Hansard, 2003-03-11

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: FromTo Name(2003)(2003) Ms Indranee Rajah11 Mar- Ms Olivia Lum Ooi Lin11 Mar- Mr Lee Kuan Yew11 Mar- FromTo Name(2003)(2003) Mr Charles Chong13 Mar14 Mar 17 Mar18 Mar Mr Davinder Singh17 Mar- 19 Mar- Mr Yeo Guat Kwang19 Mar21 Mar Dr John Chen20 Mar30 Mar ABDULLAH TARMUGI Speaker Parliament of Singapore

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, the concerns of our people today can be summarised in three words: Jobs, Jobs and Jobs. For working people, they are concerned about keeping their jobs. For retrenched people, they are searching high and low for a job. For young people, they are worried about whether there are vacancies for them after 12 or more years in our rigid and rigorous education system. Furthermore, as the Prime Minister was quoted recently in the papers, the outlook is not getting any better any time soon. The worse is yet to come. As a result, the confidence of Singaporeans about our economy has reached a bottom unprecedented in recent years. Confidence in the PAP leadership's ability to lead us through this downturn, especially amongst those in the category of so-called structural unemployment, is also diminishing. On job creation and confidence, the Budget Statement did not take the opportunity to address them in a sufficiently strong and forceful manner to make an impact. To me, Sir, it is basically a response to the ERC Report issued on 7th February. True, more than 1,000 people, amongst them some of the brightest and the best Singapore has to offer, have contributed their ideas and energies to the deliberations of the ERC Report. However, the gestation period of the Report is one year, which is, indeed, a very long time - one year during which the Government has ample time to formulate responses to some of those recommendations, many of which are not new, as Mr Khaw pointed out to us yesterday. For those hoping that this Budget will provide some magic prescriptions to bring us out of the recession, they are disappointed at the lack of any major policy announcements or bold moves. Mr Inderjit Singh expressed this sentiment in his trademark way very well. Mr Speaker, Sir, the key thread that runs through the ERC Report is the lack of entrepreneurship in Singapore. There are many recommendations to make Singapore society more entrepreneurial. It is important enough for the Government to appoint Mr Raymond Lim to be the Minister-in-charge. Sir, we do not envy Mr Lim in his new job as he has the most unenviable task. How to convert a nation of salary earners to a nation of entrepreneurs? He recognised that our education system is not geared to provide creativity and mentioned that the school system is being changed to cater to this new requirement. Even if we do everything right in the schools, how long would it take us to turn the ship around? How about all those who have left the school system and have already joined the workforce? It is, indeed, a Herculean task. Furthermore, it is not clear what are Mr Lim's powers to make changes and what are his measures of success. Perhaps Mr Lim could find another opportunity to clarify these points. However, if we were to depend on new entrepreneurs to help us in the short term, especially in the area of unemployment, our hope would be misguided. The problem is a big one. Let us look at some numbers. We have close to 80,000 unemployed. If we assume that every new start-up would employ 10 persons, we would need 8,000 new start-ups. Since the success rate of new start-ups is not very high, the number of new enterprises in order to address this problem would have to be in the tens of thousands. From the Registry of Companies' records, we can clearly see that new companies are not being formed fast enough, and we are years away from making a dent in the problem if we were to depend solely on new start-ups. Sir, clearly we have to find some alternative means, even if they were the old and outmoded means to address the unemployment situation. Singaporeans are so used to the Government's ability to tackle the problems at hand and to make some policy changes and, presto! - we would be back on the normal growth path within a very short period of time. So much so that we in Government believe that the Government holds the key to job creation and prosperity of our nation. That is also why our people accept the salaries of our Ministers and senior civil servants to be pegged to the private sector. That is why we have the best paid Cabinet in the world. But based on this Budget Statement, there is indeed a mismatch between our people's expectations and the ability of the Government to deliver. As usual, Sir, the Feedback Unit conducts dialogue sessions prior to the Budget day. Unlike previous years, participants in our dialogues did not have many new ideas. Perhaps all the new ideas have already been submitted to the ERC. In a fact sheet given to the participants as pre-reading, we asked a question: what would you do if you were the Finance Minister? Perhaps it was a wrong way to prepare the audience. The responses we got could be summarised in this one statement: "If the doctor does not know how to treat the patient, it is time to change the doctor." In short, our people are depending on the Finance Minister to pull rabbits out of the hat. However, on one issue, which I think we have unanimous conclusion, and that is, everyone felt strongly that the Government should not plan for a budget surplus in this fiscal year. The ground reaction would have been extremely negative had the Minister presented a conservative budget with surpluses. Now that the Budget is a deficit one, people are more relieved. On the other hand, some have pointed out that we could have even a bigger deficit. Mr Leong Horn Kee had brought this up yesterday. But I think we all know that we cannot spend our way out of a recession. Perhaps we can ask: why would the Deputy Prime Minister present a budget in this way? This is the first budget he presented after chairing the ERC. Had it been possible, he would probably like to make this Budget Statement a dramatic one. If it had been possible to turn the economy around by one simple Budget Statement, he would have then left an indelible imprint on the population. The bond between the new generation leaders and the younger generation of Singaporeans would then be cemented. Thus, the lack of new measures providing immediate relief in the Budget speaks volumes about the challenges facing us. It should be clear that there are no quick fixes. This should be humbling for the Government to realise that when the tide is against us, even the best Cabinet in the world could not buck the trend. On the other hand, I must give credit to the Deputy Prime Minister for not adopting any quick fix measures that would dig us deeper into the hole, from which we would then have to work harder to climb out of later. Mr Speaker, Sir, Government must take charge in leading our people out of the current depression, both with regard to the economy and also the confidence of our people. Government is the only institute we have that is able and could do the task. Mr Khaw has spoken about complacency yesterday. He warned that we would fail as a nation if we were complacent. I would go even further and say that we fail if the Government does not, as a whole, rise to the occasion. However, Singapore has pursued the same formulae of success for so long that perhaps our mindsets and institutions might not be suitable or appropriate to deal with the new challenges facing us. In leaving no stone unturned, we could draw some lessons on how successful MNCs react to a changing world. Or rather we can learn more lessons from those outstanding companies that failed to respond to changes. It is true that if we look at the corporate records, some of best companies in the world languish when the market changes. Why? It is not that the management did not foresee the challenges. It is not that the management did not formulate the proper response. They failed because they continued to carry out the counter-measures using the organisational structures and the processes that had worked in the past. They failed because they did not question whether those processes and organisations will continue to work in the new environment. Indeed, some of them went into overdrive, launching programme after programme to check their competitors. I think, as a government, we have to avoid similar pitfalls. We should relook at all Government departments, agencies, both regulatory and promotional ones, to see what needs to be refocused and what needs to be restructured. We should go beyond fashionable name changes such as A*Star, SPRING, and IES - with the result that nowadays people find it difficult to even remember what they stand for. Again, in the spirit of leaving no stone unturned, I suggest that the Government administration, in general, should ask the following questions: First, whether strategic frames that have helped us to succeed in the past have become blinders? Such paradigms shape how policymakers view the world and allow us to make quick policy decisions. The same frames can also blind us to emerging threats and opportunities. One example I would like to give here is our land use policy. In the boom time, the Government adopted the policy of assigning a value to every piece of land based on alternative use. Doing so seems logical when such land could be converted to residential use, for instance. But adopting this policy universally means that our infrastructures, such as power generating plants, have to pay high land use fees. Our port authority, the PSA, also has to pay high land use fees. We did not foresee the emerging threat of Tanjung Pelepas where the operator is given effectively free land by the government. While it would seem that it was the PSA management that lost its two top customers, ultimately, I think, it is still the Government's land use policy that drives up the cost of doing business for PSA. Recognising this, the ERC Report has proposed the concept of competitive factor pricing, which has been accepted in principle by the Government, and we look forward to the detailed implementation of such a policy. The second question we should ask is whether proven processes have hardened into routines. We are getting infamous for Government rules and regulations. Mr Raymond Lim had already addressed this and he proposed to time-stamp every rule in the Government. I think also, in this respect, we should ask ourselves whether our Ministries and agencies are fortresses onto themselves. Has the division of labour become so clear that what is undefined is left unattended in the no-man land? For instance, let us ask the question: how could we help the unemployed workers? MOM's response would be coming up with programmes for retraining and upgrading. MTI's response would be looking for more investments. EDB's response would be life sciences. The ERC's response would be to create more entrepreneurs. But who will really help the unemployed to help themselves? I think the question is left unanswered. In the South West CDC, Mayor Yu-Foo has been trying to create a people's market where the unemployed could somehow become self-reliant. But the problems she encountered are indeed monumental. The third question we should ask ourselves is whether values, that we have, have hardened into dogmas. It is true that our values inspire and unify our people. However, they too can harden into rigid, self-defeating policies. For instance, the HDB's housing policy provides two bites of the cherry for every Singapore citizen. However, by pursuing it without putting on our thinking hat, the Government is today left with a backlog of thousands of unsold flats. This brought the building programme of HDB to a halt. The building contractors that have been dependent on HDB's building programme are all now facing difficulties, some are facing bankruptcy. The other example is the CPF contribution rates. On the one hand, we say that CPF should return to the basics of providing for retirement. On the other hand, we somehow convince ourselves that the proper CPF total contribution rate is 40%. So, when the economy turns around, we pledge that we should restore that number to 40%. Mr Inderjit Singh pointed out yesterday that such a policy creates uncertainties with regard to the cost of doing business in Singapore. It is not only the promotional agencies, such as EDB, JTC, IES and STB, that should subject themselves to this particular review by asking themselves the three questions I have proposed. I have also in mind regulatory agencies, such as Immigration, Fire Department, URA, etc. In fact, one of my favourite gripes is the hurdle imposed by immigration on visitors from emerging countries, like India and China. It might have been true that, in the past, many visitors from these countries ended up as over-stayers. But to treat every applicant from these countries who visits Singapore as a potential over-stayer would indeed deprive many business opportunities for tourism and education enterprises in Singapore. Mr Speaker, Sir, many of the changes that we propose will involve pain. When the Government promises that no stone will be left unturned, no one expected that the Government will respond to some of the worms under those stones by restructuring the Government agencies, such as PSA and HDB, through massive retrenchment or early unemployment. While shedding surplus manpower is oftentimes the right approach, making jobs redundant, in particular by the Government, should be the last resort. Sir, a job is more than just a person receiving a pay cheque. A job indeed defines the role of the person in society. It gives the person respect and dignity. Often times, the workers are not at fault. Again, let us come back to the case of PSA. It is the management that lost the top two customers through inflexibility or insensitivity. However, if you look further, as I said earlier, it is also the Government land use policy that saddles PSA with a burdensome land cost that PSA must recover from its customers. Thus, the Government is ultimately responsible for PSA's troubles. Extending this idea to all businesses, it is also clear that Government land use policy has played a major role in bringing us to our current difficulties. Only the Government could unwind the situation that we found ourselves in. Mr Speaker, Sir, notwithstanding my comments, I found the Budget indeed to be a very carefully crafted one, balancing the short term needs as well as the long term goals of our country. It is a deficit budget designed to maintain Government expenditure in a shrinking economy. It maintains the support for the lower income groups. And furthermore, the Deputy Prime Minister has been bold to introduce several new measures, such as tax exemption for foreign-sourced income and interest on local bank deposits. The first exemption has been proposed repeatedly in the past by Feedback Unit participants. I am indeed very glad that the Government has finally agreed to this suggestion. The tax exemption on interest on local bank deposits is indeed quite unexpected. It is indeed quite uncommon in this world to find a government that is prepared to exempt taxes on interest from savings account. I believe this exemption will continue to promote the habit of saving and will provide great relief to our retirees who are largely dependent on their savings to see them through retirement. I would like to thank the Minister on their behalf. Mr Speaker, Sir, the prescription of the Minister for our economy reminds me of the approach between western medicine and herbal medicine. Western medicine provides quick and effective relief but sometimes has severe side effects. On the other hand, herbal medicine must be taken over a long time. It is also a more holistic approach that probably would bring about better long term health. Singaporeans have been expecting western medicine in this Budget, but the Minister has prescribed herbal medicine. It would have been ideal if the Minister could prescribe a blend of western and herbal medicines so that we would have the best of both worlds from both practices. Mr Speaker, Sir, our economy is indeed in transition. As Mr Raymond Lim pointed out, in a knowledge era, those resource-endowed countries are not necessarily those that would emerge as winners. Often times, the resource-deprived countries are those that would vault ahead of the others. In this respect, I am reminded of the analogy of the evolution of species. Species evolved from a small population are subject to rapid and severe change in the environment. The weaker ones are eliminated and only those who can adapt would survive. Our economy is now subject to severe challenges. Elimination of the weaker companies is painful but necessary. Sir, I believe that so long as we take care to maintain social cohesion through helping those unfortunate amongst us, Singapore will emerge stronger and fitter at the end of this journey. I thank the Minister for a thoughtful Budget that strikes a balance between the diverse needs of the economy. I support the motion standing in his name.

Mr Speaker, Sir, may I be allowed to make a clarification on what I said yesterday in respect of the cost of the bypass operation?

Provided it is a clarification and no debate. You have to be concise.

It will be a short one.

OK, go ahead.

May I clarify my speech on the point about the two brothers who went for bypass operations. The one done in Singapore at Mount Elizabeth cost him almost S$30,000, and not S$40,000, as I said yesterday. The other operation done in Malaysia at Johor Baru General Hospital cost him Malaysian Ringgit 500, or S$235 if we take the exchange rate at S0.47 cents to M$1. Both operations were done in 1998. Sir, I have checked with NUH this morning that, for a C class patient in NUH who has undergone a bypass, the estimated cost is about S$3,500 and the stay is about seven days. So even if we compare hospital with hospital, Singapore's cost is more than ten times that of Malaysia.

