Hansard, 2001-03-05

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: NameFromTo (2001)(2001) Mr Peh Chin Hua27 Feb3 Mar Mr Loh Meng See1 Mar3 Mar Dr Tony Tan Keng Yam2 Mar3 Mar Assoc Prof Low Seow Chay3 Mar4 Mar Mr Zainul Abidin Rasheed3 Mar7 Mar Mr J B Jeyaretnam 5 Mar5 Mar Dr Tan Cheng Bock 5 Mar5 Mar Mr Gerard Ee 5 Mar5 Mar 7 Mar7 Mar NameFromTo (2001)(2001) Mr Davinder Singh5 Mar16 Mar Mdm Claire Chiang8 Mar13 Mar BG George Yong-Boon Yeo9 Mar17 Mar Mr Goh Chee Wee17 Mar23 Mar Dr Ong Chit Chung19 Mar29 Mar Prof S Jayakumar24 Mar1 Apr Mr David T E Lim24 Apr5 May TAN SOO KHOON Speaker Parliament of Singapore

asked the Minister for Home Affairs if he will give an update on the use of the Speakers' Corner and, in particular, the number of complaints received and police investigations that have resulted from events held at the Corner.

Mr Speaker, Sir, since its inception on 1st September 2000, there have been about 800 registrations to speak at Speakers' Corner. Many more have gone there to listen. To date, Police has received no complaints from the public on the use of the Speakers' Corner. However, from a website posting, it would appear that an illegal assembly had taken place at the Speakers' Corner on 10th December last year, which I had already discussed in this House at our last sitting. Police is currently investigating into this.

Sir, may I ask if it is the principle of the Police to investigate everything it sees on the website?

Sir, if the Police receives information from a reliable source such as media report or website that an offence may have been committed, and there is indicative evidence, then it is Police's professional duty to investigate.

Sir, may I remind the Minister of State that he said that the Police has received no complaints from the public. Is he saying that every website is reliable?

The website posting was in the Think Centre website. It was a report and, in fact, there was also a photograph of people with clenched fists raised, and the report said that they chanted "Abolish ISA" several times. The Police assessed that this may be indicative of a demonstration having taken place. So, they saw it as their duty to investigate.

Sir, this is pending investigations, therefore, I am sure the Minister of State will not want to go too much into the details of this particular case. But may I ask, more generally, what is the difference between speech and demonstrations? And whether per se if I were to go to the Speakers' Corner and clench my fist in the air, is that a demonstration, Sir?

Sir, at the last sitting, I had an exchange with Mr Jeyaretnam. Many speakers have gone there to speak. Many people have gone there to listen. They have not met with any problems from the Police. But if there is an organised meeting at the Speakers' Corner to demonstrate, in this case, for the abolition of ISA, and five or more people gather there, then it is indicative evidence of an illegal assembly having taken place. So Police has to investigate.

Sir, I take it then that it is not the clenched fist which he mentioned that is the cause. May I go on to the next question, Sir? This is whether five or more people could register to speak on the same topic, either sequentially or at the same time, at the Speakers' Corner?

Sir, investigations are ongoing. So we should not go into details. Basically, we have said that the laws of the land must be observed, and the laws include the Miscellaneous Offences (Public Order and Nuisance) (Assemblies and Processions) Act read with the Miscellaneous Offences (Public Order and Nuisance) (Assemblies and Processions) Rules, which defines what an "illegal assembly" is. That is the basis upon which Police is investigating.

Sir, without going into the details of this case, I am concerned for future use, in the sense that any speaker goes down and if five or more people were to follow him and start clenching their fists and saying, "Yes, we agree with you" or "No, we don't agree with you with whatever it is you are saying", how would the Minister be satisfied that this too is not worthy of investigation?

Sir, I think it is quite different if you go there on your own accord, as an individual speaker, you go and speak. And indeed when your speech is a rousing one, people may support you. But you cannot be said to be organising an illegal assembly. It is quite different from the situation in hand.

Sir, may I ask the Minister of State that if I were to e-mail to friends saying, "I am turning up on Friday evening. Will you come and support me?", will that be considered organising an illegal assembly?

Sir, as I said, we have to look at the Miscellaneous Offences (Public Order and Nuisance) (Assemblies and Processions) Rules. If you look at rule 2, it defines when an "illegal assembly" has taken place. Rule 2 says: "If five or more persons . [gather together] to (a) demonstrate support for or opposition to the views or actions of any person; (b) to publicise a cause or campaign; or (c) to mark or commemorate an event," then an illegal assembly may have taken place. Sir, let us go on the law. In the context of these questions, it is better for the investigations to be completed before we further this discussion in the House.

A final question, if I may, Mr Speaker? This is to ask the Minister of State whether they will, in fact, help us by tracking the continued usage of the Speakers' Corner, subsequent to the public knowledge of these investigations. My concern is that there will be some chilling effect that people will stop using this early experiment in Singapore.

Sir, we do not track the use of the Speakers' Corner. I think that is the starting point. In this case, indeed, but for the website posting in the Think Centre website, the Police may not have known of the event. That is the basis on which we should operate the Speakers' Corner. Mr Simon Tay rose -

One more question, Mr Tay.

I think I was misunderstood on that point. The Minister of State has told us that 800 people have registered to use the Speakers' Corner since its inception. I am asking the Ministry just to keep track of the numbers since knowledge about the investigations that have happened. My concern is that usage will fall to close to zero, because people will be very frightened to speak.

Yes, we can do that. That is not really tracking. The numbers are there because people register. We can look at the numbers in due course.

asked the Minister for Communications and Information Technology how the introduction of Mobile TV in public buses affects the basic services offered to commuters.

Mr Speaker, Sir, the Public Transport Council (PTC) has a set of service guidelines to ensure that basic bus services meet the needs of commuters. These guidelines stipulate, among other things, service frequency and coverage, time of operations and display of service information. The PTC conducts regular audits of the services provided by the public transport operators to measure their level of compliance to these guidelines. In addition, the PTC and the LTA encourage bus operators to introduce new and innovative schemes to improve the quality of customer service, provided that these schemes do not have an adverse impact on safety and basic service level offered to commuters. . The TV Mobile scheme does not affect basic service level provided by the bus operator. The TV monitors would not pose a danger to the passengers, hinder the movement of passengers in the bus and/or affect the concentration of the drivers. The bus operator will also not be exposed to undue financial risk. We understand that in a survey conducted by the operator during a one-month public trial in 1999, commuters' feedback on the TV Mobile scheme was positive. . We are aware of the discomfort expressed by some commuters regarding the presence of the TV Mobile monitors in the buses since its launch on 14th February 2001. We have asked the bus company and Media Corp to improve the system and they are currently looking into adjusting the volume and improving on the quality of the images. We will continue to monitor to see that commuters' concerns are duly addressed.

Sir, the Parliamentary Secretary has said that there is no effect on the safety. May I know whether any tests have been carried out in case of a crash, because it seems to me that these screens could fall on somebody, or somebody could impact himself against the screen?

Sir, when the request was made, approval from the LTA was required, as there was a need to ensure safety, in case the monitors may impede the flow of commuters in the bus and they must be securely fastened, and all other relevant technical details to ensure that they do not become a hazard. The technical details were cleared and sorted out with LTA's Vehicle Engineering Department and therefore we gave the approval.

I am not sure whether the Parliamentary Secretary has answered my question about a crash simulation, Sir.

I will ask the LTA to look into this. At this point in time, I do not have the answers.

Sir, my second question is about noise volume, whether they have set some requirements of noise level and whether it is possible to secure some parts of the bus so that people who want quiet when they travel could actually opt for those seats.

Sir, as we understand it, the operator and Media Corp are looking into it. I can forward the suggestions of Mr Simon Tay to the operator. As I understand it, they are looking into how to adjust the volume to meet the needs of various commuters in the bus.

Sir, I want to ask the Parliamentary Secretary whether there will be an increase of charges as a result of this frill that has been introduced. Because if you introduce more frills in future, it is not only a distraction from the basic core services, but I would like to ask him whether there will be an increased cost.

No.

Sir, I have a reverse question. Since this is another revenue stream for the bus company, will there be a reduction in cost?

Sir, fares are regulated by the PTC. The operators are free to put up requests. We have a formula in place and we have ensured that the operators follow the formula.

"to establish and incorporate the Singapore Land Authority, to provide for its functions and powers, and for matters connected therewith; and to make consequential amendments to certain other written laws," presented by the Minister for Law (Prof. S. Jayakumar); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Resumption of Debate on Question (23rd February, 2001), "That Parliament approves the financial policy of the Government for the financial year 1st April, 2001 to 31st March, 2002.". - [Minister for Finance]. Question again proposed. 12.42 pm

Mr Speaker, Sir, it must have been a very pleasant task for Dr Richard Hu, the Minister for Finance, to deliver this year's Budget. The reason is obvious. Unlike the Budget and off-Budget statements in 1998 and 1999, when painful and belt-tightening measures had to be introduced to combat the recession and the adverse impact of the regional financial crisis, in sharp contrast, this year's Budget is a happy one. The only problem, I think, Dr Richard Hu and his Ministerial colleagues had was how to share out and apportion the goodies that a healthy Government budget can enable them to dole out to the different segments of the population. For FY2000, the budget surplus is expected to increase from the original estimate of $2.4 billion to $3.5 billion. This year's Budget is indeed an extremely generous one. The Finance Minister has given out benefits to practically everyone in Singapore. Allow me to quickly recount some of the very generous benefits doled out. There are the significant 2-5% cuts in personal income tax. Then there is the unexpected 1% cut in corporate tax, following a 1/2% cut already given out last year. Small businesses are given partial tax-exempt benefit for chargeable incomes of up to $100,000. To top off, the Government is giving a 10% rebate on personal income tax. This is more generous compared to the 5% rebate given last year. The other benefits that touch deeper into the hearts of the lower income group is the Service and Conservancy (S&C) charges, rentals and utilities rebates to various households living in HDB estates. Then there is the additional $500 million contribution into the Lifelong Learning Endowment Fund, an additional $250 million to the ElderCare Fund, and $100 million to the Medical Endowment Fund. These are very gratifying benefits indeed. These and other benefits announced brought great cheers to the people. What is worth noting is that the benefits are biased in favour of the lower income group and the smaller firms. However, in spite of the excellent benefits, I do feel that there are areas in which the Government can perhaps do more, or be more proactive to anticipate potential problem areas, and detail the possible remedial actions. Uncertainty of External Economic Developments Sir, the Finance Minister did make general broad brush reviews of the regional and international economic situation. However, I feel what is lacking are some clear statements stressing the likely problem areas in the short and medium term. We are concerned about the worsening US economy. We watch with dismay the geo-political developments in our neighbouring countries, like Indonesia, the Philippines, Thailand, Japan, Malaysia and elsewhere. The Deputy Prime Minister, BG Lee Hsien Loong, has warned about the tough external environment as mentioned in last Friday's newspaper reports. The Deputy Prime Minister said that given the current political and economic uncertainties in South-east Asia, the external environment Singapore now faces is the most difficult since the 1960s. He warned that any regional political turmoil would have direct impact on Singapore. These are strong statements and a very realistic and sober assessment of the current economic situation. Then, why is it that the Budget Statement for this year did not dwell on this matter in depth? Why are no comments made on how to deal with a potential crisis if another regional crisis or turmoil were to precipitate? We are fortunate that through sound management of the economy, we have escaped the recent crisis in a sharp "V" shape recovery. The people and the business community are indeed very concerned about a recurrence of the recession, meaning a "W" shape downturn. I suppose the Finance Minister will respond that when the time comes, he will deal with it, and propose off-budget measures. This is not a very comfortable approach. The Singapore Government is known for its practice of looking far ahead, anticipating problems and planning in advance. As the Chinese saying goes: wei yu chou mou ( ), which means to close the windows and the doors before the rain comes. It seems that this time round, the Budget did not mention these preparations. Are we getting too comfortable and too smug? I do not think so. One explanation I can offer is that talking about a potential downturn may not fit in the tone of the Finance Minister's Budget speech for this year; that things are good, let us come and share the goodies, and let us worry about the rain later. Whatever are his reasons, I do feel that it would indeed give the people more comfort that even in good times, we are reminded that our Government is prepared for any unforeseen eventualities ahead. Similarly, it would bolster the confidence of foreign investors that the Singapore Government is very alert and mindful of external eventualities, and is constantly thinking and planning ahead. We definitely are. This is the trademark of the PAP Government. Collaboration with the Countries in the Region It is evident that the region is going through a difficult transitional period. I say "transitional" because I am confident that the leaders in the regional countries will eventually overcome their problems. Since we are living in a difficult neighbourhood and we cannot just uproot ourselves and move elsewhere, it is necessary therefore for us to find ways to help our neighbours to get out of the rut, so to speak. Besides the direct bilateral assistance that we are doing, there may well be other methods for us to help each other, for our mutual benefit. One way is to use the ASEAN framework to do joint trade and investment promotions to the Western economies. Collectively, the economic and trade Ministers of ASEAN countries can work together to persuade the MNCs in the developed countries that this region (ie, Indonesia, Malaysia, Thailand and others) are still good investment areas in view of the low overheads and abundant labour supply. Singapore can help to facilitate this process, if we can undertake joint trade and investment promotions. If foreign investors return to this region, the economic recovery will be hastened. Leap-frogging the Region While we work hand in glove with our neighbours to attract foreign investors, it is also beneficial that Singapore makes direct approach to countries beyond ASEAN to encourage them to invest here. In this instance, our move to establish bilateral Free Trade Agreements (FTAs) is a step in the right direction. The FTAs will encourage the strong and successful companies in the foreign countries to seriously explore trade and investment opportunities with Singapore. In the process, they can be encouraged to cast their eyes wider, and look at other investment opportunities in our neighbouring countries. At least, we can hope that through their attention being attracted to Singapore and by casting their eyes in our direction, the region will also enter their "radar screen" of these foreign investors as areas of investments. Promotion of Nation Building Besides the main task of the Budget to plan and allocate resources for the economic development of the country, another major objective of the yearly Budgets is to apportion Government spending and resources to match the broader objective of nation building. The recently completed year 2000 survey of household income showed that over the last 10-year period from 1990 to 2000, the household income gap of Singaporeans has widened further. The national average monthly income of the lowest 10% wage earners dropped from $370 in 1990 to only $61 in 2000. In contrast, the national average monthly income of the top 10% wage earners increased from $9,670 in 1990 to $16,800 in 2000. Obviously, there has been a widening in the income gap between the rich and the poor. As I recall, the Senior Minister, Mr Lee Kuan Yew, commented before that this is like a marathon race by all Singaporeans, starting back when we first gained our independence. As we progress and prosper, the gap between the forerunners and the stragglers behind gets longer and longer. This is inevitable. We cannot stop the race and start all over again. We also cannot tell the forerunners to run slower to wait for those behind to catch up. I support the Prime Minister, Mr Goh Chok Tong's call over the weekend to the people not to fret over this income gap. Firstly, everybody's income has increased, from an average of $3,080 per month in 1990 to $4,940 per month in 2000. The Prime Minister has explained that wealth is not confined to a privileged minority at the expense of the majority. There are opportunities for all. Wealth is redistributed through measures introduced during the Budget, and Government has programmes to reach out and help the poor and needy. The key to what the Government can do is to provide everyone a sound education so that every Singaporean, whatever are his abilities, can run a good race and earn enough rewards to have a decent and useful life. For the ones with potential, we provide scholarships and bursaries, at all levels, to lift them to higher heights. Another task of the Government is to lessen the burdens that the people have to carry in the race, and at the same time provide supplements and assistance programmes along the way. In this regard, I can say that Singapore has scored top grade "A" in its mission of nation building. We have provided one of the best educational systems in the world, an envy of many others. Our students scored high grades in international mathematics and science tests. They have done well in top universities around the world. They achieved top honours in international oratorical debates. We have a low, but simple and effective tax regime. Huge foreign investments continue to flow in. We have substantial foreign reserves. And we have consistently achieved high economic growth and healthy budget surpluses. What I particularly welcome are the various funds to help the poor and under-privileged. We have the Medical Endowment Fund and ElderCare Fund. Another worthwhile programme is the Lifelong Learning Endowment Fund. These funds are very meaningful. They help the poor and elderly to pay for their medical and hospitalisation bills if they cannot afford it. The other fund helps the older workers to be trained and retrained so that they can adapt to the changing technological environment in the work place. Then what more can be done? Actually, not much more, since there are so many plans already thought out and put in place by the Government. However, I do have a few suggestions. Grassroots Fund for Community Groups First, I would like to suggest that we establish a Grassroots Support Fund which grassroots organisations can tap on to do more activities for their task to support the Government's plan towards nation-building and building stronger community ties. I would say that even if we allocate a lowly sum of $100,000 per constituency, the Government needs only to put aside $8.3 million yearly for all the 83 constituencies, as a fund for grassroots leaders to help finance their projects. Currently, I do say that the lack of ready availability of money does put a constraint on the scale and the quantity of projects and activities that grassroots bodies like the Residents' Committees and the Community Clubs can organise. It is a fact that important community groups like the Residents' Committees in HDB estates are formed with no direct funding support from the Government. Often, while they devote much time to organise activities to draw in residents, they also have to raise their own funds for activities and projects. When they have to source for donations from local residents or shopkeepers, or undertake major fund raising project exercises, these efforts can be laborious, energy sapping and time consuming. I feel that this is unfair to our dedicated and hardworking grassroots leaders. Lack of funds should not be a constraint for grassroots groups to do more. They should be freed from time spent on fund raising, so that they can channel more energy towards organising activities and promoting neighbourliness. The grassroots bodies are important elements in the nation-building process. It is time that due recognition should be given to them by allocating them sufficient basic funds so that they can be more effective in their efforts. The money is affordable. To ensure that the money is spent meaningfully, we can allow the advisers of the grassroots organisations to manage and decide how the funds can be used. Reward for Pensioners The second area where I feel strongly that the Government can do more is the recognition and rewards for pensioners. The retired Government pensioners are a group that has toiled quietly and faithfully to help build up Singapore. Many of them spent their entire career in the civil service. During the old days when Singapore was less well-off, civil servants on pension scheme generally drew lower salaries compared to their contemporaries in the private sector. It was just an honour to serve. Salary was not the key consideration. Things have changed since the pension scheme has been modified where most Government servants are switched to full CPF payments, and civil servants' salaries are matched to the private sector. However, for the pool of retired civil service pensioners, many are trying to survive and make ends meet on their lowly meagre pensions. They see the fruits of the economic pie which they have helped to build being shared out in the recent years, but they get nothing or very little. Moreover, the pensions are eroded in value through inflation and increase in the cost of living. Not many of them are complaining. You do not see many letters to the press. But I think during the good times like now, it is important that this lot of past contributors is not forgotten. In this year's Budget, the Finance Minister has made an attempt to provide something for the pensioners. He has increased the Singapore Allowance by $10 to $150 per month and increased the gross pension ceiling from $950 to $1,050 per month. This revision will cost the Government an additional $1.7 million. I wish to lament that this sum of $1.7 million is rather paltry. Compared to the budget surplus expected for financial year 2000 of $3.5 billion, this is only 0.0005%, or less than half of a 1,000th of a percent. Sir, may I quietly plead to the Finance Minister, on the pensioners' behalf, to ask that some form of a more substantial adjustment be considered so that the pensioners are also amply rewarded. I am not asking for a formula for inflation indexation scheme to constantly adjust pensions for inflation. But an ad hoc review may be a kind and thoughtful gesture. Sadly, this year's Budget cannot be said to be the most generous to the pensioners. I sincerely hope the Finance Minister will sympathise with this appeal. Raising Living Costs and Business Costs Sir, with your indulgence, I like to speak on two remaining areas that I wish to raise in this Budget debate. It is a constant refrain from both the common people and the business community, that is the call to help contain rising costs of living and costs of doing business. We have to accept that with rising affluence, living costs and business costs are bound to increase. What the people and the business sector are asking is for the Government to refrain from imposing more charges, rates and fees on them. For example, the low income group is facing difficulty with the recent increase in utility charges due to oil price increases. Their income is falling behind the increase in cost of living. For FY2000, the expected budget surplus is a hefty $3.5 billion. For FY2001, this surplus is expected to increase further to $4.4 billion. That means the Government is collecting more revenue than it needs for its yearly total expenditures. Surely there is no need to raise Government charges and fees. On the contrary, more reduction in taxes, rates and fees may be considered. As I said earlier, the low income group are the people falling behind the wage gap between the rich and the poor. The Government must continue to find ways to help them. Otherwise, they may feel left behind and become disgruntled or disillusioned that they are not enjoying a share of the country's economic wealth. Their only hope is to see that their children do well in their studies, and they look forward to the days when their children can secure good jobs, attain good stead in their careers. Therefore, education and retraining is the great opportunity equalisation factor. We must ensure that everyone has good access to education and retraining. As for the business community, they are concerned and disappointed that this year's Budget did not address or even mention how to contain the threat of rising business costs. Although the overall economy has grown by 9.9% in 2000, many local businesses have not fully recovered from the 1998 recession. Good examples are the retailers and the construction sector. They are still facing insufficient business demand, high business costs, high labour, utilities, rental and other costs. A survey recently conducted by the Singapore Confederation of Industries (SCI) has confirmed that most local businesses are still concerned about poor business prospects and rising business costs. Even MNCs based in Singapore are becoming concerned about these business cost increases. The reduction of corporate tax by 1% is welcome, no doubt. However, companies can only enjoy the tax cut if they make a profit. If they are not profitable, the tax cut is not meaningful. Therefore, reducing cost of doing business is still the best and most direct to them. The only measure in the Budget that helps to reduce business costs is the reduction in property tax rate from 12% to 10%. However, except for the residential sector, this effect is negated by the withdrawal of the 25% property tax rebate. Mr Finance Minister, you gave out with one hand and took back with the other hand. Some may cry foul. To contain business costs, companies wish to request for a slowdown in the restoration of the employers' contribution rate to 20%. The rate has already been restored to 16% from January 2001. It is appreciated that workers have taken the 10% CPF cut to help lower business cost and help revive the economy. However, many companies are concerned that too rapid a restoration of the employers' CPF contribution to the full 20% will stall their business recovery. Therefore, the business community would like to urge the Government to make a determined effort to help contain business costs. They hope that with the flexibility of the larger budget surplus, the Government can do a comprehensive review of Government administered charges, such as port charges, land transportation cost, ERP, utilities, COE, levies, and other duties, so that operating costs should be kept as low as possible. Conclusion In conclusion, Mr Speaker, Sir, I would like to repeat that this year's Budget is an extremely generous Budget. We wish to thank the Minister for Finance and his colleagues for giving us so many benefits and rewards. As he has said in his Budget speech, this year's package of "share-outs" is the most generous to date (except to the pensioners perhaps). This sharing-out is possible because of the effective and prudent Government we have. It is especially significant in the face of the turmoils we see in the surrounding region. The Government will continue to build substantial budget surpluses. Next year's budget surplus is expected to be higher, as I said earlier, at $4.4 billion. If this is achieved, we would be pleased that some of this surplus is shared out with the people, and the balance is put into our national reserves as a cushion against future uncertainties. Mr Speaker, Sir, uncertainties and changes we are sure to face them, now and in the future. In my view, the best safeguard is not how big our reserves are, but the key is to have an effective and honest Government. That is the one and only surest safeguard.

