit of Deputy Prime Minister Heng Swee Keat’s Budget Statement and it has underscored the actions that will be taken right here, right now.

The theme of this Budget 2021 "Emerging Stronger Together" resonates with me. Because if we persevere, stay the course and navigate through the storm, then we will be the ones making the waves in this ocean. Mr Speaker, I support this Budget.

Mr Speaker: Mr Christopher de Souza.

2.23 pm

Mr Christopher de Souza (Holland-Bukit Timah): Mr Speaker, Sir, what does one say as the last speaker – sandwiched between the second last speaker and the Deputy Prime Minister? So, I must thank the Leader of the House for giving me this unenviable task. But I will do my best.

Mr Speaker, last year, through the four Budgets, we assisted many Singaporeans in their time of need. I believe this year’s Budget is a continuation of that spirit, that is, timely aid to citizens and companies in need.

Sir, Singaporeans have risen up to the occasion and taken ownership and responsibility in this crisis, helping their neighbours and friends, and giving to those who need it more than themselves. I believe that COVID-19 has shown the world the best of Singapore and how we have stood together to overcome. The pandemic has revealed our common humanity. It is with this spirit – of a common humanity and our common identity as Singaporeans – that I wish to speak today.

My first point is how we should strive towards becoming one united Singaporean family. Multi-culturalism is a significant ingredient in our Singapore tapestry. Unity does not mean homogeneity. In fact, as we continue to embrace multi-culturalism and diversity, and the more we understand the differences and the richness of each culture, the tighter our social fabric becomes.

We do value the diversity in our ethnic heritages. The self-help groups, such as CDAC, SINDA, Mendaki and the Eurasian Association, play important roles in keeping ethnic heritages alive in modern day Singapore. It shows that we value the different cultures inherent in our society and aid each subsequent generation to become familiar with the traditions and outlook of each ethnic group. These self-help groups help their individual communities while also carrying out joint inter-racial events. This helps foster both the bonds within each individual community and also the bonds in the larger Singaporean context.

Another example is the Ethnic Integration Programme within HDB estates. I support this as it is in line with the spirit of enhancing ties between people of various ethnic backgrounds who become neighbours and who then share common environments.

I believe that as we continue to strengthen and understand different ethnic communities, and as our diverse culture and heritage become more and more a part of Singapore, race will become less and less a factor in evaluating a person. In fact, I would dare say that race matters less in the minds of Singaporeans, especially those who are younger, in comparison to their nationality, than that of being Singaporean. I think the identity marker in my age group of Singaporeans and younger is: Singaporean first, and ethnicity second.

But what does that mean for politics? I think that means that when choosing a candidate to lead the Government, the choice must be the best man for the job, regardless of race. Instead of being evaluated based on race, we can evaluate based on more robust factors, such as the person’s character, abilities, values and experience. Politics is about leadership. In my personal view, ceteris paribus, when it comes to leading the Government, I think it should be the best man for the job, regardless of race.

So, if there is a Singaporean Chinese candidate of the right age and with the right character and the right skillset making him the best man for the job, he should be chosen for the job. If there is a Singaporean of a minority race of the right age and with the right character and right skillset to be the best man for the job, I think he should be chosen for the job.

Leadership within the Government comes with years of experience and years of being an elected Member within this House. It could easily be 20 years before an elected Member becomes a Prime Minister and, by that time, the familiarity and connection that people would have with the Minister would count for more than just his race. COVID-19 has shown, more than ever, the need for good government and good leadership of and in government.

I know many people my age and younger do want the best man to lead the Government, regardless of race. Some may say I am being overly idealistic, to the discount of pragmatism. I beg to differ. Why? Because the very idea of a multiracial, multicultural Singapore was an ideal, an aspiration, born, literally, from the tears and the sweat of our founding fathers. And inch by inch, year by year, we grow closer to making it a reality. Are we there yet? I believe we have some way to go. But my wish for Singapore is that, one day – perhaps when deciding the 5G or 6G Prime Minister – race is not used as a trump card or a disqualifying criterion. We are too small a nation to discount a man based on his race. This is my view, based on my personal belief.

Mr Speaker, I hope this House can understand the point I am getting at. I am not saying race is not important. Neither am I saying race should be used to dichotomise and polarise. I am firmly of the view that multi-racial Singapore is important and we should not dilute the significance of race and what it can bring to the table. In fact, it brings such a rich tapestry such that many parts of the world can see themselves in us, in Singapore.

But when it comes to leadership of government, we should not discount anybody because of their race, but instead evaluate the candidate based on who is best for the job. I hold this belief. I know many in my age group and younger hold this belief firmly too. Maybe this will happen in 15 to 20 years' time when the party holding the majority of the House chooses the 5G or 6G Prime Minister of who the 5G or 6G Prime Minister should be. However, it being 20 years away should not deter us from having such conversations now.

I do not want any room for my speech to be misinterpreted. So, let me say categorically that I do believe that our Prime Minister is the best man for the job. And I also do believe that the 4G Ministers have chosen the best man for the job to eventually lead their team. So, nothing in my speech should distract from those conclusions.

The point I am making in this speech is that it should be the best man for the job regardless of race, or dare I say the best person for the job regardless of race, for I do not see why a woman with outstanding leadership ability should be discounted. Look at Angela Merkel – a woman leading a solid government.

Singapore is small. If we were to straightjacket our perception of talent, we could very well lose out on the best person for the job.

Being a Singaporean is the key identity marker in Singaporeans of my age group and younger. The second identity marker – that of race – comes after the first identity marker – which is, being Singaporean.

I mean this personally. It comes from deep within and I would like to share a story that speaks to the heart of these beliefs of mine. My wife and I have four children aged between one and 12 years old. Our second daughter was adopted. Her ethnic lineage is pure Chinese and we adopted her at birth in Singapore.

What happened was that there was a young Singaporean Chinese woman who found out she was pregnant. She decided to carry on with her pregnancy, delivered the baby and put the baby up for adoption. She got in touch with a Christian charity who helped place babies with adoptive families. My wife and I had put our names down with the charity as potential adoptive parents. And then, we received the phone call. My wife and I prayed about it and took the leap of faith in adopting this little Singaporean Chinese baby girl. Today, my daughter is completely part of our family. She is the younger sister to our first daughter and dotes on her two younger siblings. All our children are loved and treated equally, and are being brought up first and foremost as Singaporeans first; and secondly, as Singaporean Eurasians.

So, what then is race? If it is merely defined by virtue of blood lineage, our second daughter would be Chinese. But if it was also defined by culture, then living experience would play a part too. My second daughter put up the Chinese New Year decorations made up of hongbaos around our house this year. But during the Christmas season, she would eat all the Eurasian fare on the dining table, including sugee cake and even ask for seconds. To pre-empt her wondering why she looked a little different from her older sister, my wife and I told her when she was very young, "You came from your tummy mummy; but you were born in our hearts."

It is the same way I view Singapore – we are all given life from our mother's wombs but we are all born with Singapore in our hearts.

So, when I say being Singaporean is the pre-eminent identity marker of a citizen and that race is a secondary identity marker, I believe that firmly. There is no binary lens with which one should view race such that race completely does not matter or always matters to the discount of everything else. It is a spectrum – a spectrum that is a continuum within which my daughter, of Singaporean Chinese lineage and living in a Singaporean Eurasian home, is completely comfortable. Race is an asset to make the tapestry of Singapore culture richer and our identity fuller. So, let it not divide us but unite us in always choosing the right person to lead our Government.

The next point I want to make relates to adoption, a point which I have shared, I care deeply about. If we can create an environment in which couples who are unable to have their own children but who would love to have children and want to adopt can be placed in touch with the database of prospective mothers in Singapore, wanting to offer their babies for adoption, this would benefit both parties. But for this to happen, the pregnant women must be told of this option. I have had discussions with MSF over many years and I hope they will close the loop with me and inform me how the counselling for pregnant women, to ensure that they are aware that adoption is a good and feasible option, has improved.

Mr Speaker, I return to my point about our common humanity. As I have said, the pandemic has shown the strength and depth of our community bonds, as people reached out to those around them and blessed their neighbours and helped the vulnerable.

But there is a particular group of vulnerable people who are not afforded the same protection that other citizens have. These are the stateless people living in Singapore. They do not vote but they, too, need a voice in Parliament. Many have grown up in Singapore and many were even born in Singapore. They live here, work here and have families here. Yet, because their parents failed to register their birth at the time of their birth, some are denied citizenship and live their lives as stateless people. This impacts them in their daily life as some struggle to open bank accounts, buy or rent houses and even find a job. Such difficulties present a very real challenge for them. It leaves them in the lurch and vulnerable.

Today, I have spoken a lot of what it means to be Singaporean. I believe giving stateless people living in Singapore citizenship or at least PR status would go a long way in giving them something to be rooted in – the identity of being a citizen.

Allow me to conclude, Mr Speaker. This pandemic has brought the best out of Singapore. We have something precious here in Singapore. First and foremost, our people. Secondly, our Government working with the people, like a formidable aerobatics team weathering the storm in tight formation. The pandemic has not deterred Singapore's determination to build a better future for our children. The Jewel still stands at Changi Airport. Olive trees still grow on the equator at Gardens by the Bay. And we are not done turning a mudflat into a thriving metropolis.

And inch by inch, yard by yard, we strive in this House – and out there in the streets – to become a more united country, regardless of race. And that is a future worth fighting for. [Applause.]

Mr Speaker: Deputy Prime Minister Heng Swee Keat.

2.41 pm

The Deputy Prime Minister and Minister for Finance (Mr Heng Swee Keat): Mr Speaker, Sir, I thank Members of this House for the 15 hours of robust debate, which saw 65 Members speaking. Normally, the Round-up speech is shorter than the Budget speech but this year, it may be different.

I also want to thank Mr Christopher de Souza for his very moving and personal speech of what it means to be a Singaporean. And also let me thank Mr Liang Eng Hwa, Chairman of the Government Parliamentary Committee (GPC) for Finance and Trade and Industry, for laying out the big picture and key issues clearly.

Mr Liang spoke about supporting our people through the immediate pain of the crisis and the need to take action to emerge stronger. Importantly, he did not shy away from the difficult conversation of how these important measures need to be funded and offered constructive suggestions. This sets the stage for this House to discuss the way forward.

I also thank Ms Foo Mee Har who not only spoke passionately about supporting our people and businesses, but also suggested how to do so in a prudent and sustainable manner.

Over the last few days, the passionate debate went along a few threads. Some Members elevated the debate to help Singaporeans appreciate the changing landscape and the need to act. Some Members highlighted the importance of our reserves, the bold and decisive response mounted and what it achieved. Unfortunately, some argued selectively without acknowledging the broader impact of COVID-19 and the outcomes of the Government's decisive interventions.

Before I dive into the issues raised by Members, I want to situate Budget 2021 and Singapore's future within the larger forces sweeping the world.

Singapore sits at the crossroads between the East and the West. It is a position that we have harnessed to maintain our relevance to the world amid the flux and changing tides of global political and economic developments.

But we cannot take our standing in the world for granted. It is something that we have to painstakingly maintain, as the world and region evolve, so that we remain relevant.

For some time, we have observed the gradual geopolitical and technological shifts. The world was slowly adapting to a rising China, which found its place alongside the US as an economic and military powerhouse. Inevitably, there has been some friction. Fortunately, the deep interdependence of markets and supply chains served as a stabiliser for world order, as well as international trade and commerce.

But COVID-19 disrupted this tenuous equilibrium and accelerated bifurcation and change. Overnight, this virus revealed the vulnerabilities of inter-connected supply chains. The race for vaccines and the rush for economic recovery have also surfaced nationalist tendencies.

These events will play a significant part in countries' and businesses' calculations, as they rebuild their value chains and business networks. Countries will seek for greater onshoring of their key industries for resilience. Businesses may re-think their globalisation strategy and approach, giving more weight to resilience and reliability. Singapore can capitalise on them to emerge stronger, become more competitive and remain relevant to the world.

First, nations and businesses will place a high premium on partners and locations which are reliable and predictable in their dealings. This is where we can leverage the strong Singapore brand, globally trusted for long-term planning, openness and reliability.

Second, as the flow of people pulled back because of the lockdowns, the flow of digital information and knowledge spiked. There is potential for Singapore to ride on the rise of technology adoption and digital economy.

Third, climate change is a threat for humanity. We must do our part, create new opportunities from the global interest in sustainable development.

My Budget Statement laid out our strategic plan to capitalise on our strengths and to double down on our commitment to invest in connectivity, digitalisation, the green economy, and of course, our people.

So, I will round up this Budget Debate by speaking on Members' contributions along three themes: our economic strategy to emerge stronger; a cohesive and liveable Singapore and a prudent fiscal strategy for the long term.

Last year, I committed close to $100 billion to fight this crisis. Since then, I have heard many views on the appropriateness and adequacy of our economic response. Some have called for more support, while others have asked if we are doing too much.

Let me recap the context. COVID-19 has caused the worst global economic crisis since the Great Depression. Globally, real GDP is estimated to have fallen by 3.5% in 2020, equivalent to a drop of close to US$ 5 trillion dollars in economic output. Many countries experienced full-year recessions in 2020. Sectors like aviation and tourism felt the brunt of the impact, with 1 billion fewer international arrivals in 2020 – a 74% drop.

Labour markets were disrupted on an unprecedented scale, with 8.8% of global working hours lost relative to the fourth quarter of 2019. This is equivalent to 255 million full-time jobs. Economists also warn of possible scarring, with long-term GDP losses, rising public and corporate debt, higher hurdles on capital spending, and continued rise in unemployment levels.

We disbursed a total of $27.4 billion in grants to provide relief, preserve jobs and help firms build capabilities to pivot to new growth areas – more than 18 times the amount disbursed in 2019. As many Members including Mr Liang Eng Hwa and Mr Desmond Choo thoughtfully reminded us, we narrowly averted a much deeper recession and scarring. Our fiscal and monetary policy measures are estimated to have prevented a further 6.6 percentage points in GDP contraction last year, and mitigated the rise in resident unemployment rates by two percentage points – or about 155,000 jobs.

