Mr Speaker, Sir, I rise to support the motion in the name of the Minister for Finance. Mr Speaker, Sir, once there was a man, he was seen searching for something under a lamp post. After a while, he could not find what he was looking for. Another person came along and asked him, "What are you looking for?" He said, "I have lost my key. I am looking for my key." And the person said, "Where did you lose this key? Is it here?" He said, "No. Over there." The person then asked, "Why don't you look for your key over there then? Why search over here?" He said, "Because it is too dark over here. It is brighter here than there. Easier to search." Obviously, he could not find his key. Mr Speaker, Sir, when the NCMP said that he saw nothing in the Budget to enhance the competitiveness of the Singapore economy, my conclusion is that maybe he was looking for the key at the wrong place. My view on competitiveness is very simple. If we look at competitiveness as a function of cost alone, obviously to enhance our competitiveness is to lower the cost of everything in Singapore - make the land cheaper, make the office rental cheaper; better still, get the workers to take a pay cut. Then, in that way, cost of doing business in Singapore will decline overnight, businessmen will turn healthy profit overnight. But if we adopt that approach, then we are thinking of a win-lose situation. Win on one side on profitability, lose on the other side for the workers. Obviously, that cannot be the case because at the end of the day, what is economic growth for? It is not to help businessmen make more profit but, at the end of the day, to make sure that every Singaporean can live a better life. Therefore, Mr Speaker, Sir, my view of competitiveness is that competitiveness is a function of not just cost, but cost and capability. If we can upgrade our capability not just in the short term but over the long term, then over time workers can get higher salary, businessmen can still make more profit. That is what I meant by "win-win". If I may quote an example. Last month I was in Europe, in Switzerland. I visited a company known as ESEC. This company is in the business of producing back-end semi-conductor equipment and it is now one of the top three in the world. Its business is growing very fast, at 50%, 70%, every year, even during the slowdown of the global economic sector. We asked them, "How big is your market in Switzerland?" They said, "0". Everything the company produces is exported to the rest of the world, including Asia, Europe, USA, but nothing in Switzerland. How then can this company survive with no domestic market, with a high cost of doing business in Switzerland, and yet able to be profitable, able to grow? The answer is very simple. They strengthen their comparative advantages. So, over the years, they have developed their capabilities in the areas of R&D, innovation, marketing and final assembly and testing. Eighty per cent of the manufacturing is out-sourced from the suppliers from lower cost locations. In this company, all the managers, the marketeers, the technicians, the skilled production workers, everyone is well paid. And yet at the same time, the company is profitable, and the business is growing. I think here is an example of the kind of "win-win", the kind of competitiveness we should be talking about. Having said this, Sir, I would like to convey this message to the Minister for Finance that, in my view, Budget 1997 is a good budget. I said Budget 1997 is a good budget because I feel that it actually addressed the competitiveness of Singapore in a hard-headed way, and not taking a soft approach. All the new policies that were introduced for the financial sector, as well as the enhanced resource allocation of budget for the industrial and business sectors, like in the areas of R&D innovation, cluster development and upgrading of the local enterprises and so on, will go a long way to make sure that Singapore will continue to strengthen her position as a global hub in the Asia-Pacific in the 21st century. In that sense, Budget 1997 has been a pro-economic growth budget. At the same time, Budget 1997 is also a pro-worker budget. Because of the slower economic growth this year, workers are asked to accept moderated wage increase. Many of them are concerned that they have to live with a lower pay increase but higher transportation cost and higher water tariffs. They were all looking for some reliefs from Budget 1997, and they were not disappointed. I have consulted many of my grassroots leaders in my constituency as well as the unionists in the NTUC. Many of them have responded very positively. So, all in all, I would like to commend the Minister for giving Singaporeans such a pro-economic growth Budget as well as a pro-worker Budget. Mr Speaker, Sir, please allow me now to go on to offer some suggestions on how I feel future budgets can address some of the issues that will further position ourselves for future competition. I feel that the budget in the future should, firstly, address the pricing policy over the long term to make sure that the limited economic resources in Singapore can be put to better use, in particular in the areas of land and water. In the case of water, I feel that the recycling of water in the industry today is still very limited. Obviously, from the industry's point of view, it does not make sense for them to put in place all these expensive recycling equipment to save water, given the relatively lower price of water. Obviously, increasing the water charges is not the solution, because they are already paying more, and to charge them more means that it will reduce our cost competitiveness. But I think one approach is to encourage the industry to do more in the area of water recycling, bearing in mind that the opportunity cost of not recycling water has gone up by eight times with the high cost of desalination. Another example is in the area of industrial land. Industrial land in