Mr Speaker, Sir, the Minister for Finance has presented what most would regard as the most generous Budget to-date. I rise to applaud the positive intent on both the business and individual fronts. I would however want to look at the Budget from two perspectives. Firstly, to look beyond the goodies, at the material changes to, (1) the business environment, and (2) the sharing of more of the fruits of our labour in Singapore's growth. And, secondly, to be vigilant about the development of a psychological divide amongst Singaporeans from the rapid pace of change from the extensive application of ever-changing technology and increasing liberalisation or deregulation of certain industries. Firstly, on material changes. Sir, the lowering of the corporate tax rate by 1% point and personal income tax rates by between 2 and 5% points is a very significant move. Equally significant is the exemption scheme for smaller chargeable incomes which will benefit the small and medium enterprises (or SMEs), and to a certain extent companies going through a bad patch. I recall that, in earlier years, there was a concern that lowering our corporate tax rate below the 25% level may lead to Singapore being classified as a tax haven. I am by no means suggesting that we forgo the opportunity to make our tax regime more competitive but I would like to know why this is no longer a concern. Also, if this is no longer a constraint, how much lower can we go? As low as Hong Kong's? Can the Minister also discuss the implications of further reductions in direct taxes for the level of indirect taxes, such as the goods and services tax? Sir, the gap between the top income tax rate and corporate tax rate has narrowed by 1% point. I would like to ask the Minister whether there is any intention to harmonise the two in the context of entrepreneurship and start-ups. With the reduction in income tax rates across the board, presumably the tax base, in terms of persons paying taxes, will shrink further. Will this limit the effectiveness of income tax adjustments as a fiscal tool in future? Specifically, will wealth sharing through tax rebates be less wide-reaching as a consequence? Let me now move on to the development of a psychological divide. In his Budget Statement, the Minister has commented on the need for both the Government and Singaporeans to adapt quickly to changes and that we must continue to be mindful of our local context. I cannot agree more, for the ability to embrace and adapt to trends and changes by Singaporeans will indeed be key to our survival. Sir, it is in this context that I am concerned - that we are facilitating changes but may not have done enough to help Singaporeans embrace changes, many of which are not immediately obvious. It is this psychological battle or divide which, I feel, merits a lot more attention. Sir, much has been said about the wealth and digital divides which are largely the consequences of globalisation and use of technology. My colleague, Mr Leong Horn Kee, has spoken at length on the wealth divide. I should also add that much has been done to narrow the digital divide by the relevant Ministries, especially the Ministry of Manpower, MTI, MCIT and the NTUC, in terms of putting training programmes in place and for a wide range of workers. In aggregate, the Government has dedicated serious money, for example, $500 million to the lifelong learning initiative for training and retraining and cannot be accused of not funding enough. However, Sir, the digital divide, in terms of the haves and have-nots to access to computers and technology, learning and retraining, cannot be addressed simply by pumping in more money or providing even more training programmes. A part of the budget for such programmes must be allocated to extensive public education and reaching out to the target audience, working through the grassroots and community organisations, where necessary. The psychological divide must be narrowed first before the digital divide can be. The same attention must be paid to persons, who are affected by realignments to our economy, be these displacement of jobs, liberalisation or deregulation effects. Sir, this is not unique to us. Japan is being confronted with a structural unemployment challenge, which is caused by both a mismatch in skills and resistance to taking on alternative jobs. In this context, can more proactive efforts be made to identify the vulnerable industries and counselling be provided as early as possible so that workers are mentally prepared for the need to be retrained? In any case, as it is highly conceivable that contract employment is likely to dominate in future, the sooner Singaporeans modify their mindsets, the more adaptable to change they will be. The more we can minimise the sudden shock of being retrenched, the more willing to consider alternatives will Singaporeans be. Moreover, our limited manpower resources mean that we can ill-afford to lose the contribution of any segment of Singaporeans. As for adapting to the necessary or desirable liberalisation or deregulation of certain industries, there is anecdotal evidence that some degree of public education is necessary. Many Singaporeans have complained bitterly about being inconvenienced by bank branch closures, particularly, the POSBank branches that have served them for many years. But is this rationalisation of branch network unique to POSBank or DBS? No, it is not. All the other local banks are also rationalising. Or for that matter, is it unique to Singaporean banks? Again, it is not. I understand that customers in the UK and New Zealand are raising similar objections. Should the banks have done more to educate customers on the impending changes, which are really driven by competitive forces, not purely from a Singaporean context but from a global perspective? Yes, individual banks, or perhaps even the Association of Banks, could have embarked on a public education programme to pave the way for more electronic banking as opposed to branch-based cash transactions. Advice on alternative arrangements, such as the provision of cash-deposit machines, or directions to the nearest shopping mall, well ahead of the closure could have made the transition easier. Where the changes are sweeping, in terms of their impact on daily lives, even the Government can help play a role in public education. Sir, let me end by making a similar request to the Government to ensure that sufficient resources are set aside for public education on the impending deregulation of the energy or electricity market. The Minister for Trade and Industry has indicated that, eventually even the retail segment of electricity will be completely liberalised, implying that market forces will determine tariffs, as opposed to a quarterly review right now. A complete pass-through of costs will no doubt be transparent and defensible but Singaporeans need to be mentally prepared for an exposure to an occasionally volatile oil market, such as the phenomenon experienced recently. More importantly, they need to be able to take into account possible swings in their household budget. On that note, Sir, I support the financial policy as outlined by the Minister for Finance.

Sir, in 1996, we had an election budget. That year was an election year. This time round, again, we have essentially an election budget. It is quite foreseeable that the general election shall be held either this year or early next year, before the next Budget Day. The Minister this year has been much more generous than in 1996. With the election year in mind, the benefits have been mainly aimed at the individual, such as the tax reduction, rebates in service and conservancy charges, rentals and utilities. Although the tax breaks may not be really beneficial as about 71% of the workers are not paying income tax at all, there are good reasons for the Minister to be generous. The workers have given their full cooperation in the 1998 cost-cutting measures to revive the economy, after it was hit by the Asian crisis. Singapore suffered two years of recession, beginning about July 1997. In respect of the cost-cutting measures, the workers were at the forefront in those steps taken to cut costs. They sacrificed a 10-percentage point cut in their CPF. Even up till today, full restoration of their CPF has not come about yet. Despite the generosity of the Minister, workers have given up more of their pay in terms of their CPF cut than what they shall be receiving in the Budget handouts. The workers therefore deserve this generous budget. Up till now, each of the workers has put in his national sacrifice and he suffers in silence. There are forecasts that, this year, the Singapore economy shall be slowing down. It is therefore good to put more money in the hands of the HDB flat dwellers. I am thinking of the poor state of the retail business in the HDB heartland, as mentioned recently by Dr Lily Neo, the hon. Member for Kreta Ayer-Tanglin GRC. With the $1.8 billion handout, it is hoped that much of it shall be spent in the local HDB shops, to give those shops some business to keep them alive and the ability to pay their HDB shop rentals. Those rentals shall largely be returning to the Government kitty in any event. The recession came in 1997. The following year, the Government put in place cost-cutting measures. The cost-cutting measures comprise mainly cutting the workers' salary in the form of CPF and the flexi component part of the workers' pay. The reduction in wage was mainly responsible for keeping the economy afloat. Singapore's economy pulled through the recession and recovered. Last year, it had a surplus of about $4.36 billion, after the deduction of $1.85 billion for the special transfers. Almost every year, Singapore has a surplus in its Budget. All surpluses are transferred to the reserves and invested. Those reserves are not used up for the benefit of the people. Dr Kanwaljit Soin, the NMP, in 1996, during the Budget debate, suggested that the budget surpluses be used in accordance with a framework she proposed. The Minister, of course, refused and said that the proposal of using the budget according to a framework was too rigid. I would suggest that more money be released from the surpluses, say, about $2 billion for a start, to make our education system the best in the world. In the initial year, more money is needed to build more schools to keep the class size small. My hope is that every Singaporean, by the time he leaves school, shall be equipped with the English Language. He must be able to understand, to read and to write properly that language. Without a working knowledge of English, our workers shall not be able to be trained to keep up with the knowledge-based economy. That is the problem of a large number of our workforce today. They lack a working knowledge of English and, for that reason, the great efforts put in by the Government and the NTUC seem to be getting very little results. If we want Singapore to go into the ranks of the developed countries, both in terms of per capita income and in social ranking, we must make sure that every one of our workers is properly educated. I say that it is worthwhile for us to use our accumulated surpluses for that purpose.

Mr Speaker, Sir, thank you for allowing me to join in this debate. I support the Budget Statement delivered by the Minister for Finance. I am especially heartened by the Government's commitment to creating the best conditions for private enterprise to flourish in Singapore. Since our founding by Sir Stamford Raffles in 1819, people from many countries, from different walks of life, have come to Singapore in search of opportunities. They have come in search of a better life for themselves and their families. To many, this means being here to make a decent living and to create wealth. After all, we are not an island to the south of Hawaii, where people chose to retire to, or to while away their days under a coconut tree. Singapore has always been a highly competitive commercial hub for businesses. Ultimately, it is business that draws foreign people to Singapore and retains local talents to work and live here. If Singapore is a backwater economy with few opportunities for advancement, talent, which is mobile, will take flight to seek out opportunities elsewhere. In this globalised world, a highly qualified and disciplined workforce, brought about by good education and training, is important but not sufficient by itself to ensure our continued success. As Mr Leong Horn Kee has pointed out just now, we have a very sound and effective education system. Our young achieved the best scores for science and mathematics. In a recent international ranking, our students came out tops. Last year, out of 12,192 students who sat for the "A" levels, 1,251 students (or more than 10%) scored four As. They move on to do very well in foreign universities, often coming up tops in their class. But if after graduation, they decide to remain and work in London, New York or Hong Kong and never return, how would that benefit us? Singapore must not merely be a training centre for the world. We must not merely be the school that produces good students, nor merely an institution that churns out efficient and diligent workers for foreign employers to recruit. Already, this is happening. Foreign hospitals come to Singapore to look for good qualified nurses. Foreign firms woo our best and brightest research engineers. More conducive business conditions elsewhere tempt our most promising entrepreneurs. Knowledge, ideas and talents are highly mobile. These are mobile because they reside in the heads of people, who are mobile. When a person is attracted to move to a foreign land with better opportunities, his knowledge, ideas, skills and talents go with him. But capital - our own money, our own national reserves - does not move unless and until we decide to move it. Ultimately, we decide where to move and deploy our money. We should therefore use our financial assets to strategically seek out and attract other people's knowledge, ideas and talents, and retain our own. Sir, I feel that the guardians and managers of our capital have not been creative enough to use the funds at their disposal to attract and retain talent. More can and should be done. It is noted that this year's budget contains a lot of measures to stimulate the business sector and to allow new industries to mushroom and thrive. This is a good sign that we are concerned about how to make sure that homegrown businesses can flourish. We should not just be concerned about training Singaporeans and foreigners so that they can make it in the world beyond our land. We want them to make it right here within our fair shores. What we need is to make commercial room so that Singaporeans can be successful entrepreneurs in Singapore. This will be another root to bind good people here to our land. It will help us deal with the very present danger of losing these good people to a digital, globalised world - a world that does not subscribe to the concept of "Our Home, Our Nation." Entrepreneurs are more invested in a country than professionals, who just offer their services to the highest bidder anywhere in the world. Entrepreneurs will be more engaged and concerned about local issues, because the business they own is at stake. We need to give such local talented trained Singaporeans the business conditions to grow here, so that they can feel invested in this country and have a stake here. Sir, at the same time that we are making room for top talents, we must also make room for those who are going to have a harder time in this high-speed world. While we must emphasize training and skills upgrading to prepare our population for the new economy, and there are laudable success stories of those who have made it, in reality, not everyone can be retrained for the new digital age. Some may just have to be helped along until their next generation takes over and brings the entire family to a higher plane. Recently, the media reported that the income gap was widening. Those from low-income families running small businesses face a particularly daunting uphill struggle. The small business owner is becoming a dying breed. There is also a change in business operations and the big boys have an advantage. Take, for example, newspaper kiosks along Orchard Road and at bus stops are tendered and won by big corporations like Singapore Press Holdings. The individual proprietors do not stand a chance in the tender exercise. I understand that some schools are considering tendering their canteens to main contractors, who then find individuals to run the stalls for them. Of course, this makes commercial sense in terms of control, coordination and efficiency. It is easier to deal only with one "big boss" rather than many small ones. It is easier to sub-contract to a main contractor and let him deal with the small individual problems. However, what this means is that the small guys no longer have an avenue to start small, and will always be an employee and taken advantage of by bosses who act as middlemen. Many famous entrepreneurs have started small. One example is Li Ka-shing, who started the Cheung Kong factory making plastic flowers. Today, he is a major player in real estate, retail, telecommunications, power generation and port operation. Do we, in modern Singapore, have room for someone to start small and grow like this? I would say it is a room that is getting smaller every day. But I do think that we need to give some due consideration to the small business owner in Singapore, to give him a fair and fighting chance to carve out some niche here. I am happy that in this budget, we have embarked on this process. Sir, I support the financial policy of the Government.

(In Mandarin): Mr Speaker, Sir, in his Budget Statement, Finance Minister Dr Richard Hu described this as the most generous and unprecedented Budget. This Budget is not only generous, but is thought of by many as being more generous than expected. My personal view is that the generosity of the Finance Minister is a principled and creative one. It is intended to relieve the people from hardship, reassuring the people, pro-business and maintaining competitiveness. Just now, the Member for Potong Pasir said that this was an "election year" Budget. I think we can only say it is a budget which is presented close to an election year. Utilities, service and conservancy charges rebates will serve to relieve the hardship of the lower-income group. Lifelong Learning Endowment Fund, Eldercare Fund and Medical Endowment Fund serve to reassure the people. The various tax rebates and reductions will not only benefit the business community but also reaffirm their competitiveness. Yet, the most touching part of his Budget Statement, particularly to the lower and middle income workers who are apprehensive under the impact of the new economy, is the following statement, "This year's Budget emphasises how to help every worker to pull through this difficult but necessary economic transformation." The Minister also said that in the next 10 to 15 years we need to have a workforce comprising at least 65% workers who have received secondary education and above. Yet, in 1999, we had only 35% of our workforce with secondary education. The Government has allocated another $500 million to the Lifelong Learning Endowment Fund. The Fund has now $2 billion. As this Fund will eventually be topped up to $5 billion, our challenge now is how to mobilise every Singaporean to participate in lifelong learning. We should let everyone know that the objective of lifelong learning is to enable our workers to tackle the challenges of the new economy, that is, to have a job in the new economy and to lead a good life. Many workers have this worry: they thought that "new economy" means computer technology, companies reform and restructure, and hence more retrenchments. Then, they may lose their jobs. To undergo retraining, they fear it may be a case of "The spirit is willing but the flesh is weak". Therefore, during the transitional period of migrating to a new economy, the Government should give them not only the Lifelong Learning Endowment Fund but also the lifelong learning confidence. Tell them, "The new economy is actually built upon the foundation of the old economy. The new economy is not just computer technology, life sciences. It also includes the essentials of our daily lives." The new economy is to solve the problems of our daily lives in more innovative ways, to improve our quality of life, and to let us lead better lives. Let me give you an example. I believe everyone of us must have taken instant noodles. I believe every family must have stored some instant noodles at home. In fact, many people are storing some packets of instant noodles in their office to tackle the challenges brought about by working in the new economy. The instant noodle was invented in the 1950s by Ando Momofuku of Japan. He is already 94 years old today. This was the first chicken ramen invented by him in the 50s. The instant noodle is a product of the old economy. It enables us to eat a bowl of steaming hot and stomach-filling noodle very quickly, and it is cheap. But, instant noodle is also a product of the new economy because it is continuously innovating, and new types of products, new flavours and new packaging are emerging every day. We have now the cup noodle and the bowl noodle. In other words, we do not need to have a cup or a bowl to enjoy a meal of delicious instant noodle. How creative! Instant noodle is sold all over the world, even taking to the sky. When we are hungry while taking a long haul aircraft, we can simply ask the air hostess for a cup of instant noodles. Instant noodle can take to the sky because it is convenient and innovative. Instant noodle is part of the new economy. Our Singaporean popiah, kuehs, satay and roti prata can also fit into the new economy. If we can be more creative to make the production of these delicacies more economical, tastier, more "instant-cooking", they can become a part of the new economy. If they can be like the instant noodle selling to all over the world, then they are part of the new economy! I am glad to see that our "Ti Yi Jia" popiah has stepped out of Singapore. Our Bengawan Solo has set up retail outlets at Changi Airport so that tourists can bring our Singapore brand home. These are products of the new economy! Therefore, I hope that when the Ministry of the Environment and the HDB upgrade their hawker centres, markets and neighbourhood shops, they would create opportunities for creative Singaporeans to start up not only in their HDB flats, but also in our markets and shops, and extend the benefits of the "Creativity Fund" to them. Let the ordinary folks see that when computer technology which is essential to the new economy is creatively applied to our daily lives, it can make life better for everyone. This is only an example. I can give you hundreds of other examples to illustrate how we could encourage Singaporeans, especially the older Singaporeans, to take part in lifelong learning. I hope that in the new Budget, the Minister for Finance could consider allocating some funds to encourage employers to employ workers who have undergone retraining, that is, those workers who have migrated from the old economy to the new economy. I also wish that while emphasising the new economy, the Government should also simultaneously tell all Singaporeans that any service or product which brings about better results through creative measures will be needed by the new economy. Let me give you another illustration. Our public bus service conveys some 2 million passenger-trips every day, about half of our population. Buses spur on our economy, our new economy. If the buses do not move, our economy will be affected. As such, the bus service industry is also part of the new economy. Can we not conduct various training schemes through the Government to attract more workers who are affected by the economic transformation to turn to the bus service industry? I understand that many years ago, SBS attempted to promote a bus driver training scheme, but the response was not encouraging. If we can repackage this scheme, it should be able to help some Singaporeans who are affected by the economic transformation. Let them obtain a Class 4 licence which costs some $1,000. This will also help to alleviate the problem of shortage in bus drivers. Mr Speaker, Sir, I am citing all these examples to illustrate the fact that apart from computer technology, our essentials in life, such as clothing, food, accommodation and transportation, can also be part of the new economy. As the Finance Minister said, "Every Singaporean can continue to play a role in our new economy." Mr Speaker, Sir, I support the Budget Statement by the Finance Minister.