While our economy contracted sharply in the second quarter of 2020, compared to the fourth quarter of 2019, the rebound over the next two quarters recouped about 80% of the output lost. More details of our early findings can be found in the interim assessment of the COVID-19 measures that MOF released earlier this year.

The impulses from last year's measures continue to flow through the economy to complement Budget 2021. The combined effects of the two years' Budgets imply a material support to GDP in 2021. Our calibrated strategy to support businesses and protect livelihoods has seen positive outcomes for firms and workers.

We tilted support towards the hardest-hit sectors to help them retain core capabilities and prepare for recovery. Today, some of these sectors are starting to see light at the end of the tunnel. For example, with the phased resumption of activities domestically since June 2020, the consumer-facing sectors, including retail and food services, saw a gradual recovery to around 85% of pre-COVID-19 output levels by Q4 in 2020. Many firms have made good use of the support we rolled out.

In 2020, $18 billion worth of loans to 21,000 enterprises were supported by Enterprise Singapore's financing schemes. Almost all recipients were micro, small and medium-sized enterprises, or SMEs. Enterprise Singapore also supported more than 15,000 companies in raising productivity, going international and undertaking innovation projects. This is 54% more than in 2019. So, I am glad businesses were taking innovation more seriously during this COVID-19 period.

Mindful Movement was one such beneficiary. When COVID-19 struck, the yoga studio halted on-site classes. After consulting an SME Centre, Mindful Movement tapped on the Productivity Solutions Grant to transit their classes online. Today, they continue to offer both online and physical classes, to provide clients greater choice and flexibility. For sectors that remain badly affected, I will continue to provide targeted relief and support to help them transform and reposition themselves for recovery.

On the workers front, the SGUnited Jobs and Skills Package has helped to cushion the labour market fall-out and preserve the livelihoods of Singaporeans. Many jobseekers joined industries with a promising growth outlook through the Jobs Growth Incentive, or JGI, and drew the same or higher wages. The Ministry of Manpower will provide more details at the COS.

Nearly 76,000 local jobseekers were placed in jobs and skills opportunities through the SGUnited Jobs and Skills package between April and December last year. Close to 80% of them were placed into jobs. Of these job placements, six in 10 were long-term jobs. Growth sectors such as InfoComm Technology or ICT, healthcare, and manufacturing, accounted for most of the placements.

We tilted support towards mature jobseekers, recognising the higher hurdles they faced with career transitions. Based on preliminary estimates, mature workers aged 40 and above accounted for about half of the first 110,000 JGI beneficiaries, and about half of the 76,000 locals placed in SGUnited jobs and skills opportunities. This includes more than 8,000 mature jobseekers placed last year on career conversion programmes, like the TechSkills Accelerator and Professional Conversion Programmes, or PCPs. These schemes enable trainees to reskill for jobs with good growth prospects. For example, about seven in 10 PCP participants earn higher wages after starting their new jobs.

Mr Goh Che Yong has been in tourism for close to 24 years, dealing in traditional sales for walk-in customers. He witnessed the digital disruption to the industry. At 55 years-young, Che Yong embarked on the Professional Conversion Programme for Digital Sales Executive with Siam Express last March. Although he was still in the same travel industry, moving from traditional to digital sales was not easy. But with the structured training, he gained confidence. Che Yong now applies his newly acquired digital skills in his job and enjoys exploring new ways of packaging holidays for a post-COVID world.

We averted a "COVID generation" of workers and students by preserving human capital and enhancing their employability. Compared to the 2019 cohort, although full-time permanent employment fell by about 10 percentage points, overall employment rates for this year's fresh IHL graduates remained similar to past years. In particular, 94% of autonomous university graduates in 2020 found employment or got into a traineeship within six months, compared to 91% in 2019.

The SGUnited Traineeships programme has contributed significantly to this outcome. It has placed close to 5,400 recent graduates into traineeships, to help them gain useful skills and industry experience, and prepare them for the recovery. Some have already landed full-time jobs.

Mr Chen Jiahao embarked on a traineeship last year with Taiger Singapore, an Artificial Intelligence, or AI start-up. Although he had no prior experience in AI or data science, the traineeship enabled Jiahao to pursue his dream of working in deep tech. He picked up new skills quickly and developed a Natural Language Processing model to perform information extraction. Taiger was impressed by Jiahao's strong performance and hired him as a full-time Junior Software Engineer within six months of the start of his traineeship.

In this Budget, I also extended the JGI to September 2021. I hope this encourages more employers to convert trainees to employees in a timely manner. Overall, we have managed to mitigate the impact of COVID-19 on our young. While unemployment rate amongst our young increased by two percentage points from September 2019 to September 2020, it remained well below that in EU countries.

I would like to thank Members including Dr Shahira Abdullah for speaking on the importance of safeguarding the future of our youth, and I assure this House that this remains a key priority.

Looking back, the waters of 2020 have been rough. But we have kept our ship intact, with all hands on deck pulling together to navigate it out of the storm. In 2021, our suite of support measures, including the further extension to the JSS, the SGUnited Jobs and Skills Package, and targeted support for the worst-hit sectors, will continue to provide a stabilising effect on our economy, amid uncertainties and risks in the global economy.

Domestically, the pace of border re-opening has slowed amid the global surge in COVID-19 cases and the emergence of new virus strains. Nevertheless, the COVID-19 situation within Singapore remains under control. Against this backdrop, the Singapore economic recovery over the course of the year is expected to be gradual and uneven across sectors. Outward-oriented sectors are expected to benefit from the pick-up in external demand, while domestic industries improve as activities safely resume. Overall, the GDP growth forecast for 2021 is estimated at 4% to 6%.

Now is the time to chart our course, position ourselves to catch the winds of opportunity and sail boldly in a reshaped world. That is the focus of this year’s Emerging Stronger Together Budget. I thank Prof Hoon Hian Teck for his insightful comments on how this Budget has struck a balance between stabilisation and transformation.

The COVID-19 Resilience Package continues to provide near-term support to safeguard lives, jobs, supply chains, and core capabilities. At the same time, we are also dedicating substantial fiscal resources towards raising the productive capacity of the economy in the medium to long term.

I also applaud our Labour Movement, led by Secretary-General Mr Ng Chee Meng, for their excellent contributions to this debate. Let me underscore three important points from our Labour Movement.

First, as Deputy Secretary-General Mr Heng Chee How mentioned, the way forward is as much about being Stronger Together, as it is about Emerging Stronger. A number of our businesses and workers will hold their own against the best in the world. But at the end of the day, we compete as one Team Singapore, not worker by worker, or enterprise by enterprise. It is the strength of our collective capabilities and connectedness, as an economy and as a society, that will determine how far we will go.

Second, several Members, including Deputy Secretary-General Dr Koh Poh Koon, highlighted the synergies between firms and workers. The fortunes of businesses and workers are inextricably linked, more so today than ever. Demand shocks caused by COVID-19 have exacerbated labour market dislocations and skills mismatches. Coupled with the structural shift of shorter technology cycles, it will be increasingly difficult for firms to find candidates with the perfect skill sets.

So, I urge businesses to look beyond hiring just "plug-and-play" workers, and see the potential within jobseekers to learn and grow in your firms.

I am glad to see our local banking community leading the way in grooming new fintech talent like Ms Choo Cui Ling through career conversion. After working in IT audit, Cui Ling enrolled in the Technology in Finance Immersion Programme with OCBC Bank. A few months into her attachment, she was converted into a full-time employee. She now helps to coordinate information risk management for the bank in her role as Assistant Manager.

At the same time, jobseekers should keep an open mind, be receptive to new and different job roles, and take the initiative to build new skills.

Third, I am heartened by the Labour Movement’s forward-looking approach on bringing firms and workers together to ride the waves of change and emerge stronger. Technological advancements promise new possibilities as well as challenges. As Mr Melvin Yong starkly put, "every job is at risk". "Working from home" will also mean "Working from anywhere" – so job competition can come from any corner of the globe with an internet link. For our businesses, while e-commerce opens them to a global pool of customers, it also opens their customers to the global pool of sellers.

As Mr Liang Eng Hwa highlighted, our $24 billion action plan over the next three years is about pursuing our medium to longer term economic imperatives, even as we tackle the immediate challenges. This seeks to give our workers and businesses a distinct advantage in the global marketplace.

We will build an eco-system that fosters a virtuous cycle of innovation and knowledge transfer. This includes $4.4 billion of the on-going $8.3 billion Transformation and Growth strategy I announced at the Unity Budget last year, to deepen enterprise capabilities and upskill workers. Another $19.6 billion of fresh funding will go toward new digitalisation measures and enhanced enterprise development support, as well as worker support measures such as the extension of the SGUnited Jobs and Skills package to support jobseekers in upskilling and accessing employment opportunities.

Together, these measures seek to stimulate private investment over a longer horizon and boost the supply-side capacity of the post-COVID economy. This will help Singapore capitalise on the post-COVID economic recovery and emerge stronger. This Emerging-Stronger component of the Budget therefore has a strong medium-term orientation through an enduring effect on supporting the level of labour productivity in the economy.

Members including Mr Zhulkarnain Abdul Rahim spoke about what the post-COVID-19 world means for Singapore’s economy. To pave the way for our next lap of growth, we must make the following moves.

First, we must remake Singapore as a Global-Asia node of technology, innovation and enterprise. This requires enhancing our connectivity, including digital connectivity, and positioning our firms and workers at the intersection of key global chains growing out of Asia and ASEAN nations.

Second, as Mr Gan Thiam Poh highlighted, we must shift to a technologically advanced, innovation-driven economy, where firms and workers are equipped with the skills to harness technology and intangible assets as a key differentiator.

Third, we must invest in economic resilience and sustainability as a source of competitive advantage.

Building on previous Budgets, Budget 2021 invests in our economic toolkit to support these moves – or as Mr Shawn Huang aptly summarised, to "survive, pivot and develop an edge to seize opportunities of the future". If we get this right, we can set our economy on a path of growth for the next five to 10 years.

Building a stronger Singapore Core is at the heart of our approach, as several Members including Ms Jessica Tan and Mr Abdul Samad rightly noted. The ultimate goal of economic growth is to improve the jobs and lives of Singaporeans. The only way to sustain such improvements is by raising productivity, where firms transform in ways that bring workers along.

We build from a position of strength. From 2016 to 2019, labour productivity growth, measured in terms of real value-added per actual hour worked, grew by 2.7% per year, up from 2.2% per year in the preceding three-year period. Real median income of Singaporeans increased by 3.7% per year, higher than the 3.2% per year growth in the preceding three-year period.

The crisis in 2020 interrupted this progress. Still, real median income of Singaporeans grew 1.5% year-on-year, while unemployment was higher in 2020 than in 2019. Dr Tan Wu Meng spoke about our $19 billion Research, Innovation and Enterprise 2020, or RIE 2020 plan, and its potential returns on investment.

RIE is a cornerstone of Singapore’s efforts to develop as an innovation-led economy and society with good jobs for Singaporeans. The payoffs from investments in research take time to manifest. We have nevertheless made good progress and the results are promising.

One example is in the biomedical sciences, where Singapore’s RIE investments since 2000 have helped set the foundation for the flourishing sector it is today. Since 2000, the value-added of the biomedical manufacturing sector has grown by more than three times. Today, the biomedical sector makes up almost 4% of GDP, and four of the world’s top 10 drugs by global revenue are made in Singapore.

We have also established capabilities to develop innovative solutions to national challenges, including in managing the pandemic. Our researchers have worked with local companies to develop and manufacture diagnostic test kits, such as the Fortitude 2.0 test kit, that are now used both locally and in more than 45 countries worldwide.

All of these would not have been possible without our sustained investments to build up our RIE capabilities over many years.

Members including Ms Poh Li San have underscored the importance of supporting businesses to emerge stronger. The uneven impact of COVID-19 across industries and enterprises means that each enterprise segment requires different support to recover, grow and thrive.

I agree with Mr Edward Chia on the need to adopt a differentiated, life-cycle approach to enterprise development. Our agencies offer a holistic suite of support schemes targeted at the needs of each enterprise segment, by sector and growth stage. And we approach it not just at the company-level, but at the industry-level, to achieve value-chain transformation.

I spoke about the Built Environment sector coming together to transform decisively across developers, consultants, contractors and suppliers. We will build on our Alliances for Action to enable more industries to transform together.

We will continue to invest in future engines of growth to create new opportunities for our firms and workers.

Dr Lim Wee Kiak and Miss Cheryl Chan spoke about the importance of nurturing and harnessing the growth of the green economy. This is an important area. The green economy is a key part of the future economy. Making bold investments now will give us a head-start and create many good jobs for Singaporeans in future.

We will work with businesses to meet the rising demand for more sustainable products and services. We committed resources to sustainability efforts under our Research, Innovation and Enterprise or RIE 2020, and will allocate even more for this in the next five years.

Helping local SMEs expand their potential remains a focus. Most of our workers are employed in SMEs, so the success of SMEs will enable our workers to have better jobs and better pay.

Budget 2021 builds on a large existing base of measures, to provide significant enhanced support for SMEs to digitalise, innovate, and transform to seize new opportunities. For example, to encourage more local SMEs to embark on transformation efforts and venture abroad, I extended the support levels of the Productivity Solutions Grant, the Enterprise Development Grant and the Market Readiness Assistance grant until March 2022.

And as several Members of Parliament and Mr Mark Chay observed, the pandemic has forced many to take an extraordinary digital leap. To help firms confidently take this leap forward, we have also introduced a suite of digitalisation support, including the Chief Technology Officer-as-a-Service initiative and the Digital Leaders Programme. The Ministry of Communications and Information will announce more details at the COS.

We have also provided substantial support to SMEs through last year’s Budgets. On a per dollar of value-added basis, smaller firms received three to seven times the amount of support given to larger firms in 2020.