Singapore is limited. It is expensive and yet at the same time, if we drive around Singapore, we see many factories in Singapore are still low-rise, only one-storey or two-storeys. Why is that so? Obviously, developers will give you many reasons. Firstly, some factories cannot go higher up because it is very process intensive. But in some cases, they will claim that it is because of logistics consideration, very cumbersome operations, and so on. But the bottomline is this. The way we charge differential premium and development charges today has to a certain extent also discouraged the intensification of industrial land. I hope that in future pricing policy, we can bear this in mind. The second area where I think we really have to pay more attention is with regard to the upgrading of the capabilities of the Singapore workforce. We have to make sure that we will continue to have one of the best workforce in the world in order to bring us forward into the future. Here, I recall what Deputy Prime Minister BG Lee mentioned, that Singapore has the potential to grow at 7% a year over the medium term. But to realise this 7% growth potential, we have to expand our workforce by 3% and achieve 4% growth in productivity. So three plus four gives us 7% potential. Therefore, I feel that our Budget should really concentrate on these two targets of how we can expand our workforce by 3% and our productivity by 4%, so that we can fully realise our potential. Firstly, in the area of expanding the workforce. Obviously we can expand the workforce by at least three ways. First is to encourage more Singaporeans to have more children; second is to bring in more foreign workers; third is to bring more Singaporeans who have left the workforce back to the workforce. On the first approach, in fact we are already encouraging Singaporeans to have more babies. If you look at the population growth, it has gone up from 1.3% in 1980 to 1.7% in 1990, to 1.9% last year, and most probably stabilises at 2% a year. That is probably as far as we can go. On the second approach of bringing in more foreign workers, again, we are already doing so. According to the Department of Statistics, there are today 568,000 foreigners living in Singapore. Of course, not all of them are foreign workers. This number includes the foreign students and dependants and so on. But the point I would like to highlight is that one in six persons in our society today and one in five workers in our economy today is already a foreigner. So, while we should continue to bring in more foreign talents and foreign workers to supplement and complement the shortage of workers in Singapore, I think we must recognise that there is a limit to which we can do this because of the social, political and economic implications, if we are overly dependent on the foreign workers. Therefore, a more desirable and sustainable approach is really to expand our workforce by bringing back Singaporeans, Permanent Residents (PRs) who, for whatever reasons, have left the workforce. According to the Department of Statistics, the labour force participation rate in Singapore today is 64.6%. Given our small population, this is actually a very low rate, compared to, say, 67% in USA. One of the reasons why the labour force participation rate in Singapore is low is because among the female Singaporeans and PRs, only 51.5% participated in the workforce. For women aged between 40 and 49, our participation rate is only 52% compared to 71% in Japan, 76% in USA, 79% in UK. And for those aged 50 and above, our participation rate is only 41%. So one of the reasons could be that many of the Singaporean women left the workforce to look after their children when they are young, but did not re-enter the workforce. I feel that if we can find ways to bring them back, we can increase the workforce by maybe 30,000 to 50,000 if we can increase the workforce participation rate comparable to that of other developed economies. Likewise, the group of older Singaporeans who are in their 50s and 60s can also be an additional source of workforce. Again the number is quite big and I will not go into it. But the bottomline is that if we increase the participation rate by 10% to 15%, again, we can increase the workforce by 15,000 to 25,000. Altogether, these two sources of supply can contribute 50,000-75,000 more workers in the near term. In fact, over the long term, the number is likely to grow even bigger because of the aging population in Singapore. The Ministry of Labour, the PSD, the SNEF and the NTUC have already started doing this. They are trying to bring the housewives and the retirees back to the workforce. So far, the response has been positive. More than 4,000 workers have already signed up. But the success rate in terms of matching them to jobs is still fairly low, at about 20%. My point therefore is that maybe the Government should consider giving this programme a stronger push through some incentives. For example, the Government can help to defray the cost of job design, or to introduce some new measures, for example, for companies which want to employ more foreign workers, one of the conditions attached is for them to employ some of these housewives and retirees, so that on the one hand, while we continue to bring in foreign workers to supplement the shortage of workers in Singapore, at the same time, we make sure that we maximise the participation of Singaporeans and PRs in our workforce. The second issue is even more important. This is regarding the employability of our mature and lower educated workers. Mr Speaker, Sir, last month I visited three countries in Europe together with my fellow unionists. We went to Europe to study the unemployment situation in Switzerland, France and Germany. 