Hansard, 2003-03-10

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 (2003)(2003) Mr S Iswaran2 Mar6 Mar Mr K Shanmugam10 Mar14 Mar Mr Davinder Singh13 Mar- Mr Lim Hng Kiang1 May5 May Dr Wang Kai Yuen25 Mar29 Mar Mr Heng Chee How30 Mar6 Apr ABDULLAH TARMUGI Speaker Parliament of Singapore

Resolved,

That, under Standing Order 10(2), the business motion standing under the name of the Leader of the House as listed on the Order Paper for today, be taken now." - [Mr Wong Kan Seng].

Resolved,

"That, notwithstanding the resolution on the revision of Question Time on 2nd April 2002, the times stipulated under the Standing Order Nos. 21(1) and 88(2) shall apply at the sittings on the days allotted for the Debate on Budget Statement and the consideration of the Estimates for FY 2003/2004." - [Mr Wong Kan Seng].

asked the Minister for Manpower in view of the recent announcement to increase with effect from January 2004 the monthly levy on a single-skilled worker from $30 to $320 in an effort to encourage construction companies to upgrade the skills of their workers, whether there are any specific interim measures the Ministry will take to help facilitate and ease the burden of construction companies in retraining their workers.

Mr Speaker, Sir, the construction industry is the largest employer of foreign workers in Singapore. Although the vast majority possess a trade skill, this has not translated into improvements in Singapore's construction productivity. Thus, the Government had introduced multi-skilling and enhanced the skills criteria for lower foreign worker levy. This is to raise the overall skill level of the foreign construction workforce and reduce the industry's reliance on low-skilled workers. Multi-skilled workers can be deployed for a wider range of jobs at a construction site. This will result in more efficient manpower utilisation and higher productivity. Sir, my Ministry and the BCA are mindful of the impact the changes may have on the industry. Only new foreign workers recruited after 1st January 2004 have to meet the new skills criteria to be eligible for the lower levy. Existing workers have a transition period of two years until 1st January 2005 to re-qualify for the lower levy. They will continue to be eligible for the low levy (currently at $30 per month) until this date, ie, 1st January 2005. So, most ongoing contracts would not be affected. With the long transition period, contractors would also have sufficient time to adjust their operations and factor the changes in their tenders. They should also have sufficient lead-time to train their workers to acquire a second skill during this period. Contracts of a longer duration that could be severely affected will be considered on a case-by-case basis by BCA. Following these changes, contractors should not continue to recruit low skill foreign construction workers. The sensible thing is to make greater efforts to recruit better-skilled and more experienced workers. Business-wise, this is better than recruiting low-skilled workers to be trained in Singapore. While such multi-skilled workers will expect higher wages, the lower levy and productivity gains will more than offset any higher wage cost.

Sir, in view of this change, will the Ministry continue to reduce the Man Year Entitlement (MYE) as recommended by the Construction 21 Committee every year?

Mr Speaker, Sir, the answer is yes. Over the longer term, we will still move towards tightening the allocation of non-traditional source workers under the Man Year Entitlement scheme to contractors. But in view of the slew of changes that has been introduced this year, we have decided that, for this year, we will suspend any further revision of the Man Year Entitlement scheme. But, starting from next year, we will review the situation and if, in fact, there is still room for further reduction, which we believe that there would be, then we will carry on to achieve the target set by Construction 21, which is to half the dependency on foreign construction workers within a certain timeframe or faster, if we can achieve it.

"to amend the International Enterprise Singapore Board Act (Chapter 143B of the 2002 Revised Edition) and to make consequential and related amendments to other written laws",

presented by the Deputy Prime Minister and Minister for Finance (Mr Lee Hsien Loong); read the First time; to be read a Second time after the Committee of Supply debate on the Estimates of Expenditure for FY 2003/2004, and to be printed.

"to amend the Customs Act (Chapter 70 of the 2001 Revised Edition) and to make consequential amendments to certain other written laws", recommendation of President signified; presented by Mr Lee Hsien Loong; read the First time; to be read a Second time after the Committee of Supply debate on the Estimates of Expenditure for FY 2003/2004, and to be printed.

Resolved, "That, notwithstanding the Standing Orders, an additional day, namely, Wednesday, 12th March 2003, be allotted for the debate on the motion for the approval of the financial policy of the Government for FY 2003/2004 moved by the Deputy Prime Minister and Minister for Finance on 28th February 2003." - [Mr Lee Hsien Loong].

Order read for Resumption of Debate on Question [28th February, 2003].

That Parliament approves the financial policy of the Government for the financial year 1st April, 2003 to 31st March, 2004.". - [Deputy Prime Minister and Minister for Finance].

Question again proposed.

Mr Speaker, Sir, thank you for allowing me to start this important and landmark Budget Debate for FY 2003. This year's Budget is different from the norm in the past years. It contains Government's strategies and plans over the longer term based on its response and general acceptance of the Economic Review Committee's Report. At the same time, as a standard practice, the Budget Statement spelt out the Government's immediate fiscal and monetary plans, tax changes and action plans for the new financial year. This two-pronged long term and short term discourse of the Government's strategies and plans does require some re-orientation to readers and observers, trying to understand better this year's Budget. Along the same vein as the Budget announcement, I shall also structure my comments on this year's Budget into two sections, covering first the ERC Report and then the FY 2003 Budget. First, on the ERC Report. This is a monumental exercise involving about 1,000 persons directly involved in sub-committees and working groups over a period of one year. I liken this exercise to 1,000 cooks labouring together to create a Singaporean favourite dish, eg, the char kway teow, with DPM Lee as our chief cook. Now, this dish is cooked and being served to the people. What are the responses and reactions so far? Are the people satisfied? I believe the verdict is, like all recipes, it cannot cater to all tastes. Some like it, some do not. And some do not care! So, not everybody can be fully satisfied. Some want extra hot, some like it sweet. Everybody wants more goodies in it, but no one wants it bitter. Many people have said that the final ERC Report is not exciting. Nothing new or phenomenal has resulted from it. There is no grand vision. Where are the bold measures? Generally, no excitement. I have to admit that I tend to share some of these sentiments. However, on balance, I wish to point out that the ERC Report has accomplished its mission very well. No one should belittle the profound effort, the numerous valid recommendations and the vital conclusions of the ERC Report. One thousand of the best minds, top managers, businessmen and political leaders had, in great earnestness, reviewed all the major economic and economic-related policies that literally left no stones unturned. It is also correct that those stones that are found to be all right are put back - no need to change for change's sake. The involvement of the large number of people has served the purpose of bringing together wider participation of many people in charting the future of Singapore. The Report has been most comprehensive, covering every economic and related issue. I support, in principle, all the recommended policy changes with regard to taxation, CPF, manufacturing and service industries development, human capital and others. Mr Speaker Sir, allow me to spell out my specific comments regarding certain recommendations in the ERC Report. First, concern on depressing wages and land values. A main thrust that appears to come across strongly in the ERC Report is that, henceforth, the Government wants to keep the factors of production, ie. land, rentals, wages and other operating costs low. This is a well-intended objective. I have no quarrel with that. But I wish to remark that we cannot artificially hold down prices. We do wish to hold down increases in Government rates and fees, wherever possible, but many costs, such as wages, land and rentals, are dictated by the market, and the general affluence of the people. Every year, every employee wants to see an increase in his take-home pay, so as to at least match or better inflation and rising costs of expenses. They want to see improving living standards for themselves and their families. How then can we intentionally hold down prices? Moreover, it is not correct to artificially press down values. Do we not recognise that we cannot compete with our neighbouring countries, especially against China and India based on low production cost? I wonder what happened to the previously much promoted policy of going for higher technology and higher value added products, and to promote our brain services sector. Not much has been said in the ERC Report on this aspect. Is it an understood issue or is it deliberately de-emphasised in the Report? If it is intentional, it is useful to explain why. Next, concern on deflation. In line with my doubt on the wisdom of focusing on depressing the costs of production, and therefore depressing values, I also have a worry on the underlying deflationary effects of such a policy. It is therefore timely that I read in a report warning about "Overshooting deflation threatens Singapore" in the Business Times on Saturday, 8th March 2003, in a study by the US investment bank, Goldman Sachs. In the report, Goldman Sachs forewarned that, in recent years since the Asian financial crisis, there have been a series of negative shocks which add up to the largest deflationary demand shock the modern Singapore economy has ever faced. Some of the factors cited are : (a) 12% deterioration in terms of trade since 1996, ie, after the Asian financial crisis; (b) Rise in regional political risk premium and lower direct investment to the region; (c) Emergence of competition from China; and (9) Restructuring of Government-linked companies involving lay-offs. I would add to the above list that there is also the uncertainty in the domestic sector with the recent high profile lay-offs in the Government sector - of PSA Corporation and HDB. So, I am indeed very fearful that if it is the professed intention of the Government to keep wages and land values low, it will further dampen the already depressed mood of the people, leading to lower domestic spending which, in turn, will cause domestic demand to spiral downwards into a deflationary loop. I strongly urge the Government to look into this concern of threat of deflation. Next, changing mindset to promote entrepreneurship. Another key thrust of the ERC Report is to promote entrepreneurship, so as to cultivate an entrepreneurial nation. One of the three main tenets of the Report is to remake Singapore into "a creative and entrepreneurial nation willing to take risks to create fresh businesses and blaze new paths to success". I like this principle and I fully support it. However, I feel that this is easier said than done. It requires substantial effort and total commitment from all. Our people and our children are too used to being led, guided and spoon-fed by the Government. We have to break out of the old mould. We need a fundamental mindset change, to be creative and take initiative. But can we? Let me quote an observation that shows that we have an arduous task to change the people's mindset, though we must. Someone called this the No U-Turn Syndrome (or "NUTS", in short). In the US, the general traffic rule is that a driver can do U-turns along any road unless specifically prohibited by No U-turn signs. In Singapore, it is the reverse. Motorists are not allowed to do U-turns unless specifically permitted at locations where permitted signs are shown. That means that they cannot do anything, unless the authorities say "yes". This mindset of NUTS (or No U-Turn Syndrome) is so ingrained in our Singaporean mentality that we do not dare to do anything unless we get a "yes" from the Government. How then can we promote initiative and creativity? Let me cite another traffic rule example. In the US, where traffic is right hand drive, motorists are allowed to turn right at all signalised junctions on red light, provided the traffic is clear; and unless there are signs prohibiting this right turning. But, in Singapore, it is again the reverse. We cannot turn left at signalised junctions on red. However, a few years ago, LTA allowed the rule of "Turn Left On Red" or "TLOR" at some minor roads. The shocking thing is that I have seen with my own eyes, motorists who dare not make left turns on red, even though there are signages permitting it, and the traffic is clear! This is the Singaporean mentality. I would like to get our people to be more entrepreneurial. I believe the Government, being a caring parent, must learn how to "let go". We should cut down on rules and red tapes. We have to give the people their choices to make. We have to get out of the habit of planning every minuscule matter for our people. Give them more avenues to express themselves. Sir, on GST, in view of the budget deficit and the estimated $650 million cost for deferment of 1% GST increase for one year, I support the Government's intention to proceed to implement the second instalment of the next 1% increase in GST in January 2004. It is prudent not to incur higher deficit due to insufficient revenue collections if the GST increase is deferred further. On CPF, I agree with the recommendation to defer the restoration of the balance 4% CPF for another two years. This will enable companies to save on lower operating costs and better able to sustain their viability during this depressed business environment. However, I do want to voice my concern for those workers most affected, such as those in the older age group of 50 years old and above. This age group will not have their CPF cut restored, and will have to contribute more to their CPF Special and Medisave accounts. The lowering of the CPF salary ceiling from $6,000 to $5,000 will also mean that they will receive less contribution to their CPF from their employers. Then, they will have to face the double blow of higher expenses due to the further increase in GST totalling 2%, and, of course, general living expense increases which are inevitable. Therefore, the lower income group and the higher age group will continue to need support from the Government in the form of S&CC rebates, rental and utility rebates. Sir, on the next step for the ERC. As I said earlier, the ERC Report is very wide and comprehensive. What I find lacking are the specific recommendations on the implementation details to achieve the stated plans. I can concede that it will be too thick to spell out the actual implementation plans for every recommendation. It is, therefore, left to the relevant Ministries and agencies to follow through. The Report states that the Ministry of Trade and Industry (MTI) will co-ordinate the follow-through actions. Whilst I do not doubt the capability of MTI to undertake this task, I do wish to voice out aloud why it is not deemed important enough for this matter to be monitored henceforth by the Prime Minister's Office, or the Deputy Prime Minister's Office. I feel that the overseeing body should be either PMO, or by the DPM himself. In any case, he is the Chairman of the ERC. This rationale for high level monitoring is similar to the new Ministerial Committee on Services. I fully support the formation of this Ministerial Committee on Services to oversee the development of major new services, such as health, media and education. The reason is that the work crosses over many Ministries with inter-ministerial issues. Similarly, most of the ERC recommendations cut across Ministries. Therefore, a supra-Ministerial person being in-charge should spur smoother and speedier implementation. Mr Speaker, Sir, I wish to move on to the policies and measures announced in the Budget for FY 2003. As I have said earlier, the difficulty with this year's Budget debate is that we have to shift our orientation between the long term issues spelt out in the ERC Report, and then re-focus back to the short term matters in the Budget. This could be one reason why the reception to the ERC Report has been lukewarm, as some attention of the public has been diverted to short-term impact measures announced in the Budget. Sir, on focus on short term issues and threats. We know that the ERC Report is a very important landmark document. It spells out fully the total blueprint for Singapore's future survival. However, the general public is more focused on their immediate problems. Their immediate concerns are unemployment, firstly; then the uncertainty of domestic economic recovery, diminishing asset values, the looming threat of war in Iraq and the fall-outs of war, the unclear US economic recovery, terrorism, threats of China and India, quarrels with our nearest neighbour Malaysia, and the unclear geo-politic development in Indonesia. Looking through this long list, there is indeed reason for our people to feel deeply worried. Many are experiencing a sense of loss and despondency. The road ahead is hazy and directionless. Sir, turning back to the Budget for FY 2003, the Budget will see a deficit of $900 million. This is the third year of deficit in a row. It is a cause for concern on Government's principle of budget prudence. We have budget deficit for three years in a row. In this context, I can accept the announcement that there will be no corporate and personal income tax cuts and no income tax rebate for FY 2003. To make such cuts now will mean that there will be a larger budget deficit. However, I would urge the Minister for Finance that should good times return next year, please do not forget to reward the hardworking tax-paying people by giving them some income tax rebates. On the other hand, if the world and domestic economies remain poor for a few years, I wonder how would the Government meet its stated intention to cut direct taxes to 20% by 2005, without incurring further budget deficits or introducing higher GST increase. The latter move, of course, will be very unpopular. Mr Speaker, Sir, although we have a deficit budget for the new year, there is also a disappointment that the new Budget is not stimulative enough for the domestic economy. I do admit that I seem to be speaking with a forked tongue. Just a moment ago, I expressed concerns about a continuing budget deficit, and now I seem to be urging the Government to spend more to create a higher budget deficit to stimulate the economy. Let me explain. Although we said that Singapore has incurred three years of deficits, on closer examination, the deficits are still very small. In FY 2001, a total deficit of about $2.8 billion was incurred. This was about 10% of the total Government revenue for that year. This deficit was high but it was needed to stimulate the economy against a recession then. Last year's deficit for FY 2002 has been revised and estimated to be a modest $0.1 billion or $100 million, versus the original figure of $0.9 billion, or $900 million. So, FY 2002 is nearly a balanced budget. But for FY 2003, the estimated deficit is $0.9 billion. This is only 3% of the total Government's operating revenue collections for the new year amounting to $29.6 billion. For the sake of getting our economy out of the rut, and to give a booster to the people and business confidence, I would advocate a higher deficit for this new financial year. I believe we can afford it. Generally, it is thought that a deficit budget is expansionary. I would like to point out that this is not necessarily true. It depends, to a major extent, where the budget funds are allocated. If funds are not earmarked for expansionary projects, like infrastructure and growth, but to longer term projects like education and social targets, then a deficit budget may not be expansionary. This year's budget may be in a deficit, but I am not sure whether it is a sufficiently expansionary budget. To make matters worse, we understand that the Government has directed Ministries to cut down expenditures on projects and various spending. Would this instruction of the Ministry of Finance be counter-expansionary? We are beginning to hear feedback from the private sector companies that they are receiving fewer contracts from the Government. If this trend were to continue, would it not aggravate an already depressed economy? Sir, I would like to ask the Minister for Finance whether this year's Budget is indeed a stimulative budget. What are the measures to kick start the sputtering domestic economy? Where are the engine boosters? We do not have tax cuts, no pump priming was mentioned, and no announcement about additional infrastructure spending. So, how are we going to stimulate the economy to grow? Moving on to what I call the "crutch mentality", there is another dichotomy that I wish to raise. This is with regard to the continuation of the use of rebates and welfare benefits to help the lower income group and less privileged to overcome the various higher indirect tax burdens such as GST increase and the higher cost of living expenses. I am afraid that the long term use of rebates, reliefs and benefits will lead to a crutch mentality of the people. Somehow, we have to gradually wean the less able segment of the people to take care of themselves and become less dependent on welfare and financial aid. The same applies to the young. This contention is in line with my previous point that to build a truly entrepreneurial nation, the people have to learn to be less dependent on the Government, before we can truly create a new entrepreneurial and vibrant nation. The message must be made clear - the Government will help you today, but you must learn to take care of yourself tomorrow. Mr Speaker, Sir, we are living in very uncertain times. The sense of despondency is actually worse this year compared to last year. I recall that during the budget debate last year, my Backbench colleagues and I had already warned about this sense of doom and gloom prevailing in Singapore then. With higher unemployment, announcements of layoffs, and fear of the looming war in Iraq, the general sense of despondency is higher today. There is a general sense of haplessness as many factors are totally outside our control. We need to boost the confidence of the people. This is a priority task. Our people have to first understand and get used to a future where double digit growth and continuing tax cuts, more NSS and ERS shares will not be easy to come by. We have to re-orientate our expectations of growth. We have to accept that, henceforth, each incremental achievement requires greater effort. But, sometimes, I cannot help but have the feeling that we do tend to over-plan in Singapore. I recall that we had in the past the Vision 1999, The Next Lap and, more recently, the Singapore 21 Plan. We also had the Economic Committee in 1985. It seems like deja vu. No wonder there is muted enthusiasm to this ERC Report. However, I do wish to commend the Government for launching and completing the Economic Review Committee's Report. The people have been held in suspense, pending the release of the ERC Report. Now that the ERC Report, as well as the Budget, is announced, we should move on. The Government has laid down the clear long-term goals. The new fiscal and monetary policies have been spelt out. The new directions have been set. It is time to get on with the business. Mr Speaker, Sir, whatever is happening around us currently in the world, Singapore has to find its place. We cannot foresee and plan ahead for everything. If we can be nimble and creative, we shall always be able to find our place in this world. The Government must show strong leadership in difficult times. The people must respond and shoulder its share of the burden. Let us put on our hard hats and boots and take up the changkol. Together, let us start ploughing, to re-build a better future for our children as best as we can.