Sir, Budget 2001 is a generous one. As this is my last Budget speech in this House, I would like to express a few wishes for this House to consider. Sir, by adopting as a starting principle in S21 that "everyone matters", we have, as a society, explicitly recognised that, while we should continue to nurture the elites, the very smart children and big or leading-edge businesses, we must now equally focus our attention on ways to enhance the quality of life for many other Singaporeans who are not so smart, not so capable and also the small businesses like what Mr Seng Han Thong had argued for. Fortunately for us, there is no abject, absolute poverty in Singapore. However, poverty, as any sociologist or social psychologist will attest to, is a relative measure of well-being. And even in the richest societies, so long as there is competition and a free market place where some are better off than others, there will be pockets of underclass, the disadvantaged and the marginalised. That is not something to be ashamed of or to hide, but instead, to try to reduce it by first understanding what is happening, and then how to deal with it. We need better and more sophisticated measures of relative poverty, such as the impact of the length of time families spend in so-called "poor" status, on the mental health of various family members and suicide rates; or the impact of low income on educational opportunities, even within a meritocratic society. We need to explore the complex dynamics between drop-out rates from school, crime rate, family break-ups, poorer housing conditions and income levels. The recent release in the Straits Times on the rise of children as young as pre-primary and primary levels seeking psychiatric help is a disturbing trend. Is this, for example, related to income at all? Or is it a stress condition caused by school pressures which affects all social classes? These are the "untidy", no-simple-answer social complexities which are masked by macro-economic statistics such as per capita GDP. Now that we have arrived as a nation and achieved the highest per capita GDP in the region, we can do more than meeting the basic needs of Singaporeans by addressing the numerous challenges due to globalisation. It is not just the low-income families which are struggling, the impact of modern day stresses claims its casualties in all social classes in different intensity. However, the low-income or socially disadvantaged families need integrated solutions to their inter-linked problems. As Dr Hu himself had said in a World Bank meeting last year that a "new social contract is needed as distribution of wealth and opportunities cannot depend solely on free market" (June 7, 2000, Business Times). This initiative requires a belief in the worth of the individual by offering to those who fall behind a second chance and additional support to move on. The Government had identified training as an important support but we also need to know what are the socio-psychological barriers to learning and retraining and why are the older workers not stepping forward to retrain. Education is provided for even for the poor with the Education Fund proposed in the Budget, but what about those in the 60s and older who are beyond training and expect to live for 15 to 20 years more? How are we going to share our prosperity with them? Will they get farther behind us as our nation is hurtling into the new era? We need now to give substance to PM's call for a caring society by starting to construct a new social contract through specific measures. We can begin by committing resources to tracking a range of social exclusion indicators with the objective of monitoring whether we see a permanent underclass emerging. In addition, I would like to propose four measures. First, after a decade of dialogues and workshops on the family, we need some closure by enunciating a clear family policy that addresses the needs of families. This will generate an ethical movement to help Singaporeans re-focus on family values and encourage the start-up of a range of services and industries to cater to the needs of working couples. Like the $500 million Lifelong Learning Fund which was set up to develop a slew of programmes to upgrade our workers, we should set up a similar $500 million Family Fund to implement the numerous recommendations on family-friendly programmes. Second, set up an Inter-Ministry Fund to sponsor joint projects which need to be addressed in a concerted effort by all Ministries and civil servants. For example, in our effort to implement an effective care plan and rehabilitation programmes for domestic violence victims and perpetrators, we need to draw the IT resources of the various Ministries to produce a central database on domestic violence cases and their profile. We have talked about this project for four years and the progress has been slow, because there was no ownership by any one Ministry due to a lack in funding. Other projects include the collaboration among MCDS, MOM, NTUC and SNEF to set up formal structures, processes and activities to facilitate implementation of pro-family practices at workplaces. Another urgent need is to enhance the channels of information sharing and coordination of services between prisons and the community-based voluntary agencies in dealing with special needs of children and their families made vulnerable by both their parents' incarceration due to drug offences. These children, about 850 of them, are left unattended by their own parents. Sir, the fragmentation and duplication of efforts at all fronts is wasteful and frustrating for all the officers involved. Third, in view of continuing labour shortage in the services sector and particularly higher attrition rates among social work graduates, we may need to develop social work skills within our communities. I propose that we set up a Social Service Training Scheme in each CDC to design adapted social work curriculum to be conducted in various family service centres and community centres, with the objective of producing a larger pool of social service personnel to meet specific needs of that community. Housewives, retirees, mid-life adults wishing to change careers, retrenched mid-40s who have no paper qualifications, retired teachers, nurses and youths can be tapped and trained through modular programmes, to deliver paid social work duties. By introducing social service skills training programmes outside of tertiary institutions and locating them within the community, with proper supervision and accreditation status, we can effectively match the right people to appropriate skill modules. Fourth, set up a once-off Parliamentary Committee to review and rationalise budgetary, regulatory and professional issues related to the social services and its delivery infrastructure. Let me raise specific issues. Should Government adjust the current 50-50 co-sharing scheme for subsidising the operating expenses of a VWO to a 60-40 funding formula considering that operating costs are rising faster than Singaporeans' willingness to donate to charities? At the level of service providers, will the Government allow a VWO to operate a school for drop-outs to promote second chance education? Will the Ministry of Education fund it partially? If a VWO is willing to deliver occupational therapy services to homes and charge for its services, can it do so without losing its funding from the Government? There are many suggestions which can enliven the social service sector and make it more dynamic and market-driven, if some of the regulatory restrictions on the operations can be re-assessed. Can we move away from the comfort zone of making small step incremental changes to policies and instead map out new working models which place VWOs at the core of the delivery infrastructure? In our effort to professionalise and upgrade social services, we need to address the remuneration structure of the sector to incentivise more to join and remain in this sector. In similar arguments which we have used to keep civil servants or teachers in their jobs by paying them well, we need to consider paying social workers well enough to ensure that they deliver quality service to those in need. Should we also rationalise a policy on eldercare after so many dialogues and workshops were conducted last year? Who is designing a policy on disability and addressing the critical need for rehabilitative and residential needs of the severely mentally handicapped in order to lighten the burden of parents who need to go out to work? Indeed, NCSS and MCDS, as well as MOE, are the institutions tasked to provide new guidelines and seek more funding for services on behalf of these vulnerable communities. I remember the Minister for Finance told me last year that he never failed to give money away if there were good reasons, but only if they were being requested by the various Ministries in the first place. I urge the officers to take this point seriously and help to champion the needs of the community. There is a need to thoroughly review outdated regulatory mechanisms and planning norms. Let me illustrate. The financial support of 90% capital funding for a special school and rehabilitation workshop for the disabled is based on what the MOE and MCDS define as "supported" areas. These supported areas are based on space norms which were fixed during the seventies, at a time when physiotherapy and occupational therapy were based on high touch and simple equipment. Today, with better and larger physiotherapy equipment, more space is needed, but VWOs will not be funded for this increased space requirement, as the space norms remain unchanged. Believe it or not, this rigidity applies in setting space norms for details such as toilets. And different Ministries set different space norms. For example, for occupational therapy functions, MOE funds 42 square metres for two persons, and MCDS funds 18 square metres. VWOs today find the norms too outdated, limited and restrictive. So, in order to develop a building with the desired features optimal for the comfort of their clients who are on wheelchairs, for example, a social agency ends up paying close to 40% of the capital funding, instead of just the 10%. On top of that, they need to find more money for furniture installed outside of the "supported areas", including office installations. What is peculiar to me is, for a group such as the Spastics Association which is tasked to equip the disabled with basic self-management skills and cooking being one such critical skill, the space designated as domestic science classrooms is not funded by MOE. Yet, the Ministry funds mainstream schools which conduct domestic science classes. Sir, I think we need to revamp, assess and fix new space norms for special needs. Sir, given that a budget surplus of $4.4 billion has been forecasted for the coming financial year, and if there is another severe economic downturn, I hope the Minister will focus on the lower 10% segment of the population and support the social services. My last wish, Sir, is that the representation of women parliamentarians and female community leaders and directors at all levels, will increase in order to provide a multi-layered perspective to social and economic policies. Their increased participation may help to highlight more questions on the social sector which I hope will be given more priority to be raised in this House. If families are the pillars of social cohesion, then women's role in forging this cohesion is critical, as they are the primary care-givers tending to the needs of the young and the old. They know the challenges of keeping families intact. They know the impact of economic upswings and downturns on family cohesion. If we listen to what women have to say and want, gentlemen, we would have helped to solve literally half of the country's problems.

Thank you, Mr Speaker, Sir, for allowing me to join in this debate. I rise in support of Budget FY2001 and the financial policies that underpin it. Sir, by all accounts, this is a Budget that is generous and many speakers have already alluded to that. But, to me, I think this Budget is significant for one particular reason and, that is, it is introducing not just a series of one-off transfers, but also systemic and structural changes to our fiscal regime. I think that is important because it has the effect of translating one-off gains in our surpluses into a stream of incentives, a flow of benefits, for both individuals and corporations. And I welcome that because I think it will serve our long-term goals. As a case in point, I would like to focus on corporate tax. I think lowering the corporate tax by 1%, to 24.5%, is a good gesture, and it is certainly in keeping with the times. Avowedly socialist regimes like Sweden have aggressively reduced their corporate tax, and it is good to see that Singapore is not sitting by waiting to be competitively outflanked by these countries. But having said that, Sir, and I think the previous speaker Mrs Lim Hwee Hua mentioned this and I would like to bring up this point again, the Minister has previously mentioned that the long-term target was 25% for the corporate tax. And one of the reasons he cited was concern about Singapore becoming a tax haven, and I believe this, in particular, was linked to concerns from certain countries which are big investors here. I would like to know how has this scenario changed and perhaps, more importantly, since this threshold has now been breached and we have gone below 25%, the question is: what next? And I would be grateful if the Minister could share with this House the Government's thinking on its longer-term target for the corporate tax, and what will be the parameters that it will use in determining that policy. Sir, I also welcome the introduction of preferential tax treatment for the first $100,000 of the chargeable income of corporations. This has introduced, I think, as a matter of principle for the first time, an element of progressivity in the corporate tax regime in Singapore. I think this is a very welcome development and certainly SMEs who are profitable will be thankful for it. And I do hope that this is a principle that the Government will apply with greater flexibility in the years ahead in response to scenarios. I would like to focus on the company stock option plan (CSOP). Sir, the move to extend the preferential tax treatment to established companies is a welcome one. Last year, when it was first introduced for the start-ups, the question was when will it be extended to other companies, since the principles underlying stock options are general in nature. Having introduced the scheme, I would like to ask the Minister two specific questions. The first, why is there a difference in the tax treatment between start-ups on the one hand and established companies on the other? The motivation for a stock option scheme is the same. The Minister has, in the past, argued that it is because start-ups have greater difficulty in attracting talent. But I would ask the Minister to consider this. In the case of start-ups, those who join the start-ups tend to get much larger quantities of stock options. So there is a quantitative element in the attractiveness of start-ups and the option schemes therein. Secondly, one could also argue quite persuasively that the scope for upside in a start-up is significantly greater provided it succeeds. Given those scenarios, I would imagine that even if the tax regime for stock options is the same for all companies, it should not adversely affect the ability of start-ups to attract talent. So I would appreciate it if the Minister could explain why there is this differentiation and whether there is scope to harmonise this. The other aspect of this CSOP scheme is the requirement that 50% of employees must have stock options before the company can qualify. Sir, I understand the motivation behind it and I fully appreciate the intent. But I would like to pose two questions: one, which I think is a problem in principle, is stock options in general are targeted as incentive devices for the senior management of an organisation. It is debatable how valuable it is as a device to motivate lower down the ranks, because the quantum given to them would be relatively small. And, secondly, there are other devices such as variable bonuses and other performance-linked incentives, which can take its place. That being the case, I think it poses a problem in principle why we need to insist on this 50% minimum allocation. The other is the problem in practice. Sir, today, in Singapore, there are many corporations which will use Singapore as a HQ for R&D and certain core types of activities, but it is not uncommon to find that the bulk of their manufacturing operations and other activities may well be conducted outside the country. It is not uncommon to find companies which have got the bulk of their manpower living and working in countries outside Singapore, in ASEAN, China, etc. These are subsidiaries or wholly-owned. In these instances, the 50% requirement, it seems to me, will pose quite a problem for the company to structure a meaningful stock option scheme for those working in China, in order to meet the 50% threshold. So without knowing the full details of the scheme, I would urge the Minister to consider a more flexible application of this requirement. In the limit, it would be best if the requirement could be eliminated altogether. But if that is not the case, then certainly lowering the threshold, I think, would be very helpful for such companies. Sir, on the matter of systems and structures, may I just turn my focus now to transfers and income redistribution. First, I would like to add my voice to the chorus of those who have asked for a more generous - if I may use that term - treatment of pensioners. I heard feedback from many pensioners that a $10 increment in the Singapore Allowance is by all means not the best that the Government can do, and they ask that they be treated with greater consideration. Having said that, Sir, in more general terms, the Government has used three main devices to effect some form of wealth sharing or income redistribution and transfers. The first device has been tax rebates and reductions in tax for individual income. The fact that more than two-thirds of Singaporeans, and I believe the proportion will rise with recent measures, I think the first $7,500 of chargeable income will now be tax exempt as well, so the proportion of Singaporeans who do not pay income tax will certainly be above 70%. The effectiveness of tax rebates and tax rates reduction as a means of redistributing wealth or sharing wealth is limited. It is more, I think, correctly regarded as a device to incentivise those who are productively contributing to the economy. The second device the Government has used is direct transfers. The examples are the CPF top-up or the SC/CC rebates and the like. And in these instances, there is an element of progressivity, because the quantum is pegged to the housing type and the number of rooms in an HDB flat is used as an indicator of the level of wealth or socio-economic standing of the family or an income earner. While this has its limitations, I understand that it is not perfect but probably one of the most practical proxies, and I accept that. But we have to bear in mind therefore that this too has its limitations, as a device to redistribute income and wealth within Singapore. The third device has been endowments. We have set up numerous endowment funds, as and when our budget surpluses allow for it. These have been the Edusave Endowment, the Medical Endowment Fund, the ElderCare Fund, the Lifelong Learning Fund and so on and so forth. There is a whole range of these endowments. They each serve specific purposes, but the general principle in setting aside an endowment is that the income will be used to meet particular policy objectives. Sir, all these measures have advantages and disadvantages and, collectively, they do serve a purpose in redistributing and sharing wealth in Singapore. But having said that, I would like to ask the Minister whether, given that fewer Singaporeans will be paying income tax in the years ahead, there is, as part of the Government's financial policy, an effort to perhaps transfer more of the income redistribution through direct transfers as opposed to tax rebates and the endowments. I would like to get some clarification on that from the Minister. At the same time, and this is a point that Mrs Lim Hwee Hua alluded to, I would like to reinforce this with some specific proposals. I think the Budget is a very imposing document and it is a budget certainly at the macro level. But it is micro in its impact on individuals and companies. There is a need to be able to communicate the effect of the Budget and the slew of Government measures that have been set up time and again to help individuals and companies effectively to the target audience. I have two specific requests which the Minister if he could consider them, I would be grateful. The first is whether, either as part of any Budget presentation or perhaps as a separate exercise, together with the media or other communication channels, the Government can demonstrate the net effect of various transfers, etc, on the average Singaporean earner. For example, we could define that as a 4-room flat resident with a median income of about $1,500 a month. But the key point here really is bringing the Budget down to the average man's level. Many fail to grasp the significance of various measures. And I feel that this would be one way of getting the message across, that indeed if they look at the totality of what is being offered, that the Government is being fair and channelling the incentives to targeted areas. The other aspect is in terms of communication on this whole range of endowments that have been created. Each Ministry or statutory board is charged with the responsibility for a particular endowment under its care and manages its own communication. But I think it would be fair to say that on the ground, the information is certainly not perfect and many would still be quite confused or at least unaware of the various schemes and what is required. Sir, the Ministry of Finance has an overview of the entire range of endowments we have set up in Singapore. I think it would be very helpful if the Ministry could, in fact, come out with a communication plan. It is not just about printing brochures but a systematic means of getting the message across to agencies that are interacting on the ground with the average Singaporeans and companies on the whole range of measures in place. And I do not think this is a one-off exercise either because every year we have new developments, and in fact even between budgets we have changes. There is a need to communicate this in a holistic way so that agencies on the ground - for individuals, this could be the CDCs or CCCs even; on the other hand, for corporations, it could be various business groups and so on - understand the total picture and are ready to dispense advice appropriately. I know some of these have already been done, Sir. But I wonder whether the Ministry of Finance could, through its leadership, bring all this together as one key communication device which is managed systematically and regularly, so that all Singaporeans can benefit from the Government's schemes. With that, Sir, I support the Budget.

Mr Speaker, Sir, thank you for allowing me to join in this debate. This year we truly cross into the new millennium. If this marks our journey into a new future, then surely Minister Richard Hu has ensured that Budget 2001 befits the occasion. This is indeed a commendable Budget. There is something for everyone. It caters to both the future and the present. The Minister has prepared this Budget with an eye towards the future. He has reduced the corporate, property and individual tax rates. Unlike rebates, these alter the tax structure for the long term. He has made available more money for education to ensure that our young are well prepared for the future. In an increasingly uncertain world, he has provided for national security. He has ensured that research efforts will not be hampered for the lack of funds. This reflects the Government's thinking and vision of a competitive globalised future. The Minister has not forgotten the sacrifices of the people. He remembers their contributions to the sterling recovery and performance of the economy last year. He has generously shared the economic surplus with the people with, for example, increases in tax, rental and service and conservancy rebates. Some people, like Mr Chiam See Tong, have described this as an "Election Budget". But surely at all times, it is the hope of a government to be able to announce a generous budget that a country can afford. I congratulate Minister Dr Richard Hu on Budget 2001. Sir, Singapore will encounter many challenges as we transit into the new economy which is dictated by information and information technology. Among these, let me highlight the issues of the digital and social divides. These are divisive issues for a society. These issues are not unique to Singapore. All societies moving into the new economy will face them. Several of my fellow Members of Parliament have spoken on these issues. Let me add my views to them. The new economy needs people who are information technology literate. People who cannot use information technology will be cut off from the many new opportunities that will become available. They will be confined to the less meaningful and low-paying jobs which at the same time will also decrease. People who are tuned to the new economy will thus earn more. The divide between the well-off and the less well-off will widen and become more entrenched with the IT factor. Who are those affected? They are not only people without or with low education but also the older people who grew up in a world without computers and have problems learning to use it. The digital divide will widen the income gap. This is the reality of the situation. But what is important is to make sure that everyone shares in the benefits of the new economy. I am glad that the Government is allocating more money for education and has spared no effort to introduce IT into our classrooms at all levels, schools, junior colleges, polytechnics and universities. The positive outcome of this effort will be seen in the years ahead. But I would like the Government to do more for the rest of the population - the old, the working people and all the others who are not IT-literate - to help them learn to use the computer. This will open the new and increasing well-paying jobs and opportunities to them. Let us also retain jobs that do not really need to be computerised for the others who cannot adapt to information technology. No matter what we do, there will always be some who will fall through the net. These are the people who are unable to cope in an increasingly competitive new economy. In the United States where the upper end earns over 400 times those at the lower end it is an indication we are living in a world where the income gap will continue to widen. The feeling of having lost out will increase among those who are less successful. The sharing of the success of the nation will be important for the unity of the country. The system to support those in need needs to be strengthened. This became evident during the recent economic crisis. The solution is not merely financial. The issue is how to help them to get out of the rut and on their feet again. How can we help those who are unemployed to get a job? What can we do to help those who have become structurally irrelevant become employable once again in the new economy? In a rapidly changing world where a person is expected to have many careers in a lifetime, such help will become routine. We need to devise a more robust support system to help our people. Sir, social cohesion is crucial for a nation. In a new economy, social pressures arising from the impact of information technology will stress social cohesion. We must consciously and proactively tackle these pressures. The Government understands the urgency of the task and has taken steps in this direction. More, however, can and needs to be done. Sir, I support the Budget.