As I mentioned earlier, we take an eco-system approach to economic development, to support workers and companies across all sectors to reach their full potential. Mr Leon Perera pointed to the synergy of having MNCs and SMEs work together – let me add that this synergy is not just between MNCs and SMEs, but across all companies and sectors – from Large Local Enterprises to SMEs, and even among SMEs.

Our economic agencies actively support companies in their efforts to transfer capabilities to upskill our local workers. This includes the PACT scheme to support knowledge transfer and co-innovation activities between large enterprises and their local suppliers, and initiatives on knowledge transfer and skills training, such as the SkillsFuture Leadership Development Initiative. The Ministry of Trade and Industry will elaborate on this at the COS.

I have covered how we will sustain a virtuous eco-system of innovative and competitive firms that support a vibrant economy. All of these efforts serve to create opportunities for our people.

To help workers capture these opportunities and enjoy the fruits of growth, we have moved into helping workers get into growth areas, and equipping them with skills to secure sustainable livelihoods.

Our immediate priority is to build upon the skills and experience that workers have accumulated, while breaking down barriers so that they can access new jobs. As Mr Abdul Samad put it, not just to equip workers with skills today, but also to prepare them for jobs of tomorrow.

Mr Vikram Nair asked about measures to support employment. We will continue to support our jobseekers’ career growth through the labour market recovery, including through the extension and recalibration of the SGUnited Jobs and Skills Package.

Mr Sam Ong was amongst the 7,200 jobseekers who enrolled in the SGUnited Skills programme last year. He was retrenched from an offshore construction company in the oil and gas industry due to the impact of COVID-19 and the industry downturn. Sam recognised the importance of digital skills amid the future job market and enrolled in the Building and Construction Authority’s SGUnited Skills Diploma in Integrated Digital Delivery. He found the course useful and looks forward to securing a role in a company that would allow him to apply his new skills.

To equip workers with industry-relevant skills, we are partnering market leaders to conduct quality training at scale. For example, Google, Boston Consulting Group and Siemens are partnering SkillsFuture Singapore to offer SGUnited Mid-Career Pathways programmes in ICT, professional services and advanced manufacturing. These help local jobseekers adapt to the changing technology trends in a shifting labour market. Our company partners have collectively committed more than 6,000 training places and enrolled more than 2,500 trainees. I am confident that these efforts will put our workers in a stronger position to seize new opportunities in the recovering economy.

Mr Patrick Tay has highlighted employability and job security as top concerns of workers. These are important and closely interlinked focus areas in our medium-term jobs and skills strategy.

The employment landscape is evolving rapidly, with technology being a key driver and enabler. Some jobs are becoming redundant, while new ones are created.

Hence, job security is fundamentally about staying employable, rather than staying employed in the same job. We will thus continue to strengthen the skills eco-system, which comprises workers, businesses, unions and trade associations and chambers or TACs, through SkillsFuture. Let me touch on efforts to enhance the employability of every worker.

First, the efforts of our workers. I am heartened to see more Singaporeans making good use of our support to take ownership of learning and acquire skills, even in the midst of the pandemic. More than 188,000 Singaporeans used their SkillsFuture Credit in 2020, a 21% increase in participation from 2019.

Mr Melvin Tan is one of them. After a 23-year-long career in architecture and project management, he switched to the healthcare sector, so as to better care for his ageing parents. He became a freelance home care-giver last year to provide home-based care-giving for seniors. When the SGUnited Skills programme was launched, Melvin decided to enrol in the Therapy Assistant course at HMI Institute. Using his SkillsFuture Credits, he was fully covered for the subsidised course fee of $500. Melvin is keen to continue his journey in the healthcare industry as a Therapy Assistant when he completes the course this year and I wish him all the best!

Second, businesses playing their part, to enable workers to build skills. Our firms have come onboard to make workplace learning a priority. Since 2018, the National Centre of Excellence for Workplace Learning has helped about 180 enterprises per year implement or enhance workplace learning processes. Last year, 3,400 enterprises sent their employees for training in courses supported under the SkillsFuture Enterprise Credit, and about 250 enterprises benefited from partnerships with SkillsFuture anchor companies to enhance their employee skills development and workplace learning capabilities.

Deputy Secretary-General Dr Koh Poh Koon highlighted that upskilling and job redesign must come together for pervasive transformation. By redesigning jobs and training workers to take up the new jobs, employers not only help workers stay employed, but also enable the firms to thrive.

We will continue to provide strong support to companies on this front. This includes operation and technology roadmapping, or OTR, that integrates upskilling to achieve a long-term growth strategy.

Environmental services company SembWaste, in partnership with the Building Construction and Timber Industries Employees' Union and the NTUC Training and Transformation, formed the Company Training Committee and embarked on an OTR process to develop a five-year business growth strategy to support Singapore's green targets. And to support these transformation plans, SembWaste is upskilling its workers in areas such as digital technology. It has also adopted the Progressive Wage Model to ensure sustainable wage increases tied to skills and productivity growth.

Third, our unions and TACs can reach out to more firms and promote deeper collaboration between firms and workers. For example, the Singapore Business Federation, or SBF, in partnership with Workforce Singapore, leads the Industry 4.0 Human Capital Initiative, to help companies adopt Industry 4.0 through job redesign. To-date, close to 70 companies have come on board, to potentially uplift more than 1,000 jobs and generate more than $52.5 million in cost savings. SBF aims to scale this to benefit up to 300 companies and 1,500 workers by September 2022.

I also thank the Labour Movement for their tireless efforts in supporting the lifelong employability of workers, across different segments with different needs.

NTUC Job Security Council and Company Training Committees are an important innovation for NTUC to partner companies and the Government, to achieve synergy. By pre-emptively matching at-risk workers to new employers, the Job Security Council helps workers minimise employment downtime and aids businesses to manage fluctuating manpower needs. I am heartened to hear that it has successfully placed more than 28,000 workers in new positions last year.

Ms Janet Ang and Mr Patrick Tay have spoken about the importance of ensuring fair access to employment opportunities for Singaporeans, while remaining open to global talent to complement local capabilities. I agree.

I thank Members for agreeing that harnessing complementarities among our Singaporean Core and the different talent sources is important for us to remain as a vibrant and competitive economy. MOM will elaborate on this at the COS.

As Mr Henry Kwek mentioned, our TACs can support firms and workers to emerge stronger, by helping them to transform in a pervasive and sustained way.

Over the past year, I am encouraged to see TACs rallying the business community together to fight the crisis.

The SG Together Enhancing Enterprise Resilience, or STEER fund, which I enhanced at last year's Resilience Budget, has matched more than $10 million across 10 industry-led funds to help the business community tackle challenges arising from COVID-19. Over 2,700 businesses are expected to benefit from these initiatives.

This includes the $1 million Singapore Contractors Association Limited, or SCAL COVID-19 Fund, set up to help construction sector firms cope with the increased operational requirements due to COVID-19. Some 500 member SMEs will stand to benefit from this Fund. Apart from STEER, the Fund also received contributions from BCA, over 50 SCAL members and the SBF Foundation Compassion Fund that Ms Janet Ang spoke about in her speech.

The Singapore Malay Chamber of Commerce and Industry, or SMCCI, also formed a COVID-19 taskforce in March last year, to support members affected by the crisis. It set up an emergency hotline, organised individual outreach sessions to about 400 members, provided legal advice to those in need, and connected businesses to available Government support measures. SMCCI also showcased members who transformed their businesses in the wake of COVID-19 on their specially curated platform, "Discussions @ Dewan", so that others can learn from their successes.

The SBF has also been working closely with the National Jobs Council and 31 TACs, to conduct job matching on a business-to-business level, both within and across sectors. Since the start of the pandemic, SBF has assisted more than 600 companies and more than 100 workers have been successfully matched to 77 companies.

Through these collaborations, our firms and workers can emerge stronger in a post-COVID world. And as you can see, this is a case where really everyone is putting in their effort and working together.

Members like Mr Lim Biow Chuan spoke about how Singapore has come out relatively unscathed from COVID-19, and how we are starting from solid ground.

Looking around the world, beyond the economic impact, we also see broader health and social impacts.

One year on, some countries have not recovered from the initial wave of the outbreak. Many are still seeing new COVID-19 cases in the thousands each day, and repeated cycles of lockdowns. This has wrought havoc on their communities, disrupting livelihoods and day-to-day activities. People are putting the future on hold to focus on surviving the crisis.

In December 2020, UNESCO reported that, globally, classrooms for nearly one in five school children were closed. In some countries, healthcare services are still overwhelmed by COVID-19 cases, leaving little help for those with other needs.

In Singapore, many of us have resumed our daily activities. Jobs and opportunities to learn new skills remain available. Our young children are back in schools physically and equipped with digital devices for learning. I thank Mr Louis Ng for showing his appreciation for our teachers in our schools.

We are looking forward to the future and are working towards our dreams.

Demand for BTO flats remains strong even in these uncertain times. As we heard from Mr Lim Biow Chuan earlier, people are still looking to buy cars "as if there was no recession at all"!

While we should count our blessings, let us not forget that we are still in the eye of a raging global storm – there are still challenges ahead and there are still individuals and families who are under stress.

Budget 2021 focuses our efforts and resources on emerging stronger. I have shared how we are taking a long-term view and working to support transformation of our economy and workers.

But I want to assure Members that the Government has also been putting in place multiple layers of support, which will continue to provide targeted, customised relief to help Singaporeans differently affected by COVID-19 and the uneven, K-shaped recovery.

First, we have broad-based, permanent schemes to provide strong social support and safety nets that protects all Singaporeans, especially the vulnerable. When the crisis hit, we layered on temporary assistance on top of some of these permanent schemes to provide additional support to vulnerable groups. We also introduced new measures like the Solidarity Payment and Care and Support – Cash to provide quick relief for Singaporeans' day-to-day expenses, and with the lower income receiving more. Finally, for those whose livelihoods were disrupted, we stepped in to provide some bridging support as they picked themselves up, for example, through the COVID-19 Support Grant and Temporary Relief Fund.

We cushioned the vulnerable against the worst of the crisis and mitigated social inequality. As a result of these efforts, our Gini coefficient after taxes and transfers is at a record low, as this chart shows. [Please refer to Annex 2.]

Mr Pritam Singh pointed out the divergence between the data on inequality, and the lived experience on the ground. He was quoting a particular report. We are fully aware that there are families who have been deeply impacted by the pandemic, and some more than others. This is exactly why we have tilted our support significantly towards the lower income and vulnerable groups, and Government has partnered the community to reach out to those groups during this period. Mr Singh himself noted that there was and I quote, "not-insignificant" support. So, you have to see the support in totality – the full set of support – and not conclude from one sample because these are rigorous study of what his happening throughout Singapore.

Members, including Mr Patrick Tay, Prof Hoon Hian Teck and Mr Louis Chua suggested that we study the viability of an unemployment insurance for workers affected by involuntary employment.

In the midst of significant disruption, interim, bridging support is needed to tide workers over. The COVID-19 Recovery Grant will support our workers who need more help while they find new jobs or go for training during this period.

Longer term, while an unemployment insurance appears attractive, this would not be sustainable without longer-term structures to help our workers bounce back. This sentiment is echoed in other countries like Germany, Sweden and South Korea, where unemployment insurance schemes are linked to active labour market policy measures which seek to get the affected worker back into a job quickly and avoid skills atrophy.

An unemployment insurance would also have its complexities, as Prof Hoon and Mr Tay have pointed out. Instead, as Mr Xie Yao Quan said, a job is the best welfare. It is more sustainable to ensure that workers maintain a source of income, and to up-skill and re-skill our workers so that they can bounce back quickly from job disruptions.

But at the same time, I recognise that as the global economy goes through an even faster pace of change, the nature of jobs and skills will be changing faster too. We will partner our business leaders, Labour Movement and academics to study how to support employability and help those who falter, through measures that suit our context.

Mr Gerald Giam claimed that our middle income receive little support for their cost of living. Others like Ms Jessica Tan have raised concerns that the middle income may have been missed in the short-term support measures. I would like to remind Members of this House that the bulk of every Budget goes towards uplifting all members of our society, including the broad swathe of our middle class.

In this Budget, I have set aside a total of $42 billion for our social spending and transfers, 35% more than FY2019. This is on top of: our security spending, which ensures the safety of our people and allows property and asset prices to rise over time, in line with our economic fundamentals, our investments in the economy which ensure that our people have access to good jobs for many years to come. And we have different schemes and components in our support packages. Some target those with less means. Others, like the upcoming CDC Vouchers, are provided to all, including our middle class.

So, we should not look at each Budget in terms of "goodies for me", but whether the totality of the spending creates more opportunities for us and our children.

I fully understand the aspirations of our middle class earners. It is natural that we want to do better for ourselves each passing year. Like Ms Janet Ang has said, the Singapore Dream is a work-in-progress. We wish for every future generation to be better off than the last. So, let me reiterate the measures that the Government has put in place to support these.

First, we have quality housing, which is affordable to all Singaporeans.

Let me share how we are doing. Even in land-scarce Singapore, you can see in this chart [Please refer to Annex 3.], our housing prices are lower than those of many major international cities, even before accounting for grants. We provide housing subsidies to keep HDB flats affordable. The current income ceiling of $14,000 allows eight in 10 Singaporeans to buy a subsidised HDB flat. As a result of our housing policies, around 80% of new HDB flat buyers have little or no cash outlay on their mortgage payments, meaning they do not have to come up with cash, or little cash, for their mortgage payments; and nine in 10 Singaporean households own their homes. Our homes may not be the largest or the cheapest, but we definitely have well-built, affordable housing options, in a safe, secure and green environment.