Mr Speaker, Sir, thank you for allowing me to join in the debate. Sir, today, I would like to talk on three points. First of all, my assessment of the Budget - what it achieved and what it failed to achieve and what more could have been done. Second, I would like to comment on the implementation of the ERC recommendations and, finally, I will touch on the issue of entrepreneurship and what I feel will be the strategies needed to be successful in this area. My assessment of the Budget, as I listened to the Finance Minister delivering it, was that it seemed to be a balanced budget, addressing both the short term and immediate issues as well as the longer term issues needed to address the restructuring of the Singapore economy. As I analysed the Budget further, I actually saw very few new initiatives to make this Budget exciting enough to catch the attention of long-term investors. But before I touch on this point, I would like to square off some very obvious things that, in my opinion, were the disappointments of this Budget. First of all, this Budget did not address the concerns of the middle group of Singaporeans. While we did take care of the lower income Singaporeans through the various rebates, it did nothing to assure the biggest group of Singaporeans who may have more assets than the lower income Singaporeans, but who, in the short term, have the same concerns which worry them and, that is, the loss of jobs and the short-term financial help that they can get from the Government. I feel that the Minister should have done much more to assure Singaporeans that their problems will be addressed in times of difficulties. The Minister should have put in place a temporary scheme to make cash accessible to such Singaporeans, for example, a 1% tax reduction could have helped these people in tough times and these are the people who are paying tax and who may have lost their jobs. Sir, the second issue is the budget deficit, in my opinion, is hardly a deficit. It seems to me that the Minister tried very hard to end up with a deficit budget by making huge special transfers in the three areas of ERS, Lifelong Learning Fund and Medical Endowment Fund. Similarly, I do not see how the year 2003 Budget will end up in a deficit. Again, we are making special transfers, and we are forecasting a lower NII and we did not seem to have fully accounted for the 1% GST increase and the special income coming by way of more COEs expected. So if we had spent a bit more in trying to help companies and individuals in difficulties, perhaps that deficit would have been a welcomed deficit. So what about the long term cost competitiveness of Singapore? Has the Minister missed out looking at this serious recommendation, made not only by the ERC, but also by the many, many committees before the ERC, like the SME21, the T21 and the Cost Competitiveness Committee? I feel that the Minister again lost the golden opportunity to address once and for all this critical issue that is sinking the Singapore economy. I am really disappointed at the seemingly short-term thinking of the Government, especially on this important area of cost competitiveness. And why do I say short term? The measures like temporary rental rebates, temporary property tax rebates and temporary CPF cuts do nothing in instilling confidence among longer term investors that, indeed, Singapore will still remain competitive not only two years from now, but also 10 years or 20 years from now. In fact, the current approach just drives investors harder to move out faster while they can, while the rebates are still in place. As a serious investor, I know that I have to worry that in six months, rentals and property tax will go up again and that the CPF will again go up in two years. The thought process will surely be to encourage companies to prepare to move out before costs once again increase when the regime of temporary rebates and temporary increases run out and go back to a steady state of higher costs. I hope that all the efforts of all the committees I mentioned will not go in vain and I hope that the Government will overcome this inertia and get down to addressing the cost issue seriously. The ideas are all there - differential land pricing, structural changes in the wage system, levies, fees, charges from the Government and utilities, logistics and telecommunication charges. We have enough data to show that Singapore is not competitive in all these areas. Second, the issue of implementation of the ERC. We all know that many Singaporeans were involved in the above process of deriving the ERC recommendations. I must admit that there was some skepticism among some people involved in the process and a comment which summed up the feeling went like this: "I have been asked to give my feedback many, many times before for so many years. What is the point? The Government does not listen and does not believe in us anyway." Sir, this is a true quote coming from a few prominent Singaporeans. To convince them, the argument that all of us who were involved in this process was that, this time round, the Government has realised that there is a need to change for the survival of Singapore and everyone's input was needed. The outcome has been a lot of hard work by many, and the many recommendations to remake the Singapore economy. While on the whole, the recommendations have been bold and will make a big difference, there are certain areas which could have been better dealt with. First, the impression that we have is: are we really re-tuning or refining the economy? We were promised that there were no sacred cows and that no stones will be left unturned in this whole exercise. The outcome in a number of areas, which I felt could have made an even bigger difference, was not changed. The ERC could have exercised greater will power to make bolder changes in certain areas. Unfortunately, the impression many people have is that all we have done is once again to just make tweaks in certain areas when we should have made fundamental changes to turn things around. When the whole exercise started, we talked about the remaking and restructuring of our economy. It now appears more like a refining and re-tuning exercise in certain areas. Yes, we did pick the stones and place them back in the same place or in some other place. We missed the golden opportunity to make much needed changes to the economy. Let me back up my argument with a few examples. First of all, the tax system. We have been touting the tax changes as a major structural change, but as far as I can see, there was no real change in the system. The real big change happened when the Government implemented the GST system, I believe, in 1994. The ERC recommendations merely reaffirmed the 1994 changes. So the ERC's recommendation of a reduction of personal and corporate tax rate was long overdue anyway. It should have come down drastically the day we implemented the GST changes. The tax changes, in my opinion, were not radical enough. The second example is that of the CPF. It is becoming a habit now to tweak the CPF rate in times of crisis. While I am not against this to help us in the short term, this does not give us comfort that we have gotten to the root cause of the problem and that we are just addressing the symptoms. Is it not sufficiently clear that we have a structural problem with the CPF system? We should have worked on a more permanent solution, perhaps a lower contribution from employers and compensated by alternated retirement and medical schemes. Had we made bolder changes, we may never have to fiddle with the CPF contributions now and then. Sir, the final example is one of land prices, and in this topic, I tend to defer from Mr Leong. I believe that the high cost of property, particularly industrial land, is a big issue. To me, this is one of the most serious structural problems, other than the wage which directly affects Singapore's competitiveness, particularly in areas of manufacturing. So while we may talk about moving low value-added activities outside Singapore and trying to bring in more high-tech and high value-added activities in Singapore, the problem is the image that we have created for ourselves is that we are a place where business activity is going to cost companies a lot of money. It is a high-cost country. And I have personally visited a customer about three weeks ago in the US, trying to bring in what I thought was a high-tech activity into Singapore, and the answer I got from them was "We will probably not be coming into Singapore. But if you can promise to do it in China or some other low-cost countries for me, I will move my high-tech activity there." The problem we suffer is that the image that we have created for ourselves is one of a high-cost country. So we really need to fix this problem once and for all. The second issue is on the implementation of the ERC Report's recommendations and roadmap. All of us agreed that the ERC exercise was a key and necessary initiative. But, in my opinion, we reacted a bit too late. There were already a few signals that we could have picked up had we been more attentive. We could have reacted much earlier. The few signals were the bursting of the property bubble in 1996, the Asian financial crisis, the emergence of China and India and the flow of FDIs into China. These are all new things. We could have reacted earlier. But anyway, now that we have identified so many initiatives, including some considered taboo in the past, we should now roll up our sleeves and start implementing them quickly, a point that Mr Leong made earlier. The ERC should not end up as an academic exercise. Too many important people have set aside their valuable time to be involved and we cannot risk disappointing them and again failing to implement the recommendations decisively. More importantly, we cannot risk failing the Singapore economy. The reason I am bringing this up is because, in the past, we have undergone similar exercises with the likes of the S21, SME21, Retail 21 and the many '21' initiatives. For some of these exercises, we were big on plans, but short on actions. We risk losing the confidence of the key stakeholders of Singapore, should we fail in the implementation. The number of recommendations is overwhelming and, if not handled well and not implemented systematically, we could lose the intended impact. So when I read in the papers recently about Singapore climbing up one notch among the most expensive cities in the world compared to the year before, we actually became more expensive and not less expensive by one notch. My heart sank simply because it goes to show that we have not moved fast enough in our restructuring exercise. The second concern I have is that, in our attempt to restructure, are we doing this in isolation? We should, in fact, be aware of the fact that there is a rapidly changing environment around us. Our neighbours are also contemplating the same thing as us. We are working with a moving target. We want to lower the cost of doing business, so do our neighbours. We want to be the Life Sciences Hub in Singapore, so do cities like Xian, Hyderabad, Bangkok and Kuala Lumpur. I cannot over-emphasise the need for speed. I believe it is not only the ideas which will define our success, but more importantly, our ability to implement these ideas and our ability to implement them swiftly which will determine how successful we will be in transforming our economy. So let us not get too complacent but get moving faster than what we are doing right now. An example of a non-starter and a failed attempt which comes to mind is the NatSteel divestment saga, which dragged on for so long. The inability to make a judgement to take a certain amount of loss, has resulted in the sloppy execution, in my opinion, of the NatSteel divestment. It is clear that Temasek failed to realise this to be a short term loss but a long term gain. Because it has to answer to the people of Singapore, it therefore has to err on the safe side by taking a kiasu approach in ensuring the best possible value because they have to answer to all of us. Therefore, this is the cause of Government getting involved in business in the first place. In the process, we lost a greater opportunity of setting an excellent example of a GLC divestment done successfully for the long-term good of the country. I would therefore like to see an implementation roadmap and an implementation committee, like what Mr Leong suggested, with the responsibility of ensuring that recommendations are implemented the way we intended them to be, and with the speed necessary to achieve the intended impact. It will be good for this implementation committee to share its results regularly by publishing a scorecard for all of us to see. Sir, the final topic I would like to touch upon is entrepreneurship. Having been so used to developing a corporate-based economy in the last 30 years, the real question we have to ask is: are we willing and are we ready to make the transformation to an entrepreneurial economy? And I think this is the most difficult question for us to answer. There are two key elements for us to succeed. Firstly, understanding what it takes to create an entrepreneurial economy and, secondly, the lessons learnt from our successes with the multi-national companies. First of all, understanding what it takes to create an entrepreneurial economy. This is the biggest challenge and the most difficult one to overcome. Unless and until we resolve this issue, we will never be able to transform our economy. The challenge, therefore, for the Government and the Minister for Entrepreneurship is to make a sincere pledge to lead this transformation of our economy and, then, to understand what is needed to make this transformation. The first challenge, therefore, is that of a mindset change. Yes, it is difficult to attract foreign companies to invest and set up shop in Singapore, but it is even more difficult for our economic agencies to visualise how a start-up or a non-entity - someone who is trying to do a start-up - can one day evolve into a world-class company based in Singapore. So, it is therefore compelling to still take the relatively easy way out of continuing to deal with a corporate-based economy - the tried and tested model. The unfortunate fact is that I feel the Government is still unsure or half-hearted about putting in place an entrepreneurial economy. Why is this so? If we ask anyone of the Government economic agencies or the civil servants who are driving this initiative, we cannot help but conclude that they are still programmed to bring in foreign MNCs. The sad thing is that many are sceptical about the ability of our local entrepreneurs to make it big. I say this from my own personal experience and from direct feedback from would-be entrepreneurs. Sir, the second issue on entrepreneurship is lessons learnt from our successes with MNCs. If the mindset change can be achieved, then I feel that the next few steps needed to succeed in transforming our economy and of encouraging more entrepreneurs to set up their bases in Singapore would be much easier. We can learn from our successes in the economic development of Singapore in the first 30 years, which have been in attracting foreign direct investments, multinational companies, and in establishing bigger companies, ie, the Government-linked companies here. We can then apply them as we focus on building an entrepreneurial economy. There are three main lessons to be learned from building a corporate economy. They are, first, creating a conducive environment; second, putting in place incentive schemes; and last, but not least, a hand-holding of multinational companies from cradle to grave. What I am about to say may seem obvious, but I feel that we have not fully understood the root causes and have not addressed and learnt from these lessons, and to address the issues on how we can successfully create our entrepreneurial economy. Sir, firstly, on creating a conducive environment for MNCs to set up base, why were we successful? Because the Government had developed an appropriate infrastructure, offered cheap land, removed other obstacles that may have existed and made it easy for MNCs to decide to start up operations here. Rules and regulations were tailor-made for MNCs and for bigger companies. Many of the MNCs and GLCs had direct access to top civil servants and Ministers, and this allowed them to resolve issues faster. The lesson here is that the rules made for bigger companies will not work for start-ups and for smaller companies. Secondly, on incentives and financing schemes made for bigger companies. To complement the setting up of a conducive environment, the economic development agencies developed a slew of incentive schemes, Government grants and tax breaks, again tailor-made for MNCs and for bigger companies. The lesson here is that while it is easy for big companies to apply and utilise the incentive schemes, the smaller companies find it terribly difficult to do the same. Thirdly, hand-holding of MNCs from cradle to grave. This, in my opinion, is the most significant initiative implemented here that made MNCs most comfortable in setting up bases in Singapore. Kudos to the EDB for this. We created a one-stop agency which hand-held MNCs coming into Singapore, right from the time that we were courting, through the time that they started operations in Singapore, up to the time that we encouraged them to leave for places like Batam and Suzhou. Having dealt with EDB on many occasions - while working in a multi-national company as well as when I went to start up my own local companies - I thought I had a good feel of how they operate. I must confess that I really understood EDB only after reading its book published recently called Heartwork. It is an excellent book. After reading it, I understood why EDB did what it did, and became even more convinced that EDB will never be able to handle and help local start-ups. I would like to say that the EDB has done an excellent job all these years but, having understood the charter and the mode of operation, especially after reading the book, I realised that it is unfair and impossible for them to effectively support local companies. Let me share one example from the book to illustrate the mindset with which it operated in helping bigger companies coming into Singapore. Sir, in the book, what I read was, when Apple computers wanted to set up a factory in Singapore many years ago, EDB went the full mile, did all the work for Apple in fitting up the whole factory. In fact, it went even further than that. An officer was allocated on a full-time basis to become the project manager for setting up of the factory. The American manager who was responsible for setting up the Apple factory in Singapore did not have to be personally here in Singapore while the facilities were being set up. That is what I call service. Can anyone in this House give me an example of a similar service for our local companies? I do not know of any. The reality is that most local companies are left on their own to fight their own battles and to clear the many obstacles themselves. At times, I dare say that the bureaucracy works against them. The lesson here is that had we not had EDB to champion the cause of MNCs, we may not have developed such a vibrant economy. Champion agencies can do wonders because of the influence they have in clearing these obstacles. So, how can we apply these lessons? Firstly, let us create a conducive environment by making a review of rules - which is happening, and I think the rules should not just be reviewed but also revamped - this time round, by putting smaller companies and start-ups centre-stage when we develop these rules. Secondly, of course, is to revisit all the incentive schemes and tailor them to suit start-ups and SMEs. Thirdly, we really need an EDB-style organisation, a one-stop agency for SMEs and start-ups. Today, we see too many agencies claiming to champion the SMEs and entrepreneurs, but my experience with them is such that none is able to provide the comprehensive service that EDB does for MNCs. Many things, in fact, fall into the crack for entrepreneurs and smaller companies. We need a champion. Finally, to build a vibrant financing environment, such as the ones that exist in entrepreneurial economies in the USA, Taiwan and Israel. I will elaborate on these during the Committee of Supply debate. Sir, in conclusion, the budget is just one of the many levers to address the current situation that we are in. The current crisis is different from the previous predicaments, although we may use the same terminology to describe them. We have been using the same old formula to address these new predicaments. The context of the problem has changed. And it will continue to change, because we live in a world where change is a constant. As a result, each crisis will become more complex than the previous one. We have to adopt newer measures, and the speed of implementation is essential for their success. This year's budget is being hailed as a budget in transition. My opinion is that we need to get out of this transition quickly. We have been in the transition mode for quite some time. We need to arrive at an economic model that we want very quickly. We have been planning for quite some time. The planning phase is over. It is now time to execute and implement bold measures. We cannot be half-hearted in our endeavours. We need to be clear in thought and be decisive in action. Sir, on the belief that the Minister will implement swiftly these new measures, I support this motion. 11.52 am

Mr Speaker, Sir, since the Deputy Prime Minister and Finance Minister announced my appointment as Minister of State in charge of entrepreneurship, I have been inundated with emails from the public. There have been many suggestions on what needs to be done to further the cause of entrepreneurship in Singapore. I will take these and those that are being raised in this House in the course of this debate into serious consideration. Some of these I will answer in the Committee of Supply, and others I may need to get back to Members later, as it may require further thought on my part. But whatever it is, I see this sudden deluge of advice as a big positive, as it means that there is an increasing constituency in our society to embrace an entrepreneurial, go-getting culture, where opportunities are seized and risks taken to create something different in whatever we do. In fact, some email writers, after sending me one advice after another, told me that, for a suitable fee, this arrangement could be made permanent! So, I think that there are good grounds for hope that we will indeed successfully foster an entrepreneurial society. But let us be clear right from the outset that we are not here trying to manufacture entrepreneurs - that, I think, is not possible - but rather to create the enabling conditions for entrepreneurs to emerge and grow. This is an important role for the Government to play, and this is not, as some had suggested, unique to Singapore, the so-called "nanny state", but undertaken actively by many others, including the United States, Ireland and Taiwan. Some Silicon Valley types might be dismissive of any role for the Government, but the fact is that one of the key reasons for the Valley's success has been the huge federal defence spendings in the high-tech sector. The Government, as customer, as against being a direct player in the market, is one of the most important roles that it can play to promote entrepreneurship. The Government should outsource its requirements whenever the market can provide them, rather than produce them in-house. By doing so, it creates new opportunities for entrepreneurs and space for innovation. This is the basis of the ERC Yellow Pages rule, which the Government has accepted. It is one of the most far-reaching of the ERC recommendations, as it envisions a world where the boundary between the State and the market shifts in favour of the market. Its criticality lies in the fact that, by giving institutional expression to a market-driven public policy stance, it will change the way in which bureaucrats interact with private players in the economic sphere. Consequently, just as the Government wants Singaporeans to be risk-takers, it should set an example by being willing not just to oursource its requirements, but to take a chance by accepting innovative solutions from private firms. The impact of the Government on the operating culture cannot be over-emphasised, as its interactions with Singaporeans affect the way in which people behave. This was why I had argued that to shift mindsets, which is our paramount challenge, the Government should set its default key at "Yes" rather than "No" in its dealings with business. If we want Singaporeans to reach for a new frontier, to establish leadership in unknown future markets, then regulating them by what is known is not the way to go. It also means that the Government would need to gradually scale back its role in the lives of Singaporeans to allow greater room for entrepreneurship to develop. I say "gradually" as this has to be well-calibrated, so that even as Singaporeans have greater freedom, the corresponding greater responsibility that comes with it is done without upsetting the social cohesion that is underpinned by the safety nets in our society. Finally, to make this cultural shift to a more entrepreneurial society, our education system is vital. In this, things are underway, and our schools are seeking to create a more open, innovative and creative learning culture. Some schools have also introduced programmes to expose their students to the world of business and entrepreneurship. The ERC sub-committee on Entrepreneurship and Internationalisation (EISC) that I chair had suggested that we take it further by making it compulsory that every child be asked to do a business project, in the same way that they do science projects in schools. The aim here is not, as some critics have said, that the Government is trying to fix this problem by teaching "entrepreneurship", much in the same way that if we need more engineers, we simply produce more. Instead, it is to imbue in our young a different worldview. It is not a world where everything must have its place and nothing left to chance. In such a world, there can be little out-of-the-box thinking. Nor is it a world where we wipe off every speck of dust and, in the process, we may well be getting rid of stardust as well. Rather, we want our young to grow up in a world where they are comfortable with diversity and where their opportunities are limited not by the prevailing wisdom and strictures of the day, but by the extent of their imagination. Whether they become entrepreneurs or not, will depend on their own choices, but we would have done our part by widening their career horizons. Besides culture, cutting red-tape, and better access to finance are also important enabling conditions for enterprise development. We need to aggressively cut red-tape. It may be one licence requirement for one agency but, when we add them all up, we may have death by a thousand cuts. This was why the EISC had suggested that rules and regulations be date-stamped. Having sunset clauses will ensure that there is a mandatory periodic review of regulations to ensure their relevance. We are glad that the Government has accepted the spirit of this recommendation by mandating a thorough house-cleaning of rules and regulations of all Ministries every five years. In the meantime, if there are any rules and regulations that are stifling businesses, entrepreneurs can and should bring this up to the Pro-Enterprise Panel. Access to capital is another area, which is often cited by entrepreneurs as key not just to starting a business but for it to grow. We want as many modes as possible, so that there is a market for the commercialisation of ideas. But here the entrepreneurs also tell me that we should not throw money at the problem. I have had quite a number of suggestions that recommend that the Government give money freely to Singaporeans who want to start a business. It is like having an ATM machine in which when you key in the word "entrepreneurs", out comes a stash of money. These successful businessmen tell me that we should not do the work for entrepreneurs. Yes, a spectrum of risk capital is vital for entrepreneurship and we want to promote and develop that to support them. However, they stressed that people must work for this. Because only when people work for it, is it clear that they really believe in it, and that they are really committed to make it successful. That, which is given free, is seldom valued in life. This is why I think it is important that for most of our Government financing schemes that, whenever possible, there should be some form of market validation before funds are disbursed as the bureaucrats running them are often in no position to evaluate the viability of the business propositions. The people, who criticised this view, often tell me in the same breath that bureaucrats have no idea about business and that they are the best people when it comes to giving out money to business. The point worth emphasising here is that the role of Government in promoting entrepreneurship is not to ensure that entrepreneurs are successful but to create the conditions that enable them to be successful. This is a crucial difference that must be borne in mind. Mr Speaker, Sir, this then is the roadmap towards a more entrepreneurial society. We will know when we have succeeded when Singaporeans increasingly look to the market rather than the Government in making their decisions. However, there are no silver bullets here. This may discomfit some Singaporeans who are used to "instant trees". In fact, critics of the ERC have been disappointed that there have been no dramatic magic formula unveiled in its Report to ease the anxieties in the economy. Yet, there is much in the Report that gives us hope for a better future. At its core is a transformational vision of the economy - of a people intimately connected to a wider world, infused with the spirit of enterprise and where abilities and talents are recognised, celebrated and rewarded. These, in essence, are our ambitions for Singapore. However, it is not how well we plan that will determine whether we reach this destination. But how we adapt and adjust as circumstances change that will decide our future. And in this, one of our greatest strengths as a Government and a people has been that we are perpetual worriers, never complacent. This manifests itself in a willingness to anticipate and face problems squarely, take difficult decisions and a pervading sense of urgency that there is no permanent advantage in whatever we do in a rapidly changing environment. The year-long ERC process is a testament to this and it underlines that we are not wedded to our past successes and are open to views and fresh ideas from outside the public sector. It was not a public relations exercise but a serious attempt at remaking the Singapore economy. In the EISC that Mr Inderjit Singh sat on, many of the key recommendations, such as the Yellow Pages rule and mandatory periodic review of rules, have been accepted and implemented. In fact, in the area of greater access to finance for SMEs, MTI is looking towards how best to implement the recommendations of a committee chaired by Mr Singh. We thank him for his initiative. It also underscores the seriousness of purpose on the Government's part. Confidence is key to our continued economic growth. Members may want to bear that in mind. Because of the trust reposed on them as Members of this House, what they say will have a bearing on the confidence of Singaporeans. May I suggest that this trust be discharged, in what Mr Yeo Guat Kwang said in the Straits Times today, by the exercise of leadership to give hope rather than to accentuate the anxieties of Singaporeans at this difficult time. Recently, I read a very bearish view on Singapore. When the analyst was asked whether there was any area of strength that he could see Singapore developing to get out of what he saw as a secular decline, he replied, "I cannot think of any." He had just been to China and was spooked by this vast and rapidly, emerging economy. Mr Speaker, Sir, if this is so, we might as well fold up the tent and give up. But this is nonsense. Yes, China poses serious challenges to not just Singapore but the region. But as any first year student of international trade will tell you, even if China has an absolute advantage in everything, it will still buy from Singapore, as what matters is the comparative rather than absolute advantage of the two countries in the goods and services that they produce. In other words, there are opportunities. It is what we make of them. That he cannot see any future for Singapore is not that there is none, but a failure of his imagination. Thus, we should not feel handicapped by our lack of land mass and natural resources. Countries like Japan and the Nordic states have turned their national constraints into enduring strengths. To illustrate, the lack of living and working space has driven Japan to the frontier of technology in miniaturisation. Similarly, the difficult terrain in the Nordic countries has spurred them to develop great strengths in communications and power transmission. In a knowledge-based economy, it is sometimes not nature's endowment, but nature's deprivation that drives an economy's competencies and comparative advantages. For Singapore, we have never accepted that size is destiny. We are one of the world's leading trading nations despite having a very small population. We are a major petrochemical hub despite having no oil of our own. The Economist magazine has long credited us with inventing the MNC export-led model of economic development. This allowed us a headstart in accelerating our industrialisation and linked us rapidly to first-world technologies, expertise and markets. Many developing countries had earlier rejected this strategy as a new form of colonialism but they had since assiduously followed us. Of course, there are always many reasons why we think we cannot do certain things because we do not have the size. But that by itself may be the spur to creativity, to force us to think beyond our current circumstances and leverage our advantages in a different way. That was and I believe still is the spirit that characterises us as a people. We have it in us not just to ride the current difficulties but to build a better future for our children and ourselves. As William Jennings Bryan put it, "Destiny is not a matter of chance. It is a matter of choice. It is not a thing to be waited for, for it is a thing to be achieved." Mr Speaker, Sir, I support the motion.

Sir, before I go on to my speech, can I just ask the Minister of State to clarify certain things? I am speaking as an Opposition. If we want to create an entrepreneurial spirit, we must create conditions. I do not know whether or not he realises it but, to the bureaucracy, there seems to be two sides. Either you are on the side of the ruling party or on the side of the Opposition. Whenever the Opposition people try to apply for a permit, they seem to be put last in the queue. If a person, who is in the Opposition, wants to do business in Singapore, he will be treated the same as a political Opposition.

Mr Lim, do you want to answer that?

If Mr Chiam could give specific examples, we will look into it. But as a matter of principle, when it comes to building an entrepreneurial society for business people to operate, there should be a level playing field.

Mr Chiam, your speech, please.

Well, I am glad to hear that. As far as our constituency is concerned, there are many examples. Whenever we apply for a permit to use a field, it will take a long time.

Mr Chiam, we are talking about entrepreneurship here, not fields. Please carry on with your speech.

In time to come, this can be related to commercial activities. I am talking about the experiences that I know for sure. If I, Mr Chiam See Tong, am going into business, will I be put last in the queue for any permits? Will such a thing happen? Because there is a feeling that if a person is in the Opposition, he may be victimised by the Government. Can the Minister of State clarify on this?

Mr Chiam, I thought the answer has been given.

I will not give specific examples to answer him. But I will be surprised if that is the case because there are Opposition Members who are in business and who have been successful in business.

Please proceed with your speech, Mr Chiam.

Much obliged. I am thankful to the Minister of State for the assurance that whether or not you are in the Opposition, as far as the business environment is concerned, there shall be a level playing field. Sir, the unemployment figures are perhaps the worst Singapore has ever seen since the oil crisis in 1973. There are about 4.2% or about 84,000 workers out of job in Singapore today. Some economists are saying that the unemployment situation may even get worse by the end of the year, to 4.8% or even 5%, about 100,000 of our workforce would be out of job by the year-end. The bad employment situation is evident at my weekly meet-the-people session. In the past, when times were bad in 1985, 1991, 1997 and 1998, there were talks of unemployment but at that point of time, I did not get residents coming to see me at the meet-the-people session to ask for jobs. But these days are different. Almost every week, there is at least one resident who comes to see me to fix for him/her a job. The worst is that these days, residents who ask for jobs are not just manual workers. University graduates are also looking for jobs. Only last week, a lady in her mid-40s, a Business Studies graduate from England came to ask for a job. It looks like the Government must make creation of jobs one of its urgent priorities. Yet, this year's Budget is not a stimulating one. There are no indications to push the economy forward. The Budget does not address or to spur consumer and business spending and expand the economy. On the contrary, we see that the Government is rather complacent when MAERSK Sealand Shipping Line moved its operations to the neighbouring port of Tanjung Pelapas. The PSA did not seem to see our neigbouring port as a dangerous threat but, obviously, it does now. The PSA Corporation has trimmed its workforce. As a result, 800 port workers were retrenched. We also hear of massive retrenchments at the HDB and also at Chartered Semiconductor Manufacturing Limited, which is the world's third largest chip foundry. Chartered Semiconductor Manufacturing Limited is a listed company of which Government-owned Singapore Technologies holds 60.5%. The retrenchment of about 500 jobs, or 14% of its worldwide workforce, at Chartered Semiconductor Manufacturing Limited is due to the closure of an old wafer plant this month. These rates of retrenchments perhaps mark the end of the iron ricebowl in the PSA Corporation and other Government-related companies. Business people are calling this phenomenon "the Singapore squeeze", resulting in job losses and affecting the island's economy. Singaporeans must understand that our job losses at home is due to the harsh business environment in the neigbouring countries, the region and in China. Singapore's businesses are being squeezed by competition, especially from China. Singapore must find its new niches in business and the bio-technology industries that are now being encouraged and developed in Singapore. However, it is going to take time to develop. Meanwhile, Singapore must lower the cost of doing business here. Businessmen are disappointed that the personal income tax and corporate tax rates are not cut by at least 1%. Lower corporate tax rate and lower personal income tax rates would have encouraged MNCs and foreign talents to remain in Singapore. It would also appear that the middle income Singaporeans are not benefiting from this Budget. The Report of the Economic Review Committee does not seem to highlight much on promotion of education and healthcare. The people of Singapore have attained a high level of education and Singapore should exploit its know-how in education and make Singapore the education hub of the region. The Government must make sure that the people who are engaged in the education industry in Singapore have the highest quality of honesty and integrity and not be allowed to exploit foreign students. Instead of giving good value in education, some of our private schools are, in fact, misleading foreign students. A Chinese student came to see me as a Member of Parliament. She complained that a private school in Singapore has cheated her of $3,600. She paid that sum of money so that she can pursue an English course, but the private school made her sign a hire purchase agreement to buy only a few textbooks and a few brochures. The hire purchase agreement did not include the English lessons she was entitled to. In the end, the foreign Chinese student failed to study English in Singapore. If Singapore is to build a good name as an education centre, then the Ministry of Education must make sure that private schools here in Singapore are properly regulated and supervised and they do not give Singapore a bad name in the region as an education centre. As far as I know, most of our best and brightest students chose to study medicine. Therefore, our best brains go to take up medicine. Accordingly, I would imagine we must produce the best doctors and best surgeons that we can possibly produce. Singapore should exploit this great talent pool of healthcare givers. Singapore should have, by virtue of having such a great pool of medical talent, become the medical centre of this region. But I hear that because of our high cost, even much of our medical business is being taken away by Malaysia. As regards medical cost, I hear that the medical cost in Singapore is exorbitant compared to those in Malaysia. I have heard of a story of two brothers, both suffering from heart diseases. One had his heart problem treated in Singapore and the Singapore surgeon charged him S$40,000. The other brother had less money and found his way to Malaysia and had a similar heart problem treated in Kuala Lumpur. He paid only the equivalent of S$500 in Malaysia. Both patients recovered from their heart operations and subsequently both had normal lives. The question one naturally asks is: how can a similar operation be carried out at a fraction of the cost in Malaysia? The treatment in Malaysia was as good as that of Singapore. I cite another instance where I have personal knowledge. I know of a private hospital in Johor Bahru which charges only RM280 or about S$131 for treatment of one-time kidney dialysis. The Johor Bahru hospital is purely run on a commercial basis and is not subsidised. On the part of Singapore, the National Kidney Foundation (NKF) clinics here are subsidised and charge one kidney dialysis treatment at about S$400, about 3 times that is charged in the Johor Bahru private hospital. I wonder why there should be such a great disparity in medical cost between Singapore and Malaysia. There is definitely a big difference in cost of medical treatment in Singapore and in Malaysia. The medical cost in Malaysia is very much lower than those in Singapore. I would like the Singapore Government to investigate why Singapore doctors are charging so much more for their services than those of their counterparts in Malaysia. Could it be that our Singapore doctors are paying very high rentals? If that is so, then I would recommend that the HDB and the Government work out special schemes whereby Singapore medical practitioners can benefit lower rentals and those savings can be passed to their patients. The other area I would like to mention is the creative industry. Under this particular section, the report of the ERC gives only 7 short paragraphs. Although the entertainment and film industries are big businesses in other countries, in the case of Singapore, it is particularly weak in this respect. We do not have any film industry of any sort to speak of. Yet other countries, particularly America, are making very good money out of the film industry. On Singapore's part, since we do not have such an industry, we have to buy all our films from abroad, thus losing massive foreign exchange dollars in buying films to fill our television Logically, Singapore should be building a creative industry. Singapore has no natural resources, except its people, and for creative industry, all they need are people who are entrepreneurial and creative. It looks like Singaporeans have to learn to be entrepreneurial and creative so that hopefully we can build a film industry of our own. A film industry is important for Singapore, not because it would make money for Singapore but, more importantly, it can build for Singapore a cultural identity. 12.20 pm