(In Mandarin): Mr Speaker, Sir, the Finance Minister labelled this year's Budget as "Seizing Opportunity in Uncertainty". The headline caption in the Lianhe Zaobao described it as "Relieving current concerns to build long-term advantage". But, to the general public, this is a budget that cares not for the predicament of the people and offers no help to them at all. To the ordinary people, the utilities, SC&CC rebates are merely some meagre favours. At the time when the economic growth was good, and the Government accumulated huge surpluses, they gave just a little in terms of rebates, and glorified them by declaring that the Government was sharing the wealth with the people. Today, with an unemployment rate as high as 4.5%, and still mounting continuously, the rebates remain the same. Take the utilities rebate as an example. In the 1996 Budget, the utilities rebate amounted to $73 million. This year, with a situation where retrenchments are escalating, and those who are lucky enough to keep their jobs get no bonus and even suffer a pay cut, the rebates package is $71 million. Not only has it not been increased, it is actually reduced. The Prime Minister said that the present economic difficulty has not bottomed out yet and that we must be prepared for the worst to come. In his Budget Statement, the Finance Minister urged our people to help one another and put in concerted efforts to pull through the difficult times. But having said that, does the Minister lead by extending his nimble and agile hand to prevent those who were falling from dropping into the water, or pull out those who are already in the water and drowning? Absolutely NO, the Minister is merely stretching his fingers at his original position. These utilities rebates and SC&CC exemption cannot effectively relieve the anxiety. As it was said by an economist, the short-term rebates are indeed lacking in bearing. Perhaps the Minister for Finance may say proudly that he had issued to our people the Economic Restructuring Shares, and two-thirds of the shareholders have already cashed out their shares. But we must not forget that the ERS are only given as a sugar coating over the poison of increasing the GST. With higher GST, we have to pay more tax each day, be it at the wet markets, supermarkets, hospitals or on the road. . Three years down the road, I am sure that there would not be any more ERS to be issued. Will the Minister for Finance lift the GST then? Surely not! We may even expect a heavier GST. The Finance Minister may say that one cannot make bricks without straw. There is no growth in our economy, the Government's revenue is reduced. All that can be done has already been done. But I am sure the hand of the Finance Minister is certainly more nimble and agile than those of the families where the breadwinners have lost their jobs, and those who are struggling for survival. The PAP Ministers are well known for their ability to create wealth and preparing for the rainy days. Now that the rain has come, if the Finance Minister is sympathetic to the people on their present predicament, surely he can bring the initiative of his wisdom and creativity into full play and do more for the people. The Prime Minister said that he was afraid that the Government's various rebates given to help the people lighten their financial burden may be habitually taken for granted by the people. The people's dependency on the Government not only causes him to be worried, but also to feel that it is dangerous. He sincerely and earnestly urged the people to move away from the dependency mentality, and make every attempt to resolve their own problems. However, I wish to remind the Government that when we see a 80-year-old granny bending her fragile body to glean and collect scraps from the rubbish heap, when we see a university graduate putting aside his academic excellence to roast chestnuts for sale, when we see a youngster concealing his MA qualification to apply for a job as a warehouse assistant, we know that most Singaporeans want to live with dignity. They will certainly seek to be self-reliant. The PAP Government should not use the conduct of a small group of Singaporeans as a criterion, and use the excuse of not wanting the people to degenerate and forget about the promises they made during the last General Election. Do not forget that the Prime Minister has also said that the people's problems are his problems and their concerns are his concerns too. The Prime Minister is going to retire to give way to a younger person soon. I hope that the Minister for Finance who is going to succeed him as Prime Minister will remember what he said. Faced with the threat of retrenchment, pay cut, zero bonus, uncertain economic prospect, I feel that it is even more important that the Government should give the people a clear signal, to let the people know that the Government is resolute in wanting to lower their cost of living. Today, the burden on the people's shoulders is so heavy that they could hardly breathe. According to a recent report by Goldman Sachs, the debt-to-income ratio of an average Singaporean family is the highest in the world. Singaporeans consider owning their own residential property as their first priority. With 93% of the families owning their own home, every family is in debt. With the series of impacts since 1996, the debt-to-income ratio of an average Singaporean family has risen from 122% to 174%. Faced with a whole series of retrenchment exercises, uncertainty in job security coupled with the heavy debts, the people's worry is indeed understandable. For all these years, I have been repeatedly asking the Government to carefully review its policy on public service charges. Even in the good years, we should not use market forces as a cover, raising the standard of services as an excuse, and affordability of the people as the logic to keep on raising public service charges. The Government should have exercised control over the cost of living, give people a chance to catch their breath, and keep the wealth with the people. HDB flat pricing is a good example. It causes people to be up to their ears in debt. But the Government turned a deaf ear to all these appeals. Even in current bad times, on the excuse of raising the standard of service, public transport charges, medical fees and all sorts of charges such as taxi licence fees, etc, have been adjusted upwards. Apparently, the People's Action Party Government will never commit to freeze charges over a long period of time, this will cut off its sources of revenue. Once the economy recovers, the Government will go back to its old tricks of using free-market policy as a cover to increase its charges. Did the Finance Minister not point out in his Budget Statement that in good times, the Government will accumulate surpluses to offset the deficits. Increasing public service charges has been a significant means for the Government to accumulate surpluses. The only difference from now onwards is that business cost cannot be increased by a large margin for fear of frightening away the foreign investors and with such constraints, the PAP Government will surely turn to the people for their revenue, like increasing GST. Furthermore, in order to maintain its competitiveness, the Government will also control tightly the wage level of the people. Under such circumstances, the predicament of the people is clearly imaginable. As such, I would like to, once again, appeal to the Government to take the high cost of living of our people seriously and to change the policy and principle of public service charges, reconvene the Cost Review Committee to identify the problems, prescribe the correct medicine, and relieve the real concerns of the people, rather than distributing shares before the General Election, and then increasing the various fees and charges after the General Election. The Minister for Finance repeatedly emphasised that the main aim and strategy of this budget is to create opportunities for enhancing productivity and increasing job opportunities. Can I ask the Minister how many people have lost their jobs since the last General Election, and how many job opportunities have the Government created? Among these newly created job opportunities, how many are taken up by foreign talents because Singaporeans are not competent enough to take them on? The Government says that there are plenty of vacancies in our labour market, but Singaporeans are not prepared to lower their expectations to take on these jobs. Has the Government made any attempt to find out why there is such an anomaly? The policy of skill upgrading and retraining is nothing new. But, why is it progressing so slowly? If the employment situation is not improved, and batches and batches of graduates are pouring into the labour market, what counter measures does the Government have? After implementing the recommendations of the Economic Review Committee, what is the Government's forecast on the labour market? Will the situation of structural unemployment improve with the Government's decision to develop life sciences and the service industry? In its estimate, how many years will it take for the whole economic transformation to complete? Can the Government give our people a definite answer? Comparing the recently released Economic Review Committee Report to the February 1986 Economic Committee Report, the fundamental issue remains the same, that is, the weak international and regional demand coupled with the domestic structural problems, such as high cost resulting in the loss of competitiveness, the inflexible wage structure, high savings being put into unproductive investments like properties, and the reaction to external changes being slow. The 1986 report said that Singaporeans would rather stay unemployed than to take up lower-paid or demanding jobs because they do not understand that times have changed. Now, the Government is saying the same thing. Have we changed? For counter-measures, the 1986 report set a precedent by reducing the employers' CPF contributions by 15%, freezing the wages for two years, reforming the salary structure, introducing the variable wage component, controlling the Government's revenues, lowering corporate tax, developing the service industry, developing the private enterprises, developing local enterprises, etc. If the ERC has left no stone unturned, then we can say that these stones had already been turned some 16 years ago. Yet 16 years later, they are being picked up from the same localities, and most probably put back into their original positions again. The only difference is that the then Minister of State for Trade and Industry who led the Economic Committee is now the Deputy Prime Minister cum Minister for Finance, who is again leading an Economic Review Committee. And in the report then, there was no mention of China at all, yet it is now one of the major factors contributing to our being in such a predicament today. When DPM Lee met the union and grassroots leaders, he said, "If the Government had anticipated that China's economy would take off so rapidly, it would not have allowed our wages to escalate so fast." The strange thing was following China's economic reform and opening to the outside world in 1979, our leaders have been making trips to China every now and then, and were received by the paramount leaders of China. When did our farsighted PAP Government first realise that China was going to emerge rapidly? Have they adjusted their strategies then? The past may not be remonstrated with, but we can still pursue the future. We can forget about accusing the Government for its past mistakes, but we must ask this Government, which it has claimed to be formed by roping in the top talents and the most farsighted elites of Singapore, this question: when the time was good, you kept adding on to the burden of living of the people on the principle that the people could afford it. Now that the economy has gone into a predicament, you cut salaries, cut CPF under the cover of lowering business cost. The people's income is diminishing, why has the cost of living still not gone down yet? With economic development being internationalised, the changes in the economic landscape in East Asia following the emergence of China's economy, and the enhanced competitiveness of our neighbouring economies, I am not too optimistic with our medium-term economic development. Review the Government's principle of fund allocation for the public service, find ways to reduce the various charges, lighten the burden of the people and, at the same time, bring down business cost, are the immediate tasks of the Government.

(In Mandarin): Mr Speaker, Sir, I am a little puzzled after listening to the speech by Mr Low Thia Khiang. Mr Low said that the Government does not understand the difficulties faced by the people, and that the Government has not sent a clear signal to the people. I think this is a distorted opinion. We must not forget that the Government has postponed the 1% increase in GST by one year. This shows that the Government understands the difficulties faced by the people. This year's budget is a deficit budget. Does it not send a clear signal to the people that the Government cares? Mr Low also said that the Government has not done much for the unemployed. Perhaps he has not read the newspapers or heard the Minister's speeches that we have put in tremendous efforts to attract foreign investments, and by so doing to create more jobs for our people. There are problems in our economy, and these problems must be solved. I would liken our economy to a pregnant lady in labour. When my wife was in the labour room, I was there to accompany her, and the labour took a total of 18-hours. During child birth, the mother must experience labour pain. Without going through such labour pain, there would be no joy of a new-born baby. Likewise, our economy is like going through child birth. If we are not prepared to face some pain, and if we try to take short cuts, our new economy will not be born. Therefore, I urge all the MPs, including our Opposition Members, to work together to endure this pain of childbirth, and to look forward to receiving the new economy. Mr Speaker, Sir, 2002 was a very difficult year. The economic recovery which the people have been expecting did not materialise. The unemployment situation has worsened, externally there were squabbles between Singapore and Malaysia, and the bombing in Bali has made us keenly aware of the terrorist threats right before our eyes. On the whole, 2002 was a difficult year that has brought us few good news. The outlook for 2003 is still fraught with uncertainties. Externally, the tension that has bedevilled relations with our neighbour has eased somewhat although the bilateral issues have not yet to be solved. The situation in Iraq is unstable, with the war threatening to break out any moment. Our economy remains weak. With the successive retrenchments recently, the unemployment rate is likely to go up. The Prime Minister, in his recent interview, warned the people that the bad time is not quite over. He said that while we should not lose hope, we must also be prepared for the worst. Hence, when discussing the budget, we must be aware of the uncertain prospects facing us. The Government accepted almost all the recommendations of the ERC. These include postponing the restoration of the employers' CPF contributions, lowering the salary ceiling of CPF contributions, lowering the CPF contribution rates for workers aged 50 and above. All these measures are aimed at enhancing Singapore's competitiveness and preserving jobs. The Government has also put forward specific measures to help revive our economy, such as setting up a Services Committee to be chaired by DPM Lee, and the Committee on Promoting Entrepreneurial Spirit with Mr Raymond Lim in charge. What is apparently lacking in the Budget are some goodies people were hoping to get to alleviate their present financial difficulties. Their disappointment is understandable. They had expected both corporate and personal income tax rates to come down further. However, we need to focus on the long term strategic objectives, and this is precisely what this budget seeks to do. Although restructuring is painful, it is the most effective way to help upgrade our economy to a higher plane. While the budget is generally on the right track, I think we could do more in the following aspects. Firstly, build up an external economy. Secondly, help our local companies and, thirdly, we must change our mindset. Build up an external economy. We have a very small economy with a population of 3.5 million. We have to depend on foreign markets. Our only choice is to stay connected to the world while at the same time minimise the negative impact of external factors. The Budget focuses on lowering business cost to maintain our competitiveness. However, I am afraid the world economy has changed structurally. It is not enough to be merely cost-competitive. Many economies offer more than cost competitiveness. They offer a huge domestic market and an inexhaustible pool of technical professionals and rich natural resources. We cannot offer the same thing, but does it mean that we are finished? Of course not. We have to identify and leverage on our competitive advantages, for example, our people, our most important resource. Our people are nimble, quick to exploit opportunities, creative, resilient and our workers are full of aspirations and ambitions. These are essential ingredients in the make-up of any successful entrepreneur. In addition, we have strong financial resources. Even during the current economic slowdown, many of our companies, both GLCs and private companies, remain financially healthy compared to many foreign companies. Thirdly, we have a stable political and social environment which ensures that our enterprises can develop and grow unimpeded. Mr Speaker, Sir, we have all the conditions for success. I am of the view that if we are to continue to prosper in a rapidly globalising environment, what we need is not just a Singapore economy. We have to build a vibrant and growing external economy that is not constrained by our own limitations. We have to open a new window, build new channels, develop new networks and be directly involved in the world economy. Such an economy cannot be constrained by our own geopolitical boundaries. Let me give an example. Over the years, my company has been investing in some Chinese cities and most of the businesses have done well. We naturally began to consider expanding our businesses to other parts of China. There was one critical obstacle. Our local partner was not prepared to join us in investing in places outside their province. They felt that their duty was to attract foreign investment to their own province so that jobs could be created for their local people. To them, investing in places outside the province means an outflow of capital and would not help create jobs for the people. They are wrong. In view of the reluctance of our local partner to go out of its own province, we decided to venture out to other provinces on our own. With the passage of time, such new investments will become more attractive than the existing one. When that happens, we may relocate our present factories and move to the new location. Then the province where we originally invested in will lose out eventually. On the other hand, if they are far-sighted, they will know that to venture out and invest with us may bring them more profits and would also benefit the existing joint venture business. As a partner in a new investment, their partnership position will be more secure. They will become our strategic partner. This is the same with Singapore, although investing overseas may result in capital outflow and will not create jobs for Singaporeans in the short term. I believe that this is a long-term strategy that will strengthen our economy and would eventually create more well-paying jobs for Singaporeans. Once we recognise that investing overseas is an important strategy, then we have to help our companies do so. In this connection, I would like to make three suggestions. Firstly, formulate direct incentives to encourage and help enterprises to go overseas. Investing in foreign countries entails high costs at the start up stage. This has discouraged many companies from venturing overseas. Through tax incentive and rebates, we could help to share some of the costs. Secondly, set up a special seed fund to co-invest with Singapore companies. Lack of capital is a common obstacle to companies going overseas. Local banks may be averse to lending them money to invest overseas because they are not familiar with the environment in the foreign country or they do not have the licence to lend money in these countries. Therefore, companies that want to invest overseas have to look for new banks. The Government should set up some seed funds to provide such facilities. We must be prepared to take some risks. As it is said, "no risk, no gain". Thirdly, MTI should set up an agency to provide one-stop services to companies that intend to invest overseas, as what the EDB has been doing to attract foreign investments to Singapore. Our many overseas offices can also help in this respect, but it would be helpful to have a central coordinating agency. The GLCs can also play a supplementary role in assisting such companies. Many of these GLCs have built up international networks and have substantial investments in China and other emerging economies. It would be good if they can help our local suppliers by bringing them along so that they can establish a foothold in overseas countries. On their own, they would find it difficult to compete with the low cost domestic suppliers initially. If we could help them overcome the initial difficulties, they would be able to compete with them eventually and they may well emerge as another global company. Next, giving Singapore companies a helping hand. Mr Speaker, Sir, we have to be aware that Singapore companies are facing a grave challenge. The economic recession has never been so grave and the duration so long. While focusing on the need to lower business cost, we must also consider specific measures to help local enterprises pull through this difficult period, so that when the opportunity comes again, they can recover and prosper. The main factor that is likely to constrain the rapid recovery among Singapore enterprises is the lack of capital. Due to the economic crisis in the past three years, many of these companies have incurred losses and heavy debts. With banks being very cautious at this time, even when the economy turns around, these companies will find it difficult to get working capital from the banks. Therefore, their recovery will be hampered. Some of them may not even make it. We must look ahead in reviving the economy. First of all, we must ensure adequate liquidity. Next, we must make sure that the fund goes to those who need it and deserve it. Therefore, there is an urgent need to set up a special bank to cater to the needs of the SMEs. Whether this bank forms part of our present banking system, and how it would be run, are details that warrant careful consideration.. The terms of lending must also be considered. But in principle, a decision must be taken to set up such a bank to assist the SMEs to recover from the recession. I believe this is viable. Mr Speaker, Sir, it is also important to change people's way of thinking if we are to embrace the new economy. While we are making efforts to revive the economy, we could see three trends emerging: (a) As we build an external economy, we will see more and more Singaporeans going overseas to work; (b) With our economy going global, we can expect an influx of foreign talents coming here to work; and (c) The restructuring of the economy will continue and accelerate. Therefore, we have to leave our comfort zone, be prepared to take risks, be more flexible and, when necessary, free ourselves from past practices. The world is changing rapidly and we have to keep on changing too. I remember Mr Lim Swee Say saying that our restructuring is unlike mountain-climbing. In mountain-climbing, when you are tired, you can pitch a tent to take a rest and if you persist, you can reach the peak. He said our restructuring is more like rowing a boat in a stream, surging with rapid currents. If we stop, we will regress. We must get our people to expect changes. We have to progress with the times or we will be left behind. We must reform our seniority-based wage system and replace it with a wage system with monthly variable components to give employers more flexibility. We must enhance the employability of older workers so that they can retain their jobs or look for new jobs when the economy is being restructured. We must encourage people to be more flexible, be prepared to venture overseas and help them where we can. Mr Speaker, Sir, this Budget is a bold and balanced one although it offers no desserts. It has provided the necessary steps to ensure that we keep our competitive advantage. It is like a Ferrari with its engine finely tuned and the best driver behind the wheel, yet we still need to have a team of engineers and technicians working together at the crew pit to back up the machine. In this way, we will win the race and bag the trophy. Sir, I support the Budget.

(In Mandarin): Sir, just now, Mr Gan likened our new economy to a would-be mother at the labour ward. When a woman is giving birth to a baby, of course she suffers labour pain, and she knows that soon the pain will be over and joy will prevail when the baby is born. But, can the Government tell us clearly when the present economic pain is going to be over? Will the pain last a long time? In case there is no natural birth, can we resort to birth by a caesarian section? If a would-be mother cannot stand the pain any longer, she can ask for a caesarian section to deliver the baby. Can the Government also do a caesarian section to ease our economic pain?

(In Mandarin): Perhaps Mr Low has not undergone this labour pain, neither have I. But I can tell Mr Low very clearly that when my wife was giving birth, I was there with her. In the beginning, she was very nervous, the pain came again and again, and it dragged on for 18 hours before the baby was born. Even the doctors could not predict how long the pain would be. So for us to predict when our economic recovery will come, I think it is very difficult. Even the gynaecologists could not predict it. But one thing we can say for sure is that the baby is going to be born eventually. Whether it is natural birth or caesarian birth, so long as it is not an abortion, it is all right.