Mr Speaker, Sir, I rise in support of the motion standing in the name of the Finance Minister. Like all Singaporeans, I must compliment the Minister for Finance for delivering a sterling Budget. It is hard to find fault with such a Budget, except asking the Minister for Finance to do more of everything. Perhaps with such a large surplus to give away, I can only suggest that the Government should put some money to train Singaporeans from all walks of life to be IT-savvy. If we wish to transform the way we do things, the way we conduct Government business, especially making use of computers and the Internet, then we must train everyone who is not in school. The Finance Minister spoke of a major transformation in the delivery of Government services by providing these services online. He said that, "By the end of this year, nearly two-thirds of all Government services will be available online in some way or other, making them accessible 24 hours a day". While I applaud the Government's long-term plan to move with the inevitable way business is being conducted and targeting its services to be accessible 24 hours a day, there are a number of other issues. Chief amongst this is how to make sure that the users of today, and the users of today are not the school children, they are the housewives, the retirees and the not-so-well-educated, can avail themselves of such services and use these online services effectively. The Government must embark on programmes to make "IT for the Masses" or "IT for Everyone" a competitive advantage for Singapore. Besides bringing all Singaporeans into the online mainstream, we must make sure online transactions are secure and effective. Are online services user-friendly and easy to locate? Since all Government Ministries attempt to provide their services online, how does the Government ensure that there is some uniformity in the design? The Government must set up a body to ensure security and measure the effectiveness and efficiency of the online services. IT for Everyone There are now no funds set aside to make IT education available to the whole population. Funds and effort have been concentrated on our students and rightly so. But the population at large who are users of Government services must also not be ignored. The Government must not restrict its resources to just students alone if we are to make IT a competitive advantage for Singapore. We must also pay special attention to the housewives, the retirees, the retrenched workers and those who are not so well educated. In other words, we must bring IT education to the heartlanders. For this to happen, the Government must intensify its efforts by funding the CDCs, the CCCs and the RCs to help them set up computer centres. These centres will be able to offer IT literacy courses and bring IT to the doorsteps of our residents. This doorstep approach will garner more support from the housewives, the retirees, the elderly and anyone who is interested because it is in their own locality and within familiar settings, on home ground, so to speak. Such an approach will lower the barrier to learning and make IT education easily available and affordable. To the sceptics, I can quote an example to illustrate that such an approach can work. Sir, take the example of the close collaboration between the Fengshan CC and the Marine Parade CDC in setting up two Student Care Centres fully equipped with computers and four computer centres attached to our preschool education centres. These centres are equipped with broadband systems so as to allow for very quick Internet access. Fengshan PCF kindergarten is one of the first to provide computer-aided education to all children and not only those whose parents can afford to pay. Today, all Fengshan pre-schoolers are taught to surf the Internet and they know how to use e-mail. The younger they are, the lower the barrier to learning. However, the real success story is the use of the centres to train adults in the evenings and the weekends. There are ongoing computer courses for the masses at affordable and competitive rates for people within the constituency and of course outside. It is available to self-help groups, such as MENDAKI, private companies sending their staff for upgrading courses, and many other organisations. In the last three years alone, some 25,000 persons, and in the last two years more than 9,000 a year have attended courses at the IT centres in Fengshan, and these numbers do not include the kindergarten children. Also, we have opened the centres in the evenings in the last two years and some 3,000 residents actually dropped by to use the computers at a nominal charge. I can shamelessly boast of the success stories that we hear so very often of how computer literacy has helped to improve the lives and livelihood of so many computer illiterate persons in many different and unexpected ways. So what do Mdm Lee Ah Eng, who is in her mid-50s and living in Bedok North, Mdm Sahara binte Hassan, 38 years, a housewife and Mr Chin Sin Chong, a retiree have in common? Sir, all of them know nothing about computers, let alone sit in front of one. Today, after attending the computer literacy courses at Fengshan IT hub, they can now work on computers with ease that belied their true profession or training. Mdm Lee, the Treasurer of Fengshan WEC, was a butcher's assistant before the epidemic in pigs caused her to lose her job when the Government banned the sale of pork. However, unlike her other colleagues in the same trade, she quickly found another job not so long thereafter as a clerical officer of a pawnshop. Sir, the pawnshop owner needed someone who knows how to use a computer to type out pawn tickets in English and Chinese. Mdm Lee had just completed the Microsoft Word and Rich Win 97 courses offered at Fengshan IT Centre to grassroots leaders. She of course clinched the job right away during the interview after she proved her proficiency on the computer, and this is despite her age and lack of experience as a clerk. Mdm Sahara is a housewife who has never touched a typewriter, let alone a computer all her life, until she joined a computer course, especially designed for housewives, and she joined the course out of curiosity. She can now surf the Internet for new recipes (cooking recipes are her interest) and exchange cooking tips and culinary skills with friends she has met online. Finally, there is a Mr Chin who is a retiree in his 60s. He too has no computer knowledge but after attending a course at Fengshan IT Centre, he now volunteers himself as a cyberguide, as we call it, so that he can teach the elderly and other senior citizens how to use computers. I believe we have proven the sceptics wrong that such an approach cannot work and that we may be putting money in the wrong place. But these are real life examples of why the use of IT has to be widespread and made accessible for the masses, if we are to see a successful use of Government's online services. User-friendly online services. Sir, having trained the people, we must make certain that online services are truly user-friendly and effective. I quote a recent personal experience of how difficult the Ministry of Manpower's online services were. I went into the MOM's website at www.mom.gov.sg to check whether an intended foreign worker possesses a valid employment pass. Sir, I could not find a link on this web page at all after going through several of the menu items. I finally called a toll free number listed on this page. Unfortunately, the menu of telephone services was not listed on this website. So I had to go to the menu, the sub-menus and several menu items. At the end of it all, out of frustration, I went back to the main menu and got an officer on the line. After five minutes of good classical music, a nice charming officer came to the line and she told me that particular enquiry could not be found on this website. And she gave me the name of another URL, just to search for the bona fide of an intended foreign worker. Sir, I could not understand why the URL could not be hyperlinked to the MOM's website in the first place. The logical thing is that, if this is available at MOM, it should be linked to the website. MOM should not claim that potential employers or landlords can easily go to the website to check on the validity of foreign worker permits when the information they themselves give to the public are sometimes skimpy and also time consuming. Sir, after gaining access to the second website on this URL given by the officer, I was again frustrated in my attempts to solicit the information I want because my NRIC No. was rejected as I did not type in the prefix "S" before it. Sir, our NRIC Nos. are unique numbers and there is a computer to take care of all this. I do not see why we need to key in the prefix, whether it is "F", "P" or "S", and if you do not key in "S", you can never get the service. Also, requiring the foreign worker's identification number is another exercise of testing the limits of the user's patience. Why must it have to be the so-called FIN numbers, given by the Ministry, and not the worker's passport number, for example. Sir, perhaps, I would like to invite the Minister to try going online himself to test out the system and see for himself why much more improvements are necessary. Sir, the Inland Revenue Authority, IRAS, is encouraging taxpayers to submit their returns online. While it boasts of some successes, I am not the person who uses it, but I have feedback that it could have been more simpler and easier to use. For instance, taxpayers need not have to do paperwork, or must have paperwork done first before they go online to key in all the information from the worksheet which they have to complete beforehand. Sir, if the system is user-friendly enough, you just key in all the information and the computer should actually work out the worksheet and tell you what is your tax, without having to do the worksheet beforehand. So all said and done, I firmly believe that the Government must have some form of audit of all its online services to streamline them so that all claims of accessibility can be truly materialised. If efficiency and effectiveness of the Government are to be upheld, a rigorous audit is inevitable and mandatory to ensure that we rise to the challenge and this is really sharpening our nation's competitive edge through the use of IT.

Sir, after the Finance Minister's Budget speech, the Prime Minister expressed to a few of us in the House that he was surprised at the somewhat muted response by the Members present although the Budget, by all means, is an exceptionally good one, more so against the backdrop of political and economic uncertainties in this region. Could it be that we have gotten so used to expecting positive budgets year after year that we take it for granted that a good budget would be delivered at each session. In this year's generous budget, all Singaporeans, whether the well-off or the not so well-off, benefited. What is more significant is the much greater apportionment of the budget being given to education, social welfare, training and assistance to start-up companies and local businesses. Why the subdued response? Does it mean that the population has grown soft with years of good progress and prosperity? How does it affect our competitiveness in the future during this time of global uncertainty and growing regional turmoil? Can we afford to be complacent? We are fortunate that we have enjoyed stability and sustained strong economic growth at a time when some of our neighbours are still fighting desperately for survival. We should take this opportunity to consolidate and strengthen ourselves in order to remain competitive and innovative and stay as one of the major economic players in the global arena. Sir, in the last Parliament sitting, BG George Yeo indicated that the impression that the GLCs dominated over Singapore businesses was erroneous. The GLCs are responsible for only 12.9% of our GDP growth and the MNCs actually are responsible for the major percentage, nearly 40%. However, that does little to change the perception of the GLCs being so dominant in the local business scene. It may be because of the only presence of the GLCs among all businesses in Singapore that leads to this conclusion. The fact that GLCs are involved in almost all types of business, be it manufacturing, retail, property, construction, consultancy services, transportation, communication, finance, etc, leads to the perception that they are in competition with all local private businesses. Sir, one cannot question the policy of building world-class operations that can compete in the regional arena for the survival of Singapore, a nation without much resources and land mass. This policy is arguably correct as one of the most expedient ways of building such corporations is by the setting up of GLCs because of their ability to amass huge financial as well as human resources. The success achieved by corporations, like the SIA, PSA, ST, Telecom, NOL, DBS, and many others, that have made their mark in the global arena, is proof of the farsighted policy of our Government. Very few, if any private businesses, can have the ability or the economic capacity to achieve what some of these companies have. Singapore Technologies have continuously ventured into projects which require large economic resources and long-term investment, the latest being in the field of life sciences. JTC's setting up of wafer fabrication industries and spearheading the petrochemical industry in Jurong Island are among some of the shining examples. For Singapore to survive and remain competitive, we need these organisations to venture into new businesses, and R&D projects can be the pioneer for others to follow. However, while recognising the GLC's role in nation building, one should not totally ignore the contribution of the local entrepreneurs. I am happy that, consistent with the policy of nurturing local entrepreneurs, the Government has come up with many assistance schemes and incentives to help the local businesses to grow. But the Government has to be mindful that these entrepreneurs need space and scope and, if necessary, assistance from the Government to succeed. These businesses which are in direct competition with the GLCs may find it very difficult to survive as the GLCs, with the strength and financial resources, not to mention the very widespread networking, can put them out of business easily. I am not suggesting that the GLCs should be limited in the scope of their involvement or be prevented from freely going into any type of businesses they choose. But there should be a certain balance to consider whether they need to spread the business venture so widely and freely and enter into areas where traditionally our medium and small businesses are trying to survive. The Government has always stressed that, as long as the playing field is level, everyone should be free to compete. But, in reality, in any competition between GLCs and private businesses, very often, the feeling of the private sector is that, although the field may be level, they are playing with nine or 10 players against 11. There would always be a great imbalance in the competition. To illustrate my point, NTUC Fairprice is doing a tremendous job in operating a business as a workers' cooperative, bringing in benefits to all Singaporean workers, as well as ensuring stability of essential commodities. Let us say that they suddenly decide to corner all retail business in the HDB heartland and put a supermarket in all our neighbourhood centres. Surely our HDB shops would never be able to survive against them because of their size, human as well as financial resources, and eventually, all will be driven out of business. I am sure NTUC has no intention whatsoever of doing that even if it means that it can expand its business and turn out a better bottomline. Therefore, it can be reasonably assumed that any GLC, with its financial resources and, more importantly, its networking, which wants to compete in any local businesses in Singapore, it would have no difficulty in overwhelming the local competitors. The question is: is it desirable to jeopardise the long-term objective of having a strong public and private sector co-existing with each other as the twin engine that would drive the Singapore economy? Therefore, it would be good if the GLCs could concentrate in areas where the enhanced resources and expertise would maximise their potential and performance in ways that a local private business would find difficult in matching, for instance, in the international arena or in certain niche areas. Venturing into new fields and R&D projects can open new business opportunities for Singapore and, together with the input of the local entrepreneurs, both can flourish side by side. It would be a sad day if our younger generation do not see any future in the private sector and their only option after their graduation is to enter the civil service, the GLCs or the multinationals. I am sure this is not what is best for Singapore and not what the Government's policy is aiming for. Sir, I cannot help feeling that there still exists this perception of a great divide between the private and public sectors. This is not healthy, nor is it desirable. I would like to continue seeing all Singaporeans, be they in the public or private sector, working together for the good of the nation. All Singaporeans should have a sense of belonging and the opportunity to excel in whatever field and whichever sector they feel most comfortable in. Sir, I support the motion.

Mr Speaker, Sir, thank you for allowing me the opportunity to participate in this debate, and I rise in support of the Budget for financial year 2001 and the financial policy that underpins it. Sir, the Minister has pointed out that the Budget debate is a time when we take stock of the economy and the direction that we have taken. The debate is also a time for us to take new bearings for Singapore. What kind of society do we want to create for Singapore and what are the values that we want to promote? As we move into the new millennium, we are cognizant that Singapore is caught up in a transition as the economy adapts to the changes of the global economy where, as the Minister has put it, the main drivers of growth are knowledge and talent. Changes are not always welcome. This is often the case with those who are not able to cope. For the middle-aged workers who are caught in the middle, economic restructuring and realignment would mean potential job displacement and an uncertain future. For the small and medium enterprises, their inability to cope with competition brought on by an increase in the number and presence of the bigger players in the industry, means declining business and a bleak outlook. Sir, we need look no further than to consider the present plight of some of the shops in the HDB neighbourhoods. We have been assured by the Minister that, in the new millennium, there is a place for everyone. Invariably, the question to some, if not many, has been: what does it mean for them? Can we assure them that in the midst of this uncertainty brought on by the global economic changes, the dawn of the future would bring about better times for them, while those who have run on ahead would continue to blaze the trail for those who are struggling to follow? We are faced with the basic question that the budget provides the opportune time for us to ask: how can we ensure that the future of Singapore would always have a place for every Singaporean, young and old, rich and poor? Sir, we know that, at its most basic level, globalisation means, to many of us, liberalisation of trade and greater competition for businesses and resources. Our response is equally clear. We must ride with the tide or be washed away by the currents of change. This is evident in the way we sought to liberalise our economy to facilitate the free movement of labour and capital. Our economy is relatively open to investments. Sir, there are very few impediments to foreigners investing in Singapore, other than those relating to business viability. We have openly encouraged talented foreigners to take up employment and residence here in Singapore, and in the hope that their skills and talents will help add to the talent pool here. In a way, globalisation is very much driven by the economics of pragmatism. Our policies largely ebb and flow, according to the tide of dollars and cents. In other words, we allow cost effectiveness to dictate and decide our policies. It must be. Competition in the global economy requires us to ensure high profitability through constant shifts in business operations, on the basis of costs and profitability margins. Where foreign labour is cheaper to hire than local ones, we hire foreign labour. Where the industries no longer yield the necessary value-add to ensure high economic growth, we abandon them. Just look around us today. Textile factories are almost non-existent in Singapore, and I do not suppose there are many electrical appliance assembly operations remaining. Similarly, there are not many canning factories left here. On the labour front, the importation of skilled construction labour, at a fraction of what it would have cost to hire the equivalent of local workers, has but all displaced our own people with similar skill sets. Soon, there will be very few Singaporeans left who are capable of doing masonry work, or carpenters who can undertake form construction. The intense market competition, brought on by our relentless pursuit of economic efficiency, has left a mark on our population. It is not by accident that we have acquired the dubious honour of being one of the most kiasu societies. We became a kiasu society only because our competitive spirit permeates to all levels of society, practically from cradle to grave. Sir, I do not deny the benefits of an open economy driven by competition. The benefits of that ideology are, with the collapse of communism, without doubt. However, what is the cost to society? What is the cost to Singaporeans? At one level, there is the social cost. By allowing a free flow of talent, we tend to displace Singaporeans from the employment that they would otherwise have enjoyed, but for the redundancy made possible by cheaper labour alternatives. In the scheme of things, those who are middle-aged and with limited education, are most at risk to having their employment services terminated prematurely. Such premature termination of employment would invariably cause some dislocation to their family, especially when a displaced employee has a wife and children to support. Unfortunately, it would be the children who suffer. What this would mean is that there would invariably be cutbacks on tuition, music and other enrichment classes and holidays, perhaps overseas. This may, in turn, affect their development in every sense of the word, and affect the future of Singapore. Sir, when we speak of unemployment, it is not just the employee who is affected, but a whole chain of people down the line as well. So, when we speak of helping these employers to make adjustments to the new economy, we must be mindful of the urgency that is required to act on this matter since there are other lives involved as well. That is one possible cost. At another level, we have the economic cost. Labour tends always to gravitate towards sources of high wages and opportunities for social advancement. As we become more globalised, we realise that the labour of our people cannot be contained in our territorial boundaries alone. As opportunities exist elsewhere, our people would be under a strong temptation to seek out these opportunities there. In this free society, there is little we can do to stop them. What this means is that while our people get displaced at the bottom because of the inability to compete with others elsewhere, there are others at the top who are prepared to seek their fortunes outside of Singapore. Their skill sets and talents are such that they would not have a problem getting employment in the financial centres of New York or London, or in the information technology houses in the Silicon Valley or teaching positions in Ivy Leagues universities in the US. There is, therefore, this potential for hollowing out of precious limited talents that we have in Singapore, which we will have to replace, either from the younger members of our population or from other parts of the world. Indeed, as our forebears had done in the past, they had migrated from China and India, so, too, unless their roots are deeply planted in Singapore, our younger Singaporeans may likewise follow suit, except, this time, they will be moving out of Singapore. So we hire people from outside of Singapore, in part to fill in the shoes of Singaporeans who should be taking up this employment. The net result in substitution is that we do not have a steady base of locally qualified employees who are committed to this country. In other words, we end up with foreigners providing the talents for some of the key services in our economy and not just the manual labour. Sir, this is fine as long as we are able to sustain economic growth and provide the base of political stability. However, if future conditions prove unstable, we cannot count on these people to remain behind for us. If this comes to pass, Sir, I think we will have a problem. In a way, Sir, we are partly to blame for this state of affairs. For want of a better description, the basis on which we govern our relationship tends to be contractual, even if the basis of the relationship is understandable. We contract with students to send them overseas for a good education in exchange for the promise of service when they graduate. If they do not perform their side of the bargain, we claim damages and we shame them publicly. We hire good people for the upper end of the public service. We try them for a few years and, if they do not succeed or they are not suitable, I believe we will tell them to look for their careers elsewhere. So relationship with our people is often kept strictly to contract and are, therefore, economic in nature. Sir, as with any economic relationship, one tends to be calculating. For the young bright Singaporean looking at the future ahead of him and where the world is his oyster, he will soon wise up and ask himself, "What is in it for me?" He will obviously be doing his sums and decide what is in his best economic interest. Can we count on him to put the national consideration before himself? I would like to, Sir, but I doubt it. By defining success purely in material terms, we have inadvertently raised one generation of young Singaporeans who are dedicated to the god of conspicuous consumption. Driven by a deep-seated materialism, many of our best and most capable will continue to leave our shores to seek their fortunes elsewhere. This will have the effect of depleting our talent pool even further. Sir, it is, therefore, not just a problem of workers continually learning new skills and working in a new environment that we have to grapple with. It is, I submit, a deeper set of problems derived from globalisation, how this will affect our workers, their families, the likely impact that this will have on the future of Singaporeans and on the limited talent pool that we have. Finally, there is also the issue of the political cost that we are faced with. Sir, there is evidence that the income gap between the top income earners and those at the bottom has widened in Singapore. That this is so is not a surprise. Globalisation has brought about greater competition for people and talent across boundaries. Where talent is in short supply, market forces have dictated that premium salaries would go to them. On the one hand, the same cannot be said of unskilled labour. An unskilled worker in Singapore, working in a low-technology assembly operation here, will find it difficult to compete with his counterpart in China or in India. On the other hand, a highly skilled IT professional, who is Singaporean, will be in demand by the MNC who is prepared to pay top dollars for his services. The result, unfortunately, has been a widening of the income gap between the two. Yet simple economics tells us that we cannot artificially prop up wages for those from the working class in order to narrow the gap, unless we want to price ourselves out of competition. Against the backdrop of rising prices and the cost of living, the growing income disparity will, no doubt, add to the growth of discontentment within our society. We will, no doubt, begin to see the age-old conflict between the haves and the have-nots rearing its ugly head again. The statement by the Government, that our workers must go for training and retraining in order to increase their productivity and wages, has almost become a motherhood statement in Singapore. The deeper issue is: how can we ensure that, with training, our workers can be assured of better paying jobs and a more secure future? Can the inherent discrimination against older retrenched, but trained, workers seeking re-employment be overcome? Has the Government looked into and dealt with this issue? Sir, if we accept the foregoing arguments, then it follows that our financial policy should also be skewed to address these problems raised. For instance, would the Government consider the possibility of giving some form of tax rebates to companies which employ older workers or retrenched workers? Additionally, should special tax concessions be considered to attract highly qualified Singaporeans to return to Singapore to contribute to the growth of our country? In making this submission, Sir, I know that the answers may not always be there readily for us. However, as they say, the journey of a thousand miles always begins with the first step. I hope the Government will take that first step.