Perhaps I can start off where Mr Chiam left off. I agree entirely with Mr Chiam that we can certainly do with a few more of the creative industries. But he highlighted two things with which I thought perhaps are not entirely accurate. The suggestion appears to be that the Government has not made job creation one of its priorities. When I last looked at the budget, there was a $500 million retraining programme in there. If that is not a priority for creating jobs, I do not know what is. There were measures to attract foreign investments, there were also measures not to tax foreign income. All of that is aimed at creating jobs. So I do not think it is entirely fair to say that job creation is not a priority. I think that it is. The second statement that was made was that the Government does not seem to promote education and healthcare. As I remember it, we spent three days debating on a White Paper on Education, three days' worth of very serious consideration on the quality and content of education in Singapore, and I think that it cannot be disputed that our Government does concentrate a lot on education. The example cited was of a Chinese student who had received rather poor treatment in a private institution. But the Government does not run the private institution. That is something that has to be taken up at the level of the educational institution that is providing the service. The Government cannot do every single thing, and that really brings me to the main thrust of my comments on the Budget, which is that it is all about taking responsibility. A lot of comments have been floated up that this Budget does not go far enough, it does not do enough for entrepreneurs, it does not do enough for SMEs, it does not do enough for this group of people or that group of people. My response is that this Budget is what we make of it. It will succeed or it will fail depending on the amount of effort that each one of us personally puts into it. Unlike our neighbours who surround us, we do not have huge amounts of natural resources, we do not have huge tracts of land, we do not have minerals, we do not have agriculture. The one thing we have is our people. People make all the difference in these times, and the critical factor is attitude, and the mental attitude that we have to have is taking responsibility and ownership. Many Singaporeans do this. Many of them go about in life taking responsibilities for themselves and for their work and business. But increasingly, over the years, I have noticed a trend that seems to have crept into our national psyche and consciousness, which is this trend of wanting to place responsibility elsewhere. An example is the recent MRT accident. After the accident where there was a car on the MRT line, and the train had crashed into it, I noticed a couple of letters in the Straits Times saying: Why has the LTA not built stronger fences? Why have they not done something to prevent this from happening? And my response is: Is that not a wrong question? The right question must surely be: what is a 23-year old driver of a Mercedes Benz doing in the middle of a MRT track? Surely that must be the right question. What on earth was he doing? How was he driving to land up there? Surely that is the area that one should concentrate on, rather than saying that: you must be protected against something like this. It is a question of responsibility. This idea of looking elsewhere for protection against something that is going to happen is not a good one. You cannot buffer people from the vicissitudes of life. Life is tough. That is one of the things that we have to deal with, and Government cannot protect everybody all the time, from every possible adversity that might come up. It is very much a question of what each of us makes of the circumstances that we find ourselves in. I remember when I was very young, my mum took me to see a movie called "Born Free". Some of you may remember it. This naturalist had adopted this lioness cub, Elsa, and they raised her in the house as a pet. They patted her. They gave her milk. She had food every day. She slept in their bed. She played with them, and she grew up to be a very inept young lioness because she did not know how to hunt. One day, the time came for her to return to the wild and there was no other way to do it except to reintroduce her to the wild by leaving her there. And she was really upset because she had no idea what to do, no idea what to hunt. She kept coming back, looking for food. She found a male lion, and those of you who are familiar with the habits of lions will know that the male lion does not hunt, the lioness has to go out and bring him food. So, he found this lioness, fairly young, attractive looking, who was pretty useless at the job because she could not bring back the kill, so that did not work out either. She had a long hard time out in the wilderness and suffered quite a bit before she eventually learned how to fend for herself and how to hunt and how to kill, and eventually had her own family, which she raised. And, it is like that with Singaporeans, because we had been buffered from a lot of things. We were a lion city. We come from immigrant stocks. We still have those instincts to hunt, but some of them have been blunted over the years simply because we have had a fairly comfortable life. I do not think that the instincts are gone. I just think that if we are put in an environment where we have to use those instincts they will come to the fore. So, being a good entrepreneur does not mean that you succeed because of the Government. The mark of a really good entrepreneur is to succeed despite Government. That is what a good entrepreneur is. I notice also recently that SPH or Times Periodicals has come up with these awards: Woman of the Year; Young Woman Achiever. Woman of the Year Award was won by Olivia Lum. The Young Woman Achiever was Elim Chew. In their acceptance speeches, two things stood out. What they had in common, both of them, was strong religious faith, and a gung-ho attitude. I also notice that in Olivia's case, her school results were good. Elim in her acceptance speech, said that she was always bordering on not doing very well and her school results were not good. But they are both today in a position where they have made something for themselves and the common factor, apart from the fact that they are young female and single, is that they have really good attitude. They are go-getters and they are gung-ho. And that is the sort of thing that we need in Singapore today. That is the attitude that will make this Budget work or not work. There is a second wrong question that has been asked, which is: where are the goodies in this Budget? In a time like this, one does not look for goodies. It is really time to batten down the hatches and get to work in terms of stimulating our economy and making the opportunities for ourselves. The goodies, as I see it, have come in an indirect form - the measures to stimulate business, the rebates, eg, on service and conservancy charges, the deferment of the GST - that is a pretty large goody; you just do not see it in a tangible form, but it is a very big goody - the budget for retraining. This Budget is all about what we make of ourselves and the ability to stay relevant in these times. There is a small group of Singaporeans who really need this help, but there is a very large majority of Singaporeans who can help themselves, and the difference is what you make of it. One example is a lady who came to see me at my meet-the-people session. She has been doing low-skilled jobs. Her husband had just recently been retrenched. She wanted to try and get a job as a cashier and she found that she could not, because she did not have IT skills. In today's environment, anybody who wants to work as a cashier will have to be able to use a computer. She is going to be faced with a choice. She has got a choice of not learning IT skills and she will always remain low-skilled and, eventually, marginalised and irrelevant, or she can go ahead and make that choice to learn basic IT and, eventually, get herself a job. But that choice is hers and hers alone. The Government cannot make that choice for her. The goodies this year did not come in the form of a sweet dessert. For Members who are familiar with Indian food, they may know of a dessert called ghulab jamun. It is the most absolutely divine dessert. It is made from milk powder. It is made into little balls and soaked overnight in golden syrup. It is absolutely wonderful and it is like an instant sugar injection, and one probably gets an instant cardiac arrest after eating it. This year's Budget did not come in the form of a bowl of ghulab jamun. It came in the form of a plate of fresh fruit with a handful of vitamins, Omega 3 and Omega 6 oils and a bunch of antioxidants. It does not taste as good but it is a whole lot better for the system. So, it is just a question of what we make of it. This leads me to my next topic. International Women's Day was on 8th March 2003. Every time International Women's Day comes around, there is this discussion of women's issues and the question of gender equality crops up. There is one area in which Singapore women do not have equality with Singapore men. For various reasons, we have lagged behind, though it seems the gap is narrowing. As far as I am concerned, this is one area where we should remain firmly unequal and we should stay far behind the men where we belong, and this is in the area of cigarette smoking. I firmly support the increased excise duty on cigarettes and the decision to tax cigarettes by sticks instead of weight. I noted with concern the fact that although the proportion of smokers in Singapore dropped from 18% in 1992 to 14% in 2001, the percentage of young female smokers aged 18-24 increased from 2.8% to 8.2% in the same period. This is a danger signal because those who start at a very young age find it harder to quit later on in life. And if this trend continues, then in the next 15-30 years, there is going to be a substantial increase in smoking-related health costs among the young women who are picking up the habit now. Cigarette smoking was initially adopted by men in developed countries in the West followed by women in those countries. It then spread to the developing countries including Asia. And the relatively low use of tobacco by women as opposed to men is not because of better health awareness. It is attributable to social and cultural traditions and, in the past, the fact that women had less money to spend. The trouble is that now they do have more money to spend. More are picking up the habit. The reasons seem to be the same as that for young men, which is curiosity, peer pressure, need to relieve stress, desire to impress friends, and to relieve boredom. For women - for young girls especially - they think it keeps them slim. The problem is that this does not seem to be balanced by an awareness of the dangers of it. The dangers are well known. Lung cancer is the most obvious risk. That used to be a rare disease in the early decades of the 20th century. But by the 1950s, it was a leading cause of cancer death among men in developed countries. Now, it is also becoming a cause of death among women. And what is little known about the fact of lung cancer is that what you really die of is suffocation. You die because you cannot breathe. It is a horrible way to go, and smoking leads to that. There is also risk linked to pregnancy, infertility, cardiovascular disease, stroke, haemorrhage and on top of all that, you get wrinkles as well. A World Health Organisation report noted that the sad fact is this. If women smoke like men, they will die like men. It is not a good way to go. And, frankly speaking, I think that it is a very good thing that we have raised the tax of cigarettes. What does this have to do with the Budget, you may ask? It has an indirect impact in that it actually saves on medical and health costs. That is the benefit that we will see maybe only in 15-30 years. But the Ministry of Health today has to deal with medical and health costs of dealing with diseases arising from practices that people adopted 15 or 30 years ago. Studies have shown that smokers are very responsible to fiscal measures and I think that the tax increase on cigarettes is a very good move. With that, Sir, I support the motion.

Thank you, Mr Speaker, for allowing me to join in this debate. Sir, allow me to start by saying that I think the Finance Minister has strived to come out with what I think is a very prudent and balanced Budget in a time of great challenge. I say "balanced" because there is clearly an attempt to reconcile some short-term imperatives with the longer-term competitive challenges that Singapore faces. I say "prudent" because it is also trying to position Singapore for the long haul and trying to educate Singaporeans on the need, and all this whilst we have a modest deficit. Sir, I think many people have commented that this Budget lacks the silver bullet, lacks the path breaking recommendations which are going to deliver us to the new land of opportunity and prosperity. I think it was Aristotle who said excellence is a habit. And I think we should be in the habit of looking for consistent, good budgets and policies which will get us to our final goal, and not look for the magic bullet, because sometimes a magic bullet may not be so magical and it may come back at us. I think a measure of the challenges we face in this environment today is perhaps best understood if we look at the budget that was announced by the Hong Kong government recently as well. Their corporate tax was increased by 1.5%; personal tax and property tax were also increased by 1%. I think it is going to be phased in over two years. So, they have gone up to 171/2% and 16% respectively for corporate and personal taxes. Levies, including the foreign maid levy, have been introduced in Hong Kong at the expense of the pay of the foreign maids in Hong Kong. And perhaps most significant is the deficit forecast. For the year ending March 2003, the forecast is for a HK$70 billion deficit, ie, S$16 billion. For the next financial year, the forecast is for a HK$68 billion deficit, ie, S$15-16 billion. In the subsequent two years, Antony Leung continues to expect that there will be deficits in Hong Kong. There is a lot of speculation about the robustness of the peg of the Hong Kong dollar as a result of these forecast deficits and, more fundamentally, the question is: is this a structural problem for Hong Kong or something cyclical, as they assert, which they can come out of in the medium term? Sir, if we contrast that with Singapore, although much has been said about a third year of deficit and some have actually asked whether this is a departure from the history of fiscal prudence that we have had, clearly, the answer is no. And one need go no further than refer to the Finance Minister's speech itself where he made the assertion that fiscal prudence remains a cornerstone and over a cycle of business, the objective is still to achieve a balanced, if not modest surplus, budget. In fact, if we look at FY 2002, if we exclude the transfers to the endowment items like the Lifelong Learning Fund which is about half a billion dollars, and the Medical Endowment Fund which is about $100 million, there was in fact a modest surplus in the last financial year of about $1/2 billion. And for this financial year that we are now debating, the deficit is about $0.9 billion. In fact, from that perspective, if we look at the last three years, what we have seen is that first there was a deficit year; last year was somewhat of a balanced year; and now we are forecasting a deficit year again, which really is not that alarming and which has therefore given rise to questions as to whether Government can do more to give a boost, especially when we look at the situation in last year's budget as well as the comparison with Hong Kong. We have had many debates in this House against the notion of deficit funding or pump priming the economy. Some of those include the fact that ours is a small economy which has a substantial reliance on external demand. And the flip side of the coin is that efforts to boost domestic demand, whether it is consumption expenditure or Government spending, will have a limited impact, and we also allow for the fact that there will be substantial leakages from our spending. But given that, I think it would still be useful for all in this House and Singaporeans in general to better understand what would be the actual quantitative impact of such elements. Because the question is: could we not afford such leakages or such less than complete effectiveness in pump priming, and still consider additional spending in a time of some uncertainty where a boost is required in the economy, bearing in mind that overall in the business cycle, we could still achieve a surplus or a balanced budget? I would appreciate it if the Finance Minister could clarify these elements, because this is a repeated comment that emerges from the business sector and other quarters as well. Sir, there is certainly an air of uncertainty that pervades the economy and, in general, all Singaporeans, and there are many reasons for this which have been well canvassed here - the political uncertainties, the looming possibility of a war in Iraq and also the general economic outlook which is not so bright. But I think key developments in recent times which have had a profound impact on Singaporeans' sense of optimism or hope have been the reorganisation that has occurred in the public sector through the HDB and, to some extent, also in the sector that is deemed to be linked to the Government through the PSA. Some have spoken to me and they see this as a breach of an article of faith - the iron rice bowl - the expectation that when you work for the Government or a large organisation, although it is private but linked to the Government, there is a certain expectation that you will be cared for or that there will be a certain long-term commitment to keep you employed. Clearly, the recent developments have fundamentally changed that perception. And the question is: has the Government lost touch with the plight of the average man in Singapore? Put another way, for example, the question is: can we cut wages? Why must we cut jobs? That is the question that is raised time and again. And I think that those who raised this question perhaps have failed to understand the difference between an anaesthetic and a medicine. Cutting cost, in my view, is really the equivalent of an anaesthetic in this environment. Without a lot of detailed information, but having looked at many companies that have gone through these exercises in the last few years, cost reduction, in terms of cutting across-the-board wages, might relieve the company's pressure on the bottomline for the short term, but it will have a debilitating effect on its ability to manage its talent, because we are cutting the wages of all, regardless of performance. At the same time, it does not necessarily address the root causes of the problems which compel the company to take the actions that it is taking. The causes could be many. It could be that there is a need to reorganise to focus on core business. It could be because of renewed competition which has structurally occurred in recent times and therefore compelled a reassessment of the whole environment. Ultimately, one could argue that there is no such thing as a good time for retrenchments. Even in the best of times, we have a problem. Mr Chiam brought up examples of companies like CSM and so on, and I can understand that, as a Member of the Opposition, he wishes to make political capital out of unemployment. But my concern is that at a time like this - and I think Mr Chiam himself has said - many come with real problems - we need to give them real solutions, not political rhetoric in trying to deal with the issues of the day. In that context, the starting point must be to see why this is happening and whether there is a way to avoid it. Or, if we do it, is it just an anaesthetic which dulls the pain, delays the inevitable and, when the inevitable comes, it would be far sharper and graver? And let us contemplate the cost of inaction. If we do not do these things, or if these companies do not take the action, then it could be argued that the viability of the whole company and its business is at stake. And we are not talking about 10% or 15% of the workforce; we are talking about everybody. That is a consequence that is far graver. In the case of public-sector organisations, such as HDB, whilst it is painful for the individuals affected, it could be argued that it is far better to take the bitter pill now, focus on the core issues, and find ways to help those affected through the transition, because Mr Chiam himself will argue later why we are raising taxes or why the Government is spending so much. Measures like these do help the public sector to become leaner and, as a result, reduce the pressure on tax rates, allowing us to put more back into the economy. Sir, having said that, there are elements in this Budget which give Singaporeans cause for a lot of hope. It is not a cause for euphoria, and anyone who is unrealistically optimistic has to really be challenged. But I think there is a cause for measured optimism. And that is not only because of the many reasons that have been discussed in this House, including the intrinsic strength of Singapore financially, but also in other measures in terms of our social cohesion, etc, and other initiatives that are being taken up at quite a rapid pace. External opportunities through bilateral and regional Free Trade Agreements and multilateral arrangements, all of these have a significant impact on expanding the space for Singaporean companies and, therefore, opportunities for Singaporeans. What we might not have today is an effective means of communicating the value of such macro initiatives to the micro level. Some companies know how to use these to their advantage, but many would need to be helped. And this is an area where I hope the Ministry of Trade and Industry and others involved in the process would be actively disseminating information on the FTAs and trying to get businesses to understand how they can turn these to their advantage. The other major initiative that has been announced is this thrust and emphasis on entrepreneurship. Again, I approach this with some trepidation, because it is not as if entrepreneurship is the panacea for our problems. It is one plank in the bridge over this difficult time and, if it is done well, it might indeed become - to use a different analogy - the engine that will really boost the rocket. But it would be unrealistic and unwise for us to put all our bets in this one basket and say that this is going to be the solution to all our problems. On this, I would also like to echo the point raised by the hon. Member for Tanjong Pagar, Ms Indranee Rajah, because I think we do have an element of schizophrenia in Singapore. Entrepreneurs will, on the one hand, say, "The Government should leave the private sector alone. Let us charge out there. Let us do our things ourselves." But they will also, on the other hand, say, "But we need you to help us. We need you to do this, that, and so on" - whether it is a subsidy, a grant, or whatever. To some extent, that schizophrenia is quite understandable: you want to have your cake and eat it, and that is fine. But from the Government's perspective - and this is where I come to the policy proposal - having appointed a Minister of State for Entrepreneurship, I think the expectations are there in the market as to what the Government will be able to do to effectively promote entrepreneurship in Singapore. Mr Raymond Lim made a very eloquent statement on what he thinks his role will be and will not be, and the example of the Silicon Valley is a case in point. Silicon Valley thrived, in my view, despite government, although government expenditure fuelled it. But there was not the rules-bound and regulation-bound mentality that hamstrung Silicon Valley. So, perhaps the key role for the Minister of State for Entrepreneurship and the Government in general in this area is to focus, primarily, on the mindset, ie, promote a risk-taking mindset and, secondly, to focus on the environment, so as to remove impediments whilst reinforcing any enabling criteria or factors we have in our environment to promote entrepreneurship and, ultimately, to have a champion for the cause. Unless you have a champion, this message may be lost. We need it to be reiterated time and again, so that it resonates everywhere in Singapore. The last point I want to make is that having established some positive areas where more will be done and can be done for Singaporeans in terms of opportunities, I do feel that, in the short term, perhaps we could consider additional assistance for those who are in difficulty. Most of our measures in the helping Singaporeans aspect of this Budget are targeted at those who are at the lower strata in terms of income. It is right that our resources be targeted at this group who are in greatest need. But, like the hon. Member for Ang Mo Kio, Mr Inderjit Singh, I do believe that because of the nature and scale of the retrenchments we are seeing today, there is a sandwich class of Singaporeans who are hurting. By normal criteria of wealth measures, such as assets owned and so on, they would actually be deemed to be quite well-off, but, from a cash flow point of view, they are hard pressed. The response of asking them to liquidate some assets would be a lot more credible if the market was indeed a liquid market. But in many instances today, where some are in housing loans with negative equities and so on, this might actually be a difficult scenario. I am not suggesting we therefore swing to a welfare state, with a lot of unemployment benefits and a plethora of other assistance schemes. But whilst I subscribe to tough love - which was a point that Ms Indranee Rajah was making in talking about us being more self-reliant - I do think that there is a process to be managed here. When my daughter was learning to ride the bicycle, I gave her trainer wheels first. Then, when she was a little bit more confident, I kinked it up, removed the trainer wheels, held the seat, and then let her go! I do not think we need to go through such an arduous process in this philosophical shift. But there is a case to be made for some short-term forms of assistance which will deliver some relief to those who have worked very hard in Singapore over the years, but due to the circumstances shifting quite suddenly in some cases, they are caught in a difficult spot. This may not require a large resource allocation, but perhaps more a tweaking of existing rules in terms of how they can in fact tap their own resources, whether it is through CPF or other means, such as reverse mortgages, and special schemes for them. And I do hope that the Government will consider that seriously in the next year as a means of helping those in this sandwich class.

Sir, last week I was in Shanghai for a seminar to promote listings on the Singapore Stock Exchange. The seminar was held in a modern international 5-star hotel located at the rather fashionable Bund in Shanghai. More than a hundred interested parties attended, each of whom was carefully screened ahead of time to ensure that they are serious and profitable participants. The hall was packed. Those who attended took earnest notes and looked very serious about going overseas to raise their profile and, perhaps, capital. Perhaps, this reflects the strong vibrancy of the increasingly powerful Chinese economy. This was not only evident in the seminar room, but was clearly visible in the streets, shops and eating-places in the city. However, that was not what struck me. What struck me was a conversation I had with a local accountant who was present at the seminar. He told me that the Chinese recognise that they cannot go on competing on cheap labour and land alone. He recognised that in order for China to continue powering away, they must strive to move up the value chain and build on local brand names that are recognised internationally. Far from just wanting to be the back-lane sweatshops for some other people's inventions, they have strong aspirations to be the Toyotas, IBMs and Panasonics of the world. My conversation with the Chinese accountant made me realise how fast and how aggressive the Chinese are in trying to scale the ladder of economic development to become a developed nation, rivalling the US in every aspect. And I shudder to think of what this would all mean to Singapore, its economy and the future of its people. The truth of the matter is surely that the gap of comparative advantage that Singapore has over competing and emerging economies is fast eroding. In Singapore, we have always prided ourselves in having a brand name that is instantly recognisable and respected the world over. We can always leverage on this to charge a premium for our products and services. And it is this brand name which I believe that will hold the key to our future survival. The way forward for our country is not to take China on in this competition game, but to see how we can lean on our unique qualities of being a well-run, hardworking and honest English-speaking society to ensure our future survival. What do I mean? Sir, please allow me to take a leaf from the humble shoemaker. On a value chain, the common perception is that shoe-making and selling does not quite occupy the same space as bio-medical science or rocket engineering science. Yet, in terms of profitability and size of global reach, there is huge potential in this business. Take Nike, for example. No one would deny that Nike today is a global multinational whose products can be found in almost every nation on earth. Most people would have either heard of the brand or even own a pair of Nike. There are many people out there, including many young boys and girls who would give a limb for a pair of Nike. They are not able to own it because a pair of Nike shoes is just too expensive for many. And those who can afford it will not think twice about paying premium money for it. Yet, we know that Nike outsources the manufacturing of its shoes to the sweatshops in China, Vietnam and Indonesia. The factories that churn out these shoes for Nike have the capability of producing similar type shoes. The main difference is that they cannot put the famous swoosh mark on it, but some other brands, like Double Flying Wheel. Nike and Double Flying Wheel, which do you think will sell if they are both priced the same? Nike is not in the business of manufacturing. They are quite happy to leave this to others. They are in the business of branding and selling and creating in the minds of the consumers a certain desire of wanting to own and use their products. By doing that, they have added much more value to just ordinary shoes. I do not believe, Sir, that a pair of Double Flying Wheel shoes should be any worse off in quality than your Nike. Why do people choose Nike? There are numerous reasons. And this is not a forum for us to go into these reasons. However, I will just dwell on one. I believe it has to do with the American brand name. There is somehow a certain cache in the minds of most consumers that if the product came from America, it must be of a good quality. For the same reason, we see in some advertisements that specific mention is often made of some consumer electronic items being from Japan. Sir, people I have spoken to tell me that Singapore is not America or Japan, and that it would be impossible for a boy from the backwaters to make it big in the city. I used to think that was the case. However, over the years, we come across numerous examples of how a small and provincial company, or even an individual, was able to take on the world and the world became his oyster. I cheered recently, when I read of how a local Singaporean boy was able to build a name for himself by selling his line of clothes in competition with the big fashion houses in Paris and New York; and is able to claim Nicole Kidman and the late Princess Diana as his clients. This boy fortunately came from a family who is able to provide financial support for his dreams. Just think, if he did not have such an opportunity, he would probably be left selling his clothes in some run-down plaza in Orchard Road and the world would have passed him by without noticing him. And of course, would his clothes sell for the prices that he is now selling? Who would be the bigger loser in the long run? Singapore or the boy? We must pay more attention to brand building and brand management. The question is: how? Sir, in my previous speeches, I had made some suggestions on approaches. The first would be to strategically acquire or acquire substantial stakes to enable board representation in companies with very strong global brand names. In doing so, we not only acquire global companies that would help contribute to our total revenue but, if managed, would allow Singaporeans the ability to have a deeper and better understanding about the ways to international branding and marketing. Secondly, I note from the ERC Report that the proposal was made in respect of the setting up of an IP academy. While I welcome the establishment of such an academy, I am just concerned that, first, the approach taken by the academy may just be too academic and may not deal with the practical difficulties of managing intellectual properties. Secondly, the academy may just be another institution that is divorced from the reality of industry to be effective. Given the broad reach of the subject of intellectual property, I do hope that the academy would also devote much attention to the subject of brand building and brand management which, I would like to emphasise yet again, has not been given enough serious policy consideration that it deserves. At the risk of being simplistic, the world of business is very much about branding and selling. The better you are able to market and position your products and services, the better it is for you to cream off more fat for your bottom line. Everyone can manufacture a PC, it is only a question of unit cost production to stay competitive. But not everyone can create a Dell or a Compaq brand name that sells around the world. In fact, most Dell computers are manufactured and shipped out to China; but who makes the big profits? The Chinese are fast recognising the importance of the game and will soon play catch up. We, in Singapore, still have the advantage of a name that the world trusts. We should capitalise on it or run the risk of being marginalised and lose the advantage that we have. Sir, I note the affirmation of our Government that manufacturing will continue to form an important underpinning of our economy. I would support the affirmation, provided that the manufacturing activities that we support would allow us to take advantage of our comparative advantage in relation to China and the other emerging economies. I would question whether or not we are better off leaving manufacturing to the others in most instances. The logic of the globalisation argument, as we are all aware, lies in the fact that labour and capital in an increasingly open world economy would always gravitate towards places that are most cost effective through sheer market forces. It could well be that, in many of our traditional industries, it may not be more efficient for Singapore to keep them. And I would be so bold as to predict that, in the next 10 years, many of our contract manufacturing facilities, including those that are presently found in the electronics sector, will eventually be relocated to China and other places. The way forward for Singapore is to consider its comparative advantage rather than its competitive advantage. Singapore's strength has always been its well-qualified English-speaking younger generation of the post-independence people and the quality of its public service. Additionally, the fact that it is small also means that it is nimble and could transform itself quite easily. Clearly, Singapore can be a leading centre for research and development and brand building and development. The overall total licensing market is estimated to be some $300 billion a year. If Singapore cannot aspire to clinch even 5% of that share of the market, we might as well give up any pretensions about being a global industrial nation. If we are able, Sir, to develop strong global brand names, we would be able to build up a strong external economy, which will then give us much room to be inefficient in our domestic economy. For instance, we can earn enough more from our external economy to consider some form of subvention or fiscal incentive to encourage the employment of those who are structurally unemployed, especially the middle-aged workers. For them, we do not have to measure their efficiency against the workers from countries where cheap and untrained labour exists in abundance. The unit cost of these unskilled middle-aged Singaporean workers can then be matched more attractively with the support of our Government. This will provide employers here with a greater incentive to hire local employees as opposed to foreign employees. Sir, I know that the Government does not always welcome any suggestion of public subsidy, in whatever form. The conventional wisdom is that public subsidy robs the incentive from individuals to work and to improve themselves. While that may be true in general, there is no comparison when the argument is scrutinised more closely. It would be true to say that social benefits generally tend to make a person lazy and a sloth. However, what we are speaking here is to give a man back his dignity by giving him work that he would not otherwise be given, but for the intervention of the state. I know that such a policy may not satisfy in the longer term the requirement of economic efficiency. However, the point of the matter is that we do not need our domestic economy to be efficient all the time if our external economy is powering away strongly, such that it allows us this option. These structurally unemployed workers are still Singaporeans, and we will still have to carry them. Rather than give them handouts, which we have a duty to do if they are truly down, it may be better to subsidise them indirectly through employment. Sir, we are now at what most would consider the most significant crossroads of our nation's history. We are faced with having to make choices that would decide our people's fate. If we take the wrong path, the outcome could well be very different. The one salutary lesson that we have before us is New Zealand. Like Singapore, New Zealand was very much at the crossroads since the mid-80s. New Zealand also realised the need to restructure its economy and to raise its growth rate. It pointed to the need to boost training, promote entrepreneurship and facilitate new information technologies and strengthen economic fundamentals. These are clear mantras for growth which are easy to spout. Yet, the reality in the eyes of many, New Zealand has failed to achieve the results that it aims for. This is due to a whole host of factors, which included, among other things, the country backtracking on its labour reforms. Over the years, New Zealand's economy has receded to such an extent that it could not now even afford to maintain a combat wing for its air force. If you went to New Zealand today, you would not see many signs of physical wealth, which often in Asian context is measured by the number of Mercedes Benzes on the road. Singapore does not have to go the way of New Zealand. Unlike New Zealand, Singapore has a strong political will to see through the restructuring. We will not resile from taking politically tough decisions. Yet, political will may not be enough to see us through our present difficulties. We need to have clearer and more defined markers; which brings me now to the point about the ERC Report. While few would deny the logic of the proposals in the ERC Report, one could arguably say that the devil is in the detail as to how the Government is going to go about its task. The present Budget Statement has given us a broad indication of the steps that the Government is going to take. However, it has been said that we should perhaps have a sharper focus. I have earlier sought to define a more specific strategy of focusing on branding and intellectual knowledge as part of the strategy of building a knowledge economy as a driver for Singapore's future. More, however, can be done. For instance, we can set clear goals for the next 10 to 15 years. It is not enough just to say that we will remake our economy and make it a pretty slogan. We ought to have specific measurable performance indicators, for instance, looking at how many companies we want to bring global. How many GLCs are going to privatise? How many startups we want to nurture, facilitating the growth and expansion of such businesses? This approach will give the exercise a stronger focus, enable us to offer more assistance where assistance is needed. Our strength is in our ability to work towards the long term, including investment, education and training. There is no reason why the ERC Report cannot aim for such concrete outcomes. This brings us back to the question that we have been grappling with over the years. How far should Government be involved in business? Leaving aside our usual gripes about the GLCs, I believe that there is still a role for Government in business. As in the past, our Government should continue to provide leadership in strategic areas where the private sector does not have the resources or the ability to venture into. Our Government should continue to divest its holdings in the private sector, businesses that can be handled by our businessmen. However, our Government should not cease to provide initiative in other areas where the leadership of which would help us with the crucial need to successfully build up our second economic wing. I do hope that, in venturing abroad, we would have learnt our lessons from the past and avoid making the same mistakes as before; not least of which is our Government's habit of getting civil servants with little or no commercial experience to drive such initiatives. What I have advocated for is a slight departure from the yellow pages rule. We should not be afraid of going into businesses that already exist locally. Rather, we should boldly enter into such areas and add value by creating world-class companies with world-class brand names out of opportunities that we are Sir, in all my years, I have never seen the mood on the ground to be so despairing and despondent. It is dispiriting for our people to wake up in the morning, to learn of hundreds of fellow Singaporeans being made redundant by the HDB or PSA. How many more will have to lose their jobs before our economy recovers, if it recovers? How many more middle-aged workers can we employ under the present climate? In this crisis, what should stand out is our ability to inspire the confidence of our people through our leadership. We should provide our people with a very clear roadmap on how we are going to navigate out of our present structural economic problems. Making broad statements about what we are going to do is not going to add any more confidence to the people. As I have said before, we should continue to provide sharper focus on our strategies. For me, I know where we should be heading. I would say once again that we should continue to build a strong external wing by investing in or acquiring world-class companies with world-class brand names, and leveraging on these companies to help us build our own global brand names. If we could do that, and do that successfully, we could then afford to have some inefficiency in our domestic economy by subsidising employment for Singaporeans who are not able to adapt to the employment demands of the new world economic order. Subject to the comments above, I support the Budget Statement. 1.15 pm