(In Mandarin): Mr Speaker, Sir, if you are the Finance Minister faced with the present difficulty, what type of budget would you present? We should ask this question of the Member for Hougang. He would only talk about caesarian birth or natural birth, but no delivery. My conclusion is that he has just a lot of ideas, but no solution. The important thing is that we must prescribe the correct medicine for the ailment. This year's budget is a very appropriate one, and I believe most of the people would agree with me. In fact, many people are saying that our Finance Minister has prescribed the correct medicine, while some were of the view that the dosage may not be strong enough. The Member for Bukit Timah said this is a herbal cure and he has asked for a fusion between the Western medicine and Chinese medicine, and even that Mr Low did not agree. He took it as just changing in form without changing in substance. I think we need warm hearts and tough minds as mentioned by Deputy Prime Minister towards the end of his budget speech. This is precisely the spirit of our budget this year. In other words, the prescription by the Finance Minister is that we must, on the one hand, have physiotherapy for our external pains and, on the other hand, oral medicine for internal treatment. Recently, we have been talking about the difficult times and that we must change our mindset, upgrade or re-skill. This is oral medicine. And we are asking our people to move out of the comfort zone where they have been enjoying all their life to get out and venture into the unknown. This is difficult. I think we need to give them some psychiatric counselling as well. In the past, whenever we visited our constituency, and I believe my parliamentary colleagues will agree with me, and faced a resident who was unemployed, he would take it lightly as though he was just having a break. But now, when they are unemployed, they are very depressed. They told me they are prepared to take on any job offered to them, because they know job openings are not easy to come by nowadays. But when they are told that there are jobs in coffeeshops, they would give many excuses not to take up the offer.. People must accept all sorts of training to cope with the needs of the new economy. The fact that some still have not taken the first step to adjust to the new reality is that they do not realise that the world around them has changed so much. We need to make them aware of the rapid changes, and make them realise that they do have a place in the new economy. Different people may have different reactions to this Budget presented by the Finance Minister. In terms of awareness of the new challenges ahead, I would categorise our people into four different types: First, the foresighted. They know the problem, take proactive action and be pre-emptive. The Government and the successful entrepreneurs belong to this group. Second, we have the normal-sighted. They know the reality and adjust themselves to the new environment. They upgrade themselves and are coping well in the new economy. Most of our workers belong to this group. Third, we have the short-sighted. They fail to realise how fast the world is changing and do not adjust themselves to adapt to the new environment. Because of this, they lose their jobs and are not prepared to take on new jobs but simply wait and hope for the old jobs to come back to them. Fourth, we have the "switched-off". They are the so-called bo chap people. They do not care about what is happening around them. They do not know of the imminent danger of losing their jobs and simply refuse to go for training and retraining. When they eventually lose their jobs, they blame the Government for not looking after them. The Government needs to educate the short-sighted and the "switched-off" groups of people so as to enhance their awareness of the present situation before us. Mr Low Thia Khiang asked why there was no mention of the likely emergence of China in our economic review some 10 years ago. He must not forget that Senior Minister Lee started visiting China in the 1970s, even before China had adopted the "economic reform and opening to the outside world" in 1978. He encouraged people to invest in Xiamen and some of the coastal cities in China. More than two decades ago, he was already encouraging our people to take risks and venture overseas and some of our entrepreneurs did invest in China and faced the tough time initially. Mr Low said, "Let bygones be bygones, let us look at the future." I think we should do more than that. Let the past be the past, but there is still a future ahead of us. We have to make sure that the past mistakes are not repeated. I think the Government is caring too much for the people, so much so that the people are becoming over dependent on the Government. Over the years, we can see some undesirable trends in our society: First, giving a bit to everyone to make everyone happy. But, the question is: is everyone happy? When we distribute ang pows and the goodies, we want to give everybody a share so that everybody can be happy. But, many people would say it is not enough. Why is it that you have so much and I have so little? In the end, nobody is happy. Mr Low mentioned just now that the PAP Government has a lot of means to make a lot of wealth, but he was being cynical. So, I think the problem is perhaps the Government is being too efficient and generous and has given away too many rebates and shares. On top of this, you do not need to worry about the shortage of water even when there is no rain. Secondly, there are a lot of people who blame everyone else for all their difficulties but not themselves. Globalisation and regionalisation have brought about a lot of challenges. The employers would blame the employees for being too choosy, too lazy, etc, and the employees will complain that the employers are not employing them. Even though they know very well that they do not have the skill and competence to take on the job, they would say the employers do not want them because they are old or because they cannot speak English. I know of one man who even remarked that he was not employed because he was botak or bald. I received some SMS citing money not enough for them to celebrate the Chinese New Year. They complained that the employers had money but would not pay them more. They blame the employers. They blame the Government. They blame everyone, but they never blame themselves! They want to have a job that pays well, but they do not want to put in some efforts to acquire the necessary skills to deserve that job. I think our workers should work hard and try to upgrade their skills, for their own good. Thirdly, whenever there are activities, there are lucky draws. This is another strange phenomenon in our society. In the company dinners, and now even at our constituency functions and grassroots activities, people are attending only because of the lucky draws. They do not come because of our activities that we are preparing for them. So I hope that when we are planning our financial policies we should not let the people fall into any of these categories. Sir, to face the new challenges in the new economy, I urge the Government to foster the three new spirits among Singaporeans. Firstly, we should encourage our people to learn and adapt to changes. When we are being threatened, we must find ways to counter the threats. Just as we are threatened with the cut-off of our water supply, we have new alternatives, such as NEWater or desalinated water. Singapore is able to survive because we are very good in adapting to changes. We must also cultivate our citizens of all ages and all stations of life to be ready and able to adapt to changes. We have to boost their confidence so that they have hope. Secondly, we have also to encourage our people to make ours a learning nation. Last year, President Nathan mentioned that he started life as an office attendant and worked his way up to become a senior civil servant, a diplomat and eventually the President. Even our Senior Minister started learning to use the computer at a very senior age. So I think we should all learn. We should have the spirit of lifelong learning among us, and this spirit must be sustained. We should provide the facilities and convenience to motivate our citizens to become learning citizens. We may have to learn from McDonald's how they created this herd mentality that prompted people to queue up all over the island to buy their "Hello Kitty" toys! Thirdly, we must be more focused in helping the poor and needy. When we talk about the poor and needy, we would normally refer to the low-income families. But in the present day situation, even the graduates are having problems making ends meet. Mr Low mentioned that nowadays, a university graduate had to work as a hawker selling roasted chestnuts. Why not ? If you can package the chestnuts in such a way that it becomes a national brand, it could well be a good business proposition too. So under the present situation, in some families, the parents are unemployed, the children are unemployed, even the graduates cannot be spared. I think we have to focus our attention on the genuine cases of hardship, the truly poor and needy, and move away from the past practice of "a piece of candy for everyone". If we can adopt these new spirits quickly, I am confident that we will be able to get out of the hard times soon and I must say that this budget is one that prescribes the correct medicine for our present economic ailment. With a bit of luck, we will be well and good pretty soon! I support the motion. 12.10 pm

Mr Speaker, I shall speak in English and I shall not talk about labour pains although I am quite experienced here. I shall speak from the point of view of a practising accountant, serving the business world. And I would like to applaud the Finance Minister for what I would call a progressive budget. It contains some very far-sighted elements that will yield us significant results in the long term, although in the short term we may not have such good returns. Still there are many sacred cows which have been slaughtered and also quite a few significant policy shifts. I would like to take Budgets 2002 and 2003 as a package. So I see Budget 2003 as continuing the spirit of decisiveness and boldness which was established in Budget 2002. And the two budgets really set in motion the transformation of our tax regime from one that has been considered somewhat insular, somewhat domestic, to one that clearly favours the globalisation of business in a global world. There are also efforts to level the international playing field, and in so doing, would also make our environment, our tax regime, much more conducive for foreign investments. I would like to applaud the Finance Minister and Government for planning a budget deficit for the third year in a row. The Government has said that a budget deficit would be inevitable in difficult times. But I have got to say that not every Singaporean believes that statement because in the past a balanced budget has always been a long held Government sacred cow. So that had been slaughtered and I suppose we can slaughter our own scepticism as well. We do face very extraordinary circumstances and you have articulated that the macro-economic figures show that we have a small growth last year, and we will also have a forecasted smaller growth this year. But, as has been said by many, the mood on the ground is rather gloomy because businesses are not doing as well, and quite a few are on the verge of experiencing collapse. You also have bad news regarding unemployment, the PSA lay-offs, the HDB lay-offs and also the prospect of war in Iraq and terrorism. All these heightened the fear of unemployment, uncertainty, as well as pessim- ism. So we do need some exceptional measures to counter these extraordinary circumstances and we are glad that a deficit budget has been planned, although some may say, and some already had said, that perhaps the Government has been cautious, not entrepreneurial enough in taking a few risks and whether the budget deficit is the inevitable result of poorer revenue coming out from a poorer economy and also from a smaller rise in GST compared to the results that could have been computed based on deliberate efforts to boost the economy and stimulate businesses. So there are some disappointments in Budget 2003, one of course is the non-reduction of the tax rates for corporate as well as for individuals. Many had hoped that there would be at least a one percentage point reduction in the rates, but I suppose those hopes were dashed on Budget day. Having said that, I think the disappointment has been offset by some real concessions, and by the slaughtering of yet more sacred cows. One is the exemption from tax of overseas income remitted to Singapore. It has been said many times over that businesses have long lobbied for this concession but, for a long time, the tax authority has tenaciously clung on to it, and businesses have all but given up. In fact, one businessman said to me, "Good luck to you guys in trying to push this one through." So, we guys got lucky this time round, because it got introduced in the Budget. And, clearly, this is a bold step going forward. The exemption covers three areas - branch profits, dividend income and service income. And we would also ask the Finance Minister to kindly consider the exemption of interest income as well, since we have already introduced it for domestic interest income. This exemption is very important, because it really narrows the gap between us and Hong Kong. When businesses consider the location of HQ either in Hong Kong or Singapore, the tax treatment of foreign sourced income has always put Hong Kong in a much more superior position. So, this exemption closes the gap and I think we deserve a big tick instead of a little cross in our analytical spreadsheet. This will not only attract businesses to Singapore. It will also heighten wealth management for the financial services industry and will also give the entrepreneurial effort a big boost as businesses go out of Singapore. What is more important to note here is, of course, the change in the Government's stance of not allowing exemption because we want to prevent abuse. There was some worry of round-tripping, transfer pricing and denying revenue. So, it is heartening to note that the Government has abandoned this so-called "punishment mentality" and has taken on a much more enlightened approach of embracing a much broader vision of globalisation, rather than the narrower vision of preventing abuse. Along with this sacred cow, a lot of the other items on the business wish list, together with the ERC recommendations, have also been acceded to. The ERC comprises more than 1,000 people. So, it is a tremendous feat to go through the whole list of issues, ideas and recommendations. I will record that as an achievement in its own right. Amongst the many recommendations, the ERC seeks to see lower cost in doing business and also to spur the efforts in entrepreneurship. I am happy that both areas have been adequately addressed. One area is the CPF. The CPF comprises a major cost component. The decision to freeze the CPF for another two years is very much welcomed by businesses, because it provides that amount of certainty in structuring costs. I know CPF features very heavily in all aspects of the lives of Singaporeans. It is not just about the retirement nest-egg. It is about the stock market, property market and it is about businesses. So, any policy decision on the CPF must be consistently applied, so that there is certainty and the Government should not flinch in the face of pressure. In 1997, we faced the Asian economic crisis. The Government reacted very well with a massive cut in the CPF. That helped businesses a great deal. But it got restored quite quickly at the first hint of recovery. And with hindsight, we wonder whether less haste should be applied because the second economic crisis came soon afterwards. I also applaud the Government for taking all the necessary measures to support and to encourage entrepreneurship, and also the appointment of Mr Raymond Lim as the Minister of State for Entrepreneurship. This is really what "walking the talk" is all about. This is real commitment. This is sponsorship at a very high level. So, businesses, both new and old, can look forward to working with Mr Lim who will be rooting for their cause, causing a mindset change, and also the swift implementation of all the pro-business measures which have been introduced. I would now like to talk about start-up costs, which are now allowed as a deduction against business revenue. This is clearly a step in the right direction. This is what business is all about. You have got to spend your dollar first before you can earn a dollar. In fact, businessmen have always wondered why they cannot get the taxman to think in the same way as them - to view business transactions in the same way as they view business transactions. So, this is a move in the right direction, alignment of thinking, alignment of how businesses operate. On the subject of start-up costs, I wonder whether the Finance Minister would also kindly consider extension of this concept to look at group relief as well as the pioneer incentive scheme. For group relief, again on the entrepreneurship drive, whether this could also be applied to the losses of overseas subsidiaries and whether they could be used against the income of investors, both corporate as well as individuals. For the pioneer incentive relief, it would also be good if this could commence when businesses start to make money rather than when they commence business. This is all in the concept of start-ups, that costs would necessarily be incurred in order for businesses to make money. I would now like to move on to the specific tax measures which I consider progressive. First, on the Automatic Writing Down Allowances for intellectual property rights, and then on the Exemption of Withholding Tax for Digitised Goods and Services. We live in a world that is powered by technology, by information, and together with e-commerce, every aspect of our lives is touched by an interplay of these three elements. We could either resist it by instituting protectionist tax measures that would make our cost of business a lot more expensive in accessing the latest developments and really make ourselves much more efficient or we could embrace change. So, I am very happy in this regard that the Government has chosen to embrace change. I applaud the measures taken to ease and to encourage the ownership of intellectual property rights, because in an e-commerce environment, everything and anything can be patented. So, by encouraging the ownership of intellectual property rights, we have a fighting chance to spawn and to sponsor the Amazon.com of the world. And here, our status is clearly raised as a hub for intellectual property rights, because no longer do businesses have to worry whether they will qualify or whether they will be favoured for writing down allowance on a case-by-case basis. The exemption of withholding tax for digitised goods and services is also a very farsighted move to really put Singapore businesses on the cutting edge of technology. Because purchase of digitised goods and services becomes part of life these days. Information reports, data, analytical tools are all delivered electronically, and it is a "must have" for businesses in order for businesses to be effective and to be efficient. So, with the exemption of withholding tax, businesses can now have all these "must haves" at affordable cost. I would now also touch on Exemption from Withholding Tax for Payments for Cable Capacity as well as Writing Down Allowances for Indefeasible Rights of Use. Again, in the international communication capacity, this is such a key building block to our knowledge economy, and the world is getting more on-line, not less. And it is good that we recognise the vast benefits that our economy can tap into the widest network of capacities, because all the countries have already done it. The UK, Australia, New Zealand and Ireland have introduced fiscal measures to favour their operators. So, if we do not do this quickly enough, our operators will be competing in a world which is heavily stacked against them. We also benefit because we are able to tap into the benefits of an on-line world, which is already upon us. I would like to conclude by saying that Budget 2003 really paves the way for our businesses to be truly global. We have to rise to this occasion. Sure, we have to grapple with the economic problems which are right in front of us, but there are also opportunities abound outside there. So, this Budget recognises the importance of globalisation. It seeks to remove some of the obstacles in the way of businesses and it also seeks to reward those businesses that overcome these problems. So, it is now up to businesses to progress from here and also up to the Government officials to speedily implement the pro-business measures that have been announced.

Mr Speaker, Sir, in our pursuit of leisure and the good life, we must not only raise consumers' standard of living, through proper management of the economic system, but more in line with a young country's approach to increase the collective national strength of our nation. Our goal is to ensure that the nation remains independent and self-sufficient, and not for the sake of being materialistic only - a self-defeating habit that we too often fall into. The recent Budget, revealed by the DPM and Minister for Finance, reflects the right path that our country is taking, especially in the light of a slowdown in the world economy and a foreseeable difficult economic climate ahead. The biased slant in the Budget towards helping existing businesses grow and encouraging more to take the step of starting new businesses, will surely spur the economy towards the path of generating new income through goods and services which, in turn, would then generate more job opportunities. The fundamental purpose of any economy is to develop the productive base of the country - the industries no matter where they may be, within the country or under the control of the country's citizens around the world. This way, economic development will mean having more choices for the people, more leisure, more wealth, more opportunities to pursue happiness, and society as a whole will be successful. Our experience in the past years has taught us a dramatically clear lesson that we must not forget, ie, giving consumers too much and producers too little. Our wages were rising too quickly while our businesses were battling to make ends meet. Easy credit over the years has encouraged spending. Consumerism got out of hand, which was what happened during Japan's bubble economy in the 1980s, leading to the eventual collapse of the economy in 1991 and 1992. In Korea, the late 1980s were heady, pro-consumer years. The 1988 Seoul Olympics did for the country what the 1964 Tokyo Olympics had done for Japan. Anything seemed possible. By 1990, the trade surplus was heading for the cellar, and the government had to fight back with a huge "anti-luxury" campaign. Fortunately, beyond all these economic cycles - and here I would like to assure Senior Minister of State Khaw Boon Wan - the human spirit is still strong and resilient. Singaporeans have more in mind than getting the cheapest possible price and highest possible salary. There are people who like to work hard and save and make sacrifices. Even lottery winners, who typically do not have society's most desirable jobs, do keep on working even after having cashed in. In fact, people who own small businesses behave in a self-exploitative, economically irrational way. They typically work longer hours than normal employees and earn less money than they could if they sold their assets and invested the proceeds. This work culture must be preserved in order that our economy continues to grow and help spur on the spirit of entrepreneurial drive in our people. I am glad that this drive is getting strong support from the Government, starting from our education system right up to a committee looking into entrepreneurship led by Minister of State, Mr Raymond Lim. For a start, some cost-cutting measures have been adopted, such as the employers' contribution to CPF being capped at 16% for another two years, property tax rebates and certain rental rebates among others. Furthermore, a longer term lowering of cost for entrepreneurs includes certain exemptions from statutory audits and the use of limited partnership and limited liability partnership structures. As Singapore moves towards a mature economy, it becomes harder to achieve growth based on its domestic economy which is constrained by the small size of its population. Our economic interest must then be to extend our economic boundary beyond our shores to the world markets. When this happens, our national economic interest is at threat as Singapore companies will move their plants overseas to areas where labour and land are cheaper. As pointed out by Robert Reich, a former Secretary of Labour in the Clinton Administration in his book called "The Work of Nations", corporations had grown past the point where they could be considered American, German or Japanese. With headquarters in one country, research centres in another, factories in yet other countries, and customers all around the world, big diversified corporations could be loyal only to their own economic interests. Roger Porter, who was then President Bush's chief domestic policy adviser in 1990, gave a speech about America's outlook on world trade. Some people, he said, clung to the "old notion of nations, companies, and markets rigidly defined by national borders". But in this modern age, he concluded that such a notion was "outdated and dangerous". In order to still benefit from the scenario, we must continue to refine our tax laws in ways that will be attractive for holding companies and their headquarters to be sited in Singapore. The move to exempt from tax all foreign income in the form of dividends, branch profits and services income from 1st June 2003 is a good example in making the case for local corporations with international operations to have its base in Singapore. The promotion of continuing training and retraining of Singapore workers as the economy restructures itself is a commendable move by the Government. It must continue even when things get better. As an example, nursing, though a very important function in the medical profession, has not been popular among Singaporeans. However, through good collaboration between the private hospitals and training grants from the Government, this profession has now gained popularity as many educated and mature workers, who have been displaced due to the restructuring of the economy, are now turning to this job. This bold move is a far-reaching step with great implication for our economy, as corporations seek to move towards countries that are more educated and have a skilled labour force. Another example which I would like to bring to Members' attention is this. Although Chrysler had its headquarters in Detroit and Matsushita was based in Osaka, neither would necessarily care about the government or labour force of its home country. Each would go wherever the money, the market, and skilled workforce drew it. To quote Robert Reich again, "In an age of global corporations, a nation's well-being rises or falls with the skills of its workers". In line with increasing the wealth of its citizens, Singapore must be a place for present and future wealthy individuals to park their savings and assets. These individuals can be role models for budding entrepreneurs to emulate and overtake in wealth creation. The Budget strives to achieve this. Firstly, interest will be tax free in the hands of taxpayers irregardless of which financial institution is used and the amount of money deposited. Secondly, promoting the development of world-class trustee and custodian services by improving the tax environment for trusts. However, Singapore will still find it difficult to compete with other countries if it does not address the tax laws relating to estate duty. I would advocate that in developing a vibrant trust industry, consideration should also be given to the possibility of abolishing death duties. Beneficiaries will then have the incentive to reinvest their wealth in Singapore; thus, in turn, benefiting the economy. Having said this, for the present, capital preservation must be foremost in the minds in a declining economy. This is a time when most corporations and individuals face a mismatch between assets and liabilities. In a period of growth, most businesses and individuals are less concerned if their liabilities exceed their assets as capital appreciation will soon reduce the gap when their assets increase in value. However, when the economy reverses downwards, businesses and individuals suffer from the deflationary effect and the national economy will be pulled down as a result of debts. For individuals, most of their savings have been in the CPF. Over the good years, many have over-extended their housing needs by utilising their CPF savings on properties or properties which would have declined in value and, in some cases, below the amount of their mortgage. The same applies to those who have invested in declining equity markets. The immediate response to such circumstances will be to reduce spending and lift savings, if any. When you get a greater part of the population in Singapore lifting their present meagre ratio of savings to consumption, you will have a nasty impact on demand and ultimately on the health of the corporate sector. The size of the economy will shrink. But I am happy to note that the Budget this year has started the process of managing the rising cost of factors of production, mainly, the cost of land, which in the longer term will help businesses and individuals to be prudent and match better their assets against their liabilities. When more businesses and individuals are less highly geared with assets greater than liabilities, then the ratio between savings to consumption will be more manageable and demand will rise again. Looking ahead, Mr Speaker, Sir, Singapore can overcome its problems in restructuring its economy as long as we have political stability and the will to overcome difficulties. The ability for a country to achieve a robust and vibrant economy need not necessarily be from a country big and rich in resources as past economic theory shows. In this digital world, size is not a barrier to achieving prosperity. Intelligence, education and training, a stable pro-business Government, the ability to adapt to a changing environment and to capture opportunities are now the key to national prosperity. I support the motion.