18 million workers are now jobless in Europe. In Switzerland, unemployment today is 5.3%; in France, 12.6%; Germany, 11.1%. Some of these workers are out of job because the economy is going through a bad patch and as a result, workers are out of job. But this kind of unemployment, known as a cyclical unemployment, is nothing of great concern to these countries because in the near future, when the economy moves again, I think the workers are likely to be able to go back to the job market. But what is of greater concern to these countries is that the majority of the workers are out of job not because the economy is going through a bad patch but because there are structural weaknesses in the economy. In the case of Switzerland, for example, 3% of the unemployment are structural unemployment. In the case of France, it is about 9.7%; in the case of Germany, it is about 8.8%, which means 70% or so of the unemployed in Europe today are due to structural unemployment. And the scary thing about structural unemployment is that it is due to a mis-match between cost and capability. So to solve structural unemployment, either cost must come down or capability must move up, or preferably both. But in reality, cost cannot come down overnight because of a rigid labour market and high social contribution. At the same time workers cannot acquire new skills overnight. As a result of this, European countries have accepted that they will have to live with structural unemployment at least in the near term. Therefore, unemployment in Europe is not likely to decline very rapidly in the near future. Mr Speaker, Sir, judging from the experience of European countries today, we recognise that we must never take full employment in Singapore for granted. The point about the need to upgrade the skills of workers has been discussed by various Members here. Here, I would like to point out that in this world, there are many willing people. Some are willing to work, whereas some are willing to let other people do the work, whereas they only do all the talking. Mr Speaker, Sir, in the case of labour MPs present in this House, we are very willing people. We see the problem of structural unemployment, of employability, and we take action to solve the problem. But earlier I heard Mr Chiam See Tong and Mr J.B. Jeyaretnam say that in Singapore, the Government is not concerned at all - of course he did not say that the labour movement was not concerned at all - about this problem of under-educated workers. This cannot be the case. I would like to share some statistics to show that the labour movement and the Government have been working on this issue not in the last one year, or last three years, but, in fact, we have been working on this problem for the last 10-20 years. For example, in 1983, the Government introduced the BEST programme. In 1987, we introduced the WISE programme. And the union movement has worked together with the Government to make sure that the BEST and WISE programmes reach out to those workers who are under-educated. As of now, after 14 years of implementation, 212,000 workers in Singapore have gone through the BEST programme. Another 75,000 workers have participated in the WISE programme. So from these numbers, you can see that, in fact, the Government and the labour movement have been taking this issue of training of workers very seriously for the last 20 years. On top of that, the Skills Development Fund (SDF) has been supporting and encouraging training in the economy. Last year, I was told that SDF had created one training place for every three workers which means that one out of three workers last year took part in training. On top of that, the total expenditure in training last year stood at about 3.6% of the payroll, one of the highest in the world. In fact, our long-term target is 4%. We are well on our way to achieving that. Mr Speaker, Sir, even though I talk so passionately about this threat of structural unemployment and about the need to retrain our workers, my point is different from Mr Chiam's or the NCMP's. My point is not that we have been sleeping, the Government has been sleeping or the labour movement has been sleeping for the last many years. My point is that we have been working so hard and we do not take any chances. Even though much has been done up till now, we should continue to do even more because if we are affected by structural unemployment, the implication can be very serious. I would like to offer one suggestion. The NTUC, in formulating our vision for the 21st century, known as the "NTUC 21 - A Better Life", has in fact indentified life-long employability as the most important pillar in enabling our workers in Singapore to live a better life in the future. In that regard, the NTUC, working with the Government, has introduced various programmes to make sure that workers are being retrained so that they can be kept up to date. One such programme is the Skills Redevelopment Programme (SRP) whereby at this moment, 3,000 workers from 27 companies have already signed up for this programme and they are now going back to school to gain skills certification. We have gone beyond training. We are talking about skills certification where workers can now receive skills which will make them employable in the next century. These are skills which should be transferable across companies and industries. And we hope that in future budgets, the Government can consider setting aside more resources to support programmes, such as the SRP. Mr Speaker, Sir, I would like to conclude by emphasising that the way forward for Singapore is very exciting. We have Singapore 21 to make Singapore our Best Home in the 21st century. It is very important that we make sure that every Singaporean, young and old, is given a chance, given the assistance and given all the facilitation to participate in the creation of wealth in the economy, to share success in the society and to move forward together as one united people. On this note, I would like to appeal to the Government to invest not only in the young but also the not-so-young Singaporeans so that the 21st century can lead to a better life for all workers in Singapore.