Next, we have strong support for couples who want to raise a family. Miss Cheng Li Hui and Ms Hany Soh asked for more to be done to support parenthood and first-time parents. Over the years, the Government has strengthened support for families with children, to defray the cost of education and childcare, through a combination of broad-based grants, subsidies and tax benefits. Upon the birth of their child, a Singaporean family would receive up to $35,000 in cash and cash-like benefits, through the Baby Bonus and other benefits. This includes a $4,000 MediSave grant which covers the child’s MediShield Life premiums from birth till age 21. Every Singaporean child can also receive over $180,000 in education subsidies by the time he or she turns 16, including pre-school subsidies.

Even more support is available for those who come from less-privileged backgrounds. I thank Minister of State Sun Xueling, Parliamentary Secretary Rahayu Mahzam and the other women Members for speaking on the different ways that the Government, businesses and the community can support women to fulfil their aspirations and help them to better support their families. These include job opportunities, support for their jobs and livelihoods, re-designing jobs for more progressive workplaces, encouraging higher technology adoption amongst women, and support for care-giving. These are good points which we can continue to work together.

Children also have access to an affordable education, supported by nurturing teachers, which ensures that our children are equipped with important knowledge and skills to perform to the best of their potential. We nurture our students’ aspirations and continue to develop multiple pathways to enable our students to learn, including through industry attachments.

Third, I assure Mr Louis Chua that we remain committed to helping all seniors retire with greater peace of mind through the CPF system. The Silver Support Scheme provides support for our seniors who had low incomes during their working years and need additional support in retirement. Over the next five years, to help more Singaporeans meet the Basic Retirement Sum, we will also be providing an additional boost through the Matched Retirement Savings Scheme. We are also in a fortunate position where most of our seniors have housing assets which they could use to support their retirement, if they choose to.

Last but not least, the Government provides good and affordable healthcare to all Singaporeans, especially our seniors. We have been investing in our healthcare system, to meet the needs of an ageing population. We have almost tripled our healthcare spending, from $3.9 billion in 2011 to $11.3 billion in FY2019. This went into expanding healthcare capacity and enhancing healthcare subsidies. We now spend more than twice the amount on patient subsidies than we did 10 years ago and expect to spend more as our population ages. On average, a Singaporean can expect to receive about $200,000 in Government healthcare subsidies throughout their lifetime.

As a result, we do well in terms of health outcomes. I thank Dr Tan Yia Swam who has registered her confidence and, I quote: "I am confident that our healthcare system is robust and can provide adequate care for all citizens". Indeed, Singapore ranks amongst the top for the World Bank’s Human Capital Index, which measures the ability of a child to reach his or her full potential if they had full health and complete, high-quality education. We also do well in the Bloomberg Health-Efficiency Index, which measures life expectancy as compared to medical spending. In 2019, our average life expectancy at birth was 84.9 years, with health-adjusted life expectancy of 74.5 years. Globally, Singaporeans are expected to live the longest!

Ms Hany Soh will be glad to know that we have put in strong support for young parents. A young couple buying a HDB flat near their parents could benefit from more than $134,000 in support in this year alone. Besides housing grants, the support includes pre-school subsidies to help with the education of their child, healthcare subsidies, and also offsets for expenses through the Household Support Package.

Another example is a multi-generational family that already owns their 5-room HDB flat, supporting a Pioneer Generation senior with disabilities. The family could receive over $35,000 in support this year in education and healthcare subsidies, including $1,200 from the Household Support Package. And these are over and above the housing subsidies that the family would have enjoyed when it first bought the flat. Neither family needs to pay their MediShield Life and CareShield Life premium in cash. No one will lose coverage due to inability to pay.

So, with the most important items in life well taken care of, I hope Members like Mr Leong Mun Wai will agree that his position that our support is, I quote, "ad hoc, short-term and unpredictable" is wrong. In fact, our support is systematic, well-structured and balanced.

Singaporeans can be assured that: they can always have a home to call their own; that they can expect their children are being well-nurtured in a world-class education system, which will prepare them well to take on good jobs and fulfil their potential; that we will provide assurance to our seniors over their retirement; and that the healthcare needs of their family will always be well taken care of.

Now, it is also natural for us to look out for "what is new" in every Budget. But it is important for all of us to appreciate what is already there, and to see the Budget in totality, over the years. Individual Budget measures are useful enhancements which sit on top of our already significant social spending. Over the past decade, we have been gradually tilting the tax and transfer system in favour of lower and middle income groups. On average, lower income citizen households can expect to receive benefits, net of taxes, of $6,500 per household member in 2021. Members of middle income households can expect to receive $3,500 in 2021. The highest income households instead pay about $9,500 in taxes, net of benefits, per household member.

Members of this House – Mr Darryl David and Mr Faisal Manap – have welcomed the salary increase for healthcare workers and have asked for salaries for other frontline workers and sectors to be enhanced. As I have said in the Budget Statement, there are good, meaningful jobs in healthcare for our locals, and it is important to pay them the salary that they deserve – commensurate with the work that they do. This is how we are able to attract and retain locals in the long-term, even as other markets compete for our Singaporean talents.

As Mr Saktiandi Supaat pointed out, Ms Hazel Poa’s conclusion that our workers are worse off due to lower wage share of GDP is wrong. A capital-intensive economy open to investment and trade can have lower wage shares than labour-intensive economies. For example, in the biomedical sector, the wage share of the sector’s output is less than 6% compared to over 60% in the accommodation and food services sectors. But workers in the biomedical sector earn more than twice that of the accommodation and food services sector. So, what will improve the lives of our workers are better wages and better prospects, not the aggregate share. What matters more is that the wage growth of our workers is in line with productivity so that it is sustainable.

Several Members, including Mr Raj Joshua Thomas and Mr Mohd Fahmi Aliman, spoke about the need to continue boosting the incomes of lower wage workers, and the Progressive Wage Models. Indeed, there has been some progress. Citizens’ real incomes from 2016 to 2019 at the 20th percentile grew at 4.4% per annum, faster than the median at 3.7% per annum.

I thank the Labour Movement for their strong support for the Government’s vision of progressive employment, which is shared by many caring Singaporeans.

Ms Foo Mee Har and Mr Desmond Choo have also called for more help for our self-employed. We have been studying for some time how best to boost protections and retirement adequacy for this group. MOM will continue working with the Labour Movement and our industry partners, through the tripartite mechanism, to uplift the incomes of all our lower wage workers and support those in the gig economy. MOM will share more on this at COS.

Helping lower wage workers and self-employed persons is a work-in-progress. I hope that, if some of the new measures lead to a modest increase in costs, caring Singaporeans will agree that this is worth doing for solidarity.

Some members, like Ms Tin Pei Ling and Mr Yip Hon Weng, have highlighted another group of concern – our older workers.

I thank NTUC FairPrice for its efforts to support our older workers who wish to remain active in the workforce. As Mr Seah Kian Peng has shared, this is an example of a company which has fully utilised the reservoir of talent in its mature workforce.

To build on this momentum for all sectors, we are pushing ahead with our plans to raise the retirement and re-employment ages in 2022, with the Government and the Labour Movement taking the lead by effecting this in 2021. I thank Deputy Secretary-General Mr Heng Chee How for reaffirming the need for this move.

NUH is one of the organisations taking the initiative by redesigning jobs, offering flexible working arrangements and training opportunities for their senior workers in collaboration with the Healthcare Services Employees' Union. Senior Staff Nurse Mdm Badthu Manne Doraisamy has been working with NUH for 31 years. She has benefited from NUH’s strong support for senior workers. Mr Agos Salim Sapuan is a security supervisor at NUH. He shared how everything at his job is digitalised now, and he is no longer making manual entries in logbooks! I am sure he has benefited from NUH’s many training opportunities. I hope that the Government’s Senior Worker Support Package will encourage more businesses to retain their mature workers and tap on their wealth of experience.

Ms Ng Ling Ling and Mr Eric Chua have asked the Government to do more to encourage the hiring of persons with disabilities, or PwDs. Helping every Singaporean achieve their potential is a key priority for us in building an inclusive society. We agree that more can be done, and there are plans in the pipeline. The MSF will share more about this in the coming months.

As Members have highlighted, there are specific groups of Singaporeans who have been deeply affected by COVID-19 and remain so. We have seen this all over the world. Dr Wan Rizal spoke on the issue of mental health. Ms Joan Pereira, on the support needed for care-givers. Ms Rachel Ong and Ms Nadia Ahmad Samdin spoke on the employment and re-integration of ex-offenders and youth-at-risk, as well as Mr Don Wee on families with children with special needs.

Ms Denise Phua and Ms Carrie Tan spoke yesterday on how the CDCs are partnering Social Service Agencies, or SSAs, to multiply their reach for the vulnerable in the community. They have also asked to rally the community to help.

BlockBox is good example of partnership. To support seniors with chronic disease management and to address issues of social isolation due to COVID-19, students from NUS and Yale University created a community space and monthly health subscription boxes to track seniors' health and keep them engaged. For the pilot, the team received seed funding from MOH and sponsorship from the private sector.

This is the spirit of SG Together.

But the Government can only do so much alone. As Ms Carrie Tan said, we must look into the, I quote, "Sharing of Care". I am sure that she will be glad to hear that we will continue to push ahead with our plans to develop deeper capabilities in the social sector.

I announced last year that we will partner ToteBoard to jointly commit up to $350 million to support the Community Capability Trust over the next 10 years. This will drive capability- and capacity-building efforts within the social services sector, to enhance SSAs' ability to serve the community.

Like Mr Seah Kian Peng and Mr Derrick Goh have said, we must do more to "bridge the digital divide" and "grow our digital muscles", especially during COVID-19.

We refreshed our plans to ensure that no one will be left behind in this digital age.

The Seniors Go Digital programme equips seniors with digital skills.

For low-income and vulnerable families with children or PwDs, MCI's NEU PC Plus programme connects them to broadband access, and laptops to support their learning.

And who best to be our ambassadors of the digital world than our young people! Under MCCY's and the National Youth Council's YouthTech Programme, youths will be deployed to businesses and organisations in diverse sectors, including the community and social sector organisations to support their digitalisation efforts.

We will also need to boost the digital and technological transformation of the social sector. Good ideas have come from the businesses who are partnering SSAs to do good and supplement the human touch with the human "click".

For example, Engineering Good, a non-profit organisation is working with community partners to provide digital access through refurbished laptops and Internet connectivity to low-income families, coupled with digital literacy and skills programmes as part of its Building Digitally Inclusive Communities project.

This is the spirit of Emerging Stronger Together.

Mr Christopher de Souza said we need to embrace our multi-culturalism and diversity, and spoke about what it means to be a Singaporean, regardless of race, language or religion. And indeed, we are stronger together when we look after one another, and build a society that leaves no one behind.

At the end of the day, our success is not measured in terms of GDP, but in the society and community we build together.

Besides fostering a caring and inclusive community, we must ensure our clean living environment endures for future generations to enjoy.

I thank Members like Ms Poh Li San for supporting the Government's sustainability plans. I am glad that Ms Nadia Ahmad Samdin, one of the youngest Members, if not the youngest Member of this House, also spoke in support of the Singapore Green Plan 2030. But we must not take our environment, whether green or blue, for granted – or for the matter, our reserves.

What we have today is a testament to the foresight and hard work put in by many to distinguish Singapore as a City in Nature over the years. We made a big effort to improve our sanitation systems and clean up the Singapore River in the 1960s to 1980s. We launched the Clean and Green Week in 1990 to encourage an environmentally conscious lifestyle. To improve our air quality, we started encouraging the adoption of cleaner vehicle alternatives as far back as 2001. Climate change and environmental sustainability did not become a priority overnight. We have been protecting our home.

Members like Dr Lim Wee Kiak and Mr Dennis Tan have questioned why the Government is raising the petrol duty expecting many drivers can and will switch to Electric Vehicles, or EV, before the infrastructure is ready.

Now, this is not the case. The petrol duty adjustments are to set price signals and change behaviour. Just like how we have made deliberate decisions to protect our environment, we want people to make conscious choices about how to drive, how much to drive, and whether to even drive at all. And EVs are not the only alternatives to driving. Mr Sharael Taha has reminded this House that hybrid vehicles are another alternative that are already widely available today.

We are also keeping public transport affordable and accessible through rail and bus subsidies and investing in public transport infrastructure.

Dr Lim Wee Kiak and Mr Dennis Tan asked if we are sufficiently prepared for an EV future, and on the cost-effectiveness of electric cars compared to petrol cars. The Ministry of Transport will elaborate on this at the Committee of Supply.

There will never be a good time to raise petrol duty. Some Members like Ms Mariam Jaafar and Mr Darryl David have pointed out that the petrol-duty increase would affect those who drive for work more, like our taxi and private hire car drivers, and delivery riders using motorcycles. I understand the pressure that they are facing, especially during this COVID-19 situation. I have cushioned the impact for these drivers and riders.

We expect to channel almost all of the increase in duty collections in 2021 back to petrol-vehicle owners as offsets.

On top of the road tax rebates, more support will be provided to those who drive for work through additional Petrol Duty Rebates. Taken together, the support will cover the increase in petrol duty for a year for motorcycles and taxis.

Taxi operators and Grab Rentals have agreed to pass on the road tax rebates to their drivers. Gojek will also be introducing additional incentive rebates for their drivers. With this, their drivers will receive rebates starting from next month.

Motorcycle owners will receive their additional Petrol Duty Rebates from May.

Over 50,000 of our taxi and private hire car drivers would have also benefited from COVID-19 relief measures, like the Self-Employed Person Income Relief Scheme, and the COVID-19 Driver Relief Fund, which we have just topped up by $133 million.

I hope these measures address Members like Mr Chong Kee Hiong, Ms Yeo Wan Ling and Mr Ang Wei Neng's concerns over the impact on taxi and private hire car drivers.

Our broad-based rebates will not be able to cater to every unique circumstance. They may also not reach those in more informal work arrangements. We are working with the Labour Movement to see how we can provide further help to self-employed delivery workers and limousine drivers. I thank NTUC Secretary-General Mr Ng Chee Meng, our Labour Members of Parliament and their team for their partnership.