Mr Speaker, Sir, there are many who have criticised the Budget for being "a non-event" and "uninspiring". In fact, one critique is on the removal of taxation on interest income from savings. One sarcastic remark often heard is that Singaporeans have no money to generate interest to be taxed now, given that economic conditions are so bad. Even for those who have money, interest rates are so low that the impact of the relief is negligible. So, why introduce it now? Sir, like many other brickbats, these comments have missed some of the more salient benefits and measures announced in the Budget which will have a positive impact on the long-term health of the Singapore economy. Singaporeans do have good reasons to be concerned about their economic prospects and livelihoods, given the uncertainties that surround the world economy and the political environment today. However, they cannot and should not just leave the job of reinventing the economy to the Government, and assuming that the Government will save the day, or will hand out something to them should things worsen. There is a fundamental need in our Singaporean society to change our mindset to economic and social matters and indeed foster a greater spirit of self-reliance. And this is the biggest challenge before us. If we band together and change the way we see ourselves and do business, be more entrepreneurial in many aspects, the world is still our oyster. There are grounds to be optimistic and not miss the silver linings contained in the Budget 2003. Nevertheless, Singaporeans cannot just stick their heads in the sand like ostriches, and ignore the reality of the weak global economic environment confronting us today. We have been in a "soft spot" for over two years now and, unlike during the Asian financial crisis some five years ago, the US economy is also in bad shape. With a structurally weakening US dollar following budget and external deficits in the US, our ability to export ourselves out of any economic weaknesses may be further compromised. In addition, our reliance on MNCs to provide stable manufacturing jobs is fast being eroded by the cheaper competitors like India and China. In many respects, Sir, whilst we strive for value-added and highly skilled jobs to move up the value curve in job creation, or indeed to fulfill the EDB's vision to transform Singapore into a "Global Entrepolis", we have to be very mindful of the fact that Singapore, with its high wage and land costs, will find it harder and harder to continue to be relevant economically. The Budget 2003's proposals on putting off the restoration of employers' CPF contributions, and its lack of incentives to further stimulate demand in the property market, may be difficult for Singaporeans to understand. Some measures which affect the pockets of the man-in-the-street are no doubt painful. They are, however, inevitable. Going forward, more radical measures to address these two cost components may still be required. And if we do not do that, when the next economic boom comes, Singapore may be left behind. Seen in this light, Sir, to me, the crucial platform that Budget 2003 has incorporated from the ERC's recommendations is its emphasis on entrepreneurship and the growth of Singapore companies. I am glad the Government has now recognised that we must reduce our over-reliance on MNCs, and actively promote entrepreneurship, self-reliance and innovation among Singapore companies. The appointment of my GRC colleague, Mr Raymond Lim, to head the entrepreneurship drive is a testament to the Government's commitment to ensure that Singaporeans can be lured out of their comfort zones, with incentives and some prodding on their backs. I am confident Mr Raymond Lim will do a good job and have as many of the ERC's recommendations on entrepreneurship implemented as quickly as possible. However, Sir, I do not envy him. He has a difficult task ahead. Unfortunately, I believe that to be successful in this initiative to boost entrepreneurship, no amount of safety nets and incentives alone will be enough to tempt Singaporeans out of their comfort zones. They are so used to the tried and tested path of pursuing higher education, jobs and stable careers. There has to be a complete overhaul of the different parts of Singaporean society, both in mindsets and aspirations and, perhaps, a slow and gradual erosion of our kiasu and kiasi mentality. Sir, taking a leaf from Mr Sim Wong Hoo's Chaotic Thoughts from the Old Millennium, Singaporeans, by and large, suffer from "NUTS" or the "No U-Turn Syndrome". He points out that: "In the US, where there is no sign on the road, it means that you can make a U-turn. When the authorities do not want people to make U-turns, they put up signs to tell you not to make U-turns. In Singapore, it is the reverse. When there is no sign on the road, you are not allowed to make U-turns. When the authorities allow you to make U-turns, then they will put up a sign to give you that right."

Sir, the bottomline is that both systems serve the same purpose, ie, to better manage traffic. They look similar, but the social repercussion is significant. The "no U-turn syndrome" has created a way of life for us that is based on rules. And, without rules, Singaporeans cannot perform. They are paralysed. Sir, we need to change our mindset. I fear that whilst our budget initiatives to boost entrepreneurship are good, we would not realise the intentions, if steps are not taken to also address this mindset across all Singaporean society. Civil servants, for instance, need to be prepared to make decisions that would be pro-business and pro-entrepreneurs. Civil servants must not assume that the businessmen are out to cheat the system and exploit loopholes. There is a need for a comprehensive review of internal policies that stymie business and entrepreneurs, so that the spirit of free enterprise can be enabled. I acknowledge that the Ministerial Committee on Services and the initiatives to streamline rules and regulations are already in place. However, Sir, more needs to be done at a faster pace. Sir, I have long pointed out in this House that to effectively change the bureaucracy, we would need to enable more cross-overs of private sector talents into the civil service - perhaps, even as high as the Permanent Secretary level. After all, if the status quo continues, it could be self-perpetuating and not be conducive and responsive to change. Those from the private sector surely would be able to bring their perspective, from being on the other side of the table, to good and immediate use, rather than trying to get civil servants with long-standing practices to try to stand in the shoes of the private sector - a much more onerous task. I suggest that the Government seriously look at employing more private sector talents into key positions within the civil service, in the same way that we are now seeing more Ministers in Cabinet who are from the private sector. Sir, there is also a need for more attention to be paid to our younger workers and students in secondary and tertiary education. This generation should not be told to achieve greater academic qualifications and skills upgrades alone. It is precisely this motivation that has made many Singaporeans kiasu. The higher the educational certificate, or the more paper qualifications achieved, the higher the opportunity costs in leaving the comfort zone from the rule-based path of JC, university, stable job and career growth. I note the disappointment aired by a recent graduate to the Straits Times' Forum Page last week on not being able to land a job after getting his university qualifications. This is in stark contrast to the winner of Her World's Young Woman Entrepreneur Award, Elim Chew, who graduated from the school of hard knocks, at the lower end of her "O" level cohort, and many business failures. Persevering and with drive, she now runs a business of more than $10 million turnover per year. We would need to train students to inculcate in them the mindset of risk-taking and self-reliance, so that the future economy in Singapore can be bottom-up, broad-based with depth and breadth of enterprise. Sir, take another example of mindset change. It was recently reported that the School of Sports Excellence to be set up has a criterion to take in only students who are from the Express stream. Why do we restrict ourselves to this rule? True, some of our top sportsmen have been strong academically as well, but there are many more equally successful, such as Fandi Ahmad and Remy Ong. Our Asian Games bowling champion, Remy Ong, for instance, has even set up his own business. They are both not from the Express stream. There must be a sea change in our thinking across-the-board, so that flexibility in approach, daring to try, and risk taking, can permeate throughout our society. Sir, another measure that many would like to see would be the freeing up of the portion of CPF beyond the Minimum Sum, for use as business investment. There are some who have substantial savings in their CPF. These individuals are likely to be successful in their career, and have substantial private savings and investments, and insurance or pension plans of their own. Having a significant portion of their funds locked up in CPF would be a disadvantage, should we want to encourage entrepreneurship among the more able in our society. I would therefore like to suggest that perhaps a means test, say, for an individual having $X of private investment/pension set aside already, be adopted to allow for the withdrawal of CPF for business investment. Entrepreneurial activity should not be capped on the basic assumption that Singaporeans cannot think and plan for themselves, and need to lock up funds in their CPF. Some can and should be given the leeway to expand the depth of enterprise in our economy. Finally, Sir, I speak for many Singaporeans in expressing our concern about the state of our economy. True, pump-priming does not work that well in Singapore, as 80 cents of a dollar pumped in is leaked out in our highly open economy. The conditions in the labour market in the private sector are still difficult, with pay cuts, wage freezes and retrenchments seen. And this is now seen in the public sector, such as HDB and PSA Corp. Still, Sir, it is not all doom and gloom. Many have alluded to the problems facing Singapore today as akin to Japan after the twin bubbles in their property and stock markets burst in 1992. True, we are a smaller nation and would find riding the rough tides of economic ocean tougher at times. However, in our smaller size lies our flexibility to adapt and change. As long as Singaporeans continue to pull together to make the painful sacrifices, our long-term economic future is in good hands. Indeed, unlike Japan, it is fortunate that Singaporeans have chosen wisely to have good continuous stable Government, which is able to implement essential policies for the long-term good of Singaporeans, even if it involves some pain in the near term. We should be proud of that, stand tall against the challenges we face, and I am confident that, with continued good Government in place, we will rise to the occasion again. Sir, I support the Budget Statement delivered by the Deputy Prime Minister and Minister for Finance.

Mr Speaker, Sir, thank you for allowing me to take part in this Budget debate. This year's Budget contains a clear and unequivocal message for workers. There has been a significant shift in the labour market, and this has vast implications on workers. Although manufacturing remains one of the two key engines of our economy, it is no longer the largest provider of jobs. Most of the jobs are found in the services sector, but even this sector is not spared. Some jobs have shifted out of the services sector to lower cost locations. The public sector, which has undergone a lot of changes over the last few years, is also no longer a safe haven. In a nutshell, the employment market has drastically changed, and painful adjustments have to be made. Sir, we can see these changes that are taking place and know and understand why they are happening. Jobs are less permanent now, and shorter-term, compared to the past, and no one can expect to retire in his first job any more. But, at the same time, we must also understand that workers have families and commitments which are regular, permanent and long-term. Hence, they need income stability and job security. How do we ensure that we continue to maintain a flexible job market but at the same time do not cause such huge fluctuations in our workers' lives as to destabilise families and our society? Can we achieve these twin objectives of a flexible labour market, which means that more of the ups and downs would have to be borne by workers, as against their need for balance and stability? Ms Chua Mui Hoong, in her article in the Straits Times dated 8th March 2003, argued that people should stop lamenting about job losses and instead should focus on how to manage job shifts. While I agree with her on this and the many other good points which she had made, I am a bit concerned about one point which she had raised. She had argued that the employment relationship should be treated as a purely commercial contract, and one should not look beyond that. If we accept this argument, I fear that one day, we will even have to do away with core legislation which protects workers' interest and welfare, such as the Employment Act or the Workmen's Compensation Act, as the argument would then be that workers should take care of these needs through individual contract negotiations. Is this a desirable development from our society's point of view? I clearly submit that it is not, as the fact remains that there are inequalities in the labour market which cannot be completely removed by adopting a strictly commercial approach. Hence, some form of legislation and system has to be put in place to ensure fairness and to balance the interest between enterprises and workers. I would argue, Sir, that this approach is good, not only for individuals and families, but also for the economy and for employers too. Workers who are more stable and secure can contribute more effectively and efficiently to the company and our economy. Sir, I want to make one point clear though. I am not suggesting that we should become even more protectionist. But I am arguing on the need for a balance. I also wish to make the point that as we review and refine the present structure that is in place in order to achieve labour market flexibility, we also need to update and refine the existing system that is in place to protect workers' welfare. A key refinement that is sorely needed is clearly portability of core benefits. Currently, other than the CPF, the other employment benefits are rigid in two ways. They are mostly tied to workers' present job and are not movable. Secondly, they also depend on a person's length of service. A case in point is the medical benefits, which are important to workers as healthcare cost is a grave concern for many. But as the Finance Minister correctly pointed out, once a worker moves out of a job, he loses the benefit. For older workers, this is particularly hard as employers do not want to hire them because of concerns over higher medical costs. Sir, I am very happy that the Government has accepted the ERC's recommendation on portable medical benefits and decided to raise the tax exemption limit for additional Medisave contributions from private sector employees from 1% of an employee's monthly salary at present to a lump sum of $1,500 per employee per year. But, Sir, I would like to request that the Government consider two refinements. First, I would like to ask that the Government consider providing incentives for older workers to move into the portable medical benefits scheme. This is important, as they would otherwise not find the scheme attractive enough, as the portable medical benefits scheme is essentially a savings scheme and the earlier you come on board the scheme, the better. Hence, for older workers, because they have fewer number of years to work before retirement, they may find the scheme less attractive. Having any support from the Government will be very helpful in terms of extra premiums or other incentives. Another possibility is for the Government to consider providing different scales of benefits for tax exemption for workers of different age groups. For example, older workers can be given a higher tax exemption instead of a blanket exemption of $1,500 for everyone. Secondly, I would also like to ask the Government to consider pegging the additional 1% contribution into the Medisave account to the median wage of our workers. This would ensure that lower income workers have a basic floor. Otherwise, the contribution that they receive will not be meaningful enough to encourage them to adopt the portable medical benefits scheme and would not provide effective protection. Pegging the 1% contribution to the median wage is a fair and reasonable suggestion. So, I would like to ask the Minister to seriously consider this proposal. Sir, along the line which I have argued earlier on the need for refinements to our existing system to ensure a balance between flexibility and protection, it is important that we continue to strengthen our social safety net. As the economy restructures and jobs are shared, there is a need to ensure that workers get some form of compensation to tide them over their unemployment period. While news reports are full of high profile cases, like the PSA and HDB where some have lamented that the benefits are generous, there are cases where workers are not paid when the companies retrench or wind up. While there is flexibility for employers to shed workers, we also have to ensure that employers exercise this right fairly and in a responsible manner. So, I call upon the Government to monitor the retrenchment situation closely to ensure that employers comply with the tripartite guidelines when dealing with excess manpower and ensure that workers are paid retrenchment benefits when they are retrenched. Under the guidelines, employers are required to consider implementing a shorter workweek and other measures for reducing costs before resorting to retrenchments. But there is no means of ensuring that employees comply with these. There are two measures which I hope to seek a response from the Government. One possibility of further strengthening our social safety net is the setting up of a fund which could be used to pay some benefits to workers who are retrenched. I know that, in the past, this idea had been shot down. It had not been well-received but I think there is some need now for us to rethink about this issue. A key issue here is, of course, financing. But I would like to suggest also that when a review of the CPF is conducted, the Government could consider setting aside a portion of the CPF into this fund. Also, instead of giving out shares or topping up the Medisave, perhaps the Government could consider contributing into this fund. Sir, I do not have ready answers on this. But this is an issue that we need to discuss and forge a consensus on how to move ahead. As the long-term unemployment rate will remain high with structural unemployment complicating the issue, there is clearly a need to engage in further discussions on this. In order to prevent this fund from becoming a disincentive to work, there can be conditions attached, such as the maximum that can be withdrawn and the need for the retrenched worker to make serious efforts to find a job. Financing, as I said, is a key issue, but I am quite confident that if we can continue to discuss, we may be able to forge a consensus. On the issue of foreign workers, Sir, I agree that there must be flexibility. I accept the argument that there is no way that the 600,000 foreign workers can be replaced by the 80,000 Singaporeans who are unemployed. To send back even 10% of these foreign workers will significantly impact on our economy and cause loss of jobs among Singaporeans if companies pull out due to a shortage of labour or because of the lack of skilled workers. But at the same time, I feel that there is a need for balance and for the Government to monitor this issue more closely. The quotas were fixed during periods when unemployment amongst Singaporeans was lower. But with the current high unemployment rate and the projected long-term unemployment rate of up to 5%, these quotas may not be sustainable. Hence, I call upon the Government to review the foreign worker quota more frequently and at shorter intervals, depending on the economic and employment situation, to ensure that Singaporeans are not disadvantaged. Sir, a core element of ensuring that there is a balance between flexibility and protection is workers' training and skills upgrading. I strongly support the formation of a statutory board to undertake the Continuing Education and Training and job assistance programmes. This is an important milestone in our effort to upgrade workers' skills. The current measures on job assistance were developed primarily over the last few years, arising out of the economic downturn. However, structural unemployment will be a long-term phenomenon. Hence, a more coordinated and more encompassing approach is needed in dealing with workers' training and job placement. There is certainly a need to establish a closer nexus between training and job placement. But, on the other hand, some flexibility is necessary. If a worker is trained only if he can be placed in a job, this would also act as a disincentive to training. I want to applaud the Government for setting aside $500 million for the Lifelong Learning Fund and another $37 million for skills upgrading efforts. Singapore's huge investment in education and skills training is the envy of many countries. Many countries aspire to educate and reskill their workers as we do. Our efforts have been cited in many international publications, such as ILO's or the United Nations' publications, but few countries could come close to what we have done in terms of our heavy investment in our people. The real challenge in reskilling our workforce is how to ensure that those who really need the training attend training courses. Based on anecdotal evidence in the Malay community, for instance, my sense is that, in terms of percentage, the better qualified ones are those who are more likely to undergo training. We should have a more in-depth understanding and analysis of the training profile of our workers so that we could have a more targeted and focused approach in our training efforts. I hope that the statutory board charged with Continuing Education and Training would be able to deal with this issue in a more focused and coordinated way. Sir, another aspect of balance which is necessary, in my view, is to look at how to help employees balance work and family. For years, we have been trying to increase the birthrate. But we have made very little progress. Last year, despite all the incentives given to families to have more children, we had the lowest birthrate in 14 years. The underlying reason is clearly the inability of many dual-income families to cope with the increasing demands of work and family. Many women today work not for aesthetic reasons or for self-fulfillment but because they have to. Women's income constitutes a significant percentage of the total family income. Many companies have found that helping their employees balance work and family means greater job satisfaction, less turnover and higher productivity. So, I call upon the Government, Sir, to give a stronger push to initiatives to promote work and family balance. As the issues affecting the family is multi-faceted, it may be timely to consider setting up a National Family Council, akin to the National Youth Council, to take care of all matters pertaining to the family. The National Family Council can act as the coordinating body, as well as the body to champion all matters pertaining to family. I would also like to request the Government to consider increasing the subsidy for parents who put their children in childcare centres. The last time that the subsidy was increased was some years ago when it was fixed at $150. Since then, childcare fees have gone up but the subsidy has not been reviewed. Mr Speaker, Sir, I also call upon the Government to pay special attention to the plight of older workers. Ageism is alive and well and employers continue to discriminate against older workers who are considered unproductive, slower and not adaptable or trainable. Such stereotypes are not only demeaning but also untrue. I have met many older workers who are unhappy that despite the efforts to upgrade and change mindsets, employers continue to discriminate against them. We need to highlight and recognise best practices among employers. The Ministry of Manpower can perhaps work out a scheme to recognise efforts of employers who have successfully integrated their older workers in their workforce. Sir, let me move on to the public sector. I must say that there are a lot of anxieties when the Budget Statement mentioned that there would be a review of public sector's services with the possibility of privatising some of these services. There are two points which I would like to make. First, in line with our strong tripartite tradition, I would like to urge the relevant Ministries and statutory boards to consult and involve the unions before restructurings are carried out, so that workers' concerns can be addressed and the restructurings can be properly carried out. In this regard, I must commend the HDB management for involving the union and the extensive consultations that they had with the union and the workers before the restructuring. Sir, managing change effectively is critical to ensure that we do not end up with a demoralised public sector and to ensure that the outcomes which are desired are actually achieved. Secondly, Sir, I hope that the Government will put in place a system to monitor the quality and delivery of the services which have been hived off or may be hived off to the private sector to ensure that the same level of quality in good service is maintained. A key reason why there is strong opposition to privatisation of public sector services in many countries is because after privatisation, people find that the cost of the services either went up or the quality was affected. Hence, we need to ensure that whilst the objective of outsourcing services that can now be provided by the public sector to the private sector is cost, this should not result in a lower or more costly service Sir, I agree with Mr Leong Horn Kee that there are concerns among the older workers, whether they have enough savings in their CPF. I also agree with Mr Inderjit Singh that there is a need to further promote the monthly variable component. I strongly support the Deputy Prime Minister's call that employers should pass on part of the cost-savings to deserving workers through the variable component of wages. During these difficult times, it is important that we continue to maintain the trust and confidence of workers. If companies that are still doing well do not reward workers, or try to exploit the current economic downturn, then I am afraid that irreparable damage will be done, and people will be less willing to accept change or to make sacrifices. It is also important that while we ask workers to tighten their belts and accept harsh measures for their own future, the Government continues to ensure that the cost of living does not escalate. If wages do not increase, or the pace of increase is very moderate, but healthcare, housing, transport or other cost increase, then this would cause hardship and affect workers' standard of living. Hence, I urge all service providers, whether public or private, to heed people's anxieties and concerns and do not indiscriminately increase their charges. Sir, I also call upon the Government to continue to monitor the situation of low income Singaporeans. This is to ensure that they receive the assistance that they need. There are help schemes that are already in place but we need to review these schemes from time to time, to ensure that they are adequate and are accessible to those who are really in need. In conclusion, Sir, how would I describe this year's Budget? To me, this year's Budget can be summed up in three words - pro-growth, pro-job and pro-workers. This is not an assessment that everyone would agree with. Some had said that this is a pro-business and pro-employer Budget. They pointed to the many incentives given to businesses, compared to some of the painful measures for workers. So, as a unionist, why am I arguing that this Budget is pro-worker? Mr Speaker, Sir, this is because we, in the labour movement, understand the realities down the ground. Ask any worker today and he will tell you that his major concern is about employment. Those who are employed are worried that they will lose their jobs. Those without jobs are worried about how fast they would secure another one. After the retrenchments in PSA and the restructuring in HDB, many wait anxiously and watch out for signs that will tell them whether their company is next on the line. There is an air of uncertainty and general anxiety in the atmosphere. Sir, having spent more than two decades in the labour movement, I must say that this is the most challenging period that I have experienced. In such a climate, any measures that will help to preserve jobs or to delay retrenchments are welcomed. Any measures that tell us how new investments will be drawn in and new jobs created are welcomed. Will the measures announced in this Budget guarantee that no jobs are lost? Will it guarantee that new jobs will be created to soak up new entrants to the labour market and the retrenched? Will it guarantee that older workers will continue to be employed? The reality is that no one can guarantee anything, as there are just too many imponderables. But then we, in the labour movement, ask ourselves whether we would be worse off or better off without these measures. Sir, if we stick steadfastly to old paradigms and rules, will it help the workers or make their situation worse? How should we champion and articulate workers' interest? Does championing workers' interest mean that we have to take the popular line and shout slogans or do we adopt a more responsible attitude, analyse issues, think out the strategies and work out the programmes to help our workers? We in the labour movement have decided to cut the rhetoric, roll up our sleeves and get down to work. Singapore's progress is in no small measure due to this responsible part that we have played in protecting workers' interest. After much soul searching, we agree that, difficult though some of these ERC measures may be, they are necessary for the short-term as well as to protect the long-term interest of workers. At least with these measures we now stand more than a fighting chance to make a break and to recover strongly. If we had stuck to our guns, we may not even have that fighting chance. Take the case of the 2-year CPF deferment. Sir, I must tell you that there was also a lot of soul searching on our part. Some would have preferred to wait and have it assessed on a yearly basis. But at the end of the day, many of us are persuaded that we are not dealing with normal times. We are dealing with unusual times. And unusual times require unusual measures, unusual ways of doing things and unusual sacrifices. Sir, there are so many threats and challenges that Singapore is faced with. It is as if our entire resolve as a nation is being tested. I must say that we have kept the flag flying high. It has not been easy to get people to think and see the long-term. Sometimes, I think that there is a perennial disconnect between the Government's long-term plans and visions and desire for people to think long-term and people's concern over their short-term needs. The challenge for Singapore really is how to bridge this perception gap so that we have more people thinking on the same wave-length. At the end of the day, Sir, what will hold us together as a people and enable us to overcome these huge challenges that we are now faced with is the trust and confidence that people have in the Government. This trust and confidence is not something that is developed by chance or that came about overnight. It arose because the Government has repeatedly kept faith with the people and delivered on its promises. I am confident that a new partnership is now developing between the Government and the people. Trust and confidence is still a key consideration, but in this new partnership it also requires greater ownership and responsibility on the part of all Singaporeans. On this note, Sir, I support the Budget. 2.08 pm