Mr Speaker, Sir, I rise to support the FY 2001 Budget. I would like, firstly, to commend the Minister for what has been described by many as the "best ever" Budget. Indeed, whilst providing something for all Singaporeans, businesses, SMEs, individuals and families, this Budget has struck a fine balance. It sets the fiscal tone for the future economic development of Singapore, as well as addresses some pressing concerns in our current economic environment. First and foremost, I am greatly encouraged by the emphasis that the Minister has placed on the smaller members of society. The tax cuts for individuals, for instance, are not the flat-rate type cuts that provide the biggest windfalls to the rich, but were structured to benefit the lower and middle-income taxpayers most; whilst, the corporate tax relief is structured to benefit, in greater proportion, small businesses which have felt the heat from globalisation and greater competition most. I am particularly heartened by the fact that non-taxpayers also share in the surplus built up by the Government last year. For example, the $333 million rebates on HDB service and conservancy charges, as well as savings in rentals and utilities in addition to CPF top-ups, are not only timely, but crucial to maintain the social fabric that keeps and binds our nation together. Sir, I would also like to stress that it is equally important that the right incentive structures are in place in Singapore to enable the right environment for creativity, risk taking and entrepreneurship, without creating a dependency effect for the less successful members of society on the better-off. The welfare methods that were a hallmark of many European societies of the past and the fiscal drain on big governments by many state-run programmes clearly drained resources and dis-incentivised the able to produce more, is certainly not the route for us. Hence, the reduction of personal and corporate taxes is significant in that it sends the right signal to Singaporeans and foreigners alike who may be further encouraged to make Singapore their home. Ultimately, it is not increases in Government spending per se that should be the support for any economy, rather the creation of the right long term regimes to align incentives for individuals and companies to take greater risks and produce more. Sir, whilst I applaud the Minister for delivering a good Budget, I have a few questions to raise. The first question reflects the concerns many Singaporeans have over the worsening state of the world economy today. In the short term, it does look like the flu that the US economy seems to be suffering from has already affected some of our global companies, particularly those in the electronics industry. Singapore has managed to accumulate surpluses in years of plenty, running budget surpluses even whilst the Government had embarked on an expansionary fiscal policy to stimulate the economy in the last two financial years. However, now that we are reducing direct tax rates, will this limit the ability or desire of the Government to provide more off-budget measures to stimulate the economy in the future? Should the flu that the US economy has caught become prolonged, spreading rapidly here, we may have to do more. For instance, the best economists and analysts were all caught off guard in December 2000 when the US economy started to cool and it was only recently that institutions like the G7 and IMF have started revising downwards the world economic growth with the potential for more shocks to come. There is perhaps a need for Singaporeans to understand and be assured that the Government stands ready should the 5-7 % GDP growth targets that MTI has set for this year not materialise. After all, it was only 2-3 weeks ago that the Turkish Lira was devalued, and ominously, just like Thailand in 1997, the consensus expectation is that there will be no contagion effect, even though Eastern Europe has started to feel the chill already. A lower tax burden, as the Minister has rightly pointed out, will help businesses and individuals to some degree. However, it does not go very far if revenues are falling or jobs are lost. Potentially, a revisit of the global crisis in 1998 could arise, except that this time, the US, which has almost single-handedly consumed the world out from the recession then, takes the lead downwards. I would therefore like to ask the Minister if the Government does stand ready to do more for the economy if indeed the US and the global economy slips into recession this year. Has the Government a contingency plan or supplementary budget ready? Sir, the second question that I have concerns GST. We understand that when the GST policy was introduced some years ago, the longer term stated goal of the Government is to strike a balance between direct and indirect taxes. There is a concern now that with the reduction in direct personal and corporate taxes, the Government may increase indirect taxes through GST. Could the Minister therefore elaborate on what the plans are for GST, and if and when should Singaporeans expect further increases in GST, and will it be met by equally significant reductions in personal income taxes in future? The third question concerns the allocation of the "share outs" from the budget surplus. It has been widely publicised that escalating health care cost is one of the greatest pressing concerns of working adults, and especially for senior citizens without a stable income. The $10 rise in Singapore Allowance for pensioners, for example, will not go very far to help meet many co-payment schemes by health care providers. Would it therefore not be more appropriate to consider allocating the CPF top-up, not to the Ordinary account, but to the Medisave account and to re-balance the planned contribution from the surplus to the Lifelong Learning Endowment Fund and the Medical Endowment Fund in order to address the pressing need for the aged in meeting their medical expenses in the future? Fourthly, on a more specific matter, in view of the recognition of the need for Singaporeans to be part of the KBE and to embark on lifelong learning, would it not be more appropriate to review the current cap on tax relief for education course fees, currently set at $2,500 per year? Sir, I believe this level has not caught pace with the rapid rise in costs of tertiary and professional education in recent years and is incongruous to the emphasis that the Government has placed to encourage Singaporeans to upgrade their skills and education. I therefore urge the Minister to consider revising upwards this quantum, to encourage Singaporeans to upgrade their skills and education in order to keep pace with global economic demands. Finally, Sir, I would like to reiterate and elaborate on the feelings on the ground and on the part of many of my constituents. Whilst MTI and the Government have been optimistic of Singapore's continued growth this year, following the rapid recovery in our economy in the last two financial years, there is considerable concern amongst many citizens that the benefits of recovery have not been fully felt across the board. Many small businesses, like retailers, HDB shopkeepers, market stallholders, etc, have not seen a discernible increase in business activity and whilst we have not suffered the fate of Hong Kong and the UK in the early 1990s, where many households actually suffered from negative equity in their household mortgages, there has certainly been some contraction in our asset prices. Whilst many of these developments are symptomatic of the underlying changes in the structure of the economy, part and parcel of market adjustment and globalisation, they all contribute to the lack of confidence, and perception of uncertainty in the times ahead. I would therefore like to commend the Minister for addressing some of these concerns in this Budget which has certainly underlined the commitment of the Government to bridge the gap and to give more support to the have-nots and the less well-off in the form of incentives to help them to do better and, at the same time, encourage the able to do more. Sir, many of the measures that the Minister has presented in this Budget will certainly go to help those segments of our society that most require it, ie, the lower and the middle wage incomes, the small businesses and the fledging technopreneur sector. With more disposable income, hopefully, it would stimulate spending and business activities and perhaps enhance job creation. Sir, I would like to end by quoting a saying from the late John F. Kennedy, "if a free society cannot help the many who are poor, it cannot save the few who are rich". This Budget has sent the message to our citizens that the Government has a heart for its people.

Sir, this year's Budget is characterised by a strong sense of investor confidence in Singapore, which has been contributed, to a very large extent, by the discipline and sacrifice of our workers and our good governance. I am glad that the Government has decided to reward our workers for their sacrifices and help employers to enhance their competitiveness through this year's Budget. Perhaps, because of the good spread of goodies this year, the press was almost unanimous in describing it as "a generous Budget for everyone". I think they are right. But I would call it a "Budget for Social Cohesion" for the focus it gives, not just to the short-term reward for the sacrifices and in helping the lower-income Singaporeans through the rebates, but also in addressing the long-term need to help Singaporeans, particularly the lower-skilled workers, enhance their welfare through skills upgrading as our economy picks up pace in restructuring. With better skills, our workers will be able to enhance their employability and earn higher wages. Helping our workers to be employable is a very important welfare assistance to them, irrespective of their income status. These twin approaches will go a long way to addressing the issue of income disparities which could affect our social cohesion. Our workers, as reflected by the views of our union leaders, applaud the Budget. One union leader has called it a "pro-all Budget" for the various rebates given away on the service and conservancy charges, utilities and HDB rentals. These will benefit the lower-income workers who are already not paying income tax. Also welcome are the lowering of personal income tax rates by 2 to 5 percentage points, the doubling of personal tax rebate to 10% and higher tax breaks on CPF contributions from the self-employed. Another union leader feels that all these measures show that the Government cares. I would add that the Government has kept faith with the people's trust in the consultative approach among the workers, employers and the Government. These personal goodies are very important but what is equally significant is Dr Richard Hu's announcement of the Government's plan to allocate more resources to education and to facilitate lifelong learning among our workers. This, as I said earlier, is important to help our workers remain relevant in the New Economy. We learnt that last year, many of the manufacturing investment commitments of $9.2 billion were in key knowledge-intensive industries like pharmaceuticals and high-end electronics - areas that will help Singapore's future growth. We can expect the proportion of jobs that require higher skills will be larger year after year. Even though retrenchments fell to 11,500 last year compared to 14,600 in 1999, we can expect the proportion of retrenchments due to structural reasons would be higher in future. Sir, it is because of this that our union leaders applaud the plan to beef up the Lifelong Learning Endowment Fund by another half a billion dollars to $1 billion. So is the allocation of the $30 million for Manpower Development Assistance Scheme, on top of the $6.3 billion allocated to education. So, I join our workers in welcoming this Budget in its aim to helping our workers, especially the lower-income and low-skilled who missed out on education in their younger days, in making the transition to the New Economy by facilitating the learning of new skills. By emphasising skills upgrading and retraining, the Government has shown its commitment to the long-term welfare of our workers. To me, this is a very important commitment to the welfare of Singaporeans. If we do not provide and improve the facilities and resources for programmes to enhance their employability, especially for the lower-income workers, the State will have to provide a more direct welfare scheme for them in the future. Our population and workforce are greying and our people live longer. If they are to remain independent, they need to be employed. And they can secure employment only if they can contribute to companies. Sir, therefore, we have to help them to gain new skills to remain relevant. The social welfare scheme of the West is costly to the society. In fact, many Western countries are modifying their schemes. We should not take the path that others are already discarding. That is why I support strongly the move to beef up the newly set-up Lifelong Learning Endowment Fund. Sir, let me conclude by making a general comment on the corporate tax rate. I am glad that the Minister has announced a further cut of 1% point so that our corporate tax rate stands at 24.5%. Last year, Dr Hu cut it by half a percentage point. These measures, I am sure, could help companies to be more attracted to remain in Singapore or to come to invest here. But competition for investments and for jobs is not static. We should watch our competitiveness level all the time because many countries could catch up with us. Already Chile, Hong Kong, Hungary and Ireland, to name a few, have lower corporate tax rates than our 24.5%. At the same time, although many countries have higher corporate tax rates than ours, their effective rates may be comparable to ours as they have their own systems of rebates. Therefore, Sir, looking at these in the package, we have to sharpen our competitiveness edge in areas other than through fiscal measures only. With this in the background, I would support this Budget which I would describe as pro-workers, pro-people and a Budget for social cohesion.

(In Malay): Mr Speaker, Sir, the Budget for this year can be said to be a generous Budget. With a budget surplus of $4.3 billion, the Government is able to distribute some of it to the people, to assist those in the lower and middle income group. With the personal income tax reduction, it will also reduce the burden of the taxpayers to meet the rising cost of living. The budget surplus of $4.8 billion in 1999 and $3.54 billion in the year 2000 shows that we are able to manage our economy well. It also shows the effectiveness of our measures to bring about economic growth. With the cooperation and efforts made by all parties, the Government, employers and workers, our economy has grown by 9.9% last year. It is timely that the Government should share the success of our economy with the people through rebates and tax cuts for the people. In fact, we can say that every level of the people and all sectors of the economy are getting the goodies and incentives mentioned by the Minister for Finance. The people would like to thank the Minister for Finance for this generous Budget. Mr Speaker, the Budget this year has been described by our businessmen as pro-business. The reduction of 1% to 24.5% for corporate tax for Year of Assessment 2002 is to maintain our competitiveness. It will also reduce the burden of tax by the companies. What is most interesting to me is the exemption of the income tax of 75% for the first $10,000 of income and 50% tax reduction for the next $90,000. This step will benefit the small and medium enterprises. However, businessmen are still expecting that the business cost can be further reduced to assist those who are facing slow economic growth this year. It is true that businessmen will pay reduced tax to maintain their competitiveness. But what is of concern to them is the business cost, such as transportation, payment of levies to the Government, workers' wages and rentals. Therefore, the Government should assist by ensuring that these costs of business will not rise rapidly. It is no point to have all the tax cuts when our companies cannot make profits. I hope the Minister will give an assurance that the Government will take steps to control business costs. And I hope that with these measures taken, we will be able to attract more investments and help start-up companies to expand here. Mr Speaker, the general public, especially those who live in HDB 1- to 3-room flats welcome the rebate on utilities and service and conservancy charges. These rebates will assist them to settle their monthly bills. I welcome this measure. But I hope we should also consider other ways which are more effective to assist the lower income group in facing rising cost of living. Maybe we can give them a monthly grant to upgrade their skills, so that they will be able to secure a better job in future and maintain their families. I worry that the rebates which I treat as consumption may make them feel complacent and may lead to wastage. If a skills upgrading grant is given, I think this is in a way a long- term investment. Mr Speaker, the crux of this Budget is to prepare the people to meet the growth in the new era. Singapore has to compete with developed countries in the world market. In the knowledge-based economy (KBE) era, education, training and re-training should be emphasised all the time. Therefore, the allocation for FY2001 of $6.3 billion to the Ministry of Education is right. This is the second biggest allocation. This is to equip our students with the new economy skills. The contribution of $500 million to the Lifelong Learning Endowment Fund is also for such a purpose. We are urging the people to upgrade themselves with skills and knowledge throughout their life to meet the challenges of the KBE era. I fully support the Government's emphasis on education. The upgrading of our people is the only way to improve our economy. Therefore, we should nurture the attitude of lifelong learning among our people. We should emphasise among them that education is a continuing process from cradle to grave. With lifelong learning, every person will be able to follow the development, especially in science and technology, and they will not be left behind. Mr Speaker, I also notice that out of $6.3 billion allotted for education, $1.4 billion is for the development estimates. This amount is to build facilities such as schools and other institutes of education. In view of the high cost of building educational infrastructure, I think the Fund should be wisely spent. What we understand now is that many schools are not used at night. I hope that the Government will encourage other educational agencies to use these schools to educate workers who do not have a high education. We know that many workers who are 40 years and above do not have secondary education, up to 'O' level. Therefore, we could use these schools to teach important subjects like English, Mathematics and Science, up to 'O' level, for these workers whom I have mentioned earlier. For the others, they could also pursue upgrading courses which are below GCE 'O' level, ie, `N' level. If these schools are open at night, the workers who live in the housing estates could spare some time, maybe three times a week, to pursue such courses. The Government may give a grant of up to $1 billion to the Lifelong Learning Endowment Fund, so that the people will be able to attend these courses. The same will apply to the ITE and polytechnic buildings which can be used for technical upgrading courses that can lift the educational standards of our workers to NTC certificates, diploma or higher. Our schools and educational institutions are run based on meritocracy and multi-racialism. Students compete among themselves to achieve the best in education. The process of multi-racial nation building is also being carried out actively among the young. They interact comfortably in the classrooms and other co-curricular activities in schools. Although there are situations of grouping of the majority race in a few special schools meant for specific purposes, on the whole, our schools reflect the multi-racialism of education in Singapore. This process enables us to educate our young with good values such as the concept of multi-racialism to guarantee the stability of our society in the future. We can say that the process of integration in a multi-racial society has been going on well in our schools. In respect of integration, I hope this integration process will be carried out smoothly in our housing estates and the work places or in the SAF. We hope one day no question will be raised regarding the issue of loyalty or the contribution of one community towards our sovereign country. Recently, if we had followed the development in Singapore, the issue of loyalty and the participation of the Malay community in SAF has become a topic for dialogue between the Senior Minister and the Malay/Muslim community leaders. A few young Ministers also attended. I feel that this dialogue is very effective. It went on with maturity, clarity and honesty. In this dialogue, the Malay community has been urged to immediately participate in this integration process. In my view, this has already happened where the majority of the Malay community have already been together with the other communities in their daily lives, whether in the housing estates, in their workplaces, in schools and also at public places. Therefore, the issue of the Malay community wanting to isolate themselves from the other communities should not arise. What has emerged now is in respect of the identity of the Malays who are Islam by religion, especially the attire of covering the aurat, halal food, payment of zakat, and performing their religious obligations like the Haj. The Singapore community should understand that these aspects are obligations which have to be performed by the Malay/Muslim community. They should understand this much earlier to bring about a more understanding and cohesive community. In conclusion, Mr Speaker, I support the policies of the Finance Minister in his Budget speech, but I hope more funds will be given to improve or step up the cohesion of our multi-racial community.

Order. I suspend the Sitting and will take the Chair again at 3.35 pm. Sitting accordingly suspended at 3.15 pm to 3.35 pm.

Sitting resumed at 3.35 pm

Resolved, That the debate on the Budget Statement be proceeded with beyond 4.30 pm and the proceedings thereon be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng].

Debate resumed.

(In Mandarin): Mr Speaker, Sir, the Budget presented by the Finance Minister this year is undoubtedly a widely welcomed Budget. The main focus of this Budget is on the cuts or exemptions on corporate and personal income tax and property tax. Tax cuts and exemption are means in the use of fiscal policy to stimulate economic expansion. In the next one or two years, we will be facing economic uncertainty. This move will positively support our economic activities so that our economy will not turn from substantive growth to recession. To the middle and higher income people, reduction of personal income tax rates is like "adding a flower to the brocade". Their incomes are already in the middle and high brackets. Now, with this tax cut, they will have even more after-tax disposable income. To the lower income people, the tax cut is of not much help. Some may even receive no benefit at all. The lower income people are faced with escalating cost of living such as the rising utility rates, high medical cost, increasing education cost, etc. We should also think of a hardship-relieving way to approach the issue like "sending burning charcoal in a snowy weather". Of course, the $250 to $350 utilities rebate, exemption or reduction in the payment of service and conservancy charges and HDB rents is a form of help. But this is trying to "put out a big fire on a cart-load of firewood with a small cup of water". It could at most wet your throat but hardly enough to quench your thirst. Compared to the benefits enjoyed by the middle and higher income people, these benefits to the lower income people are just pittance. The reduction of corporate tax rate from 25.5% to 24.5% will attract more foreign investments to Singapore. In addition, the small companies with a profit of less than $10,000 enjoy tax relief on 75% of their chargeable income, and 50% of the subsequent $90,000. This will help the start-up companies to have more capital for further development. These are conducive to Singapore's strive to become an investment, commercial and trading centre, enhancing our competitiveness in attracting foreign investments. However, to those small businesses which are slumped into predicament because of the regional economies and economic restructure, the cut in corporate tax does not benefit them nor help them to solve their problems at all. Many SMEs have no business or are finding it difficult to operate their business. Many of them are running their business at a loss. If the companies do not make any profit, income tax cut or exemption is simply irrelevant to them. Among the struggling businesses are the retailers in the HDB estates. Because of their outdated mode of operation, they are unable to attract the younger consumers. Moreover, with the modern shopping complexes luring away the customers, these poor neighbourhood shops have been keeping their business going by painstaking efforts without much success. To these retailers in the HDB estates, this year's Budget does not bring any benefit. The benefit of tax reduction does not apply to them. There is no reduction in their rent. For those who have bought over the shop premises, the monthly instalment remains a heavy burden. There is no utilities subsidy for them. But, fortunately, the Minister for Finance has already announced that the Minister for National Development will introduce a series of measures to help them to tide over the difficult period. As a matter of fact, hardship cases are not confined to the retailers in HDB estates. Even the many shops in modern shopping complexes are having a hard time, with high rentals, high overhead expenses and low sales volume. Although the retail sector is said to have picked up last year, many small and middle retailers are moaning and groaning. Apart from retailers, many other sectors are similarly affected by poor business. Property sector aside, the related sectors such as the renovation contractors and the general traditional industries are also facing the problem of very poor business. In fact, apart from electronics and telecommunications sectors, all the other sectors are not doing well. Business may be poor but the cost of doing business remains on the high side with no sign of going down. Electricity tariffs are rising all the time. CPF contribution rates have been adjusted up by 4%. Petrol prices have also shot up. Although in this year's Budget, property tax will be reduced from 12% to 10% in July this year, the property tax rebate which was granted earlier would be revoked. As a result, property tax has in fact increased from 9% to 10%. It would appear that this year's Budget does not help to reduce the operating cost of those businesses which are not doing well, nor does it assist in solving their problem. If we want to effectively assist them, I think the Minister for Finance should consider lowering all the charges relating to the industrial and commercial sectors, for example, property tax should be reduced to 9%, and there should be some form of restraint on the raising of utilities tariffs. The Government should also exempt or lower the various charges levied on the small and middle enterprises. The Minister for Finance has used the tax-cutting measures to stimulate our economy and to bring about economic expansion and growth. This is a timely measure. However, if the fiscal policies can be coordinated with the monetary policies, the effect will surely be better. At the moment, there are signs of the US economy declining. President Bush has already announced tax cuts and Mr Greenspan of the Federal Reserves Bureau has also taken steps to lower the interest rates. Such coordination between the fiscal policy and the monetary policy will surely achieve better results in supporting the US economy. In this year's Budget, I do not see any sign of the monetary policies being deployed. In the next couple of years, if the regional economies do not recover and the US economy heads for a decline, Singapore's situation may not be too optimistic. Lowering of interest rates to encourage investments and stimulate consumption can be very useful in sustaining the economic growth. Although it is said that interest rates are determined by the commercial banks according to market situation, the Minister for Finance can make some adjustments to the discount rates and bank capital reserve ratio through the Monetary Authority of Singapore, to avail the banks of more liquidity and cause the whole interest rate structure to be adjusted downwards, thereby lowering the cost of borrowing of the individuals and corporations. On the one hand, it will stimulate personal consumption, and on the other hand, it can lower the operational cost of businesses. In this way, both consumption and investment can flourish, and economic growth can be sustained. This year's Budget can be said to be a Budget which "adds a flower to the brocade". The higher your income, the greater tax reduction benefits you will enjoy. I hope that it would simultaneously be a Budget which "sends burning charcoal in a snowy weather". Reduce or exempt levies and the various charges, lower the cost of borrowing, and cut down business cost to help the suffering businesses pull through these difficult times. Mr Speaker, Sir, I support the motion standing in the name of the Minister for Finance.