Ultimately, protecting our environment must be our commitment to future generations of Singaporeans. This is just one of the many small but necessary steps in our whole-of-society, multi-generational effort to preserve our clean-living environment.

Let me now turn to Members' points on our fiscal strategy.

Before I address individual issues, it is important that I reiterate this Government's fiscal principles. We abide by the same two core values of our forefathers: prudence and stewardship.

First, on prudence. We spend on needs, not wants, and we seek to get the best value out of our spending. We must be prudent because these finite resources are entrusted to us by Singaporeans.

Second, on stewardship. In the Unity Budget Round-Up in 2020, I said and I quote, "We have a duty not just to those who make their views known today, but also to the young and the future Singaporeans. They are not here today to represent their views – because they are not born yet! But we have a responsibility to them, and we have to take decisions which are difficult for us, but which will safeguard their interests."

In other words, we must be responsible stewards.

During a time of high economic growth in the 1980s, our leaders managed our fiscal surpluses prudently. Instead of finding ways to spend the surpluses and win popularity, they not only accumulated surpluses, but also took the bold step in 1991 to amend the Constitution, to require each term of Government to run a balanced budget.

This is to ensure that future Governments do not make unrealistic promises, dip into our savings unnecessarily, and mortgage the future of our children. They knew the temptation of squandering the easy inheritance would be too great for some to bear.

Singapore is in a new phase of development. We cannot expect the same kind of buoyant GDP growth as in the past, as our economy now matures. Our expenditure needs will grow as new needs arise, and as our population ages. At the same time, we must continue to invest to build a better Singapore for the future. We are once again confronted with hard choices. We must abide by our core values, and keep Singaporeans, now and generations to be born, at the heart of what we do.

Many Members spoke about building a fair and just society where no one is left behind. This is good, and I share this aspiration; but it is only one half of the conversation.

Mr Liang Eng Hwa, Mr Alex Yam, and Mr Lim Biow Chuan have reminded this House that just as importantly, we need to consider how to pay for these.

We do not have oil gushing out from our ground, and even Saudi Arabia, a country with huge oil reserves, is carefully planning ahead. It introduced a 5% value-added tax from 2018, which it increased to 15% from 1 July 2020.

Members of this House must have the will and courage to make the same responsible choices as our forefathers did. We must be upfront – that if we want to spend more, we have to raise the revenue.

First, acknowledge that if we want more social safety nets, it comes with costs.

Second, work out sustainable resourcing. Do not make irresponsible promises which burden future generations.

If these are recurrent needs – which have to be financed year after year – we must find recurrent revenues – which we can collect year after year.

Let me reiterate why the GST-rate increase is needed.

As Mr Xie Yao Quan has rightly pointed out, we have already seen structural increases in our recurrent spending, especially in healthcare.

The share of Singaporeans aged 65 and above will increase from one in six, to one in four by 2030. Seniors are four times as likely to be hospitalised compared to younger persons. And each time our seniors are hospitalised, they stay for twice as long.

The Government heavily subsidises healthcare at our public healthcare institutions – up to 80%! Even with an efficient healthcare system, we will need to increase healthcare spending by 30% to meet the needs of our population in 2030.

These structural trends are clear – we will have to spend more. So, let me share some data and projections with this House.

This chart shows our spending, as a percentage of GDP, over the past 15 years. [Please refer to Annex 4.]

Our spending has grown by about 1.5 percentage points of GDP in every five-year period. How much is 1.5 percentage points of GDP? About $7 billion per year! This is about two-thirds of the current GST revenue.

Half of the increase in spending was for social support.

We do not have a crystal ball but let us take a reasonable look at how our spending will change. Let us start with healthcare spending.

Our demographic trends will mean higher spending, outstripping GDP growth. We estimate that healthcare spending will reach 3% of GDP by 2030. If our healthcare spending grew like those of OECD countries with a similar demographic profile, it would be even higher, 3.5% of GDP by 2030. This would be 50% more than in 2019.

Stripping out the effects of COVID-19, the next chart shows projected spending on healthcare if we took the average of the two scenarios. [Please refer to Annex 5.]

So, this means that healthcare spending alone would cause Government expenditure to grow by 0.5 percentage points of GDP for the current five-year period, and another 0.3 percentage points for the next five-year period. So, that is the chart that I just mentioned, over five-year periods.

To see the impact of healthcare on Government spending, this chart made a simplifying assumption that non-healthcare spending will remain the same as a percentage of GDP. Now, we know this is a simplifying assumption and a very conservative one.

First, on security, threats have not diminished but are now coming in different forms – cybersecurity, hybrid, information wars, food security. In Budget 2018, I mentioned that we could expect annual security spending by MINDEF and MHA to rise by 0.2 percentage points of GDP to meet rising threats.

Second, other social spending will continue to rise. We are seeing higher spending on pre-school education and lifelong learning.

Third, as I explained in my Budget Statements in this year and earlier, we will see a hump in infrastructural spending to enhance economic competitiveness, build our home, and improve connectivity across the island. Even with borrowing under the Significant Infrastructure Government Loan Act, or SINGA, we expect infrastructural spending to remain relatively stable as a percentage of GDP.

Mr Pritam Singh asked that we increase the scrutiny of expenditures, and to set up an independent parliamentary budget office to enhance such scrutiny. I am glad that Mr Singh agrees with the need to be prudent and accountable in our spending. In fact, it would be very helpful if each time Mr Singh or his colleagues ask the Government to spend more, to give us their estimates of how much it would cost and how they would fund it.

Instead, the Workers' Party has called on the Government to spend $20 million to set up an independent parliamentary budget office to do this job for them. Even as they call for more scrutiny on Government expenditure, we invite them to hold themselves to the same scrutiny.

As I have outlined, prudence and stewardship are core values of this Government. We hold ourselves to high standards and work hard to ensure that our spending is cost-effective, to deliver the best value for money for taxpayers.

We have achieved world-leading outcomes while running one of the leanest governments in the world. We are always looking to achieve better outcomes with less, and we will say more about this during MOF’s COS.

In addition to independent audits by the Auditor-General’s Office, we also have Parliamentary scrutiny of our spending through the Estimates and Public Accounts Committees. The Workers’ Party is represented in both of them. Such an office would be a wasteful duplication of these functions.

So, let us face the hard facts and be prepared to make difficult choices. The Government is meeting difficult trade-offs arising from our society’s growing spending needs, head on.

We have shown that current taxes are insufficient to cover our spending needs. Since 2007, we have already increased various taxes to collect more from those with more means, which are then transferred to our lower income. All this while, over the 14 years, the GST rate has remained unchanged at 7%. We would be in a budget deficit if not for the contribution from reserves, in the form of Net Investment Returns Contribution or NIRC.

Economic growth alone is not likely to raise enough revenues to meet our needs. The honest, but hard, conclusion is that we will need to raise more tax revenue.

We are not raising the GST rate now, as the economy is in the nascent stages of recovery. But we have been giving notice, since Budget 2018. The fact is that some of the structural increase in expenditures will hit us sooner rather than later.

MOH is already ramping up our public healthcare capacity. Just two months ago, the Minister for Health announced that we will build a new integrated hospital in Bedok North by 2030, to serve the growing population in the east. If we defer this spending, we risk being unable to adequately care for our people when the need comes.

Some may ask if the projections are accurate, whether we really need to raise additional revenue within this timeline. No projection is perfect. We live in a complex world, filled with uncertainties. So, we must work with the information available. For example, we could not have projected the biggest disruption of our generation, or that we would have to draw on our Past Reserves for two years in a row. This is a far cry from what Mr Pritam Singh said in February 2020, and I quote, "the current Government has had the privilege of far more budgetary elbow room, both political and fiscal, than any previous Government in Singapore's history." Unquote. Unfortunately, instead of elbow room, COVID-19 has given governments around the world a very sharp elbow. Ouch – it hurts, and will continue to hurt for some time.

I also do not know how Mr Leong Mun Wai could say with such confidence, and I quote, "for the foreseeable future, we do not see any shortage of fiscal revenues", unquote. If Mr Leong could give me the basis of his projection, I will study it carefully. But if it is his hunch, I hope that as a responsible Member of Parliament, he would agree that we cannot be advocating national policy on the basis of personal hunches.

My caution to all is this: it will be foolhardy to underestimate the risks and uncertainties we are facing. Let us be honest, focus on the hard work that needs to be done and do not take the easy way out. That is the way to enable our people to make progress.

Several Members have expressed worries about the impact of the GST rate increase on Singaporeans. I share your concern – as I said before, as Finance Minister, I do not have any joy in raising taxes. I do it because I care for our future. Let me assure Members and all Singaporeans that we are committed to helping our people manage the impact.

We have set aside $6 billion for an Assurance Package, which will in effect delay at least five years of the GST rate increase for the majority of Singaporean households. Lower income Singaporeans will receive higher offsets of about 10 years’ worth of additional GST expenses incurred.

The Assurance Package is on top of existing benefits and transfers such as the GST Voucher scheme. These keep our overall taxes and transfers system fair and progressive.

In 2020, the top 20% of Singaporean households by income paid 56% of the taxes and received 11% of the benefits whereas the bottom 20% paid 9% of the taxes and received 27% of the benefits. And we are concerned for the broad middle income. The middle 60% of households paid 35% of taxes, while receiving 62% of the benefits, even for the broad middle.

Several Members have asked that we consider other forms of taxes. As I have said at my Round-up Speech at Budget 2018, we continually consider all options, so let me go through them again but it is a long list.

Some Members asked if we can do more on wealth taxes. Wealth taxes are not new in Singapore and we have in fact enhanced the progressivity of wealth-related taxes over the years.

I agree there is scope to further review our wealth taxes. But first, let me address the elephant in the room. Wealth taxes will not replace the need for the GST rate increase. Already, the GST rate increase alone will not yield sufficient revenue to meet our growing healthcare and social spending needs.

I will share briefly our considerations for the suggestions raised.

Ms Foo Mee Har suggested a one-off wealth tax. Argentina did this to fund higher spending for COVID-19 measures. Singapore entered COVID-19 with a strong fiscal position, and is fortunate to be able to tap on our Past Reserves. The impact of the crisis has been uneven. I believe Ms Foo’s intent is for those who came out on top of the crisis to do more for our community, and I share her sentiment. We will indeed continue to review our wealth taxes.

Mr Leon Perera suggested raising Buyer’s Stamp Duty and Additional Buyer’s Stamp Duty, or ABSD, for more expensive properties.

First, I am glad that he recognised that this move will not fully cover our higher resourcing needs. Second, I want to correct a misconception. The ABSD is a property market measure, not a revenue-raising one. We calibrate the ABSD carefully to maintain a stable and sustainable property market in Singapore. But I agree that there is a role for property-related taxes. The Government will continue to review this to ensure that it remains progressive. Indeed, we made property tax and stamp duty more progressive in Budget 2010, Budget 2013 and Budget 2018. I trust that Mr Perera will give his strong support if and when we make such new moves.

We have also considered other options, including estate duty. We abolished estate duty in 2008, because the middle and upper income groups were affected disproportionately compared to the wealthy, who were better able to avoid the estate duty through tax planning.

Let me reiterate. We do tax wealth and we have been raising wealth taxes over the years. This is not the question. Rather, the practical question has always been how to design wealth taxes moves to ensure that they are effective.

First, we must ensure that the tax cannot be easily avoided, especially by those with more means. Otherwise, it will not achieve the social equity and fairness that we want.

Second, we must balance between progressivity and staying competitive to grow our economy. Singapore must remain attractive to those who work hard and those who invest to create good jobs, because growing the economy is the most sustainable way to generate revenue and raise our standards of living.

Third, the move should add to our revenue resilience and adequacy.

The Government will continue to study wealth tax options and I look forward to your support.

Several Members have also said that we could rely on other sources of revenue, other than taxes. For instance, Mr Louis Chua cited the Government’s total estimated receipts and claimed that the Government has far more surpluses than we do for spending. He must know that includes our capital receipts from land sales. So, he is really saying that we should spend our land sales proceeds directly. Mr Louis Chua also cited the increase in NIRC in 2021 as one of the reasons we should not be, and I quote, "overzealous in strengthening our revenue position"; and Mr Leong Mun Wai suggested that we spend 100% of the NIRC instead of 50%.

Let me address them one by one.

First on using land sales proceeds directly in the Budget.

We should treat our land as a scarce and finite asset. Selling land does not give the Government more resources and should not directly support our expenditure. Instead, we sell the land that we need to sell for urban development and invest the proceeds. This approach generates a sustainable stream of income over the long term, and has served us well. If we had decided in the past to spend the proceeds from these land sales, we would not have built up our reserves today and would surely be worse off by now.

Relying directly on land sales for fiscal revenue also has two risks.

First, land prices can be volatile. You do not want Government revenues to fluctuate wildly with property cycles because it creates too much uncertainty for the Government to plan long term.

Second, even more serious, once a Government gets used to relying on land sales to fund spending, the Government has a vested interest to keep land prices high, or to sell more land. Both options are terrible. We can see the distortionary effects on the welfare of people, in places where local governments rely on land sales for revenue.

The current approach of spending the land sales proceeds through the NIRC avoids these pitfalls and allows the Government to make land sale decisions based on what is best for the country’s development, and not because it needs to balance the Budget.

Next, on NIRC.

The NIRC framework smooths the volatility arising from sharp fluctuations in the asset base due to market cycles. This avoids a boom-bust pattern in Government spending, driven by the volatilities of the market.

However, some variation is still to be expected for the NIRC as we update the net asset base and investment income figures over the course of the year.

The global financial market remains volatile and uncertain. How the post-COVID structural changes will affect long-term returns is still being played out.

The fact is, NIRC is already the largest single source of our revenue, larger than Corporate Income Tax, Personal Income Tax or GST.

This did not happen by chance or merely because of good fortune. It is the result of years of fiscal discipline and prudence of our founding generations. If they had succumbed to the temptation to spend more, we would not have built up our reserves. And without reserves, we would not have been able to generate this stable and recurrent source of revenue today.