Mr Speaker, Sir, I am happy to note that the Finance Minister in his 2003 Budget has taken into account many of the points made by the ERC and its various sub-committees. The ERC Report highlights the problems Singapore faces in the transition towards a full-fledged first world economy. Its recommendations will serve us well in the future as we strive to find our place in the new knowledge era. I would like to congratulate members of the ERC and its sub-committees for a job well done. The current gloomy scenario is a good time to take stock, consolidate and plan for the future. However, we must not confuse ourselves between the effects of the current downturn and the effects of long-term change, which is brought about by globalisation, the new economy and Singapore's progress into the premier economic league. The ERC should be commended for addressing both the short-term and long-term problems. Today, I would like to comment on the issues of Singapore's competitiveness and helping dislocated Singaporeans to remain employed. First, on competitiveness. I believe that Government can and should help Singapore businesses, be they domestic or international, to be competitive. We can do it by taking the Singapore Inc approach. By "Singapore Inc", I mean Government and businesses consider each other as partners to promote a flourishing economy. There is greater urgency for this now as we compete as a nation in a globalised environment. Government agencies must therefore seek ways to facilitate businesses and encourage entrepreneurship by removing obstacles and help the implementation of new and novel ideas. This will require a new mindset on the part of the Government, in that the Government, together with civil servants must stand on the side of businesses to help them survive and prosper. I am glad that Minister of State, Raymond Lim, has recognised the need for this new mindset in his speech earlier, and Mr Inderjit Singh has also spoken on this. It is not unlike the role of EDB helping MNCs to set up their businesses in Singapore. Likewise, SPRING Singapore, and indeed all Government agencies should go all out to help businesses in their thoughts and actions, be more market-friendly, and when an application goes against existing rules and regulations, find ways to justify the applications, without making the rules meaningless. Let me give one or two simple real-life examples to illustrate my point. A grassroots leader of mine operates an eating house along Race Course Lane in the central area. The property next to his has an extension jutting out from the main facade. As a good businessman, my grassroots leader put up his eating house sign above his gate away from his facade, but in line with his next door extension, so that the visibility of the sign would not be obstructed and his business would not be affected. Lo and behold, he was asked to remove the sign by the authority because advertisement rules in the central area require the sign to be flushed with the property facade. He appealed but was rejected. I found this unacceptable and so I appealed on his behalf to the Minister, arguing that if the next door extension had been allowed, and had already changed the facade of the original row of properties, why should the authority insist that the eating house sign must be flushed with its own facade? Fortunately, the Minister agreed and the appeal was granted. But what if I had not appealed? The problem should therefore not have remained unresolved in the first place. This will be the case if the relevant Government officer believes that he also has a duty to assist businesses. Let me give Members another example. A construction company recently bought over a cement plant to produce cement for its own use. One way to make its cement competitive compared to imported cement is to lower the cost of importing the raw material. The company found that if it is allowed to unload the raw material at the existing Government jetty, which is being used now for unloading of sand and granite, it can save substantially on import cost, as opposed to unloading the material at Jurong Port. The company applied for permission to do it on the grounds that the physical form of the raw material to be imported is similar to sand and granite. In addition, if the cement plant survives, it will continue to provide jobs and utilise a substantial amount of electric power. The authority, however, rejected its application. One official actually told the company that it should just import the cement instead of producing it in Singapore. Mr Sim Wong Hoo, therefore, hit the nail on its head when, according to his book "Chaotic Thoughts From The Old Millennium", he told his customer service officers that they were in fact the customers' advocates and they had to be fighting with him for their customers' interest rather than the other way round. I believe civil servants must adopt the same attitude. They must realise that they work for Singapore, as part of Singapore Inc, and that the businesses which they deal with are their allies, as well as their customers, and not an adversary to be challenged at every opportunity. It is commonly perceived that when a civil servant is faced with an application for a new business activity, which does not conform with some existing rule or policy, his gut reaction will be to simply reject the application. This is what Minister of State Raymond Lim earlier referred to as the default "No" button. The civil servant will, at best, and in line with our campaign for a gracious society, find a nice way to write the rejection letter. However, it does not solve the problem of the business applicant and, worse, if the applicant has come with a brilliant, revolutionary idea which can benefit Singapore. So what should civil servants do? First and foremost, if it has not already happened, the attitude of just following the rules has got to change. Yes, we must follow rules, regulations, policies and guidelines. They are needed for good order. However, they must not be obeyed blindly. When an application from a business with a new idea comes along, civil servants ought to try to help it obtain the approvals it needs. In the new economy, and if Singapore is to remain competitive, that should be their duty. This is how they can become the "customer's advocates". If the application cannot be approved due to some rule or policy, the civil servants should help the applicant find a way around the problem. If the case is good enough and is beyond his authority to approve, he should bring it up to his bosses. He should never wait for the applicant, who is his customer, to appeal to the "higher authorities". Being the advocate, he should initiate the appeal on his "customer's" behalf. Secondly, in our civil service system, his immediate superior should welcome such initiative instead of finding it bothersome. Indeed, the immediate superior should now, in turn, become the customer's advocate to help the applicant obtain his approval. If a satisfactory decision still cannot be made, the matter should progress further up the civil service hierarchy. As far as possible, it should not be a matter that needs to be brought up at a meet-the-people session and be resolved by MPs writing to the Minister. In this way, all avenues can be explored before turning down business applications with sufficiently good ideas. New ideas do not come about easily. Surely, we must give them due consideration before tossing them into the bin, just because of some old rule. If such due process is given before rejecting applications, the entrepreneur will at least be encouraged by the experience. He will be willing to try again in future because he can see that the Government and civil servants are on his side, and not another obstacle to be surmounted. Mr Speaker, Sir, this is one way we can encourage more entrepreneurship in Singapore. Another important issue affecting competitiveness is land. Members have spoken about it. Land cost is an important factor of production. I am glad that the ERC has recommended that our industrial and commercial land be priced competitively in relation with competing nations. In order to achieve this, land should not be priced according to alternative use but in accordance with its direct industry use. Being the largest land owner, the Government can exert a great influence over land cost. While there is a need to lower land cost generally, I understand that there is also a dilemma. If land prices fall too drastically, existing land owners and lessees will be hard hit. Our financial system may be affected thus worsening our already fragile economy. However, while caution is prudent, I urge the Government not to "do nothing" or too little since land cost is one major factor affecting our competitiveness. Two measures announced by DPM during his Budget 2003 speech are for a property tax rebate and rental rebates. Unfortunately, these measures are only for six months. I find this too cautious and feel that we can be far more generous. Let me explain. DPM has justified that the freeze in the restoration of the employer's CPF contribution rates for a further two years is to give certainty to the employers, MNCs and investors about the CPF issue. It is intended to send a strong signal that we are serious in solving our problems and that we are determined to keep our business cost competitive. This is the sacrifice our workers are asked to make. But when it comes to Government rebates, I am puzzled that the Government is only prepared to give six months. Should not the Government also make the same commitment of two years on land and other costs and send an equally strong signal to investors? The property tax rebate and the extension of rental rebates, together with the reduction of foreign worker levy and the reduction of diesel tax, etc, should also be given over a period of the same two years, instead of only six months. This will certainly send an equally strong signal to our workers. Yes, with the war looming and economic uncertainties reaching an unprecedented height, perhaps the Government should be even bolder and increase the quantum of the property tax and rental rebates given. The longer period of two years is not as "reckless" as it seems. If the economy recovers, the Government will have more tax income and can well afford it. If not, then these rebates and reduction are certainly needed to lower business cost. Heads, we win; tails, we also win - what could be better? Another threat we face is the hollowing out of some of our industries and the loss of jobs. The ERC has reported that we have sufficient industrial land. Therefore, we should start to consider pricing land according to industry use to hold on to even the lower-tech industries through competitive land prices, and dissuade them from migrating to low cost countries. We need to do this in order to provide continued employment for Singaporeans who find it difficult to re-skill. It is better to do this than to give them social assistance. Perhaps in order to limit any undesirable effects, this measure can be strictly targeted. We can start by putting aside only a small portion of our JTC land bank for this purpose. This is better than leaving our land vacant when these lower-tech companies migrate. Sir, capital is another important factor. I agree with the Government on various measures to encourage the people to keep their capital or money in Singapore. Lower direct taxes will allow for capital regeneration. The stable Singapore dollar policy is also beneficial to capital inflows. Elimination of taxes on profits repatriated from abroad will also encourage more Singaporeans to bring back much needed money from their overseas operations and help lift the domestic economy. Abolishing taxes on interest earned from deposits in Singapore will also encourage money to remain here. The capital allowances for all capital items will also be beneficial to encourage risk-taking. I also urge the Government to allow losses from an overseas subsidiary to be consolidated at the group level for taxation purposes. This measure will encourage our companies to go overseas and globalise. There may be some concern of abuse. However, the Government is already aware of this possibility and I am sure appropriate measures, like capping the quantum of losses allowable for group tax relief, or a registration or monitoring system, can be instituted to prevent this. Sir, the new knowledge economy will throw up one undesirable effect, ie, structural unemployment. There will be workers who will find it too difficult to retrain and reskill, either due to their age or other factors. As a modern society, we must provide some assistance to such people, not only in the form of a pure monetary handout, but also meaningful work so that their self-esteem does not suffer. My earlier suggestion on reserving some cheap land for lower-tech industries will help. However, more can be done. I am sure Members will agree that financial help which is tied to the performance of some meaningful work is far superior to a pure handout, like ERS shares. Such work schemes may be difficult to implement due to the concern that some unscrupulous people may abuse it. Nevertheless, we should not be swayed from the higher intent and should find ways to overcome these difficulties. It is a good idea to counter structural unemployment by using the concept of "negative income tax". This measure is better, more meaningful and more effective than the "handouts" given since the negative income tax is associated with job creation. The Government already provides subsidies for various training and apprenticeship schemes. In general, this can be further extended more widely and for longer periods, if necessary. For older workers, I would like to urge the Government to consider subsidising part of their CPF payments, instead of simply instituting a cut in the contribution rates. This achieves the intention of lowering costs for employers and will also protect the workers' retirement nest-egg from shrinkage. The amount of Government expenditure needed is small compared to the total expenditure. The money spent here is better spent, more targeted, than simply handing out shares or money across the board. Further, I would like the Government to consider instituting a "paid" community or social work scheme. The benefits of this are two-fold: the old, chronically sick, underprivileged and the community will gain from the services provided and improve their quality of life; and the longer-term unemployed will find some meaningful work to do for some pocket money. The newspapers reported that one Town Council is already doing this in a limited way by "employing" those out of work to do checks and inspections on common facilities so that a better level of maintenance can be achieved. The Government can provide some money for this and other schemes to be instituted and expanded. These can include a social visitor scheme for the old and the sick who are alone at home, or schemes such as neighbourhood watch, etc. In the social visitor scheme, our unemployed can be trained to provide visits to the old, infirm or sick. These are the underprivileged who would normally be left alone at home, unable to move around easily, and need help with simple errands or maybe simply a friend to talk to. We can certainly improve the quality of life for such unfortunate people by taking care of their basic needs and, at the same time, provide some useful work for those that are unemployed. In the neighbourhood watch scheme, an allowance can be paid to those who need a job for their role in providing some neighbourhood watch service. This could include neighbourhood patrols or even simply stationing themselves in key areas to deter petty criminals and other offenders. In difficult times like this, there is a tendency for such crimes to increase and this will be a good counter measure. Finally, Sir, I would like to close with a comment on the budget deficit. I do realise that some of my earlier recommendations need to be funded. DPM has already taken pains to point out that the FY 2003 Budget will be the third consecutive year of budget deficits. However, many have fed back that the Budget could have been more generous. The projected deficit is $900 million. But during better years, we achieved surpluses of around $4-$5 billion a year. Why can the Government not contemplate a deficit nearer such a level in what is notably a very trying and uncertain time? The war on Iraq seems inevitable. It may happen within days. The Prime Minister has advised Singaporeans to expect tougher times ahead in the next few months. The outcome of the war is an unknown. What if it is an unfavourable one affecting adversely the political and economic environment of the world over a longer period of time? Do we have the assurance of the Government to introduce another off-Budget package of measures to help Singaporeans? In the light of what I have said, I support the Budget. However, I hope that DPM will give due consideration to my suggestions. And I hope he will also give a commitment to provide further generous off-Budget measures to give the economy a much needed boost should the worst in the Iraq crisis come about.

Mr Speaker, Sir, I have heard many say that this year's Budget is a non-event. Personally, I am glad to note that the Government has attempted to create more opportunities and a level playing field for all, particularly in promoting entrepreneurship. I just wish to make two observations. Firstly, there is obviously a more deliberate move by the Government to encourage self-help and make life easier for the entrepreneurs. This is encouraging. However, Singaporeans have enjoyed many good years and the Government has been playing the role of giver and provider. Most people are used to this. In bad times, such as now, I notice the emergence of two categories of people, each with different expectations. The first category consists of those who are not willing to lower their expectations in salary or in status when they seek employment. I have witnessed this when I interviewed applicants for jobs in my company, and the problem is real. These people have been retrenched and yet they are not willing to forgo their level of material comfort and status when they seek new employment. The other category consists of those who are willing to have a go and wish it on their own but they lack the knowledge on how to make a headstart. It is this category of people that we must place more focus on. I notice that many are still unaware of the incentives and opportunities that the Government had instituted over the years. This could be due to a lack of clear communication between the Government, the people and the business communities, especially the SMEs. As what Mr Inderjit Singh said earlier, many GLCs are already well aware of the incentives and opportunities available. However, many SMEs are not that well connected and most are not familiar with Government policies. Some are also confused by the policy changes over the years. I propose that the Government play a more active role in communicating with the general public and especially the SMEs, through more regular dialogue sessions. Different Ministries could hold separate dialogue sessions to make clear the opportunities that are available. Availability of opportunities is always the gateway sought by entrepreneurs. Throughout my life, I have sought opportunities rather than handouts. Since the late seventies when I first arrived here, Singapore has offered me many opportunities to make it on my own, and for this I am grateful. It is time that we moved on and adopted measures that are sustainable in the long term and create more opportunities for individuals who are willing to take risks and make it on their own. Government should play strong leadership in providing opportunities. For example, Mrs Yu-Foo has recently proposed an initiative to allow residents who are unemployed to showcase and sell their homemade products. The start-up cost for such initiative is very low as participants pay very low rent. This will allow people to be proud of self help. I was also taught when I was young to be independent, instead of depending on handouts. Another example. The Government, being such a big buyer, and the Ministries and agencies can be more open to new ideas and new innovations. And this leads me to touch on a second issue. I feel that there is a need for constant review of the Government's rules and regulations, in line with changing times. I am glad that the Government has adopted the ERC's recommendations pertaining to this. However, this calls for a change in mindset amongst officers at every level of the public sector. My experience is that most officers in the top management of the various Ministries and statutory boards are willing to make changes. However, this is often not so for lower rank officers. Most are not willing to take on the added responsibility of making a change, even if it is a change for the better. As most officers are happy to religiously follow set rules, initiative from the top management is often needed to institute changes in the rules and regulations. This is unfortunate as the frontline officers and officers from the middle management are often the ones in direct contact with the public. They are aware of the problems created by some rules and regulations and they are in the best position to recommend and facilitate changes. To be effective, perhaps each Ministry should set up its own Rules Review Committee, apart from the Rules Review Panel proposed. The Committee should include representatives from both the public and private sectors. The people who have suffered under unnecessary rules and regulations would be in the best position to make recommendations for the better. Officers from different levels within the Ministry should also be represented, as they are the ones who know best the grouses from the ground. The Government is making fundamental changes to promote entrepreneurship. This is encouraging and I am confident with these changes, we are making progressive steps in the right direction. Mr Speaker, Sir, I support the motion.

Sir, it is a tradition for me to attend the gathering of Trade and Merchants Associations on the first day of Chinese New Year. I have been doing this since becoming an MP. What struck me in this year's annual get-together was the depressing mood - a sense of hopelessness and defeatism that the situation in Singapore is no longer salvageable. I have not felt anything like this before, to see our people discouraged and demoralised, on the verge of giving up. This was not evident during the 1997 regional financial crisis and its aftermath. Our people are looking for ideas, advice and seeking answers to get out of their dire straits. We need to buoy up their spirit. They need to be encouraged and given hope and confidence that we have the resources and resolve to overcome this recession. We have been able to do so in the past. We shall be able to do this yet again, emerging stronger to take advantage when the recovery comes. When DPM Lee presented the picture and solutions in this year's Budget, they are realistic, sound and plausible. Yet, they seem to be at odds with the experience, sentiments and feelings of many people outside the Chamber. The measures required are painful but inevitable. We have to take the bitter medicine if we want to recover and there is no easy painless way out of this recession. Indeed, the Budget measures are broadly strategic and qualitative in nature, dealing not just with the immediate issues but having an eye for the next 15 years. Between the intellect and the emotions is the attitude and mindset needed to act out our choices. Our actions must be based on the harsh realities before us. We have the natural human tendency to deny we have a problem and wish that the problem would go away without us taking the painful medicine. We were well aware of the need to restructure our economy since the 1985 recession. We had a good run of 10 years until we were hit by the 1997 regional financial crisis. Now we have to face the harsh realities of having to deal with both economic restructuring and the severe downturn. That is why the depressed feeling has been much more acute. Perhaps when we dealt with the 1997 financial crisis, we should not have slowed down the process of restructuring our economy. We cannot afford at this time to delay any further to restructure our economy. We are aware of the high cost required in terms of job losses through retrenchment, pay cuts, and fresh graduates finding difficulties to secure jobs quickly. It is unfortunate that all the painful measures are taking place at the same time and affecting a large cross-section of our people. If we are to take bold steps now to restructure our economy, we would be able to take full advantage of the recovery of the global economy when it comes. Sir, the marine industry is a good example of an industry that went through the 1985 recession with massive retrenchments and severe restructuring. Looking back, the actions taken in those years to cut over-capacity saved the marine industry. Today, the industry has not only survived but prospered. The marine sector was labelled a `sunset' industry. It has been a long `sunset' for the marine industry after 18 years. It remains a cyclical industry but the sector is able and ready to deal with the cyclical nature of business because they have put in place a structure and organisation that is resilient to cope with the upswing and downswing in the business. It is to the industry's credit that it was able to absorb some of the former PSA employees who lost their jobs recently. For those of us who went through the bitter experience of the 1985 recession, we have gained valuable lessons on how to survive and prosper in a highly competitive business. Businesses that are built to last require a stable, committed and diligent management team, strong organisational skills, good cash management, not to borrow beyond our means, be thrifty and lean, use contract workers, instead of regular employees, a flexible wage system that pays a lower base salary but with highly variable bonuses. It is not surprising that those Singapore establishments that started in the 1960s and 70s and have made no attempt to shed, restructure or reorganise their businesses would have inherited an organisation that is flabby with high cost and unable to compete in a deregulated and highly competitive globalised business environment. I read a report recently that the majority of American CEOs do not have any experience in managing an economic downturn because they were not exposed to the last recession that happened a decade ago. We know that personal experience is a good teacher. We are fortunate that DPM Lee had gained valuable experience when he helped tackle the 1985 economic recession and this has placed him in very good stead when he chaired the Economic Review Committee. The Economic Review Committee Report acts as the foundation and cornerstone of his Budget Statement this year. Sir, I note that in last year's FY 2002 budget, we had managed a small deficit of $94 million, compared to a deficit of close to $2.7 billion in the year before in FY 2001. The smaller overall deficit was on account of a better contribution of net investment income of $3,800 million. Perhaps DPM Lee can enlighten the House how the Government is able to achieve a three-fold increase in net investment income between the years 2001 and 2002, jumping from $1.375 billion to $3.8 billion. In this year's Budget, many quarters have hoped that the Government could have been bolder with a higher budget deficit. The FY 2003 Budget is estimated to run a deficit of close to $900 million, with a net investment income contribution estimated at about $3,000 million. If the Government were to continue to achieve the same net investment income of $3.8 billion, the Budget will end with a small deficit or even a balanced budget. I am glad that the Government has remained resolute not to accede to the call on Government to cut corporate taxes further and others who want more expenditure to prop up the economy. I agree that it is more prudent to take the conservative approach. We do not know how the situation in Iraq will turn out. The war and its aftermath can play havoc to oil price increases and the overall adverse impact on the global economy. This Government has shown that it is prepared, as in the past, to take off-budget measures to prevent our economy from deteriorating further. And I hope that, as Dr John Chen has mentioned earlier, the Government could give an indication of such a possibility. We shall have to wait and see if all these uncertainties in the Middle East will pan out. In promoting manufacturing and services as the twin engines of growth, we must recognise that we have fallen behind in our competitiveness. Our business cost has gone up in comparison with other emerging economies in the region and our productivity lags behind the cost increases. We have to quickly bring the business cost down before more companies get into financial difficulties. We should do our level best to prevent more companies from closing shop, relocate or shrink their operations that could aggravate our already high unemployment situation. Labour and land are two domestic components within our means to influence the business competitiveness and profitability. We have to bring down the cost of industrial land, commercial properties and manpower costs of our businesses. It is a good idea to cap the salary ceiling for CPF contributions at $5,000, instead of $6,000. The high income earners are able to manage their own retirement plans. These high income earners should be subjected to greater variability in their remuneration, linking their pay and rewards to performance and profitability of the company. This will set the tone to put quickly in place the flexible wage system against the seniority-based system that has remained unchanged for some companies. In the effort to promote entrepreneurship, we have first to develop a culture of entrepreneurship in this country. The current adverse economic situation may just provide the right conditions and impetus for individuals to be self-employed and start up their own businesses. My concern is the over-capacity situation in the retail sector where the small retailers are already suffering from poor business. With new entrants, the retail business will be even more competitive and the situation would worsen unless the economy improves and more foreign visitors and expatriates are employed to work in Singapore. As HDB retailers contribute to a sizeable proportion of neighbourhood shops, there is the urgency to deal with HDB neighbourhood shops. Singapore has an excellent reputation in our educational system. It requires business acumen to translate the reputation and expertise into successful businesses. For many years, the Chartered Institutions of United Kingdom collect large sums annually in organising examinations for their courses and issue certificates qualifying them to become members of professional bodies. Singapore has already gained expertise in a number of areas. We should be able to conduct our own examinations for foreigners who are interested in them and issue relevant certificates attesting to the standards achieved in the examinations. If properly organised and managed, they should contribute to making Singapore an education hub in the region. Our top students have acquitted themselves very well in the reputable universities in the US and UK. They are gifted and would be able to fend for themselves whatever educational system we provide. Our challenge is to bring an expanded number of students in the next few levels to an even higher level of achievement than currently the case. Our students have to be more well-rounded and be imbued with a wider interest. They should be able to handle both the Science and the Humanities subjects with ease. There is an urgent need to encourage the interest and strengthen the learning of humanities in schools and universities. The challenge in working and dealing in a cross-cultural context and issues require a deep appreciation and understanding of the Humanities subjects, and cross-cultural issues will pose a greater challenge in the future and our students should be prepared for it. Our young who neglect them do so at their peril in later years. It is like the Chinese Language now. No parent needs to be persuaded on the importance of learning the Chinese Language in schools today. So I hope that our schools do not take the short-term view in performance ranking at the expense of the long term good of our students in the study of Arts and Humanities subjects. Indeed, the biggest challenge today is to help preserve the jobs of Singaporeans and for those who are unemployed to help them find new jobs. This issue will remain with us as we expect a slower growth for our economy rising in the region of 3-5%, but unemployment is likely to stay around 3-4%. Lifelong learning has become more pressing. I am glad the Government is taking this very seriously with the setting up of a statutory board to take care of this area. But I like to echo many of my colleagues that it is the personal responsibility and self-help of the individuals that matter. This may be a wake-up call to Singaporeans to take up lifelong learning seriously to ensure their employability. The Government is in a good position to draw up the information and resources to help Singaporeans who are in need of work to be trained and help find work. Employers should also play their part to be fair in the employment and treatment of Singapore workers. They should not rely on foreign labour if Singaporean workers are prepared to lower their expectations and work hard to earn a livelihood for themselves and their families. Sir, I am happy with the breadth and depth of coverage in this year's budget. It is a reassuring Budget. The Government is on top of the situation. We have the resources. Singaporeans must draw out their courage and not be deterred by the storm we are sailing through. We will indeed reach the safe harbour if all our hands are on deck and focus on the direction we should be heading. We can then look forward to a better year ahead.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.00 pm. Sitting accordingly suspended at 2.37 pm until 3.00 pm. Sitting resumed at 3.00 pm

Debate resumed.