Mr Speaker, Sir, a lot had been spoken by the 30 speakers before me. I will not belabour some of the positive points mentioned yesterday and today about the Budget, but will instead focus on what I believe is not adequately addressed by the Budget or the Remaking Singapore Committee. These are ideas that should be considered to make Singapore a better society for the longer term. First, budget deficit versus budget surplus. Overall, this is a mildly acceptable budget. There are no surprises and no big deficit planned to help businesses and private individuals to tide over the hard times ahead. Maybe the Minister is planning for another off-budget deficit later in the year when things really get tough. If not, the Government will have lost its moral right to demand and plan for huge surpluses in better years. What is the point for citizens to allow the Government to accumulate huge reserves and surpluses in good years, spend little of those surpluses in difficult years, and not give any report of the investment return on the accumulated surplus? Nobody knows what is the return on investment or the yield till date of the Government reserves. Such figures were not disclosed. It will take many thousand man-years to compile, we were told. This is absurd. The Government can be a lot more transparent to win the people's trust. It can also be more generous by keeping the GST at 4% till the economy has fully recovered. The Government has the political clout to raise the GST if we ever get into a chronic deficit. So, let us not worry too much about a chronic deficit right now. Second, Ministers should lead by example to send a strong signal to investors by cutting their own high wage cost. There is a lot of tweaking to the current system to lower business cost. However, such tweaking does not solve the fundamental problem of high and non-competitive business cost. Like the recommended CPF wage freeze proposed for workers, Government Ministers and senior civil servants should take a similar 30% wage cut for two years, or until the unemployment rate falls back below 3%. If the Government solves the high unemployment problem, then they deserve every right to the million dollar salary and should get a performance bonus for that. But until that happens, there is no basis for such high salary when unemployment is at a record high. The Government Ministers should be more automatic in this matter. Like in the ERC Report, this will also send a strong signal to all Singaporeans and foreign investors alike - that our Government leaders are taking the personal interest to decisively reduce high wage cost, and strengthen Singapore's competitive position. It will also help a bit in reducing the Government's feared chronic deficit. Civil service employees and Government officials have long enjoyed security of employment. Unlike workers from the private sector, they are less likely to be retrenched. Even if they are retrenched, like recently, they get very good retrenchment benefits that so many actually volunteered to be retrenched. Ever since the 1994 salary revisions, the compensation for the civil service has reached parity with the private sector. Bonuses were paid without the same degree of rigorous benchmarking that is a feature of the commercial world. They can get away with any honest mistake, while a private sector CEO will immediately get the boot. Now, with an insecure and uncertain economy moving forward, the stability of careers for senior public sector employees and Government officials has exceeded parity. In fact, they are better off than many people in the private sector. They have high wages and a secure income stream. This is not correct. The Budget failed to address high civil service wage cost and this needs to be corrected. Third, the concept of retirement, jobs and the CPF. I am happy to hear that the Deputy Speaker, Mrs Lim Hwee Hua, is in common agreement with me that the concept of retirement needs to be corrected. I will touch on more of it at the coming Committee of Supply debates. Meantime, I want to touch on the CPF. The Government restructured the CPF to focus on the basic retirement needs of Singaporeans. The question is: can Singaporeans afford to retire in Singapore? I do not think so. With such high cost and high standards of living - after deducting medical and housing needs - how many years can the limited amount in the CPF last an employee? If the majority of Singaporeans are not going to be able to retire with the limited savings in the CPF, please tell us so. Stop kidding Singaporeans that they can make use of their CPF to pull through their retirement needs. It is not enough. To all the Singaporeans out there, retirement is only for the rich and financially able. If you do not have money to buy food and pay bills, you will need to work, never mind that you have reached 65. Even begging is a form of work, though non-productive and not allowed in Singapore. This is the reality of life in Singapore. If you do not have money, retirement is not an option. The Government is not going to take care of you. Retirement is a luxury for the rich, and for those who can afford to stay unemployed. So is job choosiness. If you are a responsible person, with responsibility to fulfill and bills to pay, you cannot be that choosy about the next job. If your current job is going to be gone, you will need to start hunting for the next stockpile of cheese. There is no welfare in Singapore, so stop looking to the Government for handouts. They are not giving us any. Learn new skills while you can - where funds are currently provided by the Government. Make good use of it and do not be resistant to change - for change is going to be a constant in our society. Increase your knowledge, for knowledge increases our economic value. Be gung-ho in trying out new ideas. Who knows, you may be the next Olivia Lum in the making. Now, on my next point. The whole concept of CPF savings for retirement also needs to be changed. The ERC Report has failed to address this foundation stone. Maybe it is too hot for them to handle. Compulsory CPF savings is good. It is a prudent policy to enforce savings on good working days. But what happens when things go bad and there are rainy days for months? Before our citizens can retire to enjoy their retirement savings, they might have died of stress or hunger due to lack of money and job. So let us not begrudge what rightly belongs to our members. With certain safeguards and clear guidelines, the Government should allow our citizens to borrow from their own CPF savings for emergency and rainy days - to tide them over their difficult period. If members can borrow from their own CPF to buy depreciating property and money losing stocks, there is no reason why they are not allowed to borrow from their own CPF to buy their next meal or pay their next bill. And when they return to the job market, they can start to repay back the loan amount over an instalment period. If members can take private bank loans, there is no reason why they are not allowed to borrow from their own retirement savings for needy days. This sacred cow needs to be slaughtered. Fourth, go beyond being a factory for others. 80% of our exports are manufactured products. We had done well as a centre for manufacturing excellence. The sad thing is that little of those manufactured products belong to Singaporeans. We do not own the designs, the inventions or the brands. Being efficient and productive is not enough. We must go beyond being a factory for others. We need to be owners of these manufactured products and brands. If we just rely on upgrading our manufacturing with new technologies and capabilities, we will be heading for failure when other low cost countries catch up with advanced technology. We need to celebrate those businessmen who create new products, generate interest, create demands and make good profits along the way. We, as a Singapore society, must generate new brands and repackage old products that we can market to the whole world. So, consumer brands, like Eu Yan Sang, Osim, Tung Lok and BreadTalk must be celebrated, encouraged and expanded. All these companies have one common thread. They have the ability to generate a new marketable brand following from repackaging a stale old product. There are a lot more lesser brands out there that can be helped to expand and grow regionally. MTI and Spring Singapore can take on a more strenuous effort to identify and give them more personalised support. It is stupid of us to expand overseas by building factories and industrial parks alone. Aim higher and get others to work by manufacturing for us. We need to generate good international brand names with good products that citizens of the world are willing to sell their pants - to buy from us. That calls for good marketing and branding - something that is very important, and that the Government has failed to recognise. Fifth, to my last point on benefits of being a Singapore citizen. Mr Speaker, Sir, while the Government seeks to welcome international talents and skilled workers to reinforce our limited pool, and build a critical mass of talents to contribute to our economy, we need to show greater appreciation of our own citizens and offer them something more than what non-citizens in Singapore can get. Membership must have its privileges. Singaporeans must have greater privilege than non-citizens, so much so that highly talented foreigners will queue up to sign up for citizenship. However, at the moment, the Government seems to be taking the support of Singaporeans for granted. Foreigners seem to be wooed with red carpet, open arms and good pay to come to work in Singapore. Singaporeans, on the other hand, are getting retrenched, getting pay cut and told to lower their expectations. Many Singaporeans complain to me that they only see liability in being a citizen. There is no visible benefit. They say they cannot vote because it is always a walkover in their constituencies. They cannot participate in policy making too because the Ministers will not listen to them, ikan bilis. They feel like being forced to live in a five-star hotel with no say in how the hotel is run, while struggling hard to make ends meet. They were told to lower their expectations because the Government invites lower cost skilled foreign workers and talents to come in and compete with them. They asked what are the benefits of citizenship. Yet, for the male citizens, they need to give up 2 1/2 years of their prime youth to do National Service to defend their country. On top of that, it is up to another 40 days a year, away from building their career to do reservist training. Foreign talents and foreign workers do not. They enjoy the peace and security that Singapore men provide through offering National Service and they get good pay along with building their careers. No wonder many male Singaporeans are talking about migration and giving up their citizenship if they have a choice. Maybe they intend to come back as a foreign talent to work in Singapore, to be better appreciated by the Government, and without the liability. Mr Speaker, Sir, there is something wrong here that this Government has failed to address. Membership in Singapore must have its privileges. Many young and mobile Singaporeans are saying that there is little privilege and more liability, and it is better off without. This is not right and the Government needs to get this corrected. There must be strong economic and social reasons for Singaporeans to be proud to want to remain as a Singapore citizen. The economic reason could be in the form of lower tax rate for working citizens, more so for male citizens still active in serving their NS liability. The social reason could be the concept of what does Singapore stand for. The US stands for freedom and opportunity. China stands for economic progress. India stands for the largest democracy in the world. What does Singapore stand for? Currently, most Singaporeans think that it stands for PAP - poor also pay! Until we can identify and agree on what truly we stand for as a society, we are not going to inspire pride in our citizens. To me, Singapore must aim to be a symbol for vibrancy, originality and affluence. It is an ideal end-state that talented mobile citizens can look forward to and be inspired. In conclusion, Mr Speaker, Sir, these are the five points that are important ideas to make and help remake Singapore towards the next level of prosperity. I hope the Government can take up these points and expand from them.

I would like to seek some clarification from Mr Steve Chia. Sir, he mentioned in his speech about what Singapore stands for and a lot of people complaining about not being able to participate in the elections because there was no alternative to choose from. Does he agree that, despite all these complaints, what we stand for and without the opportunity to participate, Singaporeans themselves should do their part? The basic thing is that you are born here, you are citizens here, and you are masters of this land. If you see something wrong, does he not think that Singaporeans who complain should participate to make it right? If they find there is not sufficient Opposition to choose from during the elections, then come forward to support our position, join the Opposition party and offer themselves as candidates. Then you have a choice.

Mr Low, that is not a clarification. Mr Steve Chia Kiah Hong rose ---

I do not think you need to answer that.

Mr Speaker, Sir, before I begin my speech, I would like to take up two points that the NCMP Mr Steve Chia mentioned earlier. I am actually quite surprised that he felt that the Budget has no plans to help businesses and individuals. I think speaker after speaker, as well as the people outside this House, have spoken up about how the Budget aims to help businesses, create jobs and preserve jobs. In fact, Mrs Fang Ai Lian, NMP, has also mentioned about the many benefits that this Budget will produce and the many sacred cows that the Budget has actually slaughtered in order to lay the foundation to revitalise the economy and prepare the economy for the next phase of growth. As regards the issue of chronic deficit, I think that we need look no further than Hong Kong to see what the problems are if you actually work on a budget deficit year after year. Hong Kong now, for instance, instead of reducing their income tax, has to increase the income tax because of the chronic budget deficit. And, additionally, they are also thinking that they may have to impose GST to help them get over this issue. As regards benefits of being a Singapore citizen, I think Mr Steve Chia who is himself a Singapore citizen would remember that he must have benefited from the ERS and NSS, as well as the fact that NSmen actually get extra ERS and NSS shares. There is also obviously the upgrading benefit. So I do not know why Singaporeans are saying that they do not get benefits. In fact, when we go to the constituency and do interim upgrading, very often, it is the permanent resident who says that he does not get the benefits and why only the Singapore citizens actually get additional benefits. So I think it is quite obvious. He also asked what does Singapore stand for. I think he has answered it himself. He said that Singapore should be a city that stands for talent, vibrancy and affluence. I think that is what Singapore is and many people will not disagree with that. Mr Speaker, Sir, Budget 2003 has aptly been entitled "Seizing Opportunity in Uncertainty". These are truly momentous times facing us as a nation. A recent piece by Straits Times journalist, Ms Chua Lee Hoong, warned of the danger of failing to recognise that the challenges facing us are vastly different from the ones before. The same day that Ms Chua wrote her article in the Straits Times, Streats reported billionnaire, Warren Buffett, issuing a warning of the damage that derivatives - which he calls "financial weapons of mass destruction"- can do to the global economy. We are standing on the edge of a precipice, with a coalition of forces conspiring to create a vastly different world order. Greed - Enron and World.com; malevolence - Iraq and the Al Qaeda terrorist network; nuclear brinkmanship - North Korea; and an insatiable thirst for economic success - China and many other developing countries. The Budget may be construed by some as a disappointing one, because the hoped-for tax cuts or personal rebates did not materialise. But, in truth, Budget 2003 is a holding budget, helping us to take the first few steps towards a re-engineering of our social and economic DNA, so that we can better face the challenges of a different and more unpredictable world ahead. Fiscal demand boosters, such as tax cuts or higher rebates, will not be effective against a backdrop of the Middle East war that has, in some ways, already begun. Even in the scenario that war does not break out, the UN debate has already polarised the world. Therefore, we must not be seeking short-term solutions to our longer-term problems, although there is also a need to hear the cries of the disenfranchised and less well-off. I note that Hong Kong - like I said earlier - because of its dire fiscal position, has been forced to raise taxes, the first in nearly two decades, at a time when the economic outlook is perhaps more grim than we can imagine. Yet, we cannot gloat over their present predicament, because the resilience of the Hong Kong people is legendary, and neither must we forget the salivating prospect of Hong Kong being part of the vast Pearl River Delta hinterland, one of China's economic powerhouses. If the SAR Administration can get their act together, they are well capable of overtaking us again. So, the threat can come not only from newer competitors, like Tanjung Pelapas and KLIA, but also from the resurgence of older competitors. I am by no means an ardent football fan, but many of my office colleagues - and I am sure many hon. Members in this House - are. I liken this competitive threat to the intense rivalry between top English Premier League teams, Manchester United, Liverpool, Arsenal, Newcastle, each of them jostling for primacy. Even if one of these teams falters in one season, it would be a grave error to ignore that team, and that is because the pedigree of these top teams means that any one of them is capable of staging a comeback and winning top honours. The brutal realities of global competition are here to stay. Sir, let me now deal with some specific areas in the budget. Taking the line of the ERC Report, I wish to speak, first of all, about the long-term structural issues focusing on the perennial favourites - SMEs, enterprise promotion and the role of Government and Government-related organisations. Then, I wish to say something on refining the measures for alleviating the short-term pains of the current downturn. Firstly, SMEs and enterprise promotion. While MNCs have been assiduously courted, it has been recognised that the domestic enterprise sector still employs a comparatively larger number of workers than the MNC sector, but lags significantly behind the latter and, therefore, needs help. The hurdles SMEs face are well-known, and have already received an airing in this House. Lack of access to capital, inefficiency business practices, difficulty in attracting quality staff and, most controversially, the threat of GLCs. The budget has introduced many welcome measures to promote entrepreneurship and help domestic enterprises. There is the Pro-Enterprise Panel to act on feedback from businessmen on Government rules and regulations that might increase business cost and stifle enterprise. There is now even a rule about rules. All rules will have a 5-year shelf life and are renewable only upon adequate justification. All in, these are laudable, wide-ranging and comprehensive efforts by the Government. But, as in so many other things, the real test is in the implementation of these programmes. Yesterday, the newly-appointed Minister of State for Entrepreneurship noted that to shift mindsets, the Government should, when dealing with businesses, set its default key at "Yes" rather than "No". I am indeed pleased that the Minister of State has made this commitment. However, Sir, I believe that, very often, whilst Ministers and top officials may have their default buttons set at "Yes", this may not be so for others down the line. For the officers executing policy, a "Yes" default button does mean additional responsibilities, greater fuzziness and a higher risk of unintended outcomes - something antithetical to the historically low-risk tolerance of the civil servants. But this is well worth the price. Sir, I would like to urge the Minister of State to remind all officials at all levels of Government and Government-related organisations who deal with the public, from the managers to the front-line officers, to re-set their default button to "Yes", so that a truly pro-enterprise environment can develop, and entrepreneurship can flourish unfettered. Sir, my parliamentary colleague, Mr Leong Horn Kee, mentioned NUTS in his speech yesterday. Credit for this phrase should also go to our doyen of Creativity, Mr Sim Wong Hoo, who wrote the book Chaotic Thoughts for the New Millennium. In it, he described various situations when the "No" default button characteristic of people with a NUTS mentality drove him nuts! Let me read one out to you: "When our corporate headquarters were completed in 1997, we needed to give it a name. The placeholder name was Creative Technology Centre. Made sense, but it was a boring name that everybody had. I wanted a special name, because we are 'creative'. So the usual names like, 'Creative Building, Plaza, Complex, House ...' were suggested on the name list. I rejected all of them. Finally, we came out with a very good name, 'Creative Resource' - the source of all creativity - and everybody loved it.