Mr Leong Mun Wai's suggestion of using 100% of NIRC is akin to treating our reserves as a gold mountain. If we adopt his suggestion, one day, even this mountain will be eaten up completely, like the saying in Chinese "坐吃山空". We have a responsibility to future generations.

Next, let me talk about the use of debt in our fiscal strategy.

Many Members have expressed support for borrowing for long-term infrastructure, as part of our fiscal strategy.

I was happy to hear that Assoc Prof Jamus Lim was "happy as a clam" when he heard that our fiscal strategy reflected a number of elements that he had previously outlined. But I announced that we were studying borrowing in 2019, even before he entered Parliament. But I am glad he shares our views. So, perhaps if he reads more of our past Budget Statements, he would be even happier.

Nevertheless, I must caution against the additional modifications that he has suggested to what is essentially a prudent and restrained use of borrowing.

The Government's approach to borrowing is a carefully calibrated one. As Ms Foo Mee Har said, there is good debt and there is bad debt. While we do borrow, the key difference is what we do with the debt proceeds.

The Government is currently already borrowing, under the Government Securities Act and the Local Treasury Bills Act. But instead of spending the proceeds, we invest them for long-term returns, which is used to repay our debt. The rest go back into the reserves.

The Government is going to borrow for major, long-term infrastructure. These investments will benefit and generate value over generations, but the upfront costs are hefty. Borrowing is a fair and efficient approach to spread out the lumpy costs, to ensure that we better match the timing of the benefits with the timing of spending. If we do not, I will have to raise taxes significantly to fund these major expenditures.

And Assoc Prof Jamus Lim has asked if we can borrow more to fund "soft capital" like education. Let me sound a word of caution. We have to refrain from the temptation to borrow for what are essentially recurrent expenditures.

In many countries, there is a tendency to expand the scope of what constitutes "soft capital" beyond the original intentions. So, the original intentions were good but it creeps. So, when used to fund increases to Government subsidies or social transfers, it is really more recurrent spending. Borrowing continuously for them will just lead to ever higher debts which have to be repaid by future generations.

When borrowing is not used productively, the result has often been high debt, low growth, rather than high growth, low debt. As debt level grows, interest payments can also increase, as Assoc Prof Jamus Lim himself pointed out. This can lead to an unsustainable fiscal position and spiralling debt, affecting investor confidence, raising the costs of funding for businesses and ultimately, our long-term growth. In addition, interest rates are low, in fact, ultra low for now, but this may change quickly. When it changes, existing debts would have to be refinanced and a higher rate could spiral the fiscal situation downward quickly. This usually happens in a crisis, when we can least afford it.

Borrowing is not a form of revenue. Borrowing gives us cash for liquidity planning but it does not create free monies for spending. Today's debt is paid for by tomorrow's growth and tomorrow's generation.

As I have explained earlier, our fiscal principle is that every Government must spend within its means and raise the revenue required to fund its initiatives.

Members, such as Ms Foo Mee Har and Dr Lim Wee Kiak have noted, we must borrow prudently and sustainably. So, let me now also briefly address their queries on the safeguards and how borrowing under SINGA might impact our credit rating.

We will set $90 billion as a borrowing limit and this is sized based on the expected expenditure of major, long-term infrastructure projects over the next 15 years. Any increase of this limit will require legislative amendments which is subjected to Parliamentary approval. We will also put in place other safeguards, such as a limit on the interest costs, so that the debt servicing cost will not over-burden future generations. This will address Ms Foo's concern about rising interest rates. More will be elaborated later when the Bill is presented in Parliament later this year.

Since the announcement of SINGA, credit rating agencies have also published articles affirming Singapore's strong credit standing, attributing it to Singapore's prudent and sustainable fiscal policy.

Mr Liang Eng Hwa also asked if we would consider one-off, special purpose borrowing for the economic investments under our emerging stronger strategies to help Singapore to emerge stronger. I thank Mr Liang for his suggestion.

As I have explained earlier, borrowing does not give us revenue. Instead, if the economic and fiscal outlook turn out worse than expected and we have to draw on Past Reserves for economic investments, borrowing would allow us to keep our reserves invested long term and earn good returns. Borrowing from the market also means that we will have to have the discipline to repay amounts used for these economic investments.

The key here is to use debt equitably and sustainably. We will borrow under the SINGA to spread out lumpy costs equitably across current and future generations. The Government will study Mr Liang's suggestion of a one-off, special purpose borrowing to help us emerge stronger from this long drawn out crisis.

Staying true to our core values of prudence and stewardship, we have built up significant reserves that are now our strategic assets.

Our reserves give us the confidence to forge forward, knowing that we have the wherewithal to deal with any crisis that might come our way. We have drawn on our past reserves to deal with two crises so far – $4 billion in 2009 to deal with the Global Financial Crisis; and up to $53.7 billion in 2020 and 2021 to respond decisively to the COVID-19 crisis.

Some commentators have questioned if we are dipping into the Past Reserves too readily. And yet, there are others who downplay the use of reserves, saying that these are small amounts and we can afford to use more of our reserves by spending more through the NIRC.

Let me reiterate that the Government does not take any decision on the use of reserves lightly. Our reserves serve three important roles.

First, they serve as an endowment fund, providing a key stream of revenue to supplement our annual Budget through the NIRC. Second, they provide a buffer against shocks and attacks on our financial system. Third, they serve as our bulwark against crises of an extraordinary nature.

Due to the strategic importance of our reserves, we have a two-key approach to managing and safeguarding reserves. The Elected President serves as the custodian of our reserves. The Constitution vests in the President discretionary powers to withhold her assent to budgets and expenditures proposed by the Government that may lead to a draw on Past Reserves.

On this note, I would like to address a question repeated by Ms Hazel Poa on whether the President knows the size of the reserves. I have just addressed this in June last year when I rounded up the debate for the Fortitude Budget. I shall repeat my answer here.

It is public information that, under our Constitution, the President has access to information about the size of reserves. Under Article 22F of the Constitution, in the exercise of her functions under the Constitution, the President is entitled to any information regarding the reserves. In addition, on the MOF website, it is already mentioned that the President has full information about the size of the reserves.

Ms Hazel Poa also asked about the size of our reserves. Again, it is not in our national interest to disclose the size of the reserves. As Mr Saktiandi Supaat explained very well yesterday, Singapore is vulnerable to currency speculation and large capital outflows. Revealing the size of the reserves is akin to laying bare our defence plan and will diminish the value of our reserves as a strategic defence. No responsible leader would do so.

So, I was very alarmed when I heard Assoc Prof Jamus Lim citing theoretical literature that speculation could be stabilising. I would also point out that there are other academics who recognise that currency markets can be marked by massive instability.

It is, in fact, well acknowledged by most economists today that market-driven short-term flows are and will continue to be fickle and extremely volatile. The episode in 1992 when hedge fund manager George Soros took on the Bank of England by betting against the Sterling pound and dramatically destroyed the UK monetary system is one stark example. To put it simply, foreign exchange speculations have been and will continue to be a threat to economies, especially small, open ones like ours.

As an international financial centre, portfolio and banking-related flows in Singapore amounted to S$294 billion last year, or 63% of our GDP. Just last year, we saw extreme capital flow volatility in global financial markets due to the uncertainties and risk sentiments associated with the pandemic. MAS kept the Singapore dollar nominal exchange rate stable during this period backed by the full power of our reserves, giving banks and businesses certainty to make decisions under very trying circumstances.

I personally saw this during the Asian Financial Crisis, when I was Principal Private Secretary (PPS) to Mr Lee Kuan Yew. Mr Lee was invited by several countries in the region to share his views, as Singapore was relatively unscathed. I sat in all his meetings. It was very painful to see how speculation and the currency volatilities that these countries face was destroying businesses, big and small, and the lives of men and women in these places. The exchange rate is far more important for a small open economy like ours compared to our neighbouring countries. And if our neighbouring countries are so badly affected during the Asian Financial Crisis, you can imagine the impact on us.

The Singapore dollar is one of the most actively traded currencies in the world relative to our GDP with daily turnover estimated at US$37 billion globally or annual turnover of US$9.5 trillion. Our nominal GDP is just US$350 billion. So, you are comparing trillions and billions.

Let me share that I was Managing Director of MAS when the Global Financial Crisis hit the world. Singapore is unique in operating in an exchange-rate centred monetary policy. My team and I had to not just be alert to the domino effect of the failures of banks globally, but also the flights of capital and the risks of speculation on the Singapore dollar. If we had been attacked, the businesses in Singapore, big or small, and the lives of our workers, would have been severely disrupted.

Now, as a Board member of MAS, I want to ensure that MAS is able to continue effectively using Singapore's exchange rate to deliver price stability. A very volatile Singapore dollar exchange rate, subject to market fads and bubbles, would not ensure low and stable prices for Singaporeans.

In normal times, our nation’s reserves also underpin our triple A sovereign credit rating, thus underpinning confidence in our unique exchange rate monetary policy system.

So, as a practitioner at the frontline, who tries my best to understand the intricacies of the system, I must caution Assoc Prof Jamus Lim – let us not play with fire. This is about the lives of our people, not theoretical musings.

And I urge all Members of this House to focus the debate on the merits of the policies and programmes and how we can improve the lives of Singaporeans. Instead of repeatedly focusing their attention on the size of reserves or other erroneous claims. We have inherited a strategic asset for the long-term survival and success of Singapore. Protect it, nurture it and never squander it.

Let me now turn to the global outlook, and our next steps.

I said in my Budget Statement that we expect to fund the expenditure for the remainder of this term of Government without a further draw on Past Reserves. But the global outlook is highly uncertain, and we need to think ahead of how we can respond.

Prof Hoon Hian Teck articulated well the difficult balance Singapore needs to strike: stabilising the economy to avoid a sharp downturn, but also undertaking and investing in structural policies for transformation.

The uncertainty over how quickly the global economy will recover makes this balancing act even more complicated. If we face a prolonged slump, it will be even more necessary for us to transform, but it will also be more challenging to find the required fiscal resources to both stabilise and restructure the economy.

Taking the longer-term view, we have to press on with these economic investments, secure the next decade of growth and emerge stronger. If we hold back these investments, we will miss the opportunity to restructure, seize new opportunities and race ahead. If we fail to change and our economic recovery is sluggish, it would have a long tail effect on our jobs and economic vibrancy, and affect Singaporeans adversely. It will also further worsen our fiscal situation.

So, after considering the various options, if the public health and economic situation deteriorate sharply and our fiscal situation turns out to be worse than expected, the Government may again have to seek the President’s approval for the use of Past Reserves to continue such economic investments so that Singaporeans can emerge stronger.

The President has expressed her understanding towards the Government’s approach and will consider the Government’s specific proposals, should there be a need to draw on Past Reserves.

But if we are to draw on Past Reserves for the economic investments to emerge stronger, we should do our best to make good on the draw. These investments are expected to yield returns for the economy, which can give a boost to our tight fiscal situation and allow us to make good the amount drawn.

As a crisis response to COVID-19, we have drawn from the Past Reserves, an amount equivalent to about 20 years of financial surpluses. It will be a challenge to also make good this amount drawn given the magnitude of the crisis. This is the "crisis fund" function of the reserves. Nonetheless, we should strive to remain fiscally prudent to build back our reserves gradually.

The fiscal situation ahead will be very challenging but I believe that Members agree on several issues. There is scope to do more to take better care of Singaporeans, especially the more vulnerable. With that, we will need to find the resources to do so. We need to consider all available options to raise revenues. We will continue to review additional options to complement a GST rate increase, but it is not realistic to hope for these to become alternatives to a GST rate increase, or to make the GST rate increase unnecessary.

Each of the decisions we make or do not make today to tackle the challenges will determine the starting point we give our future generations. We must have the courage to confront the hard issues now and not take the easy way out. We are stewards and must keep faith with our future generations. Doing so will give us the resources to deliver on social, economic and security priorities to further the welfare of Singaporeans. Not just today, but also tomorrow.

Mr Speaker, Sir, we inherited a strong Singapore. We are able to enjoy many opportunities and work towards our aspirations, because our pioneers were also good stewards with courage. They steered Singapore through many storms.

We have strong governance and trusted institutions today. We have built a strong global Singapore brand. We contribute to the world in our own way.

COVID-19 has taught the world that trust is a valuable currency, and there is a high premium for long-term planning, and reliability. Singapore takes pride into doing these well. First, we plan long term and act in the best interest of Singapore and our people. Mr Cheng Hsing Yao rightly pointed out that we now have the luxury of choices in dealing with resource constraints, precisely because of the foresight of the generations before us. Second, we are upfront. We do not shy away from difficult conversations. We explain the difficult decisions, as the well-being of Singaporeans are at the heart of what we do. Third, we honour our commitments and hold ourselves to high standards. Where we fall short, we learn and strive to do better.

Singaporeans know that they can trust us to lead the country. We trust one another and advance as Singapore Together, as one united people. And this is crucial to our success, because Singapore is a small island nation in a big turbulent world. We will continue to work hard to deliver results to Singaporeans, and strengthen and grow our valuable reserve of trust and unity.

Mr Speaker, allow me to say a few words in Mandarin before I conclude.

(In Mandarin): [Please refer to Vernacular Speech.] Although COVID-19 is still spreading globally, we have made progress in safeguarding our health, livelihoods and businesses. This year's Budget prepares us for a post-COVID-19 world and is more targeted at helping businesses, workers and the vulnerable groups.

The vaccine has brought hope for countries around the world in triumphing over the pandemic . But the tremendous impact of the pandemic has also accelerated the structural changes which were already taking place. We need to redouble our efforts to protect our future.

We will continue to help businesses in all sectors to transform and to create more good jobs for our workers to ensure that Singapore thrives in the post-COVID-19 era.

COVID-19 is a grave test for many countries. We will also build trust and strengthen cooperation with other countries to overcome our common challenges.