(In Mandarin): Mr Speaker, Sir, our economy recorded a 2.4% GDP growth in 2002. However, apart from transport and communication, all other sectors did not perform well compared with year 2000. In terms of employment, 78,000 jobs were lost (3.9% drop) compared to year 2000. Yet, at the same time, unit business cost and the unit labour cost were higher. At this difficult time, it makes our work in stimulating our economy harder as we face strong challenges from the low cost manufacturing base of China. It has been attracting many investments from us, particularly in the manufacturing sector. In 2002, we attracted some $9 billion worth of investments in the manufacturing sector, but these were mainly capital-intensive industries which do not create the same number of jobs to replace those that we have lost. The reduction of business cost is still an important part of this budget. On one hand, we hope to attract more good investments to create job opportunities. On the other hand, we want to retain the existing manufacturing establishments so as not to lose the jobs for our people. The Government has introduced various measures to make it attractive for the factories to stay in Singapore, such as rebates on property tax, fix petrol tax at level, lower diesel tax for taxi and change OMV calculation. The cut of such indirect taxes at this moment implies that they are significant in the cost of operation in our business. They increase the business cost. Such ad hoc tax reductions are short term measures which can be revoked when our economy has fully recovered, and we will go back to the original state, and it would continue to have an effect on increasing business cost in Singapore. So, when we are reviewing all these factors which would increase our business cost in the long term, we should look squarely on all their implications because they are disturbing matters whenever we talk about the high cost in doing business in Singapore. On rental cost, in the past two years, the price of offices and factories dropped by 34.6% and 23.7% respectively. Although there has been a significant reduction during the past two years, our office rental price is still ranked No. 18 in the world and our factory rent ranked 12th in the world, slightly lower than that of Taipei in Asia. Of course, the rent will be decided by the balance between supply and demand. It is also dependent on the Government taxes levied on them. For example, when a landlord buys a factory, he has to pay a 3% stamp fee and another 4% in GST on the transacted price of the property. Then, when the owner wants to rent it out, there is also a 10% of property tax on the assessed value paid upfront before any rent is collected. All these taxes contribute a significant 17% on top of the intended rent of the factory. In other words, these Government taxes have caused the factory rent to go up by 17% more. It increases the cost of business significantly. If a factory or a warehouse comes under one title deed, it would not be possible to sub-divide the whole premises into smaller units for separate leases. So, even if only a small portion of the premises is rented out, the owner has to pay the property tax based on the assessed rental value of the entire factory or warehouse. This has caused unfair and unnecessary hardship to the owner, especially at a time when the property market is down. This property tax aspect would have a very serious effect on the overall business cost. As we all know, transport cost in Singapore is one of the highest in the world. More than half of the cost of owning the company's vehicles comes as a result of Government taxes. In this year's Budget, the Finance Minister decides to change the basis for valuing motor vehicles which would result in a decrease in ARF and excise duty payable for most vehicles. He has also locked in the duty on petrol at its present rate, so that it would not go up with the likely inflation of oil prices. Hopefully, these measures would help to contain our transport cost. I think we should thoroughly review the various factors contributing to our high transport cost, so that it would not be ranked No. 1 in the world. Apart from these direct taxes, there is also compliance cost which adds to our total business cost. I am very glad to see in this budget some mention about how to do away with some of the repeated or unnecessary compliance costs for the businessmen. However, in our daily lives and also in the process of business operation, in order to comply with some of the Government regulations, the compliance cost is very heavy. Let me quote three examples. First, in a new industrial estate or agro-technology park, if you happen to be the first to take possession of a factory in this estate, and if there is not enough power supply, you would have to build a substation at your own cost, and it will cost you some $200,000. Those who come in later can make use of the power sub-station, free of charge. In other words, the first person who enters the estate will have to subsidise the cost of the others who use the electricity supply in this area. I think this is very unreasonable. Secondly, if you are a property developer and you have purchased a few houses which you would subsequently demolish and redevelop the land by building a row of terrace houses on it, according to the regulations, you would have to dig up the existing drain and build a wider and deeper drain in the process of building the row of terrace houses. Subsequently, you would have to cover up the newly built bigger drain with sand and gravel, and reconstruct the drain back to the original state. In other words, there is an existing drain. In order to comply with the Government regulations, you have to broaden it and then, after completion, you have to put it back into the original state. This is an additional cost, which is unnecessary and a waste of time and money. Thirdly, it may sound ridiculous, but it is true. There are people complaining about the unpleasant smell coming out from the farm. The farm owner was advised by the authority to build a scrubber, costing about $100,000. Despite that, the authority was unable to prescribe an emission standard or propose the best possible technology in dealing with the odour problem. So, even after building the scrubber, when there are further complaints, the owner would be called up, given a summons to go to court, and be fined as much as $10,000 on each charge. So, if this is to happen in our new industrial sites, I am sure the EDB would take up the matter with JTC, and it will be resolved. However, the farming industry comes under the charge of AVA, and the businessmen have no recourse but to resign themselves to fate, pay the fine and forget about it. There is no denial that business cost is very high in Singapore. Apart from direct and indirect taxes, the compliance cost incurred by having to comply with the various Government rules and regulations has contributed significantly to the burden of our businessmen. I feel that the Government should not accelerate its process to reduce our direct taxes to 20% by 2005. If we can find some way to cut down on the indirect taxes and compliance cost to reduce the burden of our businessmen in the present difficult time, they can survive, and even have some profits in their business. Otherwise, if they run into losses or even have to fold up, then any reduction in income tax will have no bearing on them. I think we should do all we can to help them so that they can survive and even make some profits. If they have no profit, they do not pay any taxes, so even if it is reduced to 20%, what is the use of it? We should look into this heavy burden that is brought upon our businessmen because of the high compliance cost. If the situation can be improved, all businesses, big and small, will find it more attractive to stay in Singapore. They can be more competitive and can face the competition posed by the low-cost localities around us. I support the motion.

Thank you, Sir, for allowing me to join in the debate. I will be touching only on entrepreneurship, and more specifically one or two aspects of it. Sir, I am pleased that the Government, in the Budget, does not see entrepreneurship as a branch of the economy or as an industry, but as a cultural mindset. For Singaporeans to be entrepreneurial, there has to be a cultural shift, and to quote the Minister of State for Trade and Industry, Mr Raymond Lim, earlier, the entrepreneurial spirit has to be one which permeates all walks of life, not only in businesses. I do not think that the entrepreneurial spirit is just about maximising financial profits, but it has to do with maximising potential of resources, lateral thinking, creativity and the pursuit of human ideals. These are some of the qualities stated by my colleague, Ms Indranee Rajah, earlier. Entrepreneurship is equally applicable in family management and social work as it is in businesses and MNCs. I agree with the Minister of State that we cannot manufacture entrepreneurship, but we can enable people to be entrepreneurs. But we, as a society, also can and should do more. We, as a society, need to evolve into an entrepreneurial one. I do not think that we can become entrepreneurial after one budget debate. Even all the fiscal measures put together in the Budget Statement do not create an entrepreneurial society. However, this Budget recognises entrepreneurship for what it actually is, elusive though it may be, and it decides to move towards a more entrepreneurial society. This House and all Singaporeans have to look at it in the long term, and we shall continue to monitor our progress as we, as a society, evolve the entrepreneurial spirit. I will now move on to my next point, Sir, on something which is related to this elusive nature of the entrepreneurial spirit. We have decided to embrace globalisation, the infocomm technology, and the new economy. We have decided to make our country more attractive for investments. We are taking steps to lessen impediments and increase attractiveness for top business people to invest in Singapore. We are allowing our people more leeway to explore and to express. The sum total of all the recommendations in the recent reports - whether in the review of the upper secondary and pre-university education or in the ERC - not only allows for more peaks in our people's achievements but also enables these peaks to go higher. But not everyone can keep up with the changes that are taking place. Some are struggling just to remain relevant. These, juxtaposed with the enhancements of peaks, mean that there will be a widening of the social gap between the very top and the very bottom. Sir, as I face many applications for financial help or otherwise from genuinely hardship-stricken families, I also see many brand new Maseratis, Boxsters and XJs on our roads. Being a young nation, Sir, social cohesion is pivotal to our well-being. Recent events related to extremism and terrorism have caused us to worry about our inter-racial and inter-religious relations. Similarly, we have to ensure that changes in the economic landscape do not over stretch our social fabric. One possible way to keep this gap down - and I say this only for discussion - is by placing caps at the top. This House has decided that capping the top runs counter to the efforts to attract and keep investors, and we need investors to keep our economy going, in other words, taxing our top earners can only be done to a limited extent, an extent to be determined, among others, by tax regimes in other countries and other costs of doing business in Singapore. The other way to reduce this gap is to raise the base. Again, there are limitations to this. The Government seeks to be a fair, not welfare state - to borrow a quote from a very well-known book, which I am sure all of us have read or are reading - and further doling out too much help runs counter to our vision to evolve an entrepreneurial culture. But if our top earners are more conscious of the need to maintain our social cohesion and are happy to do so, then we might be able to raise the base without antagonising the top. I applaud the numerous fiscal measures in the Budget that encourage and facilitate charitable acts. But, Sir, like entrepreneurship, charity is also driven by the human spirit. We need to evolve the spirit of charity, social consciousness and voluntarism. Schools now have community involvement programmes. We have also recently established a National Volunteers Centre. These are only two of many structures and programmes recently set up that would help in evolving the spirit of charity. The success of the programmes should not be measured only in terms of how many activities were conducted and how many people were reached, or even how strongly people feel towards charity and voluntarism. Perhaps, the ideal is reached when our poor and socially handicapped feel that they are not left out, that they see the rich as their partners and their helpers, and not as targets of anger or envy. This can happen when our top and higher income earners have evolved the genuine spirit to help and volunteer to do charity work. Sir, we can and should evolve this spirit. If we recognise the need and are resolved to evolve this elusive entrepreneurial culture, then, similarly, there is no reason why we cannot resolve and evolve a charitable culture. Indeed, both must go hand in hand. On that note, Sir, I support the motion.

Sir, thank you for allowing me to participate in this Budget debate. I speak in support of the 2003 Budget in the name of the Deputy Prime Minister and Minister for Finance, Mr Lee Hsien Loong. I appreciate Mr Lee's pro-business Budget and his support for the long-term vision for Singapore, as outlined by the Economic Review Committee Report. Sir, I agree that the Budget should create attractive conditions to aggressively attract foreign direct investments. To this end, we have fine-tuned our tax regime to make it attractive for both businesses and individuals. Singapore currently has one of the most attractive tax regimes in the region. I am confident that these changes will attract companies and talent to relocate in Singapore and this, in turn, will help to boost our economy and to create more jobs for Singaporeans. The Budget also encourages Singapore companies to look outwards to new markets and, at the same time, entices foreign companies that have global operations. Companies that use Singapore as a base of operation will obtain tax reliefs for foreign-sourced incomes, royalties and service incomes. There is even this deferment of income taxes for two years, if their overseas investments suffer operational losses for eligible investment companies. However, Sir, it is noted that these advantages outlined in the Budget would not be felt by small businesses in these hard times, and do not serve as a sufficient catalyst to help small businesses grow into regional businesses. I am concerned that most of the business cost cuts are temporary for another six months. This does not bode well for our long-term goal of reducing costs and attracting investments. Government infrastructure and services have not seen a drastic drop in cost. For example, it has been reported that business cost still rose by about 5% in 2001. To cite an example, just submitting an application to URA for approval of simple alteration and additional work will cost a businessman $2,080, inclusive of 4% GST. And in order to build a development of 100,000 square metres of gross floor area, the cost for essential written approval - not even talking about building - is a hefty sum of $350,000. Many of the architects and consultants are stating that these fees were last reviewed in 2000. They have not seen any drop for many years, despite the intense efficiency and productivity drives, and use of information technology. It is time for the Government agency to review its cost of provision of services. It is my view that the Government needs to reach out to the man-in-the-street, to be more sensitive, and to have the ability to be flexible. As my colleague, Dr John Chen, earlier said, the Government agency must be its customer's advocate. I would like to cite another example of the sensitivity and flexibility that the Government agency could help the local small businessmen. An eating house operator has rented a ground floor of eight conservation shophouses for his new eating house. It needs to remove the ground floor adjoining walls of the shophouses. According to URA guidelines, all alterations and additional works for conservation houses need to be submitted for approval. This is acceptable. However, the charges are now a whopping $16,640, as it is treated as eight applications for the removal of six non-structural walls shared by the eight shophouses. If it is treated as one application, the cost would be $2,080, inclusive of 4% GST. Sir, I would next like to talk about portable medical benefits. I would like to compliment the Deputy Prime Minister and Minister for Finance for the introduction of these benefits. We have had much discussion about our greying workers in this House. As our workforce becomes greyer, they become more susceptible to job changes and losses, whether due to inappropriate skill sets or as requirements for workers change, or in view of the existing structure of age remuneration pay system. In response to an aging workforce, the Budget has identified new ways in which the burden of healthcare can be reduced for employers and the ageing workforce alike. Sir, by encouraging employers to implement either the portable medical benefits or the transferable medical insurance scheme, employers will continue to enjoy a deduction of 2% of the total employees' remuneration for medical expenses incurred. If employers do not participate in this scheme, they will enjoy only half the amount. Since the portable medical benefits scheme will involve additional contributions by the employers to the Medisave accounts of the employees, the Budget has also stipulated that the employers' deductions will be increased to $1,500 per employee per year. The concerns are that this lump sum will become attractive for employers to favour younger employees, although I agree that the absolute sum is very attractive. It is also important for us to determine whether the quantum proposed under the portable medical benefits scheme is able to meet the cost of healthcare in our aging workforce sufficiently. There is a danger that the cost of healthcare insurance premiums could dramatically rise because of age, which would again be counter-productive. We need to ensure that this does not happen during this time. In addition, I would like to appeal for the enjoyment of this 2% deduction limit to thoughtful employers who have allowed ex-employees, in view of early retrenchments due to restructuring of the company, to continue to take advantage of the attractive insurance rates, because of the large global-based number of employees. One good example is Exxon-Mobil, which has done so. This is especially important for employees aged 50s who would have to buy insurance again due to forced early retirement and, in general, they would have to pay higher insurance rates on re-acceptance into the medical schemes and subject to medical review. This exemption will encourage more companies and statutory boards, such as PSA and HDB - I do not know whether they have done so - to consider allowing their retrenched workers or early-terminated employees to continue to tap on the existing insurance benefits or schemes with the relevant insurance companies. This will help the affected workers to tide over their hardship, and not reduce their insurance protection. Sir, in this economic downturn, it becomes necessary for a caring Government to help its needy citizens. Even a little assistance goes a long way for those who have been affected by this economic downturn. Sir, while we have several assistance programmes in place for the bottom 10% of Singaporeans, my feeling is that the help net is not enough for the middle income group. Many of the 4-roomers have upgraded themselves during the boom time and without proper credit guidance. Nobody would have foreseen such a long period and severe downturn of our economy. Many of such families are in need of more assistance. Many of the existing schemes offered, again by the MCDS and the CDCs, are varied, and with many acronyms attached to the schemes. Residents are confused and not clear of these assistance schemes and many of them have very minor differences. I hope these two critical agencies could re-package these minor differences and highlight the assistance programmes to the needy and to those workers who are affected by early retrenchment. The booklets for retrenched workers provided by the restructuring companies should include some of these financial, social and family assistance schemes provided by the MCDS, the CDCs and even the FSCs within the communities. Sir, the man-in-the street is already facing a tough time in this economic downturn. We will not see any economic recovery anytime soon. So, Singaporeans can expect a rough road ahead. In fact, our Prime Minister has made it clear that he expects things to get worse before they get better. And Singaporeans have been tightening their belts for quite some time. Sir, while we create ample advantages for the international business community so that Singapore can succeed in the new economy and bring in new jobs to the people, we must also provide as much assistance to our local businesses, providing the local support and services, and also carry as much of the burden for our needy citizens, many of whom have contributed to our stellar growth in the past. Sir, I support the motion.

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 Mah Bow Tan].

Debate resumed. 3.35 pm The Senior Minister of State for Transport and Information, Communications and the Arts (Mr Khaw Boon Wan): Mr Speaker, I speak in support of the motion. This year's Budget is ERC-inspired. It is an important first step to re-position our economy for the future. The ERC is a reincarnation of the 1985 Economic Committee, but its karma is different. Almost a generation has passed between the two. The 1985 Economic Committee Report and the changes it launched led to more than a decade of very strong growth for Singapore. So, the question is whether the ERC Report will be just as successful. Will it too lead to another decade of robust growth for Singapore and well-paying jobs for Singaporeans? The ideas are out there in the ERC Report. But, as a friend remarked recently, ideas are a dime a dozen. The ability to execute is what is worth millions. Whether the ERC Report will lead to success depends crucially on our collective attitude and joint efforts towards restructuring. Many of the ideas in the ERC Report are not new. You can find them in the 1985 EC Report. For example, my Services Sub-Committee's idea of making education and healthcare services engines of our growth was not new. It was a major recommendation in 1985. So, why are they being recycled in 2003? Obviously, it means that the old recommendations were not fully exploited. I was in the Ministry of Trade and Industry during this intervening period. I can testify that it was not for lack of trying. But the economic agencies did bump against many obstacles. For example, in the case of health services, there is genuine worry that if a large number of foreign patients are here, competing with local patients for the attention of our doctors, they may drive up healthcare cost. In other words, there is a trade-off between economic objective and social priorities. So, unless we have a forum to debate such concerns, we will remain in ambivalence and under-perform. Hence, our recommendation to set up a Ministerial Committee on Services where such issues can be connected and trade-offs made. I am cheered by Deputy Prime Minister Lee's decision to chair this Ministerial Committee. Many hard choices will have to be made, going forward. But there is one major difference between 1985 and now. Then we were truly way ahead of the region. But over the years, the others have caught up. We are still ahead in most areas, but the gap in capabilities has narrowed. We have good hospitals and good schools, good universities, but it is no longer sufficient to be good, as the others have also built up good institutions. Somebody pushed me this book, Good to Great by Jim Collins. Collins spent five years looking into why some companies become great but many others do not. His key insight is: "Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great." This is his observation: "We don't have great schools, principally because we have good schools.The vast majority of companies never become great, precisely because the vast majority become quite good - and that is their main problem." Applying Jim Collins' insight to the ERC Report, my take is that being good is not enough in our next phase of development. We need great institutions, and many more of them, going forward. We need to do four things. First, we must aim high. Good is no longer good enough. Without the resources, critical mass and low cost structures, we will not be able to compete if we are merely good. To illustrate this point, look at our Changi Airport. For four million people, we do not need and do not deserve a world-class airport. But because we plan it and we run it to serve 400 million, we have Changi. It is a perfect example of the abundance mindset, focusing on opportunities. Had we adopted the scarcity mindset of focusing on constraints, Changi would not be there and we will all be poorer for it. Last week, Matsushita Refrigeration Industries, the world's No. 2 maker of compressors for household refrigerators, celebrated its 30th anniversary here in Singapore. At a time when many companies are crying their lungs out about the challenge of manufacturing in Singapore, Matsushita is expanding its activities here. It aims high. It aims to make Singapore the world's No. 1 R&D Centre and Manufacturing Solution Hub. Its Singapore factory is the largest facility in the world, making more than half of Matsushita's global output. Last week, it launched the world's most efficient compressor, designed by the R&D team in Singapore. The Esplanade is not of the same scale as the Sydney Opera House, although it is not less charming. Like Changi Airport, we built it to serve a larger hinterland. To attract the clientele, our facilities, especially acoustics, have to be world-class. Last December, tenor Jose Carreras performed in our Concert Hall and he was all praise. He said, "It's probably the world's best modern hall and one of the world's top concert halls of all times." Second, let us move, and move faster than the fastest in China and elsewhere. Those of us who visit China regularly know how fast some of the cities there are moving. Just look at broadband connections in hotels. They are now fairly common in China, but our own hotels here are still slow to implement it. At the end of the day, we win a race only if we can run faster than our competitors. The ERC Report contains many sensible recommendations, but actual implementation and the speed of implementation is the key. Third, learn from our successes and our failures. We need to apply our knowledge more widely in Singapore and build up new knowledge faster. We have pockets of excellence. I may be biased, being from MITA, but I think our libraries have done a remarkable job. We should apply what they did to other areas. Likewise, NETS, Tradenet are all remarkable successes. We should apply our knowledge in cluster information integration in other areas, for example, in healthcare. But we should especially learn from our failures. This follows from the need to move fast. When you move fast, you must be prepared to make some mistakes. We must then be willing to readily admit mistakes, change quickly and correct them. For if we do not learn from our mistakes, we would have wasted our tuition fees and, worse, repeat the mistakes. Fourth, be frugal. We should try to do more with less. Even as we aim high, our feet must be firmly on the ground, focusing on the bottom line. If our feet are not on the ground, we will merely be creating bubbles like the dot.commers. And, if we are not delivering value at realistic prices, someone else would. A CEO friend of mine had this to say about management: "In my 26 years of working life, I have seen us jumping from one management fad to another. Each launched with great fanfare and consultants made tons of money from fees. All the while, I stuck with simple ideas of: (a) productivity = maximise output, minimise input;

quality is defined by the customers; (c) value = maximum perceived quality at lowest possible cost; (d) the role of management is to help the frontline staff deliver maximum value to the customers. Everything else is unnecessary bureaucracy." He may have over-dramatised, but I agree with his key message that we should focus only on things that matter to customers and cut out unnecessary bureaucracy as an effective way to reduce cost. Save every single cent and invest on the great stuff. Acquire the culture of being frugal. Look at our first generation entrepreneurs. They are famously frugal. And this is not a uniquely Asian value. The most successful American companies in modern history are ferociously competitive on cost - Intel, Microsoft, Dell, Walmart, Cisco, South West Airline, just to name a few. Up until at least 1998, Bill Gates flew economy, not first class. Walmart employees, including their executives, share rooms when on business trips. These companies have built a strong corporate culture that recognises and rewards employees for being frugal. They know that over the long haul, being cost-competitive is a key competitive advantage. In the absence of some natural advantages, we will always need to be cost-competitive, not necessarily to be the cheapest, but must provide the best value for our customers. My sense is that during the boom years of the last decade, we seem to have forgotten the wisdom of the ancient sage: Ju an si wei, ju sheng si gan ( ). In victory, remember defeat. In time of plenty, we should be especially mindful of deprivation. We should work to make frugality a national culture and regain quickly our cost competitiveness. In conclusion, let me return to the question: will the ERC Report bring in another decade of strong growth? And the answer is really in our hands. Good is the enemy of great. If we are complacent, thinking that we are good and have arrived, then success will escape us. On the other hand, if we succumb to the current economic slowdown and wring our hands in despair, success will also escape us. So, Straits Times' Chua Lee Hoong is right. In her 5th March "Budget 2003" article, she hoped that this Budget debate would generate the right buzz, by focusing on the big picture shift in direction that we are making. Instead, if we wallow in self-pity and talk ourselves into a depression, we deserve to lose. Last week, I had the pleasant duty to give away the Woman of the Year Awards to Olivia Lum and Elim Chew. Several parliamentary colleagues were also there. Wonderful choices by the judging panel, especially at a time like this. These two ladies did not wallow in self-pity when they were down. They had gone through very tough times, but they picked themselves up and succeeded against great odds. And that was also how modern Singapore was built by our parents, despite poorer endowment and more hostile neighbourhood. Surely our generation can do better, given better education and stronger resources. In last year's Sing Singapore song, Dick Lee had this to say: "Look where we are, we've come so far And there's still a long, long way to go With all of my heart, I will care I'll play my part, I will share With family and friends, together we'll stand And in the end, hand in hand We will get there" I share his optimism and his spirit of confidence. Rain will not last forever. While we may not like getting wet, rain also clears the air and nourishes new growth. Singapore has all the conditions to grow and flourish again when the sun comes up. Sir, I support the motion.