Mr Speaker, Sir, year 2001 to 2002 budget is a generous one. First, huge funds were given away in the form of year 2001 tax rebates, utilities, rentals and SC&CC charges rebates, CPF top-up and the Government's contributions to the various endowment funds. All this will cost the Government billions of dollars. This could only be possible because the previous year's budget had a surplus of $4.4 billion due to the exceptionally and unexpectedly good economic growth that led to $6.5 billion in additional tax revenue, as reported by Parliament's Estimates Committee. We have to thank the Government for its generosity in sharing the surplus and the fruits of economic success with the people. On the other hand, it is also what the people deserve for their sacrifices and contributions in turning the economy around from the Asian economic crisis. It has also established a good precedence by sharing the budgetary surplus with the people. I hope the Finance Minister will adopt sharing the budgetary surplus with the people as a standard feature for future budgets. Second, the new tax scheme for personal income tax for Year of Assessment 2002 offers as much as 30% tax reduction for an annual earned income less than $35,000 and a saving of 25% for an annual earned income of $50,000. For the high income earners, they will pay 22% less. The huge cut in personal income tax is very much more than the usual 10% tax rebate given out when there was a comfortable budget surplus in the past. To do a quick calculation, a typical family with an income of $1,500 per month, living in a four-room purchase flat, could save up to $730 from the goodies and the tax announced for Year of Assessment 2002. If the minimum $500 of CPF top-up is taken into consideration, the family will benefit $1,230. Sir, in a practical way, it is an amount good enough for the family to buy a low-end Pentium III computer. In this case, the household does not need to pay any income tax, and $1,230 is a direct contribution as income to the family. It is indeed a very generous move by the Government in looking after the people in the low-income group. Paying low income tax would mean that the people would have more disposable income. It would also help, in a small way, to boost the small retail and service industries which were not doing well in the past few years. Year 2000 economic performance was not uniform for all sectors. The construction industry and the small retail and service industries have still not picked up. The domestic industry involves quite a lot of people. In good times, the construction industry has a share of about 10% of our GDP. One could easily imagine that more than 10% of our people work in the construction industry because it is a labour-intensive industry. In this Budget, other than what has been mentioned about the possible upturn of the construction industry and the reduction of property tax by 2% from the original 12%, nothing great is being mentioned about how one could help in the recovery of the construction industry. In fact, the property tax reduction, as mentioned by my colleague, Dr Ker, was made after adjustment of the property tax rebate. This means that for Year of Assessment 2002, a land owner, property owner or developer will pay more tax in the form of property tax for Year of Assessment 2002, as compared with the previous year. I hope the Finance Minister will look into this again and see whether there is any error in the Budget announcement. Sir, the construction industry has been depressed for many years. Some of the big construction companies might be facing financial troubles. The consequence would be that we might weaken our construction industry which we had taken years to build up to the current stage. In future, if the demand should surge, we might find a similar competitive element, exercised in the past, which would not be there any more and the big foreign construction firms might dominate the market in the future. To help the industry create the construction volume is the only solution. On the one hand, we could consider increasing the public sector projects and, on the other hand, we could remove certain constraints that had artificially suppressed the demand. Sir, many of the anti-speculation policies in the property market were introduced in good times. In the post-Asian economic crisis, all these policies will go against us and suppress demand. We should either lift some of these unfavourable policies or take action to quickly let the property prices reflect its true values at the bottom of the V-shape curve and recover subsequently. The demand will continue to stay low if property prices do not bottom out. I would like to see more proactive measures by the Government to help the construction industry in its recovery. I am glad to note that there is a PSB Retail 21 10-year plan which is aimed at helping the retail industry in training, upgrading and modernisation. The retail business in the traditional HDB estates is lagging behind the modern shopping centres and is facing strong competition. The assistance from the Government comes at the right time. I hope PSB Retail 21 will help the small retail business to identify and overcome their weaknesses, reorganise the small retailers and strengthen their competitive edge to meet the challenges from the modern retail business in the future. I note that the Budget pays particular attention to the restructuring of our economy. The fund for the second 5-year Plan allocated to NSTB was doubled to $4 billion and an additional $7 billion Science and Technology Plan for the R&D activities for the next five years. In the case of life sciences, another $1 billion for R&D and $1 billion for the start-up fund were allocated. The size of the funds shows a strong commitment by the Government in restructuring our economy by moving upwards in the value-added chain. The success of Singapore's manufacturing sector must depend on the continuous innovation of new products and development of capabilities at the pinnacle of science and technology. The success will help to place Singapore ahead of other countries in the region of growth and high value-added areas. It gives Singapore a chance of success in certain areas while competing with the products from the developed countries. While emphasising so much on the development of new areas, like life sciences, we should also not forget other niche areas, like the micro-electronics and environmental engineering. They should continue to receive their assistance like before, to continuously sharpen their competitive edge. From my experience, our fellow Singaporeans always shy away from the technical and scientific R&D activities. Allocated with such a large sum of $12 billion for the next five years for R&D, I am concerned that if we did not pay sufficient attention, it might become an area overwhelmingly dominated by Asian expatriates. We should take sufficient action to encourage more of our young people to take part in this significant R&D programme which will have a very strong impact on the manufacturing sector in future. We might have to change our people's perception in the career development, reward system and the social status of R&D personnel. Generally, people may have problems in recognising that there is a career in R&D in Singapore. There are no obvious scientific and technological research posts in the public and private sectors. This is particularly true for the positions of top scientists and research engineers. The people who are employed for research and development work either call themselves as "engineer" or "scientist". And it is time that we should generously use the job title of research or development engineer or research scientist. This will help to establish in the people's mind that scientific research work is a very specific career that one could pursue. The present reward system of offering scholarships in the university could only attract students from the PRC and India. It has almost completely failed to attract Singaporeans to do research work. If we see university research training as the entry point into the chain of research manpower development, we must study how we could attract Singapore researchers. The aggressive science and technology plan given in this Budget could only be considered to be a complete success if we could mobilise and attract more young scientists and engineers to take part and contribute in this programme. Sir, I support the motion. 4.00 pm

Mr Speaker, Sir, I am pleased with this Budget Statement. It has been described as a generous Budget. In the past, budgets used to be described as "painless", and when they were painless budgets, we were very happy. And, most of the time, the painless Budget was painless but, after the Budget, there would be off-budget measures where the pain comes in the form of other taxes. But, now, in this generous Budget, we can still hope to listen to the Prime Minister in his National Day Rally and hope for more generosity. If some people describe this as a pre-election Budget, I am very happy. And since the elections need not be held until August 2002, I hope we can have another pre-election budget and, then, it would be even more generous. As Singaporeans, we are, of course, always generous in helping people in need, and we also enjoy receiving generosity from the Government. Let me state why I am quite pleased with this Budget. Firstly, I think the contributions of the workers were recognised. The workers took a huge sacrifice during the recession, they took the pain and, now, when there are surpluses, I think it is right for these to be returned to them. Particularly, the tax exemptions for wage earners and small-time businessmen are most welcome. The service and conservancy charges, utility rates and rental rebates are good gestures to the HDB heartlanders for the difficulties they had to face during the last economic crisis. I think one of the brilliant pieces is the company stock options scheme, which rules that there must be a requirement of at least 50% of the staff. This requirement of at least 50% of the staff would ensure that there is a fair distribution of gains. With many staff, at least more than 50% owning a stake in the company, they can only work to increase the shareholder value in the longer term, and this is definitely good. But we also need to look at other things. I ask the Minister why we need to reduce corporate tax by 1%. The argument about tax, whether Singapore would be declared a tax haven, was raised, and also whether the Government is locking itself in to a lower tax rate. In the past, there was the idea of giving rebates and, just in the case of personal income tax, could rebates have been a more useful tool? As trade unionists, as workers, we believe that it is very important to make companies profitable, and we actually took a lot of cuts in the past to ensure that companies remained profitable. But we also believe that when companies are making money, when they are highly profitable, they should not be unhappy to pay taxes. Paying taxes is actually paying a return to society for giving them the environment to make profits. And taxes are also useful because part of these could be used to help the less-advantaged people in our society. The other point of concern to the ground is the question of GST. They say that since personal income tax is reduced, corporate tax is reduced, can they have an assurance that GST would either stay the same or, if our surpluses are good enough, it can drop a little and it would be most welcome. Another point that I would like to raise is this: the Budget could do a little bit more for the old and sick. The pension revisions were far too little - $10 more. We could do more for pensioners and we could do more at more frequent intervals. I think that we should also revisit our thinking although we have endowment funds for the aged, for medical care, that we should revisit ourselves to see how best we could help the old in Singapore. Before I conclude, I would just like to reply to one hon. Member, who, in talking about Government-linked companies, linked NTUC Fairprice in the list of Government-linked companies. As a trade unionist, I think NTUC Fairprice is definitely not a Government-linked company. It is owned by more than 200,000 individual trade union members who own very small shares - $20, $50 or $1,000 - and a number of trade unions. So it is not a Government-linked company. It is just a workers' cooperative that is well-run and well done. And, if workers can run enterprises well, they should be applauded and given incentives to do a better job, and not be described as a Government-linked company. Finally, I would just like to describe this Budget as generous. But if only CPF had been fully restored, then I would be much happier. I think workers would be much happier and we would have described this Budget as very generous. So we look forward to a very generous Budget in future.

Sir, this year's Budget is indeed a generous one, with something for everyone. This time, the Minister has given special attention in developing the knowledge economy. It was indeed good to note that, for the first time in a very long time, something special has been done for the small and medium enterprises and start-ups. This will go a long way in helping us to grow local enterprises. I personally call this a Knowledge Economy Transition budget for the following reasons: First of all, the tax concessions for start-ups and SMEs as well as for the self-employed and entrepreneurs; Secondly, the tax incentives for software and intellectual property operation and maintenance; Thirdly, a learning fund for everyone who wants to upgrade himself or herself; Fourthly, stock options tax reliefs for big and small companies; and Fifthly, higher rebates for everyone to soften the impact of a recession or a digital divide should we see problems during this transition. Today, I would like to address a few key issues, which I believe were not adequately covered by the budget proposals but are important enough to get some attention if we want to transform Singapore's economy to be a truly first-world economy. First of all, the state of the economy. In my speech during the Budget debate in 1999, I spoke about the accuracy of the indices the Ministry uses to measure and predict the state of the economy and, hence, how policies are set for the budget. As I recall, in 1998, many private sector industry leaders projected declines in certain sectors of the Singapore economy, while the ministry projected growth in the same sectors. A year later, the results showed that the private sector's reading of the state of the economy was right while the Government's projections were wrong. This shows obvious gaps between how the private sector reads the economy versus how the Government reads it. This time around, I am afraid, we may be seeing the same pattern. Here is my take on the state of the economy and how many others are seeing it: Since the middle of December last year, there was a sudden drop in demand, as if someone pulled the plug on the growing economy. Comments like "someone switched off the lights in December" or "things fell off the cliff in the second week of December" were quite common. In my opinion, this is happening because of the expectation, of course, of a weaker US economy this year and the loss of confidence in a sustained growth in the key sectors of our economy. While I heard that Dr Ker talked about growth in electronics and telecommunications, unfortunately, I think what we are seeing is that sectors like electronics, semi-conductors, mobile and wireless communications equipment - and some of these that were high growth areas - are actually starting to see declines right now. While we started hearing of negative announcements by companies in terms of drops in revenues and profits and lowering of forecasted growth rates since July last year, the general expectation at that time was that it was a period of correction and that these were mainly company-specific problems and not a general industry problem. Now, we have seen three quarters of such negative news, with companies that did very well last year also sounding cautious about the economic growth and outlook. This now translates to a belief that we will be seeing a sustained downturn resulting in not-so-soft a landing of the US economy. Coupled with the woes in Japan, confidence levels have dropped in many parts of the world, including Singapore. In my opinion, we will, without doubt, see a slowdown for now, and it may last for the next two to three quarters. What is not so obvious is whether we will see recovery after that. And there are two possible scenarios that I would like to share. The first scenario is that the downturn is a short one and the US economy goes for a soft landing and confidence comes back, with consumers going back to purchase more. In my opinion, there has been too much of pessimism and, like always, consumers and companies have over-reacted due to the loss of confidence. This over-reaction is causing companies to drastically lower their forecasts of demand, to the point that they are now over conservative. These days, most companies do not keep very large volumes of inventories anyway, and they will see a depletion of inventory levels which have been built up in the last two quarters due to the sudden drop of demand, while production levels remained high at that time. With the depletion of inventories, we will see a quick turn-on of production when consumer demand returns. If and when this happens, we will see growth going back to sustainable levels and we can see a quick recovery. There is also the Asia demand factor, especially the demand for goods and services in China and Japan, especially if Japan reforms effectively. And this Asian demand may, to a certain extent, make up for the loss of US demand. Sir, the second scenario is not so nice. We may see a downturn lasting two to three years, and this will occur if the US goes into a recession and if they fail to get out of it fast and, especially, if the Japanese economy continues to drag. Consumer confidence would continue to be dragged down further and, if the stock markets remain depressed, people would become more conservative in spending. This will result in a continued decline of companies' performances. This, in my opinion, would lead to spiral effects of loss of confidence, where expectations of slowing sales and profits in companies would lead to worries about job cuts, which would lead to consumers slowing down spending, and which would further erode profits, which would in turn further weaken consumer confidence. Up to the end of last year, corporations were holding back making drastic structural changes to their companies, including people actions, and this was because the expectation was that there was a quick turnaround around the corner, and they wanted to be ready for a quick upturn when it comes and, therefore, they did not do the major restructuring. Given that the turnaround did not come, companies would now be seriously considering structural changes in their organisations and this scenario means a recession and tough times ahead for all of us. As to which of the two scenarios will prevail, I would say that we need a little more time to analyse and predict. We have to at least see how the first quarter goes. It is only after the dust has settled and the current confusion clears up due to the "over-pessimism" that we have seen starting December can we tell which direction the economy is heading. While I personally subscribe to the first scenario of a quick turnaround, we really need about three to four months to be a little surer. I therefore feel that the forecast of 5% to 7% is too optimistic, given the many changes that have happened, starting from the middle of December last year. I believe the indicators that the Government uses to measure the state of the economy are not sensitive enough to gauge the true situation of the economy, as the private sector has already reacted to the sudden slowdown while the Government indicators are not ringing any alarm bells. The other issue is that, in the past two years, economic recovery has been unequal, post Asian crisis. Certain sectors still lag behind and have not seen any recovery while a few did recover strongly, eg, the semi-conductors and the electronics industry. This time round, if a downturn comes quickly, we may risk wiping out some of these companies which will be hit by a double whammy because they would be hit again before they had a chance to recover from the last fall. More, therefore, should have been done in this budget, in anticipation of a deteriorating economy. We should be proactive and not reactive as we have been in the past. The second thing I would like to talk about is the cost of business and the future of the manufacturing sector in Singapore. While this year's budget was positive for businesses in two areas, first, the lowering of corporate taxes by 1% and, second, the lowering of property tax, I feel that the Minister could have taken the opportunity to review and implement changes which could further make Singapore an attractive hub and a centre for high value-added manufacturing activities. My concerns are in a few areas: Firstly, the cost increases. In the last one year or so, the cost of doing business in Singapore has increased. Costs have gone up in a number of areas, including Government rates, utilities, JTC rentals as well as CPF rates. The reversal of the cost-cutting measures occurred too fast at the first sign of economic recovery last year. The Government should hold off any more increases, in my opinion for now, and should a downturn come fast, the Government must be ready to react equally fast to address the cost competitiveness issues. The cost of doing business in Singapore will soon become a big issue again if we are not vigilant and let costs go back to the pre-Asian crisis levels. The Government should have a longer-term view of how the economy should be managed, especially when it involves the cost of doing business in Singapore. We got into trouble before and we can get into trouble again. I urge the Minister to convene a committee to start planning for a possible downturn and identify proactive measures. This will allow us to react decisively, should a downturn hit us again. The second thing on the manufacturing sector is that we all realise the importance of further strengthening the manufacturing sector as well as to establish a stronger base of SMEs which can transform into world-class companies. We have done an excellent job in attracting new investments in technology and manufacturing companies. The type of incentives, like the pioneer status, investment allowances, grants and subsidies, worked well in the past. Moving forward, I believe we need to devise new strategies and, therefore, new sets of incentives that will further strengthen the manufacturing sector as a key sector of our economy. Some of the things that we can do include giving incentives or tax breaks for companies which make productivity improvements. If a certain productivity standard can be developed and the Government can issue special tax incentives for companies that put in the resources to become more productive, this will be good for all of us. With a perpetual shortage of manpower, we have no choice but to be among the most productive in any activities that we carry out if we compare ourselves to any other countries in the world. Many of our incentive schemes also require investments to be made physically in Singapore. In doing so, we encourage companies to continue to add assets and resources in Singapore even though it may make sense to place such assets in more suitable countries. I therefore suggest that incentives to encourage outsourcing of activities to outside Singapore so that companies will restructure and focus on keeping only high value-added activities in Singapore. In a globalised knowledge economy, we should break up the whole value and supply chain of activities of manufacturing and service businesses and place the components of the value chain in countries best suited to carry out these activities productively and efficiently. Globalisation is also an urgent issue especially since regionalisation is not viable when the region is in turmoil. The Government should therefore take the opportunity to introduce new measures to give globalisation a boost, to encourage companies to move out of Singapore and beyond the region. It is about time we created more home-grown multinational companies which can compete effectively outside our shores and which can take advantage of the opportunities immediately available today as the whole market makes its transition to the new economy. On the whole, while we have done well with Government assistance and incentive schemes, I feel that we need to restructure the schemes to be more market-driven and move away from incentives that create a subsidy mentality. A subsidy driven scheme just hides weaknesses and does not give the opportunity for us to develop fundamentally strong companies able to compete in the world arena. It is time we reviewed and restructured the 60-plus incentive schemes existing today and to create a few effective ones. Sir, the third area which I would like to talk about is the promotion of entrepreneurship in the knowledge economy. The last two years had been excellent for us in encouraging Singaporeans to become more entrepreneurial. Many companies were set up and many of our young took the plunge to become entrepreneurs. The technopreneurial excitement was, however, short-lived for Singapore, but this, in my opinion, was for the better because a long drawn period of boom based on hypes and fundamentally weak business strategies could have damaged our economy more and would have damaged the confidence of would-be entrepreneurs even more. After the dot.com bust, there has been a big loss of confidence among entrepreneurs and investors. There are many lessons to be learnt from the last two years of experiences. For example, our budding entrepreneurs have learnt about the need for proper business models, the need to think of a global market place and not Singapore as a market, the need to avoid "me too" ventures where we just follow what someone else is doing without understanding the true strategies, and the need for fundamental business strategies to be worked out. From my personal experience, we had many fundamentally weak companies that sprouted out in the last two years and many could not have lasted anyway, even if the dot.com bust did not come. The bust did come and many experienced failures. I hope that this failure will become the basis of a better chance of success in the future. There is now over-pessimism among investors and VCs. Many are not willing to fund even viable companies. Unless something is done fast to help such companies, we will see a sad situation of potentially good companies seeing a premature end. At the end of last year, the Technopreneurship 21 Private Sector Committee, of which I am a member, requested the Government to set aside a special fund which we called a "Lifeline Fund" to help struggling start-ups that still have fundamentals but are facing cash squeeze that hinders their progress. Many face immediate collapse if not helped soon. I will elaborate on this "Lifeline Fund" during the Committee of Supply discussions. It is, however, really urgent and we must do something before we destroy the good environment that we have created in promoting technopreneurship in the last two years. We need to help some companies that are in trouble right now. Sir, the final point I would like to touch on is the privatisation of Government-linked companies and this is a topic that many Members have spoken about. The reason I am bringing this up again is to suggest that while we have seemingly good GLCs, if we consider how they perform in the local market, the truth of the matter is that they may develop weak fundamentals which would become serious setbacks when such companies compete with global companies outside Singapore. We have seen many examples of how some of these GLCs have failed to compete externally. If we look at the many GLCs in Singapore, the ones that are doing well are the ones that are truly privatised and hence subjected to true market discipline like any private sector company. I therefore hope that the pace of privatisation will be speeded up. While it will take time for privatisation to take place for all GLCs, in the meantime, there should also be greater transparency of how GLCs are managed. Policies and incentives for such companies should be market-driven. The Government should avoid giving undue subsidies which I feel may just hide weaknesses of such companies. We end up doing a disservice to the GLCs because in the long term, they would face problems when competing in the real world, where there is true market competition when in fact the GLCs have been used to an "easier than market" governance approach that we have created for them. I would like to end by once again expressing that we are heading in the right direction of transforming Singapore to a knowledge economy. The Budget announced by the Minister for Finance supports the transition to the new economy. I hope the Minister will seriously consider the suggestions I have made earlier to further strengthen Singapore's position as we compete with the world's best economies. With this, Sir, I support the motion.