But wait, before we could go ahead, we had to submit the building name for approval. What! I was shocked. I needed somebody else's approval for the name of my own building by some faceless committee that I did not even know existed. Imagine having the name of your baby being approved by somebody you do not know.

Hey, that is the regulation. OK, we submitted and no prize for guessing the right answer. The answer was NO. The reason given was that the name was not 'Centre, Plaza, Building, Complex, House, etc ...

There was actually a list of approved names in the rulebook and we were only given the impression that we could name our own building.

I nearly jumped through the roof when I heard the answer. It was a very typical case of NUTS. 'Resource' was not in their rulebook, hence the standard answer was NO. I was not going to give up on this, right? So we fought back and wrote letters to appeal. Finally, after a long process, our name was approved."

Sir, I am sure hon. Members of this House will smile at this incident, but setting our civil service default button to "Yes" across all levels will be a challenge to very established habits of mind, but something we must not let up on. And I suppose that is the reason why this issue has been brought up year after year in this House. But I am more optimistic this year. Many SMEs have also complained of the need to deal with an inordinately large number of agencies when applying for various schemes. The establishment of SME First Stop, which is a call centre set up by SPRING to act as a bridge connecting SMEs to the various agencies, has alleviated the problem. However, further feedback from SMEs is that it will be better if the First-Stop becomes a One-Stop. SPRING could be the one-stop centralised coordinating agency charged to deal with all, or at least most, issues faced by SMEs. This would further reduce the current labyrinth of agencies and conditions that SMEs have to navigate before they can get help for their business. Of course, one could argue that entrepreneurs must make the effort to seek assistance, and should not expect everything on a platter. But there is a Cantonese saying that best sums up the spirit of what I want to say here, and I hope the Minister for Education and the Minister for Information, Communications and the Arts will forgive this lapse. The Cantonese saying is: "Pong yan pong do tai, song fa song do sei", which means that when we render help, we should go the distance and complete the task. In fact, the Minister of State for Entrepreneurship himself noted that countries like Taiwan and Hong Kong do help their entrepreneurs by creating the right conditions for start-ups, and even those in Silicon Valley are indirectly assisted by the high defence spending in the area. Another pressing issue which Budget 2003 has not adequately addressed is access to affordable financing for SMEs, especially start-ups. Although the Government has, over the years, made available various financial assistance schemes for SMEs, there are still persistent complaints about the accessibility to capital and low cost financing. Again, the Minister of State, Mr Raymond Lim, had noted in his speech that the Government will not "throw money at the problem". He said that it is like having an ATM machine, in which you key in the word 'entrepreneurs" and out comes a stash of cash. His analogy reminds me of my eldest daughter when she was a 2-year old. When I told her on one occasion that I did not have the money to buy her the toy she desired, she told me that I could just go to the machine on the wall and press the buttons for cash! In reality, most businessmen, unlike children, know that they will have to deposit some cash into the bank before they can withdraw the money. The philosophy that there is no free lunch has been touted often enough, and most are under no illusion that the Government will easily throw money at them. However, these SMEs are appealing that there be a wider spectrum of financing options made available to them and that the conditions for obtaining such loans are not made unnecessarily onerous. Many SMEs, especially start-ups, find it difficult to meet the requirements of a secure collateral, track record and minimum self-financing that are needed before any loan can be extended by the banks. Additionally, on the side of the lenders, the knowledge required to assess the viability of SME business proposals by banks, or even SPRING Singapore officials, may also be lacking. To this end, I am proposing that perhaps a committee comprising industry practitioners could be set up to assess such loans, where the industry knowledge is lacking on the part of the lenders, particularly SPRING and other Government-related organisations. To alleviate this problem, there have also been suggestions, ranging from setting up a SME Bank, to extending the Start-up Enterprise Development Scheme (SEEDS) which is administered by EDB to domestic enterprise. Other suggestions include allowing fully paid-up HDB flats to be used as security for business loans, setting up of a private equity exchange, encouraging local enterprises and GLCs to provide venture capital to SMEs, and promoting the establishment of a SME credit bureau. I would like to urge the newly-appointed Minister of State for Entrepreneurship to look seriously into implementing at least some of these financing alternatives as soon as possible, as access to low-cost financing is the lifeblood of business. SMEs will not grow, no matter how many SME-friendly measures are put in place, without the lifeblood that is needed to keep them alive. My second point relates to the role of Government and Government-related organisations. Related to this whole issue of SMEs is the influence of Government and Government-related organisations. The common grouse is, of course, that GLCs crowd out the private sector, and this has been the subject of vigorous debate over the motion on the Temasek Charter. I wholeheartedly support the Government's move as announced in Budget 2003 to, among others, progressively stop providing services that the private sector can supply, and review all Government-related companies every three years. In fact, I think many of these measures are long overdue, judging by the calls and appeals that had been persistently made in the past, even in this House. Some TLCs have added a multiplicity of businesses that it seems incongruous to outsiders. For instance, what business does PSB Corp now have in running courses when there are so many private education firms that can do them? By the same token, why is HDBay involved in providing interior designing services and developing e-commerce applications when there are already so many existing interior design firms competing for the same pie? If errant renovation contractors were the problem, then the HDB's role should at most be one of accrediting renovation contractors. I urge the Ministries and statutory boards therefore to limit the scope of the activities of agencies or companies they spawn. Such agencies or companies should, unless they are of a strategic nature or operate in a sphere where the private sector is deemed not ready, confine themselves to policy and promotion, and also champion the involvement of the private sector to supply services to realise its core mission. For example, the proposed statutory board for Continuing Education and Training, which I fully endorse, should as far as possible outsource the courses it plans rather than try to do them itself. The IDA and several other agencies recently issued a call for business collaboration to the private sector to co-develop new business models for location-based services based on Government data. I think this is an excellent example of how the private sector can work with the public sector. Furthermore, the recent appointment by SLA of a real estate agent to sell their property at Tiong Bahru - unfortunately it is not my firm - at what was an eye-popping fee, demonstrates just how much cost savings can be achieved when the Ministries and statutory boards assiduously seek private-sector participation in implementing its policies. Such moves would further facilitate entrepreneurship and the growth of Singapore companies. Thirdly, services sector. The Government's acceptance of the ERC's recommendation to set up a Ministerial Committee on Services to be chaired by the Deputy Prime Minister and the Minister for Finance is an excellent step forward to grow the services sector which hitherto has largely remained the step-sister of manufacturing. However, several key issues still need to be resolved if we are to grow our services sector. First and foremost is the issue of adequate and appropriate manpower. The service delivery standard of many frontline workers in these services sector are also less than satisfactory, such as in the retail industry. The establishment of the Retail Academy of Singapore, spearheaded by the Singapore Retalier's Association, is a one-stop place to raise the quality of our retail staff to world-class standard and this is a positive step in the right direction. The Government, perhaps through the soon-to-be established statutory board on CET, should look into training and job enhancement schemes for the various services sector, including nursing assistants, cleaners, waiters, chambermaids and waste collectors, to help these jobs gain greater acceptance as well as raise the service standards of such jobs. Some cleaning and waste collection companies I know of have often complained about their manpower problems. They say that it is very common for Singaporeans to pack up and leave their jobs after three days, unable to take what they deem as the harsh and unpleasant conditions of the job. Our retail sales staff are, for instance, famous for their one-liner answers such as "All here already, lah!" when you ask them if the product is available in another colour or size. One also wonders why it is so coincidental that none of the waiters or waitresses at a restaurant is looking at your direction when you want to ask someone for help. Another major issue that should be tackled is the removal of regulatory impediments that stifle the growth of the services sector. For instance, while we remain unable to secure adequate numbers of trained local workers for, say, the spa industry which we are trying to promote, we should be open to relaxing our foreign worker policies for such sectors. After all, as the Minister for Trade and Industry often put forth as justification for the presence of foreign workers, they help to ensure that these businesses remain viable and thus along the way also create jobs for our locals which would otherwise not be available. Finally, alleviating short-term pains. The Budget does have some goodies for the ordinary Singaporeans - rent and conservancy charge rebates, property tax rebates, the ERS shares to help offset the impact of the GST hike. I would urge the Government to continue to move towards a more focused and perhaps community-based help system. A one-size-fits-all approach does not work because aid does not go where it is most needed. Spreading wealth like distribution of ERS shares when there are surpluses or during times of strong economic growth is acceptable, but in the new economy, where income spread will widen, it is more appropriate to render help where help is more sorely needed. It is therefore very reassuring to hear the Minister for Finance say that the Government will concentrate its social safety nets on the minority of Singaporeans who need them most. This will ensure that the help reaches the neediest Singaporeans without undermining our work ethic and culture of self-reliance. It is a delicate balance, but one which I judge could be finally met with this statement. Additionally, as structural unemployment becomes a norm rather than an exception, the Government should put in place measures to help this group of displaced workers. Whilst we do not want to encourage a crutch mentality, the reality is that structural unemployment is likely to become the norm, there would always be retrenched workers who desperately need help until they find the next job. Hence, an interim financial package akin to the EDRS but with more clearly defined and stringent conditions could be set up to grant short-term financial assistance to those who are really in need. Premier Zhu Rongji, in his farewell address to the National People's Congress, spoke on public servants who uphold the law and truly serve the public - combining aggressive pursuit of economic growth with compassion for the laggards. The newspapers quoted him as saying, "Government officials at all levels should go to the people in their neighbourhoods and homes, listen to their views, care about their hardship and promptly attend to their grievances." Indeed, this is a challenge well-worth taking up for the Government and Members of this House, including myself. Mr Speaker, Sir, despite the apparent "tameness", this Budget is, in reality, a watershed Budget. I also see this Budget as a work-in-progress of the ERC's recommendations for Singapore's long-term growth. It makes an unequivocal call for the Ministries, the statutory boards and the public sector to change their practices where they hinder private sector enterprise. As DPM Lee noted, "In Singapore, an entrepreneurial and innovative civil service bureaucracy must not be a contradiction in terms." Indeed, many of the policy changes announced in Budget 2003, such as the Yellow Pages rule and public sector market testing, require the Government and Government-linked organisations to change their mindsets and venture out of their comfort zone. Without minimising the importance of doing so, let us not brush aside the wrenching adjustments this will require of the civil service. Sir, I see this as the start of a journey to reform Government thinking. We may be far from the destination, but it is at least a good start. At the same time, this must be matched by a national movement for Singaporeans to discard a crutch mentality of wanting handouts, and instead be more adventurous, more daring, more tolerant of failure, and more resilient amidst the storms of adversity. At the grassroots level, often we see the handout mentality manifesting itself, especially during these challenging times, but I have every reason to be hopeful that the mindsets and the constitution of our people, especially the young, are changing. The daily press nowadays have regular ventures of young Singaporeans who break traditional moulds and have chosen to chart their own destinies. Like Alison Ng, the graduate "gao luk" seller or the two NTU graduate porridge sellers, as well as many others like Eugene Low of Hardware Zone and the four 28-year-old NAFA graduates, who despite all the problems they face with starting a business, have made their shop "Fourskin" at Heeren selling T-shirts a success. These Singaporeans are living proof that not all are waiting for handouts from the Government and are willing to embrace wholeheartedly the virtues of diligence and enterprise. In fact, the current adversity we are facing may in the end turn out to be a blessing in disguise. In the not too distant future, when historians document this phase of our development, they may well dub it as a baptism of fire, not just for the younger Ministers but for Singaporeans as a whole, especially the young, and equipping them for the many challenges ahead. We need everybody on board the ship to not only work together but in the right place and doing the right thing in order to continue to successfully steer and sail the ship. This in effect is what the ERC's recommendations and Budget 2003 have laid the ground for. Sir, with this, I support the motion.

Sir, I have three points of clarification. First, with regard to the criticism that there are no plans to help business and private individuals, I think the MP for Hong Kah has failed to listen to my speech carefully. I said that there was no big deficit plan to help business and private individuals, and not that nothing was planned. The second point is with regard to chronic deficit. Is the MP telling us that the Government is not going to increase GST when there is a series of deficits in the future to recover when the economy recovers?

The second one is not a clarification. It is a question.

The third point is that the MP can disagree with my comments but these are comments from the citizens that are reflected to me, and I am reflecting the concerns of the citizens. The MP can disagree with that. I have no problems with that.

Nobody is saying that you have problems with that. Dr Ong Seh Hong. 1.25 pm

Mr Speaker, Sir, thank you for allowing me to participate in this debate. Before I make my speech, I would like to take on a couple of issues on what NCMP Mr Steve Chia has said. He said that the Government is actually kidding Singaporeans that they can retire comfortably with their CPF savings. I would like to bring to his attention pages 98 and 99 of the ERC Report on refocusing of the CPF system. DPM and Finance Minister has also stated in this House that CPF would be refocused on the basic financial, housing and medical needs for retirement. Also in the ERC Report, it is clearly stated that, since its introduction in 1955, the CPF system is a sound framework for Singaporeans to save for their own retirement, reflecting our strong emphasis on individual responsibility. It is our belief that everyone has to take his own responsibility for retirement. Next, he commented that the Singapore Government did not promote or create any Singapore brand. In fact, Singapore itself is already a brand internationally and this is the hard work of a clean, capable and efficient Government led by PAP in the past four decades. I would also like to take issue with his comments on having a chronic deficit. Is he not aware that if we run a chronic deficit, as the hon. Member, Amy Khor has also mentioned, we may end up in a situation like Hong Kong? Worse still, our Singapore dollar will also be weakened and it will affect the savings of our CPF members and thus the long-term retirement nest-egg of our citizens. He also made the comment that PAP stands for "Poor Also Pays" which I differ. Look at the rebates we have given, all the assistance schemes given by the CDCs and all the Government agencies to help the less fortunate in society to tide them over the hard times. Are they not assistance for our poor and needy? Mr Speaker, Sir, from what Mr Steve Chia has commented from his dialogue with some residents and grassroots and from reports in the newspapers, I see that quite a number of Singaporeans are still complaining that there are not enough goodies in this year's Budget. They want more and more handouts, like what Mr Steve Chia has just suggested, from the Government.

Mr Speaker, Sir, I wish to clarify. I never said "handout". I said that we ought to tell Singaporeans not to look to the Government for handouts or support or help, because they are not going to get any.