Mr Speaker, Sir, I rise in support of the motion as proposed by the Finance Minister. The Budget Statement sends a clear signal to all Singaporeans. We must work together as one united people to face the new challenges in the global economy. We need to develop a resilient and diversified domestic economy, and position Singapore in the global market. In today's uncertain world, we must equip our people to be more flexible and hardworking. It is a mindset change, which we must encourage all Singaporeans to adopt in order to have a better future. I agree with the Finance Minister that "success ultimately depends on the resourcefulness and resilience of Singaporeans." Sir, while the Government moves its stride to globalise Singapore, we must not make Singaporeans lose heart that they are unable to cope with these rapid changes. Incentives and encouragement must be strategically administered to develop passion among Singaporeans. For those who have difficulty coping with the economy's transition, we must lend a helping hand. This includes the small and medium enterprises which employ many Singaporeans. There are three key aspects which the Government should focus to make Singapore a globalised economy: First, the Government must encourage and help all Singaporeans to learn new skills. Second, the Government must help to strengthen our firms to better cope with global competition. Third, the Government must help both Singapore firms and Singaporeans to globalise. Helping Singaporeans There are three groups of Singaporeans who require more help from the Government to be self-reliant. They are, first, needy Singaporeans who are chronically sick, mentally sick or elderly; second, Singaporeans with low skills or unemployed; and, third, dual income families which have become single income families. Sir, over the last 12 months, about 9,000 residents in the North West CDC district have approached the CDC for job assistance. Although 3,000 have managed to secure jobs through the CDC's job assistance, job counselling and training programmes, 6,000 residents are still jobless. Despite many job-matching attempts, many job seekers are still unable to find suitable jobs. Two key reasons are cited for this situation. Firstly, the salary of jobs offered is unable to help the job seekers to meet their living expenses; and, secondly, the accessibility of jobs and homes is poor, resulting in high transportation cost for the job seekers. In addition, many job seekers have either low skills or irrelevant skills. Job seekers who are above 50 years old face greater difficulty to return back to the job market. The limited number of job vacancies in the market further compounds this problem. As for those who have medical history, firms are not willing to employ them for fear of low productivity and high medical expenses. Sir, some dual income families also face difficulty due to over financial commitments or poor financial planning. Many had miscalculated their sources of income and were caught off guard by the prolonged economic crisis. In fact, quite a number of these Singaporeans stay in 4- or 5-room HDB flats, and receive lesser utilities and S&C rebates from the Government. Very often, their children's needs and education are affected. Sir, I wish to propose the following measures for the Finance Minister to consider: (1) Creation of jobs. More incentives should be offered for firms to provide more jobs for Singaporeans. These include part-time jobs, flexible jobs or contract work. The People-for-Jobs Traineeship Programme (PJTP) should be further enhanced to include part-time or contract work. We must also render more support to those voluntary welfare organisations which provide elderly, family and medical care services in the community. More PJTP programmes should be introduced in these VWOs. In this way, we can build a larger pool of healthcare and social service workers to meet the future needs of an ageing population. (2) Skills upgrading. The key ingredient to self-reliance is to have a positive and flexible mindset. Singaporeans must have the "never say die" attitude. We must continually strive to improve our employable skills. With the correct attitude and multiple skills, Singaporeans will always be employable in a diversified economy. The Government should also let Singaporeans take ownership of their own skills upgrading. We should introduce a "portable training benefits" scheme, whereby workers can take their own initiative to attend approved training courses which are recognised by the National Skills Recognition System. Sir, I fully support the special transfer of $500 million into the Lifelong Learning Fund. What is needed is a more effective outreach to encourage Singaporeans to continually upgrade their skills. The Skills Development Fund has achieved some success in upgrading workers through firms. We should allow more flexibility and incentives for Singaporeans to take initiative to learn more skills. With a portable training benefit scheme, workers will have more options to upgrade their skills. (3) "Means test" and subsidy. We should review our "means test" and allow more flexibility to help needy Singaporeans who are chronically sick, mentally sick and elderly. While we encourage families to help one another, some working class families do not have the financial ability to help their parents and siblings. This is especially so when there are family members suffering from chronic illnesses. The long-term medical expenses will put severe strain on the families. Thus, the Government should provide more social assistance to these needy Singaporeans and reduce the burden of their family members. To date, no fee subsidy is provided for pre-school education. Families with a per capita income of less than $700 usually face difficulty to pay for their children's pre-school education. With the growing importance of pre-school education, I hope the Finance Minister can consider subsidising the fee for pre-school education in Singapore. To further encourage Singaporeans to have more children, we should also review the subsidy for childcare and student care centres. The first three children should be given equal and higher subsidy so as to help working parents. (4) Medifund. Sir, I support the transfer of $100 million to the Medical Endowment Fund. The Medifund scheme has provided much help to many needy Singaporeans. Those who have received help are appreciative of the financial assistance, which could sometimes amount to thousands of dollars per case. Based on feedback from the CDC's social assistance services, some residents would like to urge the Government to consider extending the scope of subsidy for Medifund to include some necessary consumables for patients, such as stoma bags, adult diapers and special liquid diet. These consumables can amount to hundreds of dollars per month, which is usually beyond the reach of needy families. Helping Businesses Sir, I support the measures introduced by the Finance Minister to reduce business costs and increase the competitiveness of our companies. We must explore more innovative ways to encourage Singapore companies to be globally competitive. We need to relook into the factors of production and re-engineer our work processes to reduce cost, improve quality and productivity. Sir, I would like to suggest three areas which the Government can assist businesses: (1) Reducing business costs. More flexibility should be given to allow integrated and maximum use of land. Factories and businesses must be located near our logistics and transport infrastructure to minimise travelling time and reduce transportation costs. We should facilitate complementary mix of tenants to achieve better supply chain operations. For example, anchor tenants of industrial land should be given more flexibility to house their subsidiaries or sub-contractors/suppliers. In addition, we should also consider abolishing property tax in Singapore, especially for vacant land so as to reduce holding cost for businesses and encourage property ownership. The Government should provide more support to help Singapore firms brand their products and services overseas. I would suggest that we develop a one-stop website to showcase all Singapore's products and services in the global market. The portal can be the gateway for Singapore firms to brand their products and services. At the same time, more business tie-ups could be initiated through the web. (2) Upgrade skills of staff. The Government should facilitate the development of capabilities of Singapore companies to be globally competitive. Except for the Government agencies, private firms are usually less keen to send their staff for skills upgrading. Sir, employers are the "best teachers" to train workers with employable skills. We must provide incentives to encourage employers to train their employees regularly. Like the recent revision of foreign worker levy, the Government should also consider providing incentives for employers who train their staff in multiple skills. In this aspect, I would urge SPRING Singapore to be more proactive in encouraging employers, especially the SMEs, to send their staff for skills upgrading regularly. (3) Increase business opportunities. Sir, the reduction of business cost cannot help firms to survive if there is no business. The market in Singapore is small and saturated. Therefore, Singapore firms must search for new markets overseas. Business delegations led by the Government have indeed opened up many doors for our firms. The Government should continue to organise more such delegations and facilitate business tie-ups in specific industries such as financial services, design consultancy, trading, transport, or logistics services. Today, Singapore is a hub for almost everything (seaport, airport, logistics, trading, info-comm, finance and tourism). Although the visitor arrivals to Singapore increased marginally by 0.6% to 7.5 million in 2002, hotel occupancy rate fell by 1.9% to 74%. I understand from the business community that many visitors merely used Singapore as a transit or tourist stop where visitors will only spend a few hours here. Thereafter, they will stay at cheaper hotels in our neighbouring countries. Sir, we need to address this visitor's transit problem and encourage more visitors to stay longer in Singapore. The Singapore Tourism Board should provide more incentives for organisations or firms to hold longer duration international conventions or exhibitions in Singapore. We should also commission event promoters to bring in world-class shows, exhibitions or meetings to Singapore. As a safe haven, Singapore should capitalise on its secure environment to attract family visitors, especially children, to have fun in Singapore. But to achieve this, we need to have better tourist attractions for children and families. The Government should seriously consider building a world-class theme park, maybe a "Wonderland" or "Dreamland for Children". We must invest and build a world-class tourism infrastructure to attract new tourists to Singapore. The proposed theme park should be supported by the Government and be competitively priced to attract visitors. The Singapore Tourism Board should be tasked to operate the park so as to achieve better accountability. Sir, the outsourcing of theme parks to the private sector has failed many times in Singapore. We should not repeat these mistakes but should instead have only one world-class theme park in Singapore. Spearheading tourism will provide more business opportunities for our companies in Singapore. Globalising Singapore Sir, I wish to propose three strategies to globalise Singapore: (1) We have to focus on the quality and reliability of our products and services; (2) We must build a resilient and multi-skilled workforce; and (1) We must nurture a few world-class companies to serve the global market. (i) Quality and Reliability As competition gets more intense, we must differentiate our products and services from our competitors. Singapore is in a good position to capitalise on our trustworthiness to produce good quality and reliable products and services. We need to establish key benchmarks or performance indicators to measure the acceptance of our services and products in the global market. More resources should be allocated to brand Singapore's products and services. I fully support the setting up of a Ministerial Committee on Services. To be a global player and tourism hub, we must adopt a total approach to provide world-class customer service. In business, customer service is the key to retaining loyal customers and attracting new customers. We must make every effort to ensure that all customers have good experience with Singapore's products and services. One role model whom we can all follow is Singapore Airlines.

4.10 pm (ii) Resilient and Multi-skilled Workforce To cope with the fast changing global market conditions, we must have a resilient and multi-skilled workforce. As businessmen are always very versatile to react to market forces, workers are often caught off-guard to adapt to these changes. Therefore, we must instil an "entrepreneurial mindset" among our workers. Our workers must be capable to move in tandem with the market forces and be prepared to take challenges constantly. As such, we should encourage firms to adopt job rotation practices and provide opportunities for their employees to start businesses such as forming subsidiaries or business start-ups. (iii) World-class companies It is not practical to groom all Singapore companies to be world-class. We have to be selective and channel our limited resources to nurture a few companies, which are promising. The key support needed is funding for business ventures into the global market. For a start, the Government can provide incentives for local banks to reduce their stringent requirements for credit facilities. Many banks require personal guarantees or collaterals for business loans. As such, limited funding is available for local firms to expand their businesses overseas. In addition, the Government can also facilitate public listed companies to raise funds through share issues for business expansion programmes. With adequate capital, Singapore firms will be able to better position and compete in the global market. Sir, this year's Budget is a fair and balanced budget. It has the ingredients to prepare Singapore for the future. What is needed is a mindset change among Singaporeans to be more flexible, more hardworking and more resourceful. With the strong support from our Government, Singapore will continue to prosper in the future.

Mr Deputy Speaker, thank you for allowing me to join in this debate. My main focus would be on enhancing competitiveness, thereby helping Singaporeans. This year's Budget is presented during a time when Singapore's economy is at a crossroad. We are undergoing a structural transformation and facing greater competition due to rapid globalisation. Ahead of us are the uncertainties prevailing in major economies and the possibility of war in Iraq. This is a tough time. In the last couple of years, many Singaporeans are severely affected by the economic downturn. Many workers have lost their jobs and finding it harder to be re-employed. Those in employment are very worried about job security. I will further elaborate on this during the debate in the Committee of Supply. Sir, the message of seizing opportunity in uncertainty in Deputy Prime Minister's Budget speech is timely, given the current situation. The measures proposed by the Deputy Prime Minister and Finance Minister in his Budget speech to restructure our economy are crucial for our economic survival. Some of them are painful, such as the deferment of CPF restoration, but I understand why they are absolutely necessary for retaining and attracting businesses to Singapore. These will create good jobs and ensure continued prosperity for all Singaporeans. Allow me to elaborate on strengthening competitiveness for the creation of jobs and wealth. When we talk about competitiveness and flexibility, we should not come to the immediate conclusion that the only factors are wages and labour costs. Yes, wages and labour costs are significant, but there are other factors such as land and related costs, regulatory and statutory costs, transportation, taxes and other business costs. Let me elaborate further. First, wages and labour costs. We should continue to maintain labour cost competitiveness and raise productivity. We cannot just focus on cutting wages and retrenching workers. We have to build up the flexible wage component in our wage system, such as through monthly variable components and variable bonuses. To sustain employability of workers, wages must be directly linked to productivity improvement. I strongly urge employers to involve their employees in efforts to improve productivity for mutual benefit. Second, land and related costs. Are high land costs and other factors making Singapore uncompetitive? We have to further explore whether the land pricing and other related costs are artificially high in Singapore and not adhering to current market factors. Third, regulatory and statutory costs. As a union leader, I have come across concerns from businesses that regulatory and compliance costs on companies are high in Singapore. These have affected businesses and our competitiveness. Will more steps be taken to address these concerns? Sir, the Deputy Prime Minister and Finance Minister has announced a number of measures to make it attractive for businesses to invest in Singapore. At the same time, he has announced various rebates and reductions for businesses until year's end. Would it not be better if such rebates and reductions are extended for another three years? Further, why not freeze all other cost increases at the same time for another three years? I believe all these suggestions will greatly help businesses in Singapore and attract new ones, which will result in the preservation and creation of jobs for Singaporeans. Retrenchments can be minimised and not make the unemployment situation worse. This will boost the confidence level of Singaporeans. Enhancing human capital. I applaud Government's move to set up a new statutory board under MOM to promote adult continuing education and training. The new statutory board will oversee our continuing education and training efforts. The details of the statutory board have not been announced, but I would like to see the new statutory board addressing the following: (1) Enhance the employability of older workers who have mainly knowledge in job-specific or technology-specific skills. (2) Help workers make career switches. (3) Continual learning and skills upgrading for professionals, executives and self-employed. (4) Help the structurally unemployed gain new skills and find new jobs. (5) Manage a database of important information emerging from the rapid structural changes. This will ensure optimum investment in training and retraining, so as to enhance workers' employability and help them adapt quickly to changes. (6) Strengthen synergies with other important partners such as EDB, NTUC, SNEF, and others. These strong synergies will help identify the type of skills needed for the jobs that new investments will bring and help prepare workers through training and skills upgrading. With the concerted efforts of all partners working in tandem with the new statutory board, we can collectively and confidently address the issues of skills gap, wage gap and structural unemployment. Mr Deputy Speaker, Sir, during this period of uncertainty and tight budget position, the initiatives by the Government to help Singaporeans, especially the poorer ones, must be lauded. The measures would lighten the load of Singaporeans. Assistance such as Utilities Save and additional S&C rebates will help workers and Singaporeans. The additional allocation of funds for Skills Redevelopment Programme, Lifelong Learning Fund and Medifund are steps in the right direction. Taken together with the earlier announcements of ERS and the phased-in introduction of GST, there is no doubt that there is help available. These various assistance schemes clearly show that the Government is committed to its social contract with the people of Singapore. For the future, I urge the Government to continue to target more help to the most needy, the unemployed, the poorer or unfortunate Singaporeans and their families. I suggest an opt-out donation mechanism to a central hardship fund be explored, so that better-off Singaporeans can donate the shares or benefits granted by the Government to those in greater need. Sir, in conclusion, the challenges ahead of us are formidable, one of the most difficult facing our nation since independence. In the past, we have worked together and remained focused on our objectives. This has led to continuous growth and prosperity for all of us. This is the approach we must continue to take. We must never allow minor problems or even setbacks to distract or discourage us. The greatest welfare to people is jobs. And I strongly urge the Government to do all that is necessary for the preservation and creation of jobs. Policies to bring about this should be implemented fairly and humanely, especially to those who are affected most. Together, let us seize the opportunity in uncertainty and strive for a better Singapore. I support the motion.

Mr Deputy Speaker, Sir, like many of the hon. Members in this Chamber, I would like to join in the debate on the Budget Statement delivered by the Deputy Prime Minister and Minister for Finance. I hope to give my perspective and views on the matter and, at the same time, give feedback on views that I got from the ground. As I stand here before you today, I can safely say that I do not recall a period where the nation has faced greater uncertainty. The seemingly inevitable war in Iraq and the performance of the regional and US economies will pose serious challenges for us. In fact, they are already affecting us. Indeed, we are facing difficult times. The waves that we have to ride may grow in size. We do not know. Therefore, we can only do what is humanly possible to stay prepared and survive this period in our nation's life. I believe that fellow Singaporeans are very familiar with the way the Government works. Our approach in times like this is almost predictable. It is simple. We study the problem at hand and we seek solutions. Often, the way out is not a breeze. It is usually painful. But we go to our people and work with them. Retrospectively speaking, we have been fortunate that they understand when it is necessary to grit our teeth as a nation, persevere and patiently wait for the storm to blow over. More often than not, the fruits of our policy changes emerge after several years. History has shown that they are not immediate. It is this lag period which many find excruciating, and no amount of explanation will appease the man-in-the-street who bears the brunt of the economic slowdown and, on top of that, the additional blow from policy changes. The recent increase in job losses, the highest unemployment rate since 1986, and the daily war rhetoric are all very disheartening. As a nation, we have also recently been plagued by a series of freak accidents, beginning with the Pedra Branca tragedy and a few others. We are terribly saddened by the loss of innocent lives amidst the economic and geo-political uncertainties. While Budget 2003 is really a continuation of Budget 2002, the global situation has since last year deteriorated, and our people need more hope than ever. Hope, hope and more hope are my mantra these days. The belief that this too, like most things in life, will pass, holds true. Sir, I hope it is obvious to many that Singapore needs to embark on a different path where individual entrepreneurship will propel the economy while the country is on the path of consolidation. Private enterprise must be encouraged, engineered even for the sake of growth. If this is indeed the direction that we have charted for Singapore, are we willing to seriously assist our start-ups in every sense of the word, and sincerely provide infrastructure and financial aid? Supporting them is inevitably part of a conducive environment that we need to create. How do we create risk takers when the predominant culture is to always ensure certainty, back-up plans after back-up plans? I support the call by Dr John Chen and other Members that our civil service officers should be more pro-business and act as advocates for companies and start-ups, rather than just apply rules and uphold regulations. It will certainly help to smoothen the flow of requests and applications and reduce wastage of time and money. Perhaps, Sir, the changing of mindsets is the greatest challenge at hand. I am glad that more support is being allocated, and the Minister of State for Trade and Industry, Mr Raymond Lim, has eloquently spelt out his vision and mission towards this effort. My hope is for him to listen to the industry players and stakeholders. Very often, I hear people lamenting that the policy makers are oblivious of happenings on the ground when they are churning out policies, schemes and programmes that are supposedly intended to help the companies. Mr Deputy Speaker, Sir, in the present economic climate and challenges that face the country, the Malay/Muslim community must continue to strive along. It is definitely not easy for all Singaporeans, but it is also commonly known that the majority of the Malay/Muslim workers are in the lower-income and the lower-skills category. If the economic slowdown persists, the community will naturally be hit by retrenchments and loss of jobs. But this does not mean that we should just lie down and consider ourselves defeated. Instead, we should take this opportunity to improve and upgrade. The community must take these challenges and face them, just like all the other difficulties that they have faced and overcome in the past. We should continue to focus on education and the vision of a community of excellence. The young and the youths of the community are doing better. Similarly, the Malay/Muslim organisations and NGOs have done quite a commendable job in terms of providing accessibility to resource and assistance. However, the journey surely cannot end here. They should continue to work closely with the Government agencies and other self-help groups to continue to uplift the community. Sir, in the long run, we all agree that handouts need to be reduced. We do not intend to be a welfare state. However, having said that, addressing real needs is part of our commitment to care for our people, and this deserves our full attention. Health cost is a real problem to three categories worth mentioning here: the senior citizens and retirees with chronic illnesses, the handicapped and the unemployed. Not all companies can afford to provide healthcare, post retrenchment. Some may, but are not motivated or required to do so. This is a problem and needs to be looked into seriously. Mr Deputy Speaker, Sir, the arts carry very little weight to the average Singaporean. This area of interest is not perceived as a serious subject. At best, it is limited to a favourite pastime. I know many parents who send their children for piano or violin lessons with the contention that the stimulation helps their children to perform well in mathematics and science instead. Perhaps, there is a neurological link. Credible or not is not to be discussed here, but my point is that the mentality at large does not regard the arts very highly. I am often worried and concerned that in these difficult times the support and resources for arts and culture will be reduced. However, thankfully, our hearts are at the right places, and the cultural achievements in 2002 are very encouraging. It presents concrete steps to change perceptions and mould different opinions. It is thus heartening to note that we will continue on our pursuit of creating a cultural capital and boosting our arts scene and industry, as recommended by the ERC. The economic and social potential of our cultural capital cannot be denied, and the ERC recognises this fact. I certainly believe that, as we develop and grow as a young country, these aspects of our development should not be neglected. Let us not choose the convenient and so-called obvious choice of cutting expenditures in this area and, thus, bringing us back in time. The importance of continuous learning and upgrading in all areas cannot be emphasised enough. Our schools and institutes of higher learning are intricately linked with our chief engines of growth. The formation of a statutory board to focus on this area is laudable. Mr Deputy Speaker, Sir, I would propose to this new organisation to try and leverage on the existing institutions and bodies, and streamline the schemes and programmes that could further encourage and incentivise lifelong learning. Our workers are worried that, even after picking up new skills and knowledge, they still cannot improve their chances of getting new jobs. We need to address this concern clearly. Beyond that, our tertiary institutions must continue to remain relevant and serve not only the student cohorts but also the working adults who yearn to upgrade themselves. Our universities need to be relevant, and the recent university review was timely. They need to work closely with industries and look at feedback seriously. This brings me to the kind of graduates that we are producing at our universities. Can our graduates think for themselves? During the recent student dialogue with our Senior Minister, the criticism was that the questions were mainly from foreign students, whereas the Singaporeans were often silent. Are they simply shy to ask or are they complacent, contented to simply sit comfortably and absorb without doing more serious thinking? Are they independent? Can they cope with not being able to find a job immediately after they graduate? Sir, going back to the current situation that faces the nation, my last word on this is that we need to work together and help our people to get out of the doldrums. The retrenched may actually find themselves employed in a shorter period, if some things are put into perspective. Often enough, we hear of jobs and opportunities in the service industry, but they are not well regarded and thus the take-up rate is slow. It is time we started to change mindsets and prejudices towards jobs and careers in the service industry. To those who are considering to go into this industry, let me give this small piece of advice which I picked up from a movie that I watched over the weekend. There was this very professional and dignified butler who said, wisely: "To serve people takes dignity and intelligence, but remember, they are just people with money. Although we serve them, we are not their servants. What we do does not define who we are. What defines us is how we rise after falling."

I wish that every Singaporean would remember this. 4.28 pm

Mr Deputy Speaker, Sir, thank you for allowing me to join in this debate. It is to be applauded that in spite of a difficult environment and much pressure to implement populist measures, the Government has come out with a clear roadmap that will take us to the next lap to be a global, entrepreneurial and diversified economy, one that will be well-positioned to take on the competition and challenges posed by mega-cities around the world. Rather than manage just for the short term, the Government has decided to take measures to ensure the long-term survival of Singapore. In my mind, that we would succeed to remake Singapore to be an attractive place to work and play for both Singaporeans and foreigners, is without doubt. Three and a half decades ago, Singapore was in a worse position - a poorer background and devoid of the many advantages that we have today. While today's competition is stiffer, we have also progressed much in terms of being a better organised country with world-class infrastructure. Just as the Senior Minister of State, Mr Khaw Boon Wan, has said, we are a fertile ground that would be nourished by today's rain. But we are also pragmatic and hard-nosed enough to take the bitter medicine required at each stage of our growth. Nowhere else is a country's leadership so forthright and bold enough to be upfront on the need for retrenchments, that they are a necessary part of the solution needed to meet stiffer competition. Retrenchments alone are not sufficient. We need measures to take care of the lower strata of society, and to prepare them to contribute positively in the new Singapore. I am pleased that we would have a new statutory board set up to look at retraining and employment opportunities and placements. Job creation is key. Singapore would need to find new value-added activities that are either generated in the country or attracted from abroad. The many FTAs that have been put in place since the last budget debate will certainly help, and they will give much comfort to Singaporeans that this Government plans and executes well. With the many measures being put in place, there is no doubt that Singapore would be well-placed with a significant role in the world and the region. With first-class infrastructure and value-added manpower, it is not difficult to imagine several years from now when Singapore will have a vibrant movie industry, a hotbed of R&D activities, that it will be an indispensable node in the world of network finance and a key hub through which tangible and intangible services flow efficiently and seamlessly through. But, as we all know, everything eventually hinges on confidence. While we hope to be a linchpin in a thriving Southeast Asia, it would be too hopeful to think that the threat of terrorism would subside anytime soon. While we yearn for a peaceful world, we must not let our guard down. The very ingredients of our success make us a choice target. The fact that we succeed as a key cog in the world machinery will make us a natural target. So, while we keep a sharp eye on the fiscal position of the country, it is imperative that we invest enough in our homeland security in order to deter anyone with intentions to inflict harm on our citizens and to dent economic confidence. I hear with much comfort the measures we have undertaken in being the first to participate in the container security initiative, a key node in the so-called Green Lane. There is also further confidence that we read of the gamma ray machines and the focus that are being brought to bear at the new Immigration and Checkpoints Authority. However, I believe that it would do us well to be doing even more. We need to further reinforce the confidence of our people and external investors. We must stand out from our neighbours as being ahead in the area of security and vigilance. We must be the bedrock of stability in this part of the world. Looking just beyond our shores, we are beginning to develop Bintan and Batam as part of our economic hinterland. They feature in our FTAs. We should now extend our security measures and procedures to this extended hinterland as well, so that they become part of our security eco-system. With greater confidence in these two islands, investors would no doubt be more convinced and motivated to plant the more labour-intensive factories there, while using Singapore as their logistics and management centre. For expatriates, the security of their families is often paramount. More so for those who make Singapore as their launch pad and spend most of their time travelling in the region. Peace of mind would definitely drive their choice of location. For the investors who decide on the location of their multi-million-dollar plants and are reliant on these to be sole suppliers of key components and processed materials, Singapore's commitment to homeland security to reduce even the remote possibility of a catastrophic event would definitely be a swing factor in their investment decision. For our people, especially those who have experienced the lack of civic safety in other major concentrations of population, we understand too well that our safe environment cannot be taken for granted. We must draw upon all our resources to tackle the new terrorist threats. The issue of social cohesion had been well debated during the debate on the White Paper on the threat of terrorism. But I wish to add that strengthened social cohesion must be supported by reinforced security infrastructure. Terrorists, like water, seek the path of least resistance. But we are already ahead in this respect. We are probably one of the most IT-savvy and wired-up islands where pockets of good information technologies are under the jurisdiction of different agencies and Ministries. The next step is to have all these agencies connected up, sharing information and sharing learning. The fact that we are a small island makes this task even easier. A similar analogy is the rationale for the setting up of the credit bureau in the financial industry. Prior to this, each bank has its own information, but this is not shared. The sharing of critical information on a common platform now results in a better outcome for all. Today, technology allows us such sharing of data, information and experience on a broad-based basis on end, even instantaneously. Just as we have strong ministerial overview on entrepreneurship and services, I hope we will likewise strongly consider having an overview on homeland security on a ministerial level. There must be a strong concerted and focused effort by drawing upon all the agencies that straddle different jurisdictions and a determined effort at wiring up and strengthening our island and its infrastructure. The mission requires resource coordination, tracking, quick identification and precise response, often in very compressed timeframes. The security agencies must be given the tools to get this job done and done well. The economic agencies and the security agencies would debate on how much is affordable and whether it would increase the cost of doing business. But I would contend that security and efforts to enhance personal security and business continuity make good business sense for the people, for the Government and for the business community. I believe that the people would not want us to be stingy on issues of security.