(In Mandarin): Mr Speaker, Sir, in his speech, the Finance Minister said that this Budget is the "best ever" and "most generous". I was somewhat surprised because, by right, during the last two years, when the region was facing the financial crisis, and the people were desperately waiting for the Government to dish out more, the Government should be more generous in its Budget, yet it chose not to be so. In the past, even when the Government had a lot of budget surplus, it did not appear to be so generous. Why is it that the Government decides to be so generous this year? Now, let us look at just how generous this Budget is. First, in the reduction of personal income tax rates, the Finance Minister said that "an individual with an annual income of $35,000 would pay approximately 30% less tax and an individual whose annual income is $100,000 would save approximately 20% in income tax." As such, the lower and middle income taxpayers will benefit most. However, from my own calculations, under the new tax structure, an individual with a $35,000 annual income would save only $230, while one who earns $100,000 would save $2,230. How can we say that people in the lower-income group will benefit most? Secondly, the tax exemption on the first $7,500 chargeable income and the 10% tax rebate that came with the implementation of GST would benefit the higher income people most. To the lower-income group, the rebate and tax reduction mean nothing to them because if their income is low, they pay no tax at all. This is the true colour of the Government's generosity. You must first be able to earn money and the Government reduces its taxes on your earnings and it is then deemed to be mercifully generous to you. But please do not forget that even the lower-income people have to pay GST! This Budget also introduces a so-called "benefit-sharing" package, and the most attractive part is the CPF top-up scheme. However, under this scheme, in order to be entitled to the Government's top-up, there must first be some money deposited into the CPF account. It is like what the Hokkien people say, "Money fears loneliness". Only if you have money can you earn money. Then, you can earn some money from the Government and have more money. The Government is happy to spend some money and show generosity, at the expense of the people, with the hope of achieving what was described by an associate professor of NTU that "The ordinary people are overwhelmed by an unexpected favour to the extent of wanting to be thankful and be whole-heartedly grateful to the great leaders." I believe the people of Singapore will face three major problems in the next few years: first, a weaker US economy; secondly, with the economic reform, the older people with low educational level will not be able to cope and may lose their jobs or suffer a reduction in income; and, thirdly, the rising cost of living. The Finance Minister said that the Government would help those people who were affected by the economic reform to pull through. Yet, in this Budget, I do not see how the Government is going to help these lower-income people to pull through. The most worrying part is that if the regional situation worsens, and if the US economy heads for a hard-landing, many companies will close down or retrench their workers. The people in the lower and middle-income group will be affected most severely. Then, how are they going to survive? As regards the cost of living, in last year's Budget, the water-borne fees were raised substantially. Electricity charges were also increased considerably. If the charges for the various basic services continue to be adjusted upwards, then the burden of the people will become heavier and heavier. Although this Budget provides for a Utilities Save scheme whereby rebates are given (and rebates can please the people and show that the Government is able and generous), it is not a long-term solution. The rebates can be reduced or even revoked at any time. I feel that what the Government should do is to ensure that the cost of living will not keep on going up, and to alleviate the burden of the people through some budgetary measures. The various rebates can only temporarily relieve the pressure in the daily lives of the people. It is unable to resolve the problem of the escalating cost of living and the heavier and heavier burden of the ordinary citizens. Therefore, Mr Speaker, I am disappointed with this Budget which appears to be spectacular and extremely generous superficially, but which in substance fails to alleviate the burden on the people.

Sir, I wish to speak in support of this motion. If I have to describe the characteristic and impact of this Budget, in the history of Budgets presented in Singapore, I would say this is the big one.

4.27 pm Firstly, it turned out a budget surplus of $3.54 billion, after providing for 50% of the Net Investment Income contribution to the reserve without entering the budget's operating revenue stream (this amount is $1.55 billion) then providing for $1.84 billion in special transfers to the various top-ups to CPF, Lifelong Learning Endowment Fund, ElderCare Fund, MediShield Scheme for the Elderly, Senior Pensioners Grant Scheme, etc. This out-turn of $3.54 billion is arrived at after transferring almost $2 billion to the telcos in the course of the year's decision to accelerate telecommunication sector liberalisation. Even if we were to add back these figures, the figure is a staggering $8.9 billion. Out of a total budget of $28 billion in 2000, the surplus is almost one-third of the total expenditure budgeted. In the same breath, the economy turned in a 9.9% growth. The explanation for all these phenomena is not as discussed just now, to be found in the year for the general election, but I believe to be found in nowhere except in Chinese mythology. It is called the Year of the Dragon. The Minister is quick this year to give a $2 billion tax cut across almost all sectors in reduced personal and corporate tax. This is naturally welcome and needed. It is also necessary, I think. I am not against budget surplus, but excessive budget surplus out-turns at one-third of the projected expenditure for the year can mean unnecessary deflationary pull on the private sector economy through taxes and statutory costs and fees. This $2 billion tax break is almost universally welcome by people from all walks of life. A freer tax burden, including lower fees and statutory costs, can lead to a more dynamic, entrepreneurial economy with lesser debt burden. Despite this high growth budget surplus result, many people are asking: where is the growth coming from? They do not feel the growth in their sector, especially among the SMEs, the construction sector, which almost absorbs half of the capital formation and the financial services sector. More than 100,000 new jobs were created last year and the total external trade hit a record with exports growing by 22% last year. There are three areas in the economic data profile which I would like to express some concern for clarification by the Minister. The first is that overall productivity figures did not show comparable achievement, being at just over 5.2%, which was lower than the previous year's 6.2%. Sectoral productivity in the financial services, business services and construction services sectors declined. Overall and sectoral labour productivity figures can vary from year to year, because of many data reasons, but the sectoral productivity figures give me cause for concern, as a large proportion of the economy is languishing. Some of these sectors are undergoing re-engineering. So I would expect some adjustment in their output and input figures. Others are already making significant growth and development, especially in manufacturing, wholesale/retail trade and transport and communications. Our worst performing industrial sector continues to be construction where we have almost 50% of our gross capital formation - more than $23 billion out of $46 billion. The construction sector, which has contributed to about 6.8% of our GDP at constant dollars, has been showing negative labour productivity growth since 1995. Also, both the financial services sector and the business services sector which contribute about $31 billion out of a constant dollar GDP of $140 billion, ie, about 22% of the economy, are also experiencing negative growth in productivity. Therefore, almost 30% of the economy is languishing in declining productivity compared to the previous year. This is something of note while we congratulate the Minister for his Budget and economic growth. These may perhaps explain the often time gasp, "where is this growth coming from?" I urge the Minister not to let up on fiscal measures to give incentives and penalties for the errant construction sector to buck up and improve the construction sector's productivity. Unfortunately, we put half of our domestic capital formation in this basket. The lagging financial services and business services sectors also should be given some doses of incentives for responsiveness, as they have also been in negative labour productivity growth in these few years. They somehow have not quite recovered from the financial crisis since 1997. Apart from the productivity figures, however, an important feature is that a significant number of 100,000 jobs were created, more than our annual addition to the working population by the natural cohort of 50,000. It also shows that there is considerable success in re-channelling our workers who have been dislocated in one job to seek other employment by training and retraining programmes. I believe we are on the right track with the Ministry of Manpower's redoubtable Manpower 21 programme and the NTUC's Skill Retraining effort. The second area I wish to express concern is that somehow the growth of 9.9% in the economy did not quite reflect its lustrous performance in the monetary aggregates of M1 and M3, narrow money and broad money. M1 only grew by 7%, while broad money, M3, had been declining since 1998, and since August 2000, M2 has actually been shrinking. This is an unusual phenomenon, as strong economic growth usually correlates with growth in the money supply. I hazard a guess that domestic money is seeking refuge in foreign money for better returns, either as deposits or as foreign equity or assets. Last year, in the balance of payments figures, the Net Financial Account Deficit was $19.7 billion, quite sizable, although reduced from the previous year. Since 1996, on the balance of payments Capital and Financial Account Balance, there has been a net private sector financial outflow of funds on the capital accounts. These figures and the general perception of "where is this growth coming from?", coupled with this deflationary pull of a huge budget surplus, underline my concern on the state of the economy. The third area concerns deregulation in this new era economy, especially in telecommunications, utilities and Government statutory boards. Deregulation and liberalisation are important for introducing competition and customer-oriented development for efficiency. But by themselves, they are no panacea. Just like the hype about the new economy where at one time, it was even touted that the more chaotic and fuzzy the thinking, the better the prospect and potential for the new economy valuation, deregulation and liberalisation of the New Zealand economy, for example, one of the world's first pioneer in government sector liberalisation and deregulation, did not quite make for efficiency and customer satisfaction. Today, consumers there are not benefitting from the liberalisation programme. While the Government would like to liberalise or deregulate certain sectors or privatise certain businesses, it must not do so on the sacred cow, forsaking convenience and customer service, and for the small guy and the people at large. The example of DBS and POSBank, and Singapore Power come to mind. At the end of the day, I hope we should remember that good old economic value analysis still applies, whether in the old or new economy. Capital has its price, and business is about serving customers. We are transferring billions of dollars from the revenue stream onto all kinds of Funds - Lifelong Learning Endowment Fund, Medical Endowment Fund, ElderCare Fund, etc. I hope the Minister has some mechanism to monitor whether these funds are put to good productive use. These tax offsets and rebates given this year will help make an impact on the overall population. The Government promised last year that significant steps will be taken to uplift our people by financial assistance, by access to education and learning funding for school-based or work-based learning, to level up society in the wake of the income inequality from globalisation challenges. I think it is delivering all this. A tax cut on property from 12% to 10% is quite across the board, impacting many Singaporeans. The reduction in individual income tax by 2-5 percentage points for all bands will significantly impact Singaporeans from all walks of life. The generous service and conservancy charges and rental rebates granted for HDB dwellers are welcome goodies from the Minister. Many low income families and retirees will appreciate this gesture from the Government towards building a caring society. Sir, I support the motion.

Mr Deputy Speaker, Sir, the Budget this year has been generous, yet crafted carefully to propel the economy forward. It has measures to help Singapore stay competitive and has also eased the pain of restructuring. While the Budget has focused on the big picture, I am glad that the Budget has also catered for the needs of the individual Singaporeans. Most importantly, I am concerned that the unskilled or lowly skilled Singaporeans will have difficulty in finding a niche for themselves in the new era economy. Many of them are also sole breadwinners. I am glad that we have announced increased funding for several schemes, like investment in education and technology, CPF top-up, utility rebates, SC&CC rebates, ElderCare Fund and the Medical Endowment Fund. These are some measures that have been put in place to help the lower income, but I think more needs to be done. As we push ahead to help propel the economy forward, there will be stresses on the social fabric of society. For the unskilled or poorly skilled, structural unemployment will be a major social stress on the family, and many of them find that even though there are opportunities for training, they may not have the ability to adapt to the new environment. For the skilled workers or even the professionals, they face a different type of stress. The increasing trend of families with both parents working long hours will also stress the family unit. It is important that as we work towards increasing productivity and restructuring the economy, we must be mindful of the family unit and the stresses it faces. Having more children see psychiatrist and increasing divorces are signs of strain on the Singapore family unit. Down on the ground, the Community Development Councils (CDCs) can play a pivotal role in working with the voluntary welfare organisations to help prevent or relieve the social stresses on the Singapore family. It can be a central agency to marshal the resources of the voluntary welfare organisations, and also be a key point for people to go to when they need help in this area. Current CDCs have insufficient manpower and resources to carry out their roles to their full potential. Government should increase funding for CDCs, and also look at increased incentives to encourage both individuals and companies to help provide increased funding for the CDCs in their personal or company capacity. The other key organisation that is important in the heartlands where most people live in will be the town councils. After the Asian economic crisis, the town councils and, more lately, the CDCs have been looking for alternative financial instruments to place their funds. With the lowering of interest rates, bonds have become attractive alternatives. In line with the Government's effort to grow the bond market, town councils have also been active in participating in the bond market. In the 1998 Budget statement, a 10% concessionary rate of tax on interest income derived from qualifying debt securities was announced. However, the concessionary tax rate for bonds has not been extended to town councils and the CDCs. Both these organisations are organisations that work not for themselves but for the people on the ground and the people in the heartlands. I think it is time that the Ministry of Finance considered extending this concessionary tax rate to these organisations.

Mr Deputy Speaker, Sir, I wish to congratulate the Minister for Finance for giving out the best Budget during his tenure to date. In many ways, Dr Richard Hu's long years of prudence in steering the financial and fiscal policies has enabled Singapore to remain the beacon of a stable, progressive and prosperous economy. On the operating expenditure side, the Government has kept itself small, lean and effective. In the development expenditure, there is no let-up in ensuring that our infrastructure and investment in schools and educational institutions, transportation, housing, hospitals, medical centres and polyclinics keep up with the times and of high quality for the benefit of all Singaporeans. On the revenue side, personal incomes and corporate earnings have grown and therefore tax revenues. The introduction of COEs, GST and new fees and charges has enabled the Government to have good and regular income stream to finance the expenditures required. What is of significance is Singapore's ability to ride over the difficulties of economic downturns and prepare for the new wave of economic and business challenges in the horizon. The economic restructuring process, began in the mid-1980s, when Singapore met with its first economic recession since independence in 1985, taught us the valuable lesson. We learnt the lesson well and successfully overcame quickly the regional financial crisis 12 years later in 1997. The new knowledge economy poses tremendous challenges for the Government and Singaporeans at large. But, Sir, I like to make a plea for the elderly citizens in the light of all these challenges. The longevity of our people, because of higher standards of living and the increasing number of elderly persons, are long-term issues we cannot avoid, but to deal with as early as possible. For this growing group of elderly citizens, their earnings will decline and expenditures will rise. We are already seeing within a family two generations of retired persons - parents in their 80s and above, and children in their 60s who have also retired. This brings a heavy burden on these families where medical cost and healthcare expenditures are major concerns. They belong to the generation of little or no CPF savings and lower earnings in their early active working lives. For many of them, the homes they live in are the only assets they own. They have little cash. Yet the policy appears to disadvantage them for assistance. It is not easy for the elderly with financial needs to dispose of their homes they are comfortable with or to downgrade to smaller flats or selling off their property and living in rented accommodation. I wish to ask whether the Government can be a little bit more sympathetic and considerate to these elderly citizens with financial difficulties to exclude from consideration the HDB flat that they own, to be able to obtain financial help from the Government through the CDCs or other Government agencies. The difficulties lie because their children, who themselves are not doing well, have their own families to support. I know the children are encouraged and expected to support and look after their parents, but for those whose parents have prolonged illness and need long-term medical care, the financial strain is burdensome indeed. Perhaps the Government can modify its attitude to recognise that we are having in our midst the pioneering generation of independent Singapore needing help. If we lighten the burden of these elderly citizens in their twilight years, we are helping their children at the same time. They would be relieved from the financial burden of taking care of their grandparents and parents and concentrate on taking good care of their young families. Competencies in Finance and Risk Management When I observe the difficulties faced by individuals and small businesses, what strikes me most is the general lack of competency or even literacy in the management of the financial affairs and risks in our population. I agree with the principle of caveat emptor, that the individual is responsible for the consequence of his investment decisions, but do we have the positive attitude of sharing investment knowledge and experience amongst our people? Perhaps the Finance Ministry can take upon itself to educate our population in the area of financial and risk management. These are areas of knowledge and skills essential to strengthening Singapore's position as a financial and business hub where we have an investment-savvy population playing an active role in the businesses of the region and the international markets. We can all help one another to realise better returns and values for investment, both national, corporate and individuals. This is one way of securing the best growth returns for the retirement nest egg of our people. I say this, Sir, because in recent years we have seen that those who have made investments through their CPF savings have not obtained the kind of value that they have wished. By and large, Singaporeans like the "DIY" (Do It Yourself) approach and are not prepared to pay for the service of the experts. Sometimes I do not blame them because the so-called experts are not truly the experts. Therefore, the move towards greater professionalism in the financial services sector is a welcome one. The Singapore consumers deserve better service from businesses and service providers. In order to break away from the traditional ineffective ways of rendering service, foreign talents are attracted to play the useful role of providing the much needed expertise in both the domestic and international markets. Though I must add that the DBS Bank management did not display the high standards expected of talented foreign management in the handling of the POSBank merger and subsequent consumer retail business in POSBank, I believe we all can learn from the lessons there. Supplementary Retirement Scheme The Supplementary Retirement Scheme allows foreigners to enjoy additional benefits that they do not have on tax deductible allowance for CPF contributions. Concerns have been raised about the level of charges levied by SRS operator banks and the quality of financial advice they can offer to SRS participants. I agree with the Government's move to support the local banks. I hope these banks will do justice to the favourable position they enjoy in the deposit and investment of SRS funds. Perhaps the Government can take one step further through the SRS to give incentives to small and medium enterprises (SMEs) to encourage them to engage the services of foreign talent to help expand their markets. Traditionally, the executives in the MNCs have specialised and expert market knowledge and networks round the globe. The Singapore SMEs can benefit tremendously if they can be more successful in achieving good brand names for their products and services. In the Internet world, having indigenous brands and managing the integrity of our products and services will become highly critical in the global markets. Stock Option Scheme Finally, Sir, on stock option scheme. Under the Company Stock Option Scheme, the Government has provided some waiver of tax for gains of up to $1 million over 10 years, and I believe this is a good move. I support the sentiment that the Company Stock Option Scheme should benefit the majority of the employees so that as stakeholders, the workforce will bond the staff together working as a team for the long-term interest of the company and the people working in it. I am surprised that there are still some tax experts who quibble as to why tax should be shifted from the point options are exercised to the point when stock is sold, given the wild swings in the share prices. Do these experts not know that, firstly, the employees would be granted share options regularly, and secondly, precisely because of the volatility of share price fluctuations the option holders should only exercise their options when they want to sell their shares. It is really unwise for the option holders to exercise their shares and continue to hold them as they would then have to bear the risk which many have learnt to their despair during the regional financial crisis that it is the most unwise thing to do. I am glad that the Finance Minister does not heed this suggestion of shifting tax from the point option is exercised to the point when stock is sold, giving the clear guidance and message as to how option holders should be careful in exercising the options only when they want to sell the shares. Sir, I support the motion.