They want more and more handouts from the Government even though many of them are employed in this difficult time. I am very worried about this trend, Mr Speaker, Sir. I am worried that Singaporeans have failed to see the impact of the economic restructuring we are going through. They might not have seen that in the new economy. There will be some Singaporeans who may actually become long-term unemployed. There will not be any lifelong employment in Singapore and every Singaporean has to expect frequent changes in job to stay gainfully employed. Mr Speaker, Sir, to survive and to succeed, I think the Singapore society as a whole must cultivate a mindset change and to develop a culture that embraces change as a way of life. As the Chinese saying goes, "qiong ze bian, bian ze tong", which means when we are caught in extreme circumstances, we must change and only change will bring about relief. This Budget policy has painted the changes we are expecting ahead. So it is now for us - the people, the Government, the unions, the companies and everyone who has a stake in Singapore - to pull together and face these changes together. However, much has still to be done to bring about this mindset and culture change. We have probably been cushioned too well in the comfy zone and somehow we have this mentality of waiting for the Government to do everything for us. Maybe that is like what the hon. Member Mr Ong Ah Heng quipped yesterday that we have a er shi si xiao government, ie, a Government that looks after everything. Singaporeans must grow up, like a teenager growing into an adult and getting out of the parental house and becoming more independent and self-reliant. The signals are there for Singaporeans to see - changes in CPF, bank originated loans for HDB, removal of restrictions on car loans, relaxation of CPF investments and so on and so forth. All these carry a similar underlying message - Singaporeans have to make their own decisions and take their own risks. However, from the way people have rushed to take up bank originated loans to buy cars, I do not know whether they have realised the significance of the impending changes. To adapt to the changes, all of us must learn to be flexible, nimble, quick to act in a crisis, and responsive. We must always be positive if we want to succeed in an environment of changes and to have the confidence to overcome difficulties. On the other hand, when we encourage our people to embrace changes, we ourselves must also be mindful of the constant stress level that our people would go through with these changes. Human beings are by nature not fond of frequent changes, whether in their environment or circumstances, because change means uncertainty. Uncertainty makes a person worry. Even for the employed, in the new economy, they probably have to go through many transitions of jobs and during these transitions they would also have to look for some means to look after themselves while in-between these jobs. So these are things that we will have to understand and do something to help our people. I know of a lady in her 50s who has worked in SingTel for about 30 years. She was always in the Customer Services Department. However, the call centre handling residential accounts was relocated to Malacca. She has been transferred to another department to handle commercial billing. She told me that she was only given 4 days to train and 2 days of orientation and was expected to handle a different job scope. Such is the speed of change and the adaptations we must face. Of course, she feels stressed with these changes but anyway she was lucky to still keep a job to go to. After restructuring the economy, we would probably expect a small group of Singaporeans who would be structurally unemployed, not through their own doing. They might go for training and retraining and still could not get a job. Maybe they are not up to par for the job or there is just no job for them. It is a correct approach that we should not give free handouts to these people as otherwise we may probably degenerate into a welfare state and perpetuate the cycle of dependence. So, how? Maybe, for this group of people, we should encourage them to venture into some small businesses and services, a kind of "cottage service industry", providing some domestic help, repair or delivery work. However, we must have the legislation to help them keep the cost of doing business to the very minimal. For a start, for example, maybe we should relax further by allowing them to use HDB flats to register their business. Currently, my understanding is that a HDB flat is only allowed for some IT-related business and to get approval you are also subject to IDA support, and so on and so forth. So we may have to do something to relax this and to help these people. Some of my grassroots people also suggested that to help this group of people get started, some small, low interest or interest-free loan, may be given to them through some self-help groups or CDCs in order to get them started. This equivalent to some sort of "semi-informal sector" will help to create some jobs and income opportunities for some of these people who may be out of job or not able to get jobs. And we should not forget that even Bengawan Solo, a successful confectionery and kueh maker, had its humble beginning in a HDB kitchen. This call for a change and flexibility of our rules and the civil service has been much alluded to by many of my other parliamentary colleagues here, and I should not go further. Mr Speaker, Sir, here I would like to link it to the role of the Government in promoting entrepreneurship. Like many of the other Members here, I am very encouraged by the appointment of the Minister of State in charge of entrepreneurship. I agree with what he said that the job of the Government is to create an enabling environment for entrepreneurs to emerge and grow and let a thousand flowers bloom. But we must do this fast. Speed is the essence if we want to succeed. I would urge that the Government expedite its review of all the statutory requirements and regulations of doing business here and to make it less restrictive and easier to start up business. One example that comes to my mind is the change of use of HDB shop space. I notice that in Hong Kong and Taiwan, if a business does not do well, within 24 hours you can see that the owner will change the shop front and start a completely different trade. But in Singapore, the change of use usually requires a lot more work and application. This rigid mindset of "do only if the rules permit" is pervasive and is very bad for us. It also affects the operation of work even at the grassroots level. Recently, my Constituency Sports Club wanted to organise a basketball tournament and they were creative or innovative enough to suggest that they want to get sponsors to put up advertisements on the banners around the basketball courts. I said, "Good, brilliant idea. Why not go and do it?" But I was taken aback when the Chairman of the CSC suddenly asked me, "Do PA rules allow us to do that?" I think everything that we have to go back to the rule book is something like the NUTS syndrome that was alluded to by Amy Khor just now. I think we should encourage more entrepreneurs. We should actually move away from this checking the rule book mentality. Next, the funding of entrepreneurs and local enterprises. It is good to see that the Government has actually put in various schemes through SPRING, IES, to help Singapore companies to venture out. But we must review the way they are being given out and administered. In this area, more flexibility and more customer-friendly approach have to be adopted. I will give another example. A grassroots leader of mine told me that he went to the Philippines to bid for a contract to build cellular phone antenna stations. He told me that there were another three Singaporean firms competing with him, including a listed company. Eventually he got the contract, even though he said that he made the presentation wearing a T-shirt while the other people were wearing suits. I asked him how did he make it. He said he was able to do it, and he used Hokkien to say it, by "boo kia pang piow, boo kia char tan". Basically, he had a very gung-ho mentality. He was not afraid of the bombs and kidnappings there. He also managed to keep his overheads low by hiring locals compared to his competitors who used Singaporeans who had to fly there 3 to 4 times at 3 to 4 times the cost and they have to check into a hotel. But he said that when his business expanded and he needed to get some help, he was turned down by TDB for the simple reason that his company was registered in the Philippines and not in Singapore. I thought in this sort of situation, our agency, even if it cannot give the grant, should point out the road and help them by providing a one-stop customer service to tell them how they can navigate through the system and where are the other fundings that are available. If we are able to help these people to spread their wings to the region or internationally, in return, they will plough some benefits back to Singapore. I see that this policy statement has signalled that these mindset changes will be there and hope that these changes will happen sooner rather than later. The next point I would like to touch upon, Mr Speaker, Sir, is on the concept of retirement. This has been alluded to by the hon. Member Lim Hwee Hua yesterday, and I support her view that in the new economy, the concept of a pre-determined retirement age is probably no longer relevant. I think we should let everyone have a greater say. If you want to encourage self-reliant and self-independent Singaporeans we should allow them to have a greater say in when they want to stop work and, at the same time, we will let them take care of themselves, financially or otherwise. So, we need to rethink this idea of a legally defined pre-determined retirement age. With better healthcare and social conditions we are living longer and healthier. To condemn a healthy, energetic 62-year-old man to his home or spending his time on the golf course is probably a waste of human capital. We should make better use of them because we already have scarce human resources. We must also understand that chronological age is no indication of a person's physiological and mental health. The concept of setting a retirement age actually contradicts our move to make Singaporeans to be more independent and to take charge of their own destiny. By removing the concept of retirement age, we can encourage Singaporeans to plan for themselves financially, psychologically and emotionally. And this is definitely a right signal sent to our people. But, of course, together with this change of retirement age, we need to re-orientate the employers and employees towards, for example, redesigning the work environment, the job, redefining the work, and for the employees to be able to accept reduced working hours or some sort of flexible working arrangement if they are going to work beyond a certain age. The advantage of hiring older workers is manifold and I am not going to elaborate here. For Singapore, it will also give us the added advantage of reduced reliance on foreign workers and we are able to keep our citizens gainfully employed longer, promote their independence, dignity, confidence, self-worth and reduce their dependence on the State for financial, social or medical needs. Mr Speaker, Sir, to manage these changes ahead calls for the cohesion of the people and the wisdom of our leaders. If not managed properly, there would be a lot of resentment and it is a fertile ground for extremist views. History has shown that difficult economic situations have often led to profound changes. When confronted with economic hardship, the social fabric woven into the society can be undone very quickly. So we need to be very vigilant over such potential threats to our society. This is especially so for a young nation like Singapore. For example, the depression in 1929 sent the German economy into extreme slump. The German people immediately began to blame the government for the state of affairs. They were then willing to buy in any political party that promised them changes, especially the extremist parties. The rest was history, and how Hitler came into power. Sir, this is a gloomy picture and I do not think the likelihood of it happening in Singapore is high, but we have to be mindful of the divide that economic uncertainty can bring to our society. In any case, this is a whole new world order we are seeing now. All of us have to pull together as a united people behind the strong and capable Government to sail through this rough sea, as we modify the ship, because there is no safe harbour for us to park our ship and rebuild. But, in the end, I believe we will emerge a stronger nation. Mr Speaker, Sir, I support the motion.

Mr Speaker, the public finally got a glimpse of the long awaited Economic Review Committee Report. Adorning the cover of the Report is the beautiful and resplendent "Esplanade". I have a copy here. I like the cover. This is, to me, an interesting parallel. When I saw the cover and when I read the Report, I thought the parallel was even more appropriate. The ERC Report provoked many reactions, the same kind of reactions as the Esplanade. Most people did not fall in love with the Esplanade at first sight. Indeed, when the idea was conceived years ago, when many of us saw the pictures and the models, there were scathing comments. However, over time, most of us have fallen in love with our magnificent Durian. The first reactions to the ERC Report were also mixed. Different people saw different things in the Report. Employers found relief in the non-restoration of the CPF. Investors were encouraged by the long-term direction of low taxes and cost. Workers were reassured that they will be given a helping hand. However, Sir, it is equally true that many on the ground, including many MPs in this House like Dr Wang, were clearly disappointed. Ignatius Low and Soh Wen Lin of the Straits Times wrote on 8th February that many felt the ERC "blew a unique chance to rebuild the system." Mano Sabnani wrote in the Weekend Today on 8th February that his friends thought the "visions and strategies were not all new." They were old stuff. Indeed, many of the ideas have been around for some time. But the difference between then and now is that a collection of ideas has now become a set of Government policies. Why do people react so differently to the ideas in the ERC Report? In part, because it is a voluminous report. After all, it is the product of 1,200 man-years. In part, because everybody was looking out for their own little niches, their own little ideas, their own little suggestions. When their ideas were there, their reaction was, like Dr Wang said, "It was an old idea; in any case, it was my idea." When their ideas were not there, the reaction was, "The Government didn't look deep enough. It was a waste of time and resources." Just like the Esplanade, Sir, each one of us sees a different facade of the monumental ERC Report and passed judgment. How then should we read the Report? Sir, to illustrate this point, I want to bring you on a journey to China, to a place call Jiang Xi ( ) where there is a famous mountain called Lu Shan ( ). Tourists and scholars flock there by the thousands - in fact, millions - to unravel the poem of one of China's most famous poets, and his name is Su Shi ( ). Singaporeans will probably know him as Su Dong Po ( ). The title of the poem is Ti Xi Lin Bi ( ). It is a Song ( ) Dynasty poem. It reads like this: heng kan cheng ling, ce cheng feng ( ) yuan jin gao di ge bu tong ( ) bu shi lu shan zhen mian mu ( ) zhi yuan shen zai ci shan zhong ( ) I cannot translate the poem as well as I can appreciate it, but I will try. The poem says: When I look at the mountain from the front, it looks like a ridge. When I look at the mountain from the side, it looks like a cliff. There are so many of them, they are near and far, tall and short, they all look different. I cannot see the real face of Lu Shan ( ). Because I am right in the middle of the mountain range. Sir, people rush to mountain tops only to be disappointed because they could not see the majesty of the mountain or the ranges in the mountain or at the summit. In fact, we all know that the most beautiful view of Lu Shan ( ) or any beautiful mountain like Mount Fuji, is not in the mountain or at the summit but rather the majesty is gleaned from a far distance. Sir, the ERC Report, to me, is like Lu Shan ( ). It has many radical policies, the import of which can only be appreciated from a far distance. You do not have to be physically removed from Singapore, but you must read it with a mental detachment. How far from Singapore must we read the ERC Report? I think we have to read it from really far, from outside South East Asia and beyond. Investors looking at Singapore from outside Singapore will quickly differentiate Singapore from the rest of the region. It will then be clear that the Singapore mountain is quite different from those in the region. The ERC Report has many radical ideas. But to me, it sends a few, simple but clear messages. The first message is that Singapore is open for business. It is a simple statement, but we go beyond that. We say that we are not xenophobic. We welcome talent, whether they are black or white, and all shades in between. The second point I read in the Report is that the Singapore Government will lower costs, the direction of costs will go down, both corporate income tax and personal income tax. And this Government is determined to make Singapore an affordable business and manufacturing centre by sweeping away as many rules and bureaucracies as possible. Yes, individual factors of production will not be the cheapest in the region, but if investors look at the total cost - the key words here are "total cost" - they will find that the total is less than the sum of its parts. For example, Matsushita's Maris, the world's foremost manufacturer of refrigerator compressors, found that while labour cost in Singapore is much higher than in the region and in China, Singapore is still a cheaper place to manufacture its products. The third point I gleaned from the Report is that, collectively, we are willing to sacrifice short-term gains for long-term benefits. All of us will moderate our pay increases, like deferring the CPF restoration for two years or maybe even beyond, and all of us must upgrade ourselves and make ourselves relevant to the world outside. DPM mentioned that the ERC Report is not just an economic roadmap for the future. It is also an exercise in social bonding. For this reason, Singaporeans do not go to the streets to demonstrate, unlike our friends in Hong Kong, because here we need to make adjustments to our lifestyle, to make a living for tomorrow. For all these, foreign investors have begun to notice us from afar. The ERC Report is like a lighthouse that beckons them to our shore. Many foreign banks are beginning to shift forex operations back to Singapore from our competitors like Hong Kong, Sydney and Tokyo. The Bank of Tokyo and Credit Swiss First Boston are among those reported to be moving major components of their currency trading operations from Tokyo to Singapore. Others who are here like Citibank and ABN-AMRO will be adding more forex and derivative businesses. Germany's WestLB Bank has recently started operating here. Sir, this trickle will slowly turn into a tide. Fidelity Investment, one of the world's biggest fund managers, left Singapore in a hurry immediately after the Asian crisis in 1997. Today, it has applied for a licence to restart its operations in Singapore. Sir, we might well ask: how can all these new happenings be attributed to the ERC Report which was only released early this month, on 7th February? The answer is that many of the key recommendations were already released many months ago. To me, the ERC Report is an anti-climax too, like MPs here have suggested, but there are good reasons why it is so. The ERC Report, to me, is like a movie. It is like a movie where the story line had been told many times. In fact, over the last 12 months, we were also invited to some detailed early previews. It was as if the whole nation was invited to sit next to the director's chair while the ERC "movie" was being made. Sir, while the ERC Report might be an anti-climax, I cannot understand why many are not excited by the recommendations in the Report. Memories are very short. We have forgotten that some taboo policies, which only a few years ago were held to be sacrosanct, have now been bulldozed by the ERC. For example, lowering taxes to as low as 20% was an absolute no-no, even only a few years ago. The argument then was that if the Government were to lower taxes below 25%, Singapore could be blacklisted as a tax haven, an absurd answer you might think. Then, it was the holy grail, only a few years ago. So, a major U-turn sign has been removed. One big nut has been cracked. While there are other taboos which have been swept away, another one was the concession to exempt selected foreign income remitted to Singapore from taxes. The Budget will now give such income remitted back to Singapore tax free exemptions. A smaller taboo may be exemption of interest of domestic deposits from taxes. Today, the ERC Report has consigned these nuts to the incinerator. So, I cannot understand why Mr Leong Hong Kee said that major U-turn signs have been allowed to stay. These are radical policy U-turns which many of us, including myself, have railed against 10 years ago. Many of us failed then. But, today, 10 years on, they have become policies. The policies have come about because of the ERC Committee meeting, deliberating and finalising the recommendations. Sir, a major crisis, a new economic landscape post-September 11, and a new Finance Minister have made a hundred flowers bloom. I celebrate these U-turns. I think we can do with a few more of these U-turns, but let us digest the present lot of cracked nuts on our plate before we move on to the next plate of cracked nuts. Sir, the ERC Report serves a very important purpose. Investors take a long-term view of their investments. The ERC Report provides them with advanced intelligence of Singapore's long-term policies. The ERC prescription is a holistic treatment to our current economic ills. This kind of treatment takes time. But what investors are seeing is something even more illuminating. In spite of a major economic crisis, resulting in the Government running three years of deficit, Singapore is lowering taxes. This, by itself, may not be profound, but we are lowering taxes in the face of difficult economic times, in the face of deficits. When we compare this to Hong Kong, which is raising taxes to cover their shortfalls, this move by Singapore, as opposed to what our most fearsome competitor is doing, is clear evidence to investors that Singapore, first, has the financial clout; and, second, the social cohesion to restructure the economy and reorganise ourselves in order to move ahead of the crowd. Sir, Singaporeans caught up with the daily routine may not appreciate these long-term policy implications. I can understand that. Like all MPs here, I do have the meet-the-people sessions. And in these MPS sessions, my grassroots leaders and I have met many casualties of what I would call this very severe economic downturn. And many of them have come with a begging bowl asking for handouts. My grassroots leaders and I cannot be unmoved by these events. We help them in any way we could. I turn to my CCC. I turn to my Mayor who is sitting there, and they all chip in and help them in one way or another. I write to MOM. I write to NTUC and some of these cases were successful. In fact, the sad story is many of my key grassroots leaders themselves have been retrenched, but they are still with me. They are still doing the MPS, and they understand that their unemployment is not the fault of the Government. Sir, all of us here understand the desire for more handouts, and we also understand the desire for instant cures for our economic malaise. But, really, there is no viagra for our economic impotence. Many people tell me there is - the economy will rise again, they say, if land cost was lowered. I heard Mr Loh Meng See say business cost in Singapore is high; land cost is one of the sins. Many of them have told me that if the Government was to lower land cost, then all will be well. But two issues need to be looked at very seriously. First, artificially lowering land cost by flooding the market with land might well make land cheap, but the consequence of taking large doses of this kind of strong medicine has a known medical side effect. It causes massive heart attacks. For those saddled with negative equity, the disease might well be cured, but the patient will be dead. And negative equity works like a virus. Once it has infected a critical mass, the entire population is in peril. In fact, much of Hong Kong today is trapped in negative equity. I was reading the South China Morning Post last night, and on the weekend issue, the Sunday Morning Post issue of March 9th, there was a report which said that a survey by Mastercard showed that Hongkongers were more gloomy in the middle of last year than Indonesians were when Indonesia was at the height of the Indonesian crisis. That was how depressing. Hong Kong is a land of entrepreneurs. Today, it is more like the land of the gloomy. Sir, the second point is land cost in Singapore is not that expensive today. It is not the cheapest in the region, but it is not that expensive. Since the Asian crisis, market forces have driven down land prices considerably. Compared to Shanghai, for example, good quality housing in Singapore might well be cheap. I was reading the Time magazine last month. Hannah Beach, Time's Shanghai correspondent, lamented that she could not find a decent - I repeat decent - not luxurious, accommodation for her housing budget. What does she mean by "decent"? She means a flat or a house with running water, continuous lighting and heating, because she needs to file reports back to the States. When she found a decent place at US$5,000 per month, the agent immediately told her that the asking rent had been up to US$5,500. For that kind of money (which is something like S$9,500), she could have got a luxurious penthouse in Singapore. Premium grade office space in Singapore is quite cheap today. One would easily get reports in the Straits Times today, but I got this figure sometime ago. Premium grade office space in Singapore could go as low as $5 per square foot. I am talking about top grade office space. If you bargained hard enough, you might even get it lower - I do not know. But for $5, you can get reasonably very good office space. In Guangzhou today - not Shanghai or Beijing - good grade office space is already $3 per square foot. We are only $3 difference, but we are Singapore. In my assessment, land cost in Singapore is reasonably cheap, and the same for industrial land. Sir, there is no need to artificially drive down land costs to be the cheapest in the region. Competitive pricing, yes; but fire sales, no. Land is only one factor of production. We can compensate for this by making the total cost less than the sum of individual costs. I call this synergy in reverse. Singapore is in bear territory. We hear his roar, we see his footprints. But the marauding bear is not just chasing us; the bear is chasing each and every one of our neighbours as well. We do not have to strip ourselves naked - like selling everything on the cheap - in order to out-run the bear. All we need do, Sir, is to shed enough baggage to out-run our neighbours. In fact, we should not out-run the bear this time. We need some clothes on for the next bear run. Many of us are unnecessarily gloomy. A few even think that this is the end of Singapore. Yet, during the good times, many of us thought the music would never stop. Now that we are in bad times, the same people think the music would never start again. We have been through this before in 1986-1987. This is not the first economic downturn, nor will it be the last. Memories are always short. In the recession of 1986 and 1987, Singaporeans went through the same emotional trauma. Sir, I want to end my speech by quoting a familiar Chinese idiom. It says: Sai Weng shi ma, yan zhi fei fu ( ). Sai Weng was a horse trader. One day, his favourite stallion ran away. He was extremely sad. Soon after, the stallion brought back a herd of wild thoroughbreds. He was delirious. The essence of this idiom is: do not despair, something good will come out of something bad. The Chinese say: Yin huo de fu, huo fu wu chang ( ). Nothing is forever. I like to look at things with an "Ah Q" mentality. Because of the economic crisis, the Government has reviewed and agreed to U-turn on major policies, which were once immutable. In fact, many nuts were cracked. I see this as a sign that good things are on the way. The crisis has injected in us all a sense of urgency for change. Clearly, we could not carry on business the way we did. The crisis gave birth to the ERC. And I think the ERC Report will guide us into the future. 1.50 pm