Our Past Reserves give us the confidence to move forward because we have enough resources to cope with a possible crisis. Drawing on Past Reserves is a difficult decision. When considering whether or not to draw on the Past Reserves, the Government has always adhered to the principle of fiscal prudence and long-term planning, as practiced by our forefathers. This is to ensure the sustainability of our fiscal policy, that we act as stewards to safeguard the interests of future generations.

Today happens to be 元宵节 or the Lantern Festival. The significance of the Lantern Festival lies in family reunion. Family union is happiness. When all of us are united as a nation , we have strength. Over the past one year, Singaporeans have shown a spirit of solidarity and fortitude. In the new year, I hope that Singaporeans will uphold this spirit and work together to build a prosperous home with strong social cohesion. The future will change rapidly but I firmly believe that as long as we work together, we will be able to overcome the challenges ahead and emerge stronger.

(In English): COVID-19 has tested the strength, unity and resolve of countries – socially, economically, and fiscally. Singapore has done relatively well so far. Our society came together as One Team Singapore to battle this invisible but deadly enemy. We looked out for one another, and we stood united. We protected the livelihoods of Singaporeans amidst the immediate economic fallout. Now, our economy is gradually, but steadily, recovering.

We have been careful and prudent in the use of our reserves to protect the lives and livelihoods of our people. There remain huge uncertainties ahead. But we confront these unknowns together with confidence, knowing that we have built a deep reservoir of trust to meet the challenges head on.

The years ahead will be crucial. We have a narrow window of opportunity to transform our economy and forge ahead as One Team Singapore.

Singapore did not happen by chance. Whether we continue to do well cannot be left to chance. I have laid out our strategy to emerge stronger. The Government is committed to put in the investments. But the Government cannot do this alone.

To succeed, every Singaporean must come together to build the Singapore that we want. Businesses should continually innovate and support their workers through opportunities for training, growth and progression. Workers should seize the opportunities to up-skill and re-skill. And within our communities, I urge all Singaporeans to lend a hand to those who need more help.

Nation building is hard work. But if we put our hearts, minds, hands together, I am confident that Singapore will continue to prosper and be a place we are proud to call home. That is why I have given the name "Emerging Stronger Together" to this year’s Budget Statement. It is as much about "Stronger Together" as it is about "Emerging Stronger".

We are in this together. We all need to each play our part. We have a clear view of where we are headed. Government, businesses, and the community must come together to overcome our shared challenges; and Singaporeans must care and look out for one another along the way; so that Singapore will emerge stronger together. [Applause.]

Mr Speaker: Mr Pritam Singh.

4.43 pm

Mr Pritam Singh (Aljunied): Thank you, Mr Speaker. Sir, I have three questions and clarifications for the Deputy Prime Minister. Before I start, can I ask Deputy Prime Minister Heng where did he get the figure of $20 million for a Parliament Budget Office from?

Mr Heng Swee Keat: Mr Singh, I got it from your Member who mentioned it. It is in the record.

Mr Pritam Singh: Mr Speaker, can I ask that the Workers' Party's Member who gave that figure to please clarify. Was that figure actually given?

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): I believe that the information was shared with the Ministry in bullet points for my cut which has not been delivered.

Mr Pritam Singh: A point of order, Mr Speaker. The Committee of Supply debates have not begun. That figure was specific to a cut. I believe the MOF officials have asked Member of Parliament Assoc Prof Jamus Lim to deliver points for and it should not really be part of this debate. But having said that, that was with regard to, I believe, a fiscal office and the cut has not been delivered.

Let me carry on with my clarification questions, Sir. The Parliament Budget Office or the Parliamentary Budget Office is not an unusual institution in many parliamentary democracies. It is a fairly new institution and, really, it is not to help the Opposition in Parliament. It is to help all Members of Parliament. This is constant with the separation of power schema.

I was a Member of the Estimates Committee some years ago, and I will never forget – and those Members of Parliament who were Members of the Estimates Committee will also remember – a senior civil servant said, "I cannot be smarter than my boss". Who is her boss? Her boss is the Minister for Finance.

And so, a Parliament Budget Office or officer is there to provide independent analysis to confirm the nature of the Budget, to confirm that programmes are delivering the outcomes that are desired. As was quite eloquently put by the Member for Aljunied, Mr Leon Perera, who said it is not just about getting an "A" for effort, it is about scoring and "A" for outcomes.

And to that end, as I acknowledged in my speech, and Deputy Prime Minister Heng also shared in his Round-up speech, the Budget is not about a one-year programme. It is about a multi-year programme. And in my speech, I asked Deputy Prime Minister Heng – for which I do not believe a clarification was forthcoming – about the headline $24 billion figure which is a multi-year initiative, questions about the accountability of this figure, how are we going to look back at this figure and say that money has been spent prudently?

The second point is with regard to the Capability Transfer Programme. I believe I had some questions about it and fundamentally again, the Minister committed until 2024, I believe. And I had some questions about how many Singaporeans were trained? The Minister gave the number: less than 970. And my query also sought information on how much money was spent on this initiative and whether these outcomes are outcomes that the Government is satisfied with. I do not believe that was answered.

My third point is a carryover from the Unity Budget. The Minister made the point about a remark I had made, elbow room, more fiscal elbow room than any other government. I think that is factually true. More revenues, certainly, more expenditure, but certainly more revenues as well for the Government to spend and to consider how to lay out its plans. So, there is nothing factually inaccurate about that.

But I would come to the point of the Driver Support Programme or the various programmes that the Government has laid out for private hire drivers. In the Unity Budget, I spoke about another community of individuals – private hire bus drivers – and many of them support the tourism sector. I think in this Budget with the JSS being extended to severely-hit sectors like aviation, I am sure the workers in that industry, the companies in that industry, appreciate the support.

But this group of private hire bus drivers; there was support rendered in the subsequent Budgets from the Unity Budget. One of the most important interventions was to subsidise the cost of parking in HDB estates for these private hire bus drivers. And that was extended to March 2021. Can I ask Minister Heng whether this extension would continue for this group of workers, because the tourism industry is decimated?

Mr Speaker: Leader.

The Leader of the House (Ms Indranee Rajah): I apologise, Mr Speaker. I did not mean to go before the Deputy Prime Minister's response, but I just wanted to ask or seek a clarification from the Leader of the Opposition, because this may be helpful for either the Deputy Prime Minister's reply or perhaps for later.

When he refers to the Parliamentary Budget Office, and I think it was quite clear in his original speech and just now, that he indicated that the purpose of this Office is to assess outcomes of Government expenditure. Can I just clarify if that is the purpose? Question number one.

Question number two, is this the same as the Independent Fiscal Council that the other Member of the Workers' Party, Assoc Prof Jamus Lim, has filed a cut on?

Mr Pritam Singh: The Parliament Budget Office that I had shared in my speech in this debate about, actually mirrors the Canadian model, the Canadian Parliament Budget Office. Or under the Parliament of Canada Act, I believe it is called Parliament Budget Officer. So, the second question is then answered: no, it is not the same proposal that has not been delivered by Assoc Prof Jamus Lim.

Mr Speaker: Leader.

Ms Indranee Rajah: I thank the Leader of the Opposition. So, there are actually then two proposals: one, for a Parliamentary Budget Office, and the other for an Independent Fiscal Council. Is that correct?

Mr Pritam Singh: Mr Speaker, I am not sure whether Leader can phrase it that way because the Independent Fiscal Council, that cut has not been delivered. So, there is terminology. I think IMF refers to all these different agencies within Parliament as Fiscal Councils, but perhaps we should wait for Member Jamus Lim to deliver his cut. Then, the clarification would be obvious.

Ms Indranee Rajah: Mr Speaker, that was not really my question. The Leader of the Opposition is well also the leader of the Workers' Party, so I assume he knows what he is talking about, and I assume he knows what his Member is going to to ask about. So, I am not asking in advance what Assoc Prof Jamus Lim is going to say. That, of course, he will do in the Committee of Supply. But I am just asking and I am sure the Leader of the Opposition must know this: is the office that he is asking to be set up the same thing as what his colleague is going to ask for, or are they both asking for two separate things? That is all I want to know.

Mr Pritam Singh: Mr Speaker, I can assure the Leader that it will be the same thing.

Mr Speaker: Deputy Prime Minister Heng.

Mr Heng Swee Keat: Mr Speaker, Sir, now that Mr Pritam Singh says that it is the same thing, I am totally confused. Because they are very different entities. But before I answer his specific questions, let me repeat what I said right at the beginning of this debate.

I said over the last few days, passionate debate went along a few threads. Some Members elevated the debate to help Singaporeans appreciate the changing landscape and the need to change. Some Members highlighted importance of our reserves – the bold and decisive response mounted and what it achieved. Unfortunately, some argue selectively without acknowledging the broader context, broader impact of COVID-19 and the outcomes of the Government's decisive interventions.

So, Mr Singh said earlier that we should set up such an office because it is important to examine outcomes. He had an encounter with a Ministry of Finance official who say that, "I am not smarter than my boss". Your arguments are totally convoluted. One does not lead to the other.

If you are focused on the outcome, may I ask if Mr Singh and the Workers' Party Members have read the interim report which I have put out in the Ministry of Finance website, widely reported in the papers, on what the measures have achieved? There is a reason why I put out the interim report, even though the full effects have not been done. Because I am conscious we have used a big part of last year's Budget, we have used the past reserves and that I have a responsibility to account for those outcomes. And I put those outcomes.

So, the Member talked about assessing outcomes. That is our biggest spending. Does the Workers' Party have any comment on that? Because I sat through the debate, I read your transcripts, but no one no, one mentioned about outcome, no one raised a question about, "Could this have been done better, could that have been done better".

So, what is the purpose of setting up an office when, with information that is publicly available is there for you to ask?

Mr Speaker: Mr Pritam Singh.

Mr Pritam Singh: Thank you, Mr Speaker. Sir, this is essentially a question, as I mentioned in my first intervention about Organs of State. You have the Ministry of Finance, you have Political Office Holders who drive the agenda of that Ministry and you have a parliamentary platform where the proposed Parliament Budget Officer will sit. Two different functions completely independent of what Government is saying about the outcomes, because that is an independent perspective and that is something for Parliament who is going to approve the Budget. Those who are approving the Budget ought to have access to an independent analysis. And that is what the Parliament Budget Officer will give.

Mr Heng Swee Keat: Mr Singh himself, admitted that he has different names, different nomenclature. So, I do want to prolong this debate but we have the Committee of Supply coming up on the Ministry of Finance and we can debate that.

But let me just ask for the Workers' Party to be clear about what is it that you are proposing; and second, I am asking you a very simple question. Have you or any of your Workers' Party Members scrutinised that interim report and have questions for us?

But instead, in talking about outcome, what you have asked us just now, you raised the issue about, what about the Capability Transfer Programme which MOM is going to do in 2024? This is going to be debated at the Committee of Supply for MOM. You can ask those detailed questions.

Then, you asked what about the private hire car drivers and so on, and would it be extended? Those are details of the scheme. This Budget debate is a serious debate about whether our broad direction is correct. Do you have suggestions on how we can do it better? I am open to your ideas. But I have to say, unfortunately, so far, I have heard none.

Mr Pritam Singh: Mr Speaker, I understand that when there is a Budget debate, it is again part of the rules of debate, that when I bring up a subject matter, that is the subject matter I want to talk about. I am not sure another Member has capacity than to ask me about a matter I have not spoken about. So, just as a point of order, I think we should make that clear. I mean, the Standing Orders exist for a reason, I suppose.

And insofar as the Minister's answers on Capability Transfer Programme, other issues being dealt with in the Committee of Supply, I can accept those answers. I can ask my questions during the Committee of Supply.

Mr Speaker: Mr Louis Chua.

Mr Chua Kheng Wee Louis (Aljunied): I thank the Deputy Prime Minister for responding to some of the points I raised in my speech. Just two clarifications, Mr Speaker.

The first is one where I raised that the Government cash surplus from 2011 to 2019, that is about $261 billion or about $29 billion of cash surplus a year. I understand that the Deputy Prime Minister mentioned that the land sales revenue would form a key part of it. Based on what I could see, that would be about a $138 billion within the same time period or about $15 billion. So, in the spirit of accountability, just so all of us can better understand, where did the balance of $14 billion of cash surplus come from?

And I understand the need for us to be prudent about the use of land sales and this is something which I understand, but I think it is not one where we are calling for the use of land sales revenue in its entirety. It is one whereby, if you look at the incentives to using land sales revenue, they already exist today, but probably in a different extent. And I think it is also important, I guess, for me to share that —

Sorry, so, what I mean is that the incentives for using land sales as a means to increase revenue. I think that is something that is already done indirectly and so that is already in place although to a different extent.

But I think the broader point that I also would like to share, is in the context of Singapore, when it comes to land sales, it is something which I believe is a recurring source of revenue for the Government as well. That is the first clarification.

The second is, there has been a lot of talk about our reserves. Just now Deputy Prime Minister mentioned that is about 20 years of surplus. Yesterday, a different Member shared that we have blown about 10 years' worth of savings. And I think earlier today, a separate Member also asked how long do we need before we can replenish our reserves.

So, probably it will be helpful for Members of this House to understand, after accounting for the additional $11 billion of the draw at the end of FY2021, where would our reserves be? I mean, we do not need to know an absolute number, but where would our reserves be compared to 10 years ago, five years ago. That also helps us to understand the context, but without knowing the absolute amount of the reserves itself.

Mr Heng Swee Keat: On the technical question that Mr Louis Chua asked about, what constitute the other big part, well, one bit which, as the Member has pointed out, is the land sales; and the other part, a big chunk of it, is the NIRC. The NIRC is already being used. [Please refer to "Clarification by Deputy Prime Minister and Minister for Finance", Official Report, 26 February 2021, Vol 95, Issue No 21, Correction by Written Statement section.]