(In Mandarin): Mr Deputy Speaker, Sir, this year the Minister for Finance, Dr Richard Hu, has presented a wealth-sharing Budget and this has made Singaporeans think that this is a very generous Budget in an election year. With global economic competition getting more and more intense today, many countries have plunged into economic and political predicament. In certain countries, owing to the quality of political leadership, these leaders are unable to turn around their economic decline, resulting in substantial currency depreciation, outflow of capital, withdrawal of foreign investments and grave unemployment situation. The people there have not been able to see the light at the end of the tunnel and there are frequent riots. The whole economy is paralysed. Under these circumstances, even a general election followed by a change of government is unable to solve their national problems. On the other hand, take a look at Singapore. We are able to accumulate budget surpluses year after year. The people are well taken care of. They are well fed and well clothed. People enjoy high wages and stable jobs. Even the low income group and the less fortunate people receive very good care and concern. People are able to share in the prosperity of the country. Our society is stable and peaceful, and our currency strong and stable. People live in safety and prosperity. This is due, to a great extent, to the fact that the people of Singapore have been wise in electing a reliable and good Government which has the people's welfare at heart. I know that some Singaporeans are of the view that the political leaders are overpaid in Singapore. Fortunately, the vast majority of Singaporeans are sober in realising that we would rather have a good government which is paid well, of high quality, efficient, and works for the benefit of the people than to have a "cheapskate" government to lead Singapore into disasters and chaos. As long as we are able to maintain this national consciousness we will continue to have a peaceful and prosperous Singapore where the people are able to share in the wealth of the nation, year after year. This is our common wish. The Opposition Member, Mr Low Thia Khiang, remarked that the Budget was only seemingly generous but not so substantially. I think such a remark can only come from those who may know a lot about politics but little about economics. Mr Deputy Speaker, Sir, when I visited the Silicon Valley in the United States of America in July last year, the US economy was booming. I was told that when a high-technology company wanted to engage a head of department, it had great difficulty in getting a suitable candidate. Very often, it had to offer very attractive salaries and stock option to poach from other high-technology companies for the required talent. Even then, not many people were interested in such attractive offers. However, a few months later, the situation over there underwent some earth-shaking changes. Two weeks ago, I visited the Silicon Valley again. I could vividly feel that the US economy has slowed down. Those dot.com companies which did not have solid foundations saw their share prices falling from US$100 to US$1, some even went down to 60 cents. Even the strong high-tech companies also found their share prices tumbling down from US$100 to between US$16 and US$26. The consumption market was also very hard hit. The same high-tech company, which I mentioned earlier, now receives some 60 to 70 applications for one vacancy of head of department. Among the applicants, many are Ph.D and M.Sc degree holders. As such, I feel that the slowing down of the US economy or the possible recession will have great impact on the world economy, including Singapore's economy. There is one observation which warrants our attention. When I was talking to the entrepreneurs in the Silicon Valley, they did not think the conservative economic ideas of the new US administration would be able to solve the present economic crisis faced by the United States of America. That being the case, we should pay more attention to the changes in the US economy, and monitor closely the progress over there. Perhaps, we should consider putting part of our economic development plan on the two major economies in Asia, namely, flourishing China and the potentially viable India. In my view, hitherto, our investments in these two countries and our understanding of their cultural backgrounds are grossly inadequate. I am very pleased with the tax reduction and rebates announced in the Budget. These will benefit Singaporeans from all stations of life as well as the business community. Reduction in corporate tax is the general trend in the whole globalised economy. The biggest piece of good news to the business community is the reduction of corporate tax from 25.5% to 24.5%. To maintain our competitive edge, it would be absolutely necessary to carry on cutting our corporate tax in the next few years. As for the individual tax, with effect from YA 2002, the Government will reduce the rate of individual income tax by 2% to 5% and the top income bracket will be reduced from 28% to 26%. This is a wise move. The Government has continued to help the low income group by ways of rebates and reduction in rental, utilities, and S&C charges. This means that when we have succeeded in our economic development, we do not neglect those less fortunate and elderly people. We also provide opportunities for them to be trained and retrained. The Minister has also put forward many measures to stimulate our commercial and business community. These include the employee stock option scheme. From 1st April onwards, the gains made by this scheme will be tax exempt for the first $2,000. Thereafter, a tax of 25% will be levied on the other gains with a cap of $1 million. This measure will stimulate the enterprises and the enterpreneurs. I feel that the Government is still very conservative in this scheme. I hope that the Government will be bolder and faster to approve the entrepreneur's application for such a scheme so that their employees will be able to enjoy the gains under this scheme earlier. I support the motion.

Mr Deputy Speaker, Sir, I rise in support of the motion as proposed by the Finance Minister. This year's Budget is indeed a good Budget filled with goodies for everyone. It is a Budget aimed at nurturing Singaporeans and our businesses to transit into a knowledge-based economy. The Budget will provide a boost for Singapore to position itself in the new economy. It will also help Singaporeans to prepare themselves for global competition. As a small country with limited resources, Singapore has no choice but to continually carve out niches to position itself in an increasing seamless global market. Development of human capital has always been our main focus. The Government continues to invest heavily in educating our young, and upgrading the skills of our workers. While we are constantly chasing global trends, we must not forget those who may encounter difficulty to keep pace of the changes. Every effort must be made to help these fellow Singaporeans feel at home in Singapore. Otherwise, dichotomy will occur in our population, thus weakening our social fabric. Thus, the key challenge facing the Government is to develop a globally competitive workforce, and at the same time continue to improve the quality of life of all Singaporeans. Although this year's Budget is a generous one, I am sure the Government can do more to help small consumers and small businesses. This is particularly so for many working Singaporeans who had suffered CPF cuts over the last two years. Small and medium enterprises (SMEs) have also been badly affected by the financial crisis and globalisation trends. Sir, I would like to propose the following measures for nurturing small consumers and SMEs to transit into the new economy:- On personal tax and GST rebate, the cut of income tax rates and one-off income tax rebate of 10% have indeed lowered the tax burden of many workers. A comparison among low, middle and high-income earners shows that low-income earners (those earning $35,000 per annum) will enjoy a tax saving of $175 while the middle income (those earning $50,000 per annum) and high-income earners (those earning $100,000 annual income) will have $375 and $1,775 tax savings respectively. As all income earners suffer a flat rate of $250 GST rebate cut, this has drastically reduced the income tax saving of low-income earners. Sir, whether you are a low or high-income earner, you still pay the same price for a cup of coffee and a bowl of noodles. The increasing cost of living has put much financial burden on many small consumers. It affects their quality of life. I hope the Finance Minister can consider more innovative ways to give out tax rebates, which will benefit low-income earners. A good example to follow is the National Wages Council which recommends a fixed and variable salary increase mechanism to help low-income earners. Income tax rebate can also have both a fixed sum rebate and a percentage cut to motivate all our workers. As for S&C and utilities rebates, we should extend the benefits to HDB Executive flat residents and retirees living in private estates. Some Singaporeans in these groups do not enjoy much benefit from income tax rebates or other relief. For example, in Woodlands New Town, we have quite a number of multi-tier families staying in jumbo HDB Executive flats. These residents have made efforts to stay together as one big family so as to look after their parents. But, they are always being left with not much rebate when Government shares its surplus. On Widow Fund, the competitive society and cost of living in Singapore have made life very difficult for one group of Singaporeans, that is, widows. Families that are struck with disaster, such as death, or major illness of their sole bread-winners, usually encounter much difficulty to raise their families thereafter. Their quality of life deteriorates very quickly and their children's education is badly affected. A widow with two or more children to support will face grave difficulty to balance between work and family. There is a drastic lack of communal support facilities and affordable family service centers to help these families. I would urge the Government to consider setting up a Widow Fund to provide special assistance to these disadvantaged families. This will provide a level playing field for their children to succeed in life. The present assistance schemes provided by the CDCs and various constituencies are inadequate to alleviate the financial burden faced by widows. Very often, the financial assistance is short-term and does not alleviate the long-term financial burden of widows. I would urge the Government to show more compassion to widows, and help them to live life more comfortably. My sympathy and admiration goes to all widows who make untiring sacrifices for their children to succeed in life. Sir, they deserve special attention. On subsidy for pre-school education, in the past, the Government has taken a position that pre-school education should be left to the private sector, and thus not much support was given to pre-school operators. However, recent findings have shown that pre-school education plays a critical role in nurturing young minds to be well equipped for mainstream education. Today, children in mainstream education enjoy subsidized education while those in pre-school centres pay market rates ranging from $25 to about $800 per month. This has placed much financial burden on families with two or more children. If the Government were to encourage Singaporeans to have larger families, we must provide this basic support of subsidizing pre-school education. This is in line with the Government's focus on educating our young. On Eldercare and Medical Endowment Fund, the contribution of $250 million to the Eldercare Fund and $100 million to the Medical Endowment Fund is a welcomed move in view of the fast ageing population. The rising health cost in Singapore has been a concern for many Singaporeans, especially the elderly and low-income earners. Besides supporting nursing homes and medical bills of the lower-income individuals, I hope the funds can also be used to provide free community ambulance services for the elderly and primary healthcare services at the community. In October last year, the Ministry of Health implemented a pilot Primary Care Partnership Scheme to contract private clinics to serve needy elderly in the community. This scheme can be expanded to provide a wider range of medical services for the elderly. The eligibility criteria should be reviewed to allow more elderly to qualify for the scheme. The scheme can also be extended to young children below the schooling age. On nurturing small and medium businesses, local SMEs play an important role in our economy. They comprise 92% of the total establishments in Singapore and employ 51% of our workforce. In the knowledge-based economy, our local SMEs will continue to perform a vital role to spearhead Singapore's globalisation efforts. But, the Government must be proactive to help local SMEs perform this role. The SME 21 plan is a step forward in building the capabilities of our local SMEs. But we need to identify the potential of SMEs in the products and services industry. More efforts must be channelled to help SMEs that have good potential to develop niches and position their products and services in the global marketplace. More generous grants can be given to accelerate their globalisation efforts. Feedback from local SMEs indicates that many of them are facing problems of high rental and labour cost in Singapore. The cost of Government services and compliance cost have also contributed to the increased business costs. In order to position local SMEs in the new economy, I would like to propose the following measures: (a) Property Tax Cut The cut in property tax and the removal of the existing 25% property tax rebate in July 2001 will not help much in reducing business costs. SMEs, especially owner-occupied businesses, expect a higher property tax cut to enable them to ride out the crisis. Since the implementation of GST, the tax base of the Government has broadened. It is about time that the Government seriously considered removing property tax in Singapore, especially for owner-occupied properties. This would not only encourage asset ownership but also reduce the cost of businesses that invest in property for long-term growth. Our taxation policy must not pose unnecessary hindrances to the growth of our local SMEs. (b) Reduction of National Development Expenditure This year's budget has allocated a lower development expenditure for the Ministry of National Development. The $500 million reduction in development expenditure will have an adverse impact on the construction industry, which is presently experiencing low workload. The projected slowdown of HDB building programme will further aggravate the state of the construction industry. Many local construction firms are HDB contractors and, thus, will not be able to secure enough contracts this year to keep their workforce. The decrease in development expenditure will further dampen the industry, resulting in more job losses. There will be more intense and unhealthy competition among contractors, leading to undesirable consequences such as poor construction quality and safety. As the Government is actively promoting sporting and healthy lifestyle among Singaporeans, we should expedite the construction of park connectors and upgrading of sports complexes. Older design swimming pools should also undergo major upgrading to keep abreast of new lifestyle aspirations of Singaporeans. Sports complexes can be upgraded with modern equipment, like those of the California Fitness Centre, to attract Singaporeans to keep fit. Sir, the construction industry is in need of assistance to get out of the crisis. Many construction firms are finding it difficult to survive in the present environment. Unless the Government steps in to assist, we may lose some construction firms, including some construction pioneers of Singapore. This will retard our efforts to nurture local SMEs to be world-class companies. Sir, the next few years will be testing years for Singapore as we transit from the old to the new economy. Both our business community and people will be affected in one way or another in the transition. We must continue to strive to work hard together to cope with these changes. I believe our concerted efforts will definitely bear fruition for future generations of Singaporeans. We must continue to support good governance to safeguard our future. In a globalised environment, it is even more crucial to have good governance to ensure that Singapore can thrive in the global world successfully.

Mr Deputy Speaker, Sir, I join others who have spoken already in expressing appreciation of the Minister for Finance's generous Budget, with something in it for everyone - companies big and small, and individuals across the board. Against the background of the Census Report 2000, released last month on household income, it is good to note that we have not forgotten to specifically direct some small measure of assistance to those at the bottom of the economic ladder in the form of utilities and rental rebates, and in the structuring of CPF top-ups, such that lower-income earners receive the highest payouts. The Census Report showed a widening of the income gap, with those at the top 10% of households earning 36 times more than those in the bottom 10%. It has caused a significant discussion, as indeed it should, especially in the midst of concurrent recent soul-searching about what it means to be Singaporean, on belonging, rootedness and values. The Prime Minister, just quoted in yesterday's newspapers, said that we should not get too carried away in exaggerating both the width of the income divide or its consequences. Certainly, at this point in time, we are very far from being a society that is polarised, with a group of very rich who indulge in ostentatious consumption, against the backdrop of large numbers of desperately poor without even their most basic needs met. In fact, our short history has been one that has seen large numbers of Singaporeans, the majority, being able to translate their efforts and capabilities into much improved standards of living for themselves. Nor is there any argument with the Government's focus and policies to ensure that we keep abreast of the challenges of globalisation, of its philosophy of leveraging upwards, giving its attention to how to support and facilitate enterprise and talent at the top, so as to generate benefits for the nation at large. Nevertheless, I do believe that we should pause to look at the widening income gap and review if we are indeed doing enough to ensure that we will continue to maintain our social cohesion and build an even stronger national spirit. In addressing the income divide, there are two main issues that are cause for concern. The two issues are, firstly, ensuring access to education and training that are critical to providing all Singaporeans the opportunity to do better for themselves and, secondly, providing adequate assistance and support to those who are struggling at the bottom of the income ladder. These two issues are of particular relevance to four groups of people: the elderly poor, women, the large group of older and unskilled workers, and the present and future school children from low-income households. We have an education system that produces sterling examination results and sees our children winning accolades at international mathematics and science competitions. These are our kids at the top. But does our system give enough support to the kids at the bottom, particularly those whose home environment may afford them hardly the bare essentials? That education is the bridge across the income divide is clear and unquestionable. Another quick look at the Census Report shows clearly the difference that just one member of a household having a higher level of educational attainment makes to those households' average income. It is imperative, therefore, that children of the lower income households have not only the opportunity to be in school, but a little extra attention, where necessary, to make up for what support may be lacking in difficult home circumstances, so that they may have a good shot at better opportunities in life in the future. Similarly, for the large pool of older unskilled workers, retraining and upgrading of their skills are critical and, in this area, the Government has been devoting significant attention and resources. However, response to skills upgrading programmes could be much more satisfactory, and work must continue to be done to see how this can be improved. Apart from those for whom the issue is simply that of poor attitude, what are the obstacles hindering the participation of the others? For the elderly, we must look at both those who are already currently in their retirement years as well as preparing for the aging of our population of baby boomers. The IMC on the aging population in 1999 devoted one segment of its report to planning for financial security in retirement. For those already 65 years and above, it is too late to be talking about financial planning, and our efforts must be to see how we can help those who need assistance to access it. These are the citizens in our midst who do not know what help is available, do not know how or are too frail or otherwise incapable of accessing available assistance. The recent information on the almost 200,000 Singaporeans who missed the opportunity of benefiting from the first tranche of CPF top-up is an illustration of this. 23% of them were over 65 years of age, probably without CPF accounts in the first place, unaware of the scheme or the necessity to deposit $100 in the qualifying period, or too poor to spare the amount. Our CPF top-up is the best way to share some of the economic surpluses during good years for the country. Would the working majority begrudge some portion of the goodies being shared with those who have no CPF accounts, particularly if they are the older generation who contributed in the past, or women whose contributions are not in the labour force? In fact, could we go beyond the current structuring of payouts to further direct the money where it is most needed? For the people in the top 20%, could we implement an opt-in scheme to indicate that they want their $500 top-up, otherwise that money would be re-directed for disbursement to the bottom 20%? The amount could mean very little to one group and be significant to the other, and it would be a good way to demonstrate concern and support across the divide. The approach of looking at various ways of enhancing Singaporeans' financial planning for their retirement, through their CPF savings, assumes that people have enough savings available to spare in the first place. The Supplementary Retirement Scheme, the details of which were also recently announced, is such an example. In fact, there is a large group of Singaporeans, the 47% of women who are not in the labour force, ie, the homemakers, and who therefore have no CPF accounts, who will presumably have to rely entirely on their children to provide for them, since they are most likely to survive their spouses. These women work; only their work is unpaid labour, done at home. Would our economy be able to hum and grow as it has, if there was not all that work being done every day in homes all through the island to keep our workers fed and rested, and our children cared for? These women will also grow old and add to the households with retirees without income that form the bottom 10%. We must find a means to register and reward their contribution so that, when they grow old, they do not then find that, after the many years of contribution, they are reduced to feeling that they survive only on the generosity of society. Finally, there is one other group that has an important part to play in any discussion on the income divide, and this is the group at the top, who are of concern for two reasons. Firstly, they may be moved to give something back to the society that has enabled their development and progress, and contribute their skills and abilities as well as some portion of their material wealth in helping the further advancement of the nation and the welfare of its less well-endowed citizens. And, secondly, that they will remain rooted to Singapore in the face of the many opportunities open to them anywhere else in the world.

Resolved, That the debate be now adjourned. - [Mr Wong Kan Seng].

Dr Hu, debate to be resumed on what day?

On Wednesday, 7th of March, Sir.

So be it.

Resolved, That Parliament do now adjourn. - [Mr Wong Kan Seng]. Adjourned accordingly at Half past Five o'clock pm.

asked the Minister for Education (a) whether an analysis has been done of the socio-economic profile, as measured by household income, housing type or other relevant indicators, of students in (i) the Gifted Education Programme (GEP), (ii) the Express Stream, (iii) the Normal Stream, (iv) the polytechnics, and (v) the universities; (b) if so, what is the profile; and (c) if not, does his Ministry intend to do such an analysis to determine how successful or otherwise we have been in helping the younger generation from the lower income groups break out of the poverty trap.

59% of secondary school students live in HDB 4-room or smaller flats. Currently 16% of GEP students, 52% of Express Stream students, and 72% of Normal Stream students live in HDB 4-room or smaller flats. We currently do not have complete data on the socio-economic profile of our students in the tertiary institutions. The data above shows that our education system, based on meritocracy, provides a range of opportunities for educational advancement to all students according to their aptitudes and abilities irrespective of their socio-economic background. While it is possible to make opportunities available, equalising opportunities will not equalise outcomes. That 89% of students now obtain post secondary education, a figure that compares favourably even with developed countries in the OECD, indicates that the education system does provide opportunities for the vast majority of students to secure good jobs in a modern economy and avoid impoverishment. To ensure that all children in Singapore can benefit from our education system, general education is almost fully subsidised by the Government. Parents are only required to pay miscellaneous fees as a contribution towards the cost of materials used by pupils in the schools, and subsidised school fees in secondary schools and JC/CIs. There is also a Financial Assistance Scheme which pupils from lower-income households can apply for. School fees for pupils under this scheme are waived. The scheme also offers exemption from payment of miscellaneous fees, except for a portion that parents have to co-pay. Needy students under this scheme also receive free textbooks. Needy pupils can also receive additional assistance and bursaries from schemes administered by their schools and community organisations such as the Community Development Councils and Family Services Centres. In addition, under the Edusave Pupils Fund, every 1st to 3rd born child between the ages of 6-16 receives an annual contribution to his/her Edusave account. In 2001, the Government contributed $160 to the Edusave account of eligible pupils. Pupils can use the money to pay for enrichment programmes or pay for a portion of their miscellaneous fees. As a special encouragement to pupils from more modest backgrounds, Edusave merit bursaries are granted to those in the top 25% who were not eligible for Edusave scholarships.