Mr Deputy Speaker, Sir, thank you for allowing me to join in the debate on the Budget. Over the next few years, as we encounter the same issues as other developed economies, we will face the problem of the lowly-educated workers who have limited skill sets. They may become our long-term unemployed. We need to think of ways to help them, without encouraging them to just sit back and collect welfare payouts. Can we think of ways to encourage them to earn at least whatever they can earn? For example, additional help with school fees for an extended period that our grassroots and Government agencies might offer could be contingent on the unemployed head of the household accepting at least a job, even if after accepting this job the family would still need some additional financial help, eg, with education of the children. Those who consistently turn down job matches that the CDC provides could then be given the least priority for extended help. The second point I want to touch on is about encouraging an entrepreneurial culture. Some of these unemployed would also be white-collar workers. While individuals may feel unsure of becoming entrepreneurs, community centres or other agencies could also help them to meet, after the manner of the Social Development Unit (SDU), so that they can network and form syndicates of people with complementary skill sets and who could either then strike out on their own as a group or seek venture capital to get jobs overseas. Recently, in the papers, there was a group of people who had done just that. While the SDU has arguably been successful in getting people to meet partners of the opposite sex, an organisation, eg, an Entrepreneurial Development Unit - to coin a phrase - could provide opportunities for like-minded people who happen to be professionals, or people who have marketing skills, or even people who have had technical training from various statutory boards, such as PSA, etc, to get started together to talk to each other and, perhaps, to listen to motivational speakers who themselves have started a business, about opportunities elsewhere, eg, in neighbouring countries, and those who share a common vision might start a company in someone's flat and, who knows, one day, this could be another Apple or Microsoft. Members might ask on what basis I make these suggestions. I have never started a commercial company, but I have helped to start up one professional association, two NGO organisations and two service centres, both in Singapore and in the region. In all these cases, these projects took off because, firstly, there was an opportunity for people to discuss these ideas socially. The people who discussed these ideas believed in them, believed that they would benefit people, and decided to run with the idea over a period of time, overcoming obstacles along the way. In Kandang Kerbau Hospital in 1998, a small group of staff from different professional disciplines also brainstormed, developed and patented a small device which we still use now for all children in KK Hospital. I am sure that Members of the House here, who have successfully started businesses, would have similar examples in mind. I am sure that Singaporeans are as capable and innovative as anyone else in the world. We just need to dare to dream, to share our dreams, and believe that we can achieve these dreams, if we also dare to fail. Let me turn to another point - about whether we would be penny wise and pound foolish in some of the things that we do. Mr Deputy Speaker, Sir, can the HDB miracle of affordable modern homes for most Singaporeans be sustained? Will our clean and tidy neighbourhoods be also clean and tidy in five years' time, if we see increasing numbers of citizens with power and water supplies cut off? While there may be good reasons why this has to be done, it could be that these people would eventually live in squalor and lack modern sanitation, even within our modern HDB townships. How can we help them? How can we ensure that we will not get many ghettoes within our sparkling city? Could we not be innovative and have maybe a small timer switch that would allow just enough electricity to run lights between the evening hours when children need to do their homework and, perhaps, in order to ensure sanitation, that a thimble or some other mechanism might be found to let water supplies be given at low-flow rates, again in the interest of public safety? I understand that Singapore Power is now a commercial entity, but we should also consider public health and decency. It would not be helpful for our school children to go to school spreading lice and infectious diseases that used to be seen only in the kampungs of old. A dishevelled worker, unable to bathe for several days, would also find great difficulty convincing a would-be employer to employ him. On the other hand, Mr Deputy Speaker, Sir, I strongly support the increase in tobacco duties. As a doctor, I am convinced that smoking is clearly linked to cancer, heart disease, blockage of blood vessels and other medical ills. The downside of smoking is tremendous. The only upside is fiduciary. And, even so, Mr Deputy Speaker, Sir, I doubt that the increased tax revenue could exceed the cost of increased medical care needs and social costs of smoking. While the loopholes in the cigarette size and length have been plugged by the Deputy Prime Minister and Minister for Finance, I still hear of young people banding together to share a pack of cigarettes. It is a difficult loophole. But I am confident that the Minister will find a way to plug this one as well. Perhaps, there ought to be a COE for cigarettes! The arguments for smokers to bear a greater burden of the true social cost for smoking are no less strong than the arguments for road users! Next, Sir, support for tax incentives to relocate foreign talent. I strongly support these moves to make it more financially attractive to locate talent and skill in Singapore, be they foreign or previously resident Singaporeans. Our property market, retail sector, entertainment sector, and even the little neighbourhood shops and eateries, are suffering from a lack of clientele. Singapore needs a certain critical mass to achieve this cosmopolitan buzz, and talented people, with their generally greater spending power, will make a great difference to the local economy. Can we also make it easier for these people to live in and perhaps own the bigger and less affordable - at least to current Singaporeans - HDB flats? I would also say that allowing these people perhaps lower tax rates may still benefit us, provided that the money is kept in Singapore and not repatriated back home. I support the statements by my fellow MPs to ask the Government to consider to continue with rental rebates for JTC and HDB commercial tenants for a longer period. However, like Dr John Chen, I would argue that with a situation of soft demand, where investors are weighing carefully the pros and cons of locating new investments, we should take an approach where we would adopt fixed rates or lower rentals for a longer period of two or even three years. Our emphasis should really be on making the sale and making a prospective investor sign on the dotted line. The effect of having predictable fixed costs for rentals cannot be under-estimated, given our generally high cost structure. Again, the knock-on effects of a hollowing out of our local industrial base are tremendous. Even if factories will come for the next three years, they may be persuaded to stay. If they do not come at all, we will not get the chance to renovate their premises, sell them new computers and create jobs for our workers even as we retool and remake our economy. In that regard, I am strongly in support of the incentives for uptake of industrial land with long leaseholds, as has been announced. I also hope that the Government will also make some lands available at short leaseholds to make it more affordable for businesses to set up shop and have a lower entry hurdle, especially where they think they can make their money back in a shorter period of time. For example, big electronic factories have been known to locate and even relocate in very, very short time-frames. Nevertheless, we benefit when investors do come to set up shop. At least we get the chance to persuade them to stay. Sir, I support the Budget.

Mr Deputy Speaker, Sir, thank you for allowing me to join in this debate. DPM and Finance Minister announced in his Budget Statement the five long-term strategies to make Singapore a leading global city and immediate measures to help our economy to recover from the recession. He cautioned that there is no safe harbour where our ship can shelter to rebuild and refit before heading out to sea. All work must be done on board ship while we are sailing and battling the elements. As more disheartening economic data from major economies like the US, Germany and Japan were released and the acrimonious debate at the UN Security Council on Iraq revealed a great political divide, the elements that our ship is battling are fast becoming a perfect storm. It does not make our immediate future prospect look optimistic. Set against this background, the 2003 Budget is a practical and a reasonable one. It does not meet everyone's wish but it gives where it is needed and matters most. The $900 million deficit is significant after running a deficit for the last two years. To address the concern that not enough has been done to help the people who are in need as well as to help the economy to recover should the economy worsen, I hope that the Government will come forward with subsequent off-Budget measures quickly if it becomes necessary. It is heartening to note that the Government will continue to extend help to those of our fellow citizens who are most affected by the recession. They deserve our support. Many in the business community, while disappointed that the much anticipated corporate tax cut will not materialise this year are, however, reassured that the Government would likely reduce the current corporate tax from 22% to 20% for the Year of Assessment 2005. However, I think we should avoid the Hongkong example where the substantial budget deficit of HK$70 billion this year necessitates an increase in corporate and personal income tax. Hongkong has announced an increase of 1.5% increase in corporate tax to 17.5%, and an increase of 1% in personal income tax to 16% to support its budget deficit. The Government's commitment to continue to help reduce business cost, simplify its rules and procedures and cut red tape and for the Ministries and statutory boards to avoid crowding out the private sector are all necessary measures in the remaking of our economy. An entrepreneurial and innovative bureaucracy will also help to support our businesses and entrepreneurs. I would like to suggest that there could also be greater inter-agency cooperation so that policies and measures of different Ministries would be harmonised and conflicts minimised. The business community has long viewed tax on foreign income remitted into Singapore a sacred cow as repeated recommendations and suggestions for exemption were rejected. The move to exempt tax on foreign income remittance is, in fact, very well-received. It is significant not just in monetary terms but also symbolically it represents a change of mindset and a paradigm shift. It is a pro-business decision and one that the ERC has also recommended. The move to exempt domestic interest income to individuals derived from savings, current and fixed deposit accounts is also most welcomed. Companies who up to now keep foreign income offshore and individuals who keep deposits out of Singapore for tax reasons will now find no barriers in bringing them back to Singapore. All Singaporeans should indeed take heed of the call to pull together to tide over this difficult period and move ahead. South Korea, one of the worst hit economies during the 1997 Asian economic crisis, made an amazing recovery and remains as one of the world's most resilient economy, with some of the world's most admired companies such as Samsung and LG. During the 1997 crisis, South Korea had to be built up by IMF with a loan of US$50 billion. In an amazing recovery story, South Korean economy grew by 9.3% in the year 2000, 3% in 2001 and 6.2% in 2002. The South Korean people are hardworking. They can endure a lot of hardships. They have a 'never say die' attitude. They tighten their belts to support the Government during their crisis. I can still remember vividly reports and images in newspapers and television on news of South Korean women queuing up to contribute their gold and jewellery to help the economy. I think such is the spirit of the South Korean people and such is the spirit that we must cultivate for our Singaporeans. This is an area we must build on - the resilience of our economy and the resilience of our people. I think Singaporeans can also make it. We can be like another South Korea. And I look forward to the difficult voyage ahead with optimism and hope. I know as a country and as a people, we will survive this perfect storm and survive well. Sir, I support this Budget.

(In Mandarin): Mr Deputy Speaker, Sir, I support the motion in the name of the Minister for Finance. This is an apt and timely Budget. For the 1-room to 5-room flat owners, they will continue to enjoy the utilities and S&C rebates. At the same time, everyone will benefit from the additional $100 million paid into the Medifund account by the Government. To the business community, the Government is granting some tax rebates and extending the rental rebates to help companies reduce their business cost and enhance their competitiveness. The Government is also accepting the Economic Review Committee's recommendations of the five strong strategies to enable Singapore to remain competitive and establish itself as a leading global city. Mr Deputy Speaker, Sir, although the Government has done so much, there are still some people who feel that the Budget is not generous enough. I can understand their feelings. It is never easy for any Government to please everybody. If there is no complaint, it means that the Government has done perfectly well, and there will be no improvement and progress. That is not necessarily a good thing! When reading the Lianhe Zaobao on 1st March 2003, I paid particular attention to the remarks given by the NCMP and the Opposition MPs. I feel that in this difficult time, whether you are a Government MP or an Opposition MP, we should all try not to please the people with claptraps, but rather contribute feasible and constructive suggestions on the real issues. Do not harp on the same old tune and adopt a sentimental pose. Do not be carried away just because someone sings some praises to you. In Singapore today, the young people are pressurised in their studies. They also face the gloomy prospect of securing a rewarding job after graduation. The middle-aged people worry about their job security, and whether they can continue to draw a regular income to maintain their families. The older people worry about their ability to afford the healthcare services provided by the Government, and try not to burden their children with their medical cost. Today, the people's concern is not on the salaries of the Ministers and the senior civil servants, but whether the Ministers and senior civil servants can help them to solve their unemployment and healthcare problems. As a labour MP, I am glad that the Government has set aside $500 million to establish a Lifelong Learning Fund to assist the workers in their upgrading and training programmes. I am also encouraged about the initiation of $3.7 million for a MOM training scheme to provide assistance to the unemployed and retrenched Singaporeans, so as to equip them with the necessary skills for re-employment. I would also like to commend the Government for the setting up of a Continuing Education and Training Centre for adults. However, I hope that the Ministry would scout around for the right people with the necessary know-how and experience to manage the centre so that relevant training programmes would be rolled out to suit the needs of individuals, and to equip them with the relevant skills for better employability. Any irrelevant training programme would only result in more disappointment and frustration of the workers. If possible, the Government should consider my fellow labour MP, Mr Seng Han Thong's suggestion of getting the workers employed before undergoing training. This would boost their confidence and they would be better prepared to participate in the training programmes to improve themselves. According to a survey conducted by the National University of Singapore, our graduates no longer expect high starting salaries upon graduation. Some 85% of NUS graduates are prepared to participate in training programmes to upgrade their skills so as to improve their chances of being employed. This is a very encouraging sign! I hope that the mature workers would also seize the opportunity to upgrade their skills in whatever line they are in so as to enhance their employability. They should persevere and be courageous in taking up training programmes and learn new skills so that they can be self-reliant. To make a good living they must depend on themselves rather than on others. Some people have asked me why the NTUC has not opposed the Government's delay in the restoration of CPF and the gradual reduction in the CPF salary ceiling. They asked why the NTUC dare not hold a demonstration in the streets. I told them that even if a demonstration succeeds in getting the Government to restore the CPF contribution to 40%, and no lowering of the CPF salary ceiling, it would only succeed in making the headlines of the foreign newspapers and our Secretary-General, Minister Lim Boon Heng would be hoisted as a hero. This would be very thrilling and awe-inspring, but what will be the end result? The end result would be that the companies, owing to higher business cost and a heavier burden to carry, will retrench more workers, and there will be more unemployment. Since we do not want to have more workers retrenched, we support the Government's action because that will ensure that our workers get to keep their jobs, and the employers would be able to survive, to continue looking for openings to expand their business, and hence create more jobs for Singaporeans. Mr Deputy Speaker, since 1965, the Malaysia media have been regarding Singapore as an "abnormal baby" abandoned by Tunku Abdul Rahman. We can read this in their newspapers all the time. They believed that Singapore could not survive after its separation from Malaysia, and they never expected Singapore to grow and prosper. Apart from being a politician, Senior Minister Lee is also a first-class doctor. Under his careful nurturing, this "abnormal baby" grew up strong and healthy, it did not die an early death. We all know that Prime Minister Mahathir is an astute statesman. As a doctor, he knows that one can survive without food for three days but no one can live for three days without water. As such, he has been using the water issue as a lever against Singapore. But he forgets that our Prime Minister Goh is also a very brilliant person. He adopted the NEWater as a substitution for natural water, to ensure that we do not die young. We are still surviving and we will continue to do so. Singaporeans should be proud that our leaders are all very skilful kung fu experts. They can deal with all the blows that have been rained on them. However, we should not be complacent, neither shall we be self-abased just because we are a "little red dot". We want to live with dignity and self-respect, but not forgetting to be prepared for danger in times of peace, and be vigilant even in peace time. A Taiwanese friend of mine commented to me that the Singapore Government was like a "twenty-four filial father" (a Taiwanese dialect expression to the effect that the father takes extreme care and looks after every detail of his children's well-being). Perhaps this is why our people are so heavily dependent on the Government. I think this is food for thought! We should all ponder over this. I agree with the Senior Minister of State for Trade and Industry that it is not the policy that drives Singapore ahead. It is everybody, every company and every individual that drives the country forward. We are all assets of Singapore. We can make contribution. Everyone of us must work hard. We must learn how to be self-reliant. Singapore is small in land, with a small population. We must look after one another, stay united so that together we will be able to help Singapore maintain its competitive edge. As the Finance Minister has said, we will then become a leading metropolis in the world.

Mr Deputy Speaker, it is interesting to note that when the Deputy Prime Minister delivered his Budget Statement, we were expecting both a response to the ERC report which contains recommendations for the longer term and Government's package of measures for the immediate or short-term challenges. Some of these ideas may appear to contradict one another. But the themes common to both are those of Singapore's competitiveness and economic positioning. Let me dwell on three aspects, with the first in greater detail. CPF and the Concept of Retirement The ERC has made many recommendations on restructuring the Central Provident Fund in order to refocus its role back to old age financing. The Government has decided to defer the restoration of the CPF contribution rates for two years, lowered salary ceilings for contributions and reduced contribution rates for older workers, whilst phasing in higher contribution rates to the Special and Medisave Accounts. Sir, these can be confusing signals, as they serve different purposes - from ensuring Singapore's competitiveness to providing for old age to checking any imprudent allocations to property investment. I believe the discussion on what appropriate structure our CPF scheme should take is incomplete without addressing the fundamental concept of retirement itself, and not enough attention is paid to this. Sir, generations ahead of us never stopped working and had no concept of retirement. They literally worked till they dropped or were prevented from doing so by illness. The present generation of Singaporeans, however, feel they have worked doubly hard, no thanks to the competitive pressure from globalisation and technological advances. Retirement is therefore a given - regarded by some as a necessity, by others as an entitlement and, to many, the earlier the better. But, Sir, the reality is, as a nation, we cannot afford the pensions and the CPF savings are insufficient for most people. With the CPF withdrawal age at 55 and a life span of almost 80, we could be facing some serious challenges if Singaporeans, who are expecting to retire at around 60-62, fail to ensure they have sufficient finances for themselves for a good 20-25 years. This takes on greater urgency when one were to look at the sweeping changes to the concept of employment itself and, specifically, to the relationship between the employer and the employee. Let me explain why I think this relationship will increasingly be mercenary. Firstly, the idea of a one-career-in-one's-lifetime is no longer the reality. Business and product cycles are shorter. Just look at the speed at which new mobile phone designs flood the market. A manufacturer employing a few thousand workers today may be history in a matter of 2-3 years. Thus, a person will increasingly have to bring his skills across different industries in order to remain employed. Even more unlikely is the possibility of one-employer-in-one's-lifetime. This is not peculiar to Singapore. It is incumbent on corporations world-wide to restructure and re-position themselves to meet the changing demands of a global market place. Look at the sweeping changes in the telecommunications arena. Even hitherto old-fashioned businesses, like postal services, have extended themselves into a larger supply chain of courier and other distribution services. Sir, even Government Ministries have to remake themselves on a continual basis to serve the economy better. For example, the creation of Media Development Authority to deal with the convergence of channels and the corporatisation of certain services like HDB Corp. With employment trends changing in tandem with those in the underlying economy, gone are the days of a predictable job pattern and fixed compensation schemes. Jobs are no longer 9-5, Mondays to Fridays, or confined to working within Singapore. Salaries will increasingly be linked to performance rather than to seniority or pre-determined salary structure. The short business cycles mean that companies can no longer carry fixed labour overheads and that they need to be nimble-footed when it comes to right-sizing. Therefore, unlike in the past where contract work is associated with temporary or even cheap labour, contract work will increasingly be the norm for many professions. By extension, Singaporeans can no longer expect the income levels to be one predictable and regular wave, but a series of steps, both up and down, with the occasional gaps. Towards this end, the promotion of portable medical benefits is a step in the right direction of dealing with multiple employers and the occasional breathers in-between employment. Sir, in this context, the concept of retirement at a certain legislated age is no longer tenable. Neither will it be helpful to our ageing nation. Some may argue that the solution may be found in raising the retirement age, difficult as it is politically, to inch the bar upwards. Sir, I believe we should abandon the concept of retirement altogether, and the earlier the better. Singaporeans should decide when they want to make transitions between jobs or to slow down at a certain age or when they would like more leisure. We should work longer, but moderate the pace as we go along and not artificially stop at some pre-determined age. Moreover, there is anecdotal evidence that an abrupt end to active employment can cause the retiree to lose self-esteem and suffer poor health prematurely. I would therefore like to urge the Government to consider abandoning the whole concept of retirement even as we proceed with the various CPF changes. In addition, can incentives be provided for Singaporeans to maintain sufficient finances as they age, eg, such that CPF balances are kept even past the withdrawal age of 55 years? At the same time, can the Government inject more resources into facilitating the employment of older people on a contract or part-time basis? Role of Government in Services Sir, the Deputy Prime Minister has elaborated on the need for us to nurture the services sector as a twin engine of growth to manufacturing. But, many have unwittingly limited this to the role of the private sector as the driver, with the Government playing the role of a facilitator or, better still, as a customer through continual outsourcing of non-strategic services. Sir, I agree that the Government should outsource as much as possible. However, we should not pre-judge the roles or limit our own potential as a collective whole. We need to think out of the box, blur the demarcation between the public and private sectors and do an inventory of our services expertise. Let me illustrate with some examples. Much of our expertise resides within the Government Ministries. In education, we have over the years honed our abilities to develop sound curricula and testing resources for schools, established commendable practices for managing educational institutions and systematically nurturing teaching resources. Some schools in the US have paid the compliment by using our mathematics textbooks. Foreign delegations visit our schools for ideas and to learn more from our experience, and the list goes on. Other examples can be found in our healthcare services, town-planning and business infrastructure building skills. But these are all deemed strategic services and thus far the respective Ministries are unlikely to have considered their commercial applications beyond Singapore. Earlier on, my colleague Mr Khaw Boon Wan had explained the concerns over the influx of foreign patients which may drive up healthcare cost in Singapore. But I also note that he gave many other examples of the pockets of expertise that we have, for example, in running libraries. Sir, I am optimistic that we can add substantial economic vibrancy through broadening the services sector. The challenge is therefore one of commercialising such skills and exporting them to markets where the stage of development warrants the use of such expertise. I would like to urge the Deputy Prime Minister, in his capacity as Chairman of the new Ministerial Committee on Services, to place emphasis on and explore the commercialisation of the expertise residing within the Ministries. I am hopeful that these can be nurtured into new services to be exported and can in turn spawn new business for the private sector to participate in. Unlike Mr Chiam See Tong, I do think we need to operate on a caveat emptor principle as opposed to tight regulation. Role of the Public Sector in Economy Sir, it is heartening to note that the Government will devote serious efforts to reviewing rules. This is to be applauded but perhaps the Government should go one step further and impose the sunset clause requirement to rules relating to business operations. A sunset clause puts the onus on the Ministry or statutory board to justify why a particular rule should be kept, whereas a review is likely to lead to the retention of existing rules than otherwise. Sir, as some of my colleagues have urged, we need to shift towards being more pro-business rather than pro-risk aversion. Generally, our policies are sound but our execution is frequently fraught with an overkill of measures to stem out the violation of rules. This, I am sure, is best described by the now famous "no u-turn" story about policy execution in Singapore. Like Mr Raymond Lim, my plea to the public sector is: when in doubt on business issues, please say yes. With regard to Singapore's competitiveness, I would like to propose that the relevant Ministries and statutory boards be assessed according to how well they contain business and other operating costs under their watch. This goes beyond reviewing fees and charges. For example, in compliance checking with the financial institution, if more hours are spent fulfilling this requirement from one year to another, the spotlight should be shone. Frequently, it is time costs which are the real hidden costs. In this context, Ministries should be encouraged to pledge a certain standard of service which must be credible, not the usual 3-6 months or 4-6 weeks, but one that is reflective of a real intent to provide top notch service. Sir, we have an excellent public sector which has served us well. In meeting the challenges ahead, we need to have the same amount of nimble footedness in both the private and public sectors. On that note, Sir, I support the financial policy for the new fiscal year.

Order. I intend to stop here. Mr Mah.

Resolved, That the debate be now adjourned. - [Mr Mah Bow Tan].

Mr Lee, resumption of debate on what day?

Tomorrow, Sir.

So be it.

Resolved, That Parliament do now adjourn. - [Mr Mah Bow Tan]. Adjourned accordingly at Twenty Minutes past Five o'clock pm.

asked the Minister for Manpower (a) if he will provide an update on the plans and actions taken to date to liberalise the Central Provident Fund (CPF) Investment Scheme; and (b) how does the CPF Board intend to market new plans to the CPF members.

There are currently no plans to further liberalise the Central Provident Fund (CPF) Investment Scheme, apart from implementing the ERC recommendation to offer low-cost privately managed pension plans to CPF members. The Board is studying the best practices for pension plans in other countries. A consultant was appointed in December 2002 to assist in establishing an appropriate pension plan structure within the CPF framework. The objective of such pension plans is to enable members to have a better chance to obtain higher long-term returns through a well-diversified portfolio. The private pension plans are meant to facilitate regular investments over a long-term horizon, but should not require members to make complicated investment decisions (cost of participation should be kept low). This is to cater for the majority of CPF members who are not investment-savvy. Details on the private pension plan framework will be announced in a few months' time. The Board is also working out strategies to educate members on private pension plans. This will build on existing public education efforts to increase members' understanding of the financial market and investment products. This would include the admission criteria for pension plan providers and investment guidelines for pension plans. The Board has sought public feedback and will also be seeking feedback from the financial service industry soon.

asked the Minister for National Development (a) whether the scheme to raise the skills level of the foreign construction workforce will similarly apply to Singaporeans; and (b) how can we ensure that this sector of the economy will increasingly attract local participation.

The objective of the new multi-skill scheme is to raise the overall skill level of the foreign construction workforce and reduce its reliance on foreign workers. This does not apply to local workers. Only foreign workers attract the levy. The Building and Construction Authority (BCA) is working towards raising the skills level of Singaporeans in the construction sector and attracting more local participation in the sector. It aims to transform the industry from a dirty, demanding and dangerous industry to a professional, productive and progressive industry. The new measures to upgrade the skills of foreign workers would help in this transformation. There are also opportunities for Singaporeans to take up higher value-added jobs such as professional, supervisory and technical positions in the industry. In addition, BCA conducts talks in schools to encourage students to consider a career in the construction industry and offers scholarships to groom talents. For existing local workers, the Construction Industry Training Institute (CITI) and other institutes of higher learning offer a wide range of construction-related training courses to upgrade their skills. Many of such courses are subsidised by the Skills Development Fund (SDF) and Skills Redevelopment Programme (SRP).