Mr Speaker, Sir, thank you for giving me this opportunity to join in the debate. We are making a Budget in the middle of many developments. The economy is weak. Jobs are harder to find and to keep, both for retrenched workers and for new graduates. Crime was up last year. A war in Iraq looms, driving up oil prices and inflation worries. Cut-throat competition breathes down our neck both in the neighbourhood and further afield. And we can hear the sucking noises of the giant Chinese vacuum cleaner that draws away investments, factories and jobs. On top of all that, terrorism tries to paralyse societies by fear and by tearing up the social fabric. Not surprisingly, more Singaporeans are feeling anxious. The world seems to have turned very messy, very harsh. There are changes upon changes. Many wonder what is happening. How can Singaporeans find courage and strength to press on and face life's challenges, and see the ongoing struggles as an investment in their future? And what future would that be? Sir, in these circumstances, I feel that our Budget must strengthen hope. Realistic hope, to me, is central to our ability to deal decisively and effectively with the many challenges, and to emerge victorious. How do we strengthen hope? First, let us press on with all efforts to inform Singaporeans about the developments around us that affect us in the economic, social and political arena. It is a natural tendency for people to avoid pain. And one way to avoid pain is to try and block out unwelcome news and information. Some may think that it is perhaps more merciful and maybe easier to keep morale up, if we shield our people from having to face the increasingly harsh realities. Yet, if we do that, we dull our senses and lull ourselves into wrongly believing that there is somehow an entitlement to a good life, and that would be counter-productive. Clearly, we must not set out to demoralise our people. But we must always call a spade a spade, so that by and by, Singaporeans at large will adjust to understanding that the world has changed in big and fundamental ways. Then, we will be much more ready and able to make the necessary adjustments and adaptations. Here, I am glad that the Finance Minister has been forthright in his analysis of the economic picture that we face, and also the fiscal position that we must expect, going forward. Specifically, he has pointed to volatile times ahead and tighter Government revenues. In other words, the days of what I would say cruise control life management - which is that you just put on a constant setting and the car just moves on its own - assuming that there will always be a job and that there will always be pay that goes up - those days are over as well as any expectations that, whether in Government or in our private life, we can spend freely without much thought. Those days are also over. The future is about staying nimble, making choices, taking chances and living with our own decisions and within our means, both as a nation and as individuals. And as these big changes in thinking and behaviour take place, we would have positioned Singapore and Singaporeans for a more hopeful future. Second, hope rests on the confidence that things will improve in the future. This confidence must have a proper basis, for otherwise it would be mere wishful thinking. Take the area of jobs, for example. We all know that this is now a key concern among working age Singaporeans, because of the restructuring, relocations and retrenchments. How do we show Singaporeans who want to adapt that they would be helped? Or put it in another way: how do we explain to adaptable Singaporeans that the Budget measures will bring more jobs to Singapore, and that they will have an equal chance to take these jobs? Let me start with job creation. Jobs do not appear out of the blue. Jobs are created when companies invest in Singapore and do business here. Unless Singapore is attractive to investors, they will not put their money here, and there will not be jobs. What does Singapore offer? Do we offer cheap land? No. Cheap wages? Not when compared to many developing countries. Do we have capabilities that companies need? Well, our workforce has been top-rated by BERI for many years, but our overall education profile, because of our history, trails those of developed countries in whose league we must fight if we want a better standard of living. Our infrastructure? Yes, we are rated well here and it gives us a certain edge. And then we have strengths in certain key intangible areas like political stability, low corruption, effective and proactive Government, hub status offering high connectivity in various areas, open trade links, industrial peace, and a pro-investment, pro-business tax environment. Given all these, one may ask: why would companies not want to invest in Singapore? And the answer is because every other country wants that same investment dollar, and will compete fiercely for it. So companies compare the packages that different countries offer before making their decisions. Even companies already here will do their sums to see whether they want to move or stay. How then can we be hopeful of winning our share in this fierce competition? The short answer must be to reinforce our strengths and remedy our weaknesses. For example, on company and personal income taxes, the Finance Minister has introduced changes beginning last year that will see Singapore becoming progressively less demanding. Although no further corporate and personal tax reductions were made in this year's budget, the commitment to make further reductions by 2005 remains. At the same time, the exemption from tax of all foreign income in the form of dividends, branch profits and services income in this year's budget will encourage enterprise. In the area of capability building, the budget in financial year 2002 saw another $500 million transferred into the Lifelong Learning Fund. The Fund, which now stands at $1.5 billion, is expected to generate $60 million in income to pay for more worker retraining and skills upgrading. There are also additional tax incentives for those who, on their own, take up training and attend courses and seminars. And of course there is the setting up of a special agency to promote and coordinate Continuous Education and Training. The commitment of the Government to do everything possible on the supply side to give Singaporean workers the chance to compete for the new good paying jobs is very clear and unwavering. Turning to healthcare cost, which is another concern, especially among older Singaporeans and lower-paid workers, the Government has transferred another $100 million into the MediFund, bringing it to $900 million. And the interest income will help more poor Singaporeans deal with high medical expenses. But, to me, it is the spur given to the introduction of the portable medical benefits that deserve special mention. We have an aging workforce. And when an aging workforce meets with the end of lifelong employment, then it becomes obvious that many are going to be stuck financially if they fall ill in between jobs, or if their employers do not provide basic medical benefits. I am glad that, after many years of discussion, a specific tax incentive is now given to promote the implementation of portable medical benefits. However, I do feel that the pace of progress in this matter is too slow because there is not yet a proposal with defined terms and premiums for workers and employers to adopt. My worry is that the longer the delay in implementing this, the more older workers will be placed in jeopardy. So I urge the Government to consider an aggressive and specific timetable for the implementation of portable medical benefits. Another area that I feel the Government can do more is business costs. Cost levels directly impact the competitiveness of companies. Feedback received by unions indicates that a significant proportion of unionised companies that had relocated part or all of their operations to other countries in the past few years had cited high cost of business as one of the reasons for their decision. Therefore, it is an important item to pay attention to. If you look at the cost factors, wages and land are two main ones. On wages, I would say that, over the years, tripartite partners have worked closely to reform the wage structure in Singapore. When companies have to deal with increased volatility, the wage structure cannot be rigid. Otherwise, we will be forcing many more companies to prematurely lose money, downsize or close down and many more workers will lose their jobs. But much work remains to be done. The seniority-based wage system will, in an increasingly volatile operating environment, make our older workers more and more vulnerable. The lack of more timely adjustment mechanisms, such as the monthly variable component, will also harm companies and their workers in times of sudden poor demand. Other cost components that work against the employability of older workers, such as high medical and statutory costs, must also be tackled so as to minimise casualties. We must press on with reforms and provide more flexibility in practical and equitable ways, so that all stakeholders of the companies, including the workers, will be able to share in the success and growth of their companies. At the same time, when companies know that their manpower overheads are not locked into rigid structures, but pegged to productivity, performance and value, they will also be more willing to hire when demand picks up. On land cost, I just want to make a comment on industrial land pricing because I do believe that a different approach from that of the present will help to strengthen our attractiveness as an investment location. Currently, industrial land prices, I believe, generally reflect their opportunity cost in Singapore. That is to say, the valuation of a piece of industrial land is determined by the value of its alternative use. As the property market in Singapore has grown strongly for many years, that has nudged up the price of industrial land. Beyond a certain point, too high land costs cannot be offset by relative productivity factors, and some industries may be prematurely priced out of the Singapore economy. And with their departure goes jobs. Yet, in the long term, even property prices can only be sustained if the economy does well. So therefore, given this nexus, I really suggest we rethink how we want to price industrial land. I support the concept of opportunity cost. And I do think that it can be used in this case to benchmark the price of industrial land for given kinds of industries against relevant competing locations. For instance, if having a hub port, an air hub, or a chemical industry, considered strategic to the interests of Singapore, then the pricing of land for such purposes should be determined with an eye on competing locations. The positive multiplier effects in employment and spending will, to some extent, compensate for any lower collection of land sales revenue upfront. Just to give an example. Arising out of the concern over terrorism, security at Jurong Island was stepped up and Police had to introduce a stricter security pass control system for that island. As against the initial estimate of about 10,000 passes that they have to issue for direct workers on the island, I am told that in the end, they issued close to 100,000 passes. So you can see that when you enable a hub like that to take place, the positive multiplier effects are significant. Therefore, we want to ask if we had charged condominium land prices for the land in Jurong Island, for example, then could we have had the benefit of the 10,000 direct jobs and the 100,000 indirect jobs created for Singaporeans? Sir, our willingness and readiness to change and make Singapore more attractive to investment, to business and to job creation will be the basis of a realistic hope for the future. Finally, Sir, the hopes of Singaporeans cannot rest just on what the Government does for us. We have to choose to ride the changes. This is an act of will. Returning to the example of jobs, we must ask ourselves that when the Government pours in money on the supply side to create training places, what do we do? Do we do our part on the demand side by stepping forward and going for training and skills upgrading and therefore make ourselves eligible for the new and restructured jobs of our current employers and future employers? We must also ask ourselves what else are we doing to stay employable in the event that we are displaced. In the light of a more volatile environment, we must also ask ourselves how we can make better spending and investment decisions as individuals, especially on big ticket items, so that we will be as unencumbered as possible financially, even if we are displaced. Sir, informed individual choices and decisions, together with correct policy directions and speedy implementation, give us confidence for the future. This Budget promotes those outcomes. I support the Budget.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 2.50 pm. Sitting accordingly suspended at 2.27 pm until 2.50 pm.

Sitting resumed at 2.50 pm

Debate resumed.

Mr Speaker, Sir, practically all Singaporeans know we face uncertain times. Obviously, difficult times too. But the degree differs. And this can be seen in the way many of the unemployed and the retrenched behave. Contrary to what hon. Member, Mr Low Thia Khiang, said earlier, jobs are still available - plenty in fact - but not the ones many of the retrenched or the unemployed are waiting for or willing to accept. They give many and varied reasons why they chose not to accept the jobs matched or assisted by the CDCs, for example. Among them: "Money no enough"; "Jauh lo - distance. How can I work in Jurong? I stay in Punggol, you know?"; "No shift, please"; "Weekend free, can or not?"; "Admin job only, OK?" These are some of the responses that we got from many of those who actually came forward to seek help. We can understand the low salary as being a not strong enough pull, especially when a person, having benefited from the high wage policy and earning about $1,800-$2,000 after working for about 10-15 years suddenly finds himself retrenched, with two kids in school and has recently upgraded to a 4- or 5-room flat. Thus, for someone like him - and there are many of them - the $1,000 salary, with a take-home of about $850, in the mind of such a person, surely "money no enough". But after months of waiting, surely it is better to grab the $850 rather than no money at all, except for the interim assistance from Government, which is less. Mr Speaker, Sir, the CDCs try. Nearly 5,000 applied for assistance last year at the North East CDC, out of which 65% were matched, but only 14% placed with jobs. From the macro job fairs held with the help of the Ministry of Manpower to a more focused Compassvale locality and industry-based job fair, the CDC tried and tried. It never gave up. Even the GRC-based approach was taken, through Pasir Ris-Punggol, for better focus, with geographical considerations taken into account. Temporary employment through Town Councils too for those in arrears, pioneered by Pasir Ris-Punggol Town Council, thanks to the hard work by its Chairman, the hon. Member, Mr Charles Chong. The scheme is now extended to Tampines and Aljunied Town Councils. Mr Speaker, Sir, times are bad, all right. My CDC officers now tell me that there has been a change in attitude lately. More of those who came to seek help are less choosy. More desperate perhaps, savings dry up, relatives' help not as forthcoming, and more are even prepared for training and retraining. Before, it was difficult to convince them to go for training and retraining, they were thinking that the Government, with its past track record, would be able to turn the economy around in no time, and they would go back to their old jobs. I personally know of cases of those who, having worked as policemen, firemen, water boat men or tug boat men, did not see themselves in alternative work. They wanted to work in the same jobs till retirement. They are proud of the work they did, and they were good workers indeed. But those jobs are no longer available. This is the structural unemployment which the Government has been trying to prepare Singaporeans for, especially in terms of training and retraining. But some, perhaps many, did not take heed. Mr Speaker, Sir, the CDC experience shows how we have tried and how sad sometimes the stories can be. They serve as a reality check as to how difficult times can be, especially for those in need. As hon. MP, Mdm Cynthia Phua, said yesterday, many have to tighten their belts. This, Sir, reminds me of an anecdote, more like a joke. There was a time during the Cold War days when China used to provide a lot of financial aid to many African countries. One day, Chairman Mao got very upset because these satellite countries were getting spoilt. He decided to give them a dose of reality check. He sent them a note: "Comrade, yes, times are bad, but we cannot go on like this depending on others for help all the time. We must each do our part. Tighten your belts."

Then came one reply: "Comrade Mao, you are right. We agree. We must tighten our belts. Yes, Comrade, please do send the belts."