On the second point about land sales, and that there is an incentive for the Government to use land sales because the revenues are already done indirectly, that is wrong. I said very clearly that when we do land sales, it is to meet the needs for our people, for our economy. You cannot plan land sales on the basis that we need the revenue, and therefore, I would have to do that. The land sale proceeds, they go into the past reserves.

I totally reject your allegation that the Government has an incentive to sell more land in order to generate revenue. If the Government had an incentive, I would not have pointed out the problems in many countries. I have studied this in many countries where unfortunately, where the government, especially the local government, is so reliant on land sales that they have a vested interest to keep land prices high because they need the revenue, and, in turn, that creates a lot of hardship for the people.

So, our system cannot incentivise it. URA has long-term plans – 50-year plans, 20-year plans. The land use planning has been a great strength of Singapore. I think you should seriously look at what the agencies have been doing and do not make allegations like these. Because I think it will demoralise the many good officers that we have in our planning departments, in URA and the Ministry of National Development, who have over the years, allowed for so much development in so compact a land.

And by the way, one of the areas that I am hoping that we can do more in our research plan, is precisely on urban solutions and sustainability, something which Senior Minister Teo started when he was the Chairman of the National Research Foundation (NRF) and which we are continuing. Because that is a constraint for Singapore and if we can overcome this constraint, we can do better.

It is not for us to sell land in order to do that. So, I would like you to take back your allegations that the Government has an incentive to sell land for that purpose.

Mr Chua Kheng Wee Louis: I thank the Deputy Prime Minister. I would just like to share that I did not make the allegation. Basically, what I was trying to get at is that if you look at the context of Singapore, the land sales revenue, I think that is a recurrent source of revenue for the Government over a period of time. I am actually not belittling the work of our MND and the good officers of the URA. I think that is something that they have done well in terms of the concept plan and the master plan.

What we are looking at is in terms of the level of cash surplus that the Government is generating, understanding where this comes from. Because on the technical point as well, if the NIRC is something that is to be used, then that should not actually form part of the cash surplus if it has already been used.

Mr Heng Swee Keat: Mr Chua made the points in a very indirect way, to say that, "Well, the Government is doing it indirectly." I am glad that you are taking it back to say that you are not making that statement. So, I thank you for that clarification.

But let me repeat that the Government has no incentive to sell land for the purpose of generating revenue. Our Reserves Protection Framework has safeguarded all the assets that we have. You are just converting one asset to another form of asset and these are guarded.

Mr Speaker: Mr Darryl David.

Mr Darryl David (Ang Mo Kio): Thank you, Mr Speaker. I have a point of clarification for the Deputy Prime Minister.

Earlier, in his wrap-up, the Deputy Prime Minister mentioned the point that I made about nurses and healthcare workers and how I was very supportive of the decision to enhance their salaries and to review their salaries. I also made another point beyond that, which was to say that, I believe, it is not just about salaries; there are other factors that perhaps we could look at in terms of enhancing careers, mid-career conversions, perhaps in improving the work-life balance. I even suggested a bit of a radical idea, like paid holidays or mandatory leave that nurses and healthcare workers need to take to encourage them to step back from the frontline.

The Deputy Prime Minister did not quite address this in his speech and I wanted to ask if it is something that the Government can actually consider beyond the salaries and the financial aspects of a nursing career.

Mr Heng Swee Keat: I thank Mr Darryl David for the question.

When the issue of raising the salaries of our nurses and healthcare-related workers was raised as part of this Budget approval process, I did speak to Minister Gan Kim Yong. I asked exactly the same question. Minister Gan has given me a very good reply and I am satisfied with that.

The MOH Committee of Supply debate is coming up and I will leave it to my Minister for Health to outline more fully.

But let me say that personally, I support what you have said about how we can improve the working conditions of our nurses. I myself am a big beneficiary of the care of our nurses. I would like to see improvements, certainly, and career progression for our nurses and related healthcare workers.

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): I thank the Deputy Prime Minister for his comprehensive response to a few points that had raised in my Budget speech.

Let me just begin by fully agreeing with the principles that he has laid out. And I believe that, not only myself but also the Workers' Party, agree with the principles of prudence and stewardship. And we also agree that we, of course, do not have oil gushing out of our ground.

Now, that said, I think we can potentially have ideas gushing out of our heads and that is precisely why I made the suggestion about soft infrastructure. And I wonder why Minister Heng remains dismissive of soft capital.

The key I think is ultimately that we invest what we end up borrowing and while I agree that we should not allow recurrent expenditures to be lumped into soft capital, it is easy to allow recurrent expenditures of all forms, like various HQ functions in hard capital projects. The key is that we always evaluate what how we define a given project as soft or hard capital; and its ultimate investment and repayment potential.

Now, I should also clarify another point on the exchange rate.

Mr Speaker: Are you seeking a clarification?

Assoc Prof Jamus Jerome Lim: Yes. So, the first one I was hoping for clarification on why he remained dismissive of soft capital.

My second point is again a clarification. I should be clear. I am not suggesting a revision in our exchange rate regime. I am questioning whether there is a need to keep reserve information secret and whether that actually helps, or hinders, our effort to do.

What I heard Deputy Prime Minister Heng share was a lot of reasons why the exchange-rate-targeting regime is warranted for our country. And I cannot agree more. But I did not hear strong reasons why secrecy over our reserves actually helps in that case.

Markets, I think, we both acknowledge, can be volatile. But I think they tend toward the truth. And indeed, speculation, as I conceded, can in fact be destabilising if our exchange rate is disconnected from the fundamentals. So, it leaves me to wonder is if Minister Heng is suggesting that with our current situation, such secrecy can actually help us to maintain what is an otherwise untenable rate? Because I know that the Ministry has routinely denied that we manipulate our exchange rate.

Mr Speaker: If the Member can keep the clarification short, please.

Assoc Prof Jamus Jerome Lim: Yes. And the Ministry has routinely denied that we manipulate our exchange rate, only that we seek stability. I will stop there.

Mr Speaker: Deputy Prime Minister Heng.

Mr Heng Swee Keat: Mr Speaker, Sir, first, let me let me say that in Parliamentary debates, please do not put words into my mouth.

I did not dismiss soft capital. You said that I was dismissive of soft capital. I was not. I said that we have to be careful. I said, I sound a word of caution about soft capital. Precisely because it is soft, it can morph into various shapes. I had mentioned how many good schemes started with very good intentions, with very good people, but precisely because it is soft, the shape changes, and over time, everything becomes capital investment. So, that is the first point.

Second, I think there is a role for building all this soft capital. If you want to talk about whether my notion of partnership, working together, is soft capital, well, you can say that and say: should we invest a lot of money in that? We have been very careful to say how we can build our society. In fact, if you want to use academic terminologies like these, there is a lot of soft capital in our neighbourhood because people are supporting one another, and we did see soft capital coming up.

But that is not the issue. The key issue is this. We have to be very careful with recurrent spending and the outcome focus, which was a point that Mr Pritam Singh mentioned right at the outset.

So, let me share my experience as Education Minister. I said in my speech, and in fact, I have shown this slide many times. Perhaps I should show it again and again until the message gets through. I have shown it many times how Singapore has been ranked so well in the international ranking of students.

I have also shared that in 2018, when the IMF/World Bank meeting was held in Bali, President Jim Yong Kim of the World Bank invited the Prime Minister to talk about the Human Capital Index. And when I was walking with President Jim Yong Kim to the venue site, I asked him: "Personally, I am not terribly comfortable talking about Singapore being ranked well because it is not our approach to talk about our ranking. So, what is your purpose?" And he said something which has never left me. He said, "Well, actually, my interest in Singapore is not how much you spend, but how well you spent."

And the reason he could say that was that he had done comparisons, the World Bank team had done comparisons, of the educational expenditure and the outcomes of the student. We ranked well not because we spent the most money, but because we actually achieved outcomes.

Having been Education Minister for five years and visiting so many of our schools, I am convinced that our schools and our teachers have put in the greatest amount of effort, and the fact that we have parents who are so supportive of our kids' education is what allowed our students to do so well. There is no one magic formula. You can have a number and say, "I would like to know whether it is 5% or 10% of GDP" and so on. It does not.

I have also said in this Budget debate and even in the previous round, about our healthcare outcome. It is the same – it is not what you spend; it is how you spend it and the dedication of the staff.

So, I am extremely grateful to our frontline officers, to our teachers and our educators in their various roles in our schools, and which is why, as Education Minister, I talked about every school being a good school, because I am deeply convinced that that is the case. It is not something that a Budget and a theoretical number can give you the result.

So, President Jim Yong Kim told me, "I hope that Singapore is open to sharing this so that others can learn because there are countries who will need to raise this, and they are very concerned that they will not have the resources to educate their people better".

So, it is how we use it.

Now, the second question on the exchange rate. Let me again state, for the benefit of our currency stability and for the benefit of all of these debates around the world about manipulating exchange rate, Singapore does not manipulate our exchange rate. Singapore does not manipulate our exchange rate. We do not manipulate it to secure a competitive advantage because that is not sustainable.

As an economics professor, I think he will fully understand that, that long-term sustainability for economic competitiveness must come from productivity growth and labour force growth. Our labour force growth is turning towards zero. And so we have to rely on productivity growth –which is why in the next phase of our transformation, we need to focus on technology and innovation-driven growth.

So, we do not manipulate our exchange rate. So, what do we do? What is our exchange rate policy centred on? It is not different from other central banks, which is maintain medium term price stability, so that economic agents, economic players can make decisions on the basis that these are the relative prices that they can make decisions on, that you do not have runaway inflations.

Even then, I will say that, right now, because of COVID-19, there is, again, new thinking about whether this inflation targeting is the right approach, and so on. But as far as Singapore is concerned, we have been maintaining price stability and that has allowed our economy to have the macro economic framework to stay competitive.

So, the question about our exchange rate regime, I am glad that the Member is not saying that we should reveal our exchange rate regime, that is good. As to your question about why the secrecy, I do not wish to hold up this whole forum. I devoted more than two pages of my reply to you on that, about the size of currency trading, about my experience in MAS during the Global Financial Crisis, about my experience when I was accompanying Mr Lee Kuan Yew to the countries which were so badly hit by the Asian Financial Crisis. So, please, have a care that policy-making cannot be theoretical musings.

Mr Speaker: Mr Sitoh Yih Pin.

Mr Sitoh Yih Pin (Potong Pasir): Thank you, Mr Speaker. Mr Speaker, I would just like to add on to a point that the hon Member Assoc Prof Jamus Lim had raised. Because I know he is very gung-ho on borrowing; he is entitled to his views. But I just want to add, in life, when you want to borrow, it does not automatically mean people want to lend to you.

In the case of Singapore, we will be able to issue debt papers if we want, but that is because of the huge reserves that we have accumulated over the last 55 years.

I would like to raise a question to Deputy Prime Minister Heng. Deputy Prime Minister Heng did not say so but I am trying to read into his mind, and I apologise if I got it wrong.

I think one of the reasons we are quite comfortable to borrow now, with fairly large reserves behind us, is because we are quietly confident that in the long term, our rate of return from our reserves is going to exceed the cost of borrowing. Because when the Government of the Republic of Singapore goes out to borrow, there is a premium. The cost of debt is significantly lower than others. So, am I right about my assumption?

Mr Speaker, Sir, I know you are going to ask me to sit down but please allow me to share a story. Thirty seconds. I want to share a story with the House.

Mr Speaker: Fifteen seconds. Thank you.

Mr Sitoh Yih Pin: Thirty seconds. I had a conversation with our retired Member of Parliament Mr Chandra Das not too long ago. I do not think he will mind me mentioning his name. Mr Das worked with Dr Goh Keng Swee in the 1960s and 1970s. So, I asked Mr Das, "During your time, did you go out to borrow?" And he said "Once"; only once but for a different reason. And that was because Dr Goh saw a project, he was not entirely convinced that it was feasible and he gave instructions to the staff, "Go out to an external third party financial institution and get a second opinion and see whether they lend us". So, that is how careful we have been. In the past and even today —

Mr Speaker: It is more than 30 seconds.

Mr Sitoh Yih Pin: Okay, and that is why when we issue debt, the international financial world is willing to take it. Thank you, Mr Speaker, Sir, thank you for your indulgence.

Mr Speaker: Thank you.

Mr Heng Swee Keat: I thank Mr Sitoh Yih Pin for his question and for sharing the story. Why are we borrowing at this point? There are several reasons and the Member touched on two of them.

One is that for our SINGA Bonds, which is about borrowing for our infrastructure, the significant national infrastructure, we are borrowing because we are now coming to another hump in our development expenditure.

In the early years, did we borrow? Yes, we did borrow when we were building the first MRT and our airports. And, again, that was another big hump. So, the nature of infrastructure project is such that you need to build it over the next two, three years, but the benefits of that project should last us several generations.

So, therefore, how do we spread out the borrowing? First, do we build or do we not build? Just because we do not have the resources to build it now, do we forego it? We must build it only if it gives you economic or social return. The projects that we did for our MRT lines, for our airport, give us both the economic and social returns, and therefore we can justify why we are doing it.

But at the same time, I mentioned that, in the coming years of, first of all, even if our fiscal situation was good, it may not even be enough for us to fund that lumpy investment. So, lumpy investments need to be spread out over time.

Then, the next question is how do I fund it? There are several ways. One is, could you go and use the past reserve for that? It is not because the reserves are used for extraordinary and temporary situation. It is spelt out in our Constitution.

So, why are we borrowing? Well, I mentioned before that there are several reasons. One, that it is fair for inter-generational equity, because you spread out the cost of borrowing, because various generations are going to benefit from that. Second, at this point, it is efficient because interest rates are very low and ultra-low. And to your observation as to whether, therefore, we should not touch our reserves and liquidate our assets to borrow, you are a good investor.

Mr Speaker: Time is also not unlimited, so I will not borrow anymore time. Otherwise, we will not finish on time next week. I will wrap it up.

Question put, and agreed to.

Resolved, "That Parliament approves the financial policy of the Government for the financial year 1 April 2021 to 31 March 2022."