Mr Speaker, Sir, the situation faced by many of our retrenched and unemployed is no laughing matter. Much of the interim assistance given out has been exhausted, and even those forced to take lower paying jobs are now faced with loans and arrears beyond repair. Money owed to Singapore Power for electricity and water has led to many now living without those amenities. I do not have the numbers, but perhaps during the Committee of Supply, the relevant Ministry would be able to give us an update. But this situation must have dented the level of self-confidence and self-esteem in many of those affected. I dare say that many of those caught in this predicament are victims of their own situation and financial mismanagement. They will say that it is easy for people like us to say that. Nevertheless, their problems are real and they need urgent help. I dare not, however, say that we must provide more of Government assistance to get them out of the deep hole. Welfarism is not the way out. But how do we fare as Government and fellow Singaporeans in the face of these needy cases? The number of fellow Singaporeans hauled to court for bankruptcy, for example, must have risen, desperate and not knowing how to save themselves. All these will certainly have an impact on their self-confidence. When the number of those affected is large enough, either from a social and low income group or, worse, a particular race - as a significant percentage of those affected are Malays and Indians - the problem becomes more acute. There is a need to look at this problem of financial squeeze in the short term while we pursue to prepare them to overcome their predicament for the long term through education and training. Mr Speaker, Sir, the hon. Member, Dr Wang Kai Yuen, earlier this morning described the situation in three words: Jobs, Jobs, Jobs. I agree. But may I add that the solution is in a 4-letter word, an abbreviation: JELL. It is not a signal for a short cut nor a quick fix. But, indeed, it is to emphasise a longer term view for the future. JELL stands for Jobs, Employability and Lifelong Learning. This is also the approach at the North East CDC. I am therefore happy to welcome the decision by the Government to establish a statutory board in charge of Lifelong Learning and Training. MOM, NTUC, CDCs, self-help groups and voluntary welfare organisations will tell us that there are serious hurdles to overcome for training and retraining. The untiring efforts shown by MOM and other complementary agencies must continue and should bear fruit. The Government, the Ministry of Finance in particular, should not leave any stone unturned here to provide the infrastructural and financial help needed to give the new board a fighting chance to succeed and to excel. The mindsets and attitude problems on the ground are real. It could be as innocent as senior workers - those 45 and above - not wanting to attend classes for perceived fear of holding back others, to the more serious ones like those having mental blocks to upgrade, especially with computer training. The not-so-young 45 and above, concept of retirement - for a long time pegged to the 55-year mark - needs redressing, and their grey mindset about-one-job whole-life career too needs sensitive overhauling. Counselling for second and alternative careers needs to be looked at carefully as there is a serious shortage of counsellors working on the ground, whether at MOM, CDCs or VWOs. On a related but important new frontier, the Government's call for more entrepreneurs deserves closer scrutiny by all for the opportunities they come with. More can be done to upgrade and expand opportunities and open up new fronts for employment. We have often heard that not enough was done to support the nation's call for our budding entrepreneurs. From the stories we read or heard or saw in the media, the new budding - and now more successful - entrepreneurs did it on their own steam. That is what entrepreneurs and entrepreneurship are all about. Nevertheless, I personally believe that we could do a lot more to sow the seeds for more entrepreneurial flowers to bloom. While we would want to see more local entrepreneurs to succeed, creating employment in the process, I feel that it is equally important for the Government to nurture the spirit of enterprise in as many Singaporeans as possible. With your indulgence, Mr Speaker, Sir, the North East CDC believes so. We start young, even at primary schools. In fact, the need to instill the spirit of enterprise should cover all age groups. Like at the North East CDC, the Students Middle Aged and Senior Citizens (SMS) approach will provide opportunities wide enough for all to realise their potential for entrepreneurship and being enterprising. Our national efforts at promoting entrepreneurship should also cover as wide and as deep an area as possible. In short, jobs, JELL and entrepreneurship should provide us the glue that would bind the people together in good or in bad times. Economics, or livelihood, after all, is the best bond for social cohesion. It is easy to say that the Government should and could do more but this is also an opportunity for us, the people, to ask ourselves: what have we done more to help ourselves and the economy in these uncertain times? Yes, the Government must and will have to take the lead but the people must also have the will to learn and unlearn many times around what holds for the future economy and the challenges of uncertainties. Let us not swallow the Oliver Twist culture for more hook, line and sinker unthinkingly. Instead, more Singaporeans should stand up, fighting for - in the words of SMS, Mr Khaw Boon Wan - a 'more than good' chance to be the best through a competitive culture called ERC - Enterprising and Resourceful Culture. Sir, I support the motion in the name of the Minister for Finance.

Mr Speaker, I would like to draw attention to two big areas of concern for Singapore, both of which relate to our demographics - our aging population and our declining fertility. The Budget addresses both subjects to varying degrees - the aging population and the changes to the CPF contribution rates, and in the measures to enhance older workers' employability. With regard to fertility, there is one solitary item, tax exemption, for employer subsidised childcare benefits - not much, but perhaps just a signal that the issue is not being forgotten. For today, I will touch only on the first subject, leaving my observations on our pro-family efforts and policies for the Committee of Supply debate to come. The Member for Marine Parade GRC, Mrs Lim Hwee Hua, spoke yesterday on the need for us to totally review our concept of retirement and the way that CPF is structured, against the background of CPF withdrawal age of 55, retirement age of 62 and life expectancy of 78, and the rapidly evolving patterns of employment as companies compete in the globalised economy. Many Singaporeans have come to realise, with considerable consternation, that what they had been taking for granted or assumed that somehow CPF would take care of their retirement needs has been an illusion. In 1998, the Inter-Ministerial Committee on the Aging Population found that only 24% of those turning 55 had $60,000 in their Minimum Sum cash portion. Now the ERC estimates that even of new account holders contributing for a full career span at current CPF rates, only 50% would achieve the targeted $80,000 Minimum Sum for the cash portion of $40,000. The Government has taken steps to limit the ceiling on CPF withdrawals to be made for property purchases, and the DPM has announced that the rate of contribution to the Special Account will be raised in steps over the next three years towards addressing the shortfall. But even with these, it is anticipated that only 60% of account holders will reach the target Minimum Sum level. Further, this target amount translates into an income stream of something like $600 per month, assuming a 4% interest rate for a period of 16 years, taking retirement at 62 and life expectancy at 78. Thus, recognising that this amount may not be adequate and, indeed, the ERC has recommended that the Minimum Sum should be subsequently raised beyond $80,000. But truly, how much will we be able to do and, if anything, at what pace? In addition, another major deficiency of the CPF model in catering for Singaporeans' retirement needs is that the system currently leaves out some significant groups of people - the self-employed, workers in the informal sector and home-makers - whose contributions are not attributed economic value and are not included in its cover. As the latter group is largely women, who will in all probability outlive their husbands, their financial security in old age will be precarious. The ERC has taken the approach in its recommendations that CPF should cater for the 10th to the 80th percentile of the income spectrum. Now, this approach makes eminent sense, as indeed the top 20% can very well look after itself and, truly, the bottom 10% would have so little put aside through regular contribution rates - as well as did every dollar that they earned to meet their immediate day-to-day expenditures - that it does not make sense to have them make an employee contribution at all. However, implicit in this recommendation is that there will be 10% of the population who will have no financial provisions for their post-retirement needs. This is a very significant number. Just some months ago, the Minister for Community Development and Sports, in answer to a question on the financial assistance schemes available, shared that in the financial year 2001, almost 15,000 beneficiaries were helped. But on examining the details of the numbers, one finds that the majority of these were either in interim short-term assistance schemes or for very specific purposes, such as student care fee assistance, and only 2,773 were beneficiaries under the main Public Assistance System. Compare this number to a full 10% of the population of workers as they reach retirement age. The DPM has mentioned in his Budget speech the need for Government to focus its social assistance in the future on only the truly needy. It appears that this group of truly needy may be a very significant number. How has Government planned to provide for this bottom 10% in their retirement? Is the intent to simply gear up, so that more people will come under the current assistance schemes, coupled with continuing to depend on families to step in the breach, as is the present practice and expectation? Is this realistic, considering the trends of family formation that we are currently experiencing? Given this scenario of the lack of any savings at all for the bottom 10%, the full-time home-makers not catered for in the CPF system, the anticipated inability of 40% of CPF account holders in the future to meet the Minimum Sum target, and indeed the likely inadequacy of that sum to generate enough monthly income to maintain a desired living standard, it seems to me that a critical part of the solution must be the continued employability and employment of older workers. Many of us must be looking to being employed well beyond our current expectations, not only to keep active and engaged, but also to generate some continuing income to supplement what we have been able to put aside as savings. In this, the Government has been very active and very visibly putting its money where its mouth is, so to speak, with generous funding invested in the Skills Redevelopment Programmes since 1996 and, more currently, in the People-for-Jobs Traineeship Programme. The $0.5 billion that Government has just deposited into the Lifelong Learning Fund in financial year 2002 to bring it to $1.5 billion to date will generate $16 million of interest income to continue to support the skills upgrading and retraining programmes. This is truly a commitment that few governments anywhere else would make and something which Singaporeans should not take for granted. But Government's willingness to generously fund skills upgrading and retraining alone is not enough. Workers and employers need also to play their part. On the workers' part, while some are still refusing to accept the reality of Singapore's changing environment and its implications and impact on them personally - as just been recounted by Mayor Zainul Abidin Rasheed - I believe that there are many more people now who are much more willing to adjust their expectations and to try new jobs in sectors that they may not have considered attractive enough previously. There are jobs that are available, if all parties are willing to give it a try. Besides creating new jobs in new sectors, we have some 900,000 non-Singaporeans working in our midst. While we welcome them and know we will continue to rely on them far into the future, there are many sectors, like healthcare, for example, where employers would welcome, with open arms, willing locals to fill positions, so that we can moderate the ratio of local to non-local employees. The Government has put in the money to support reskilling workers. Workers are now more willing to give the schemes a try and to moderate their expectations. Now, employers must also be willing to overcome their prejudices and mindsets to hire these mid-career recruits. I would like to share a success story, not only to encourage workers currently looking for a break in the dark clouds that they can take heart, but more so to encourage employers to engage in some enlightened self-interest. It is about our experience in KK Hospital with a group of new recruits who underwent three months of training in the National Skills Standard for healthcare attendants. In fact, in the HMI training programme that my NMP colleague, Dr Gan See Khem, had established, they are a small group and they have been with us for just two months. But I have been tracking their progress and I am confident enough that they will be long-term employees with us to share our story with the House. We started with 10 recruits, mostly in their 40s from varied backgrounds - clerical, secretarial, production operations, storemen. They are now deployed in frontline positions in our wards, clinics and operating theatres. Frontline jobs in healthcare institutions are very tough work. You are on your feet most of the day in constant patient contact and service, going on shifts. I can tell you that this group has had some tough time adjusting, but they are very determined and very committed to making this endeavour work. On the hospital's part, each of their supervisors had been briefed as to making an extra effort to help them settle in, to be available to help, either to coach or to assist, just to provide encouragement. We started with 10, we have lost three, who are unable to make mainly the physical adjustments. The remaining seven, however, their reports on them, both from the recruits themselves, as well as their supervisors, is that they have got through the adjustment period and are now functioning very comfortably in their assignments. In fact, they have been given top marks by the supervisors for attitude and performance. I think 7 out of 10, a 70% retention rate, is pretty good, and I am very happy with the outcome. This group of 40-somethings is a shining example of what is possible with reskilling, good attitude, commitment and the willingness to stick it out through the initial adjustment to a new work environment. The moral of the story is that effort is most certainly required on the part of the workers, and on the employers, in paying attention to job fit, some orientation and instructions on the job and attention from supervisors in helping the new mid-career recruit to settle in and adjust. This did not take a huge effort or commitment of any additional resources on the company's part, mainly just some additional attention from supervisors in the initial period. For that the hospital has gained a bunch of enthused, committed and stable staff. I see in these tough times an opportunity to redesign jobs and to fill vacancies with mature and stable workers. Not all sectors are in the doldrums and I would like to take the occasion to encourage employers in those sectors that are in good shape to engage also in what is not at all altruistic, but distinctly in their own self-interest, as I believe the returns are well worth the efforts. I have shared one story of one group in one organisation. We must share all other success stories that there are, big and small, to talk about what is possible and workable and viable. But beyond spreading the good word, we need to do more, to urgently accelerate the process, getting companies over preconceived ideas of the capabilities and commitments of older workers. Exhortation and proselytising would only get us that far. I would like to therefore suggest that it may be a worthwhile investment to incentivise employers to hire older workers by offering tax offsets against the cost of employing these re-skilled older recruits, but for a limited period only of, say, 3-5 years, as the intent is purely to get them pass the existing immediate prejudices and mindsets. Once employers have had the opportunity to get past the initial scepticism, I am sure that they will have enough positive experiences with older workers that sweeteners would no longer be necessary in the long run. No doubt, details of such a scheme will have to be worked out to prevent gaming and abuse. Government has already shown the importance it places on addressing the problem of structural unemployment and enhancing the employability of older workers in the generous funding it continues to direct towards skills upgrading and retraining programmes. This investment in reskilling would go to waste if employers do not respond in sufficient numbers. I believe a concerted effort to incentivise companies for a limited term to hire older reskilled workers would be well worth the money spent. There are other significant factors in the total picture of enhancing the employability of older workers. The two most important that have been discussed often before are moving away from a seniority-based wage system and portable medical benefits. We have been discussing moving away from a seniority-based wage system since the 1980s. As recommended by the ERC, we really need to act much more expeditiously on this. With regard to portable medical benefits, the Deputy Prime Minister has offered both a bit of a carrot and a stick in the budget. But the question is: is this enough, and how can we move this along faster? Both Members, Halimah Yacob and Heng Chee How, have also spoken on this. Finally, while the manufacturing sector continues to be very important to us, many of the jobs that are available, and will be available, are in the services sector. Singaporeans need to change yet another mindset - that of the attitudes towards work in serving others and accord such honest labour the respect that it deserves. This would facilitate the transition we need to make. With that, Sir, I support the motion.

Mr Speaker, Sir, I stand in support of the motion raised by the Minister for Finance. I would like to especially welcome his Ministry's acceptance of the recommendations by the Economic Review Committee on focusing to make Singapore the regional hub for new areas like healthcare, education and creative industries. Sir, I have some time ago raised the notion in this House that Singapore becomes the regional medical hub. This idea is not new; the implications are not unknown. We have, indeed, been there, but balked each time. I hope that this time this idea will not be thwarted again, lest we lose the chance. Sir, Malaysia and Thailand have been making up ground in healthcare services by leaps and bounds. In 2001, the Thai's Bumrungrad Hospital alone saw 225,000 foreign patients; much more than all the hospitals in Singapore put together. Treatment like open heart surgery, once considered beyond the abilities of many hospitals, is something most hospitals in Malaysia and Thailand offer today, at a fraction of the costs charged here. Both Malaysia and Thailand have declared their intention to go for a bigger slice of the healthcare pie in the region. Both these countries have the advantage of lower costs and the marked difference in costs is driving large numbers of cost-conscious patients from the region away from Singapore. What are the serious questions encountered from this idea of making Singapore into the regional medical hub that caused key players to abandon it in the past? First, the fear of spiralling cost of healthcare. Second, "the demonstration effect", which is the effect of increasing demand from the local populace expecting the services being offered to foreign patients at full-fee paying prices and perception of inequality. On the point of spiralling costs, having more full-paying foreign patients, apart from giving a spin-off effect for our other services by having more visitors to Singapore, may be a source of subsidy rather than a cause of rising healthcare costs for local patients. Sir, there is a need for a mindset change here. Getting more foreign patients paying full rates help hospitals in operating costs and may moderate the need for future hospital fees hikes. It is more cost effective and sensible to share expertise and expensive equipment in Singapore, especially in the very specialised fields like liver transplants and gamma-knife facilities. There is not a sufficient pool of patients to support these areas from our population of 3 million people. Super specialists will get more patients to keep their skills and improve on them. This will benefit both the local and foreign patients in the end. Mr Speaker, Sir, the present scheme of blurring the private and public sectors by allowing private specialists to come back to public hospitals as visiting consultants and allowing public hospital specialists to practise in the private sector will minimise the ill-effects of doctors leaving the public sector for more lucrative returns in the private sector. There are enough specialists, especially in the private sector, to cater for both local and foreign patients. Private hospitals today are running at less than half capacity. Spiralling healthcare costs are inevitable the world over. Having foreign patients here will have a cushioning effect rather than a worse-off effect in this respect. Sir, the real reasons for our inevitable rising healthcare costs are the increasing expectations of patients, the Government's assurance that our public healthcare system is the best, the demographic variables of population growth and age structure, the changing epidemiological patterns of diseases with a shift towards chronic degenerative conditions requiring intensive and longer-term care and the rapid advances of complex capital-intensive technology. On the point of perception of inequality, consensus must be reached through more informed discussion and public education. Assurance must be given on good affordable and basic healthcare to all Singaporeans. Sir, the demand in medical care could be moderated by the suppliers themselves. Since consumers cannot exercise their sovereignty in purchasing the appropriate amount and level of medical care in most cases, they are invariably dependent on the expert judgement of the providers. Hence, to address this issue, healthcare providers can be subjected to the audit of an effective watchdog body with a system of checks and balances and healthcare providers should be bound by ethical codes of conduct. Public hospital A-class beds should be limited to not more than 13%. A further measure may be the requirement of the public hospital providers to follow prescribed fair allocation of time for local populace as against foreign patients. What are the challenges facing this path of being the medical hub of the region? Sir, I feel the following areas are worth elaborating. Singapore's healthcare services are high in costs and fees in comparison to about half in Malaysia and about one-third in Thailand. In this respect, I applaud the Economic Review Committee's recommendation to ensure adequate supply of land at institutional rates for medical hub developments. Singapore may have lost the edge to Malaysia and Thailand for many low-end medical treatments and Singapore should aim for high-end medical treatments such as transplant surgery, complex heart surgery and other complicated or advanced surgeries. There must be concerted efforts by service providers to contain and keep healthcare prices more competitive. Sir, I feel that integration of the private and public sectors is the way forward to maximise our resource pool, to have better economies of scale, to contain costs and to avoid duplication of services. Sir, there is a need for mindset change here by the Government to treat these two sectors as one entity to achieve our aim of being competitive globally. I therefore welcome the Economic Review Committee's recommendations on the establishment of a responsible healthcare consumer forum for greater transparency on pricing and clinical practice norms and the introduction, selectively, of subvented healthcare at private facilities to help generate economies of scale in the private sector and enable them to provide more cost-competitive services. Sir, Singapore has a very good reputation as a centre of medical excellence and our healthcare professionals are recognised for their high quality and efficiency. We need to have more structured aggressive marketing of this fact. Both the private and public sectors must undertake this in a coordinated manner. Remembering that there is increasing protectionism of local healthcare services in other countries, joint-ventures with reputable big names within the region to form strategic alliances may be necessary. Other areas worth considering should include offering incentives and recognition to healthcare professionals, strengthening international professional associations and enhancing networking with regional healthcare providers. China is a country with a huge potential demand for healthcare services and is a new market that needs our immediate attention. Sir, in order to have the upper edge, there is a need for innovations and an ability to predict future trends. For example, with the trend towards an ageing population, there will be an increase in the incidence of chronic diseases. Thus, a greater focus on strategies in eldercare and health promotion as well as development of treatments for chronic diseases should be encouraged. A good example would be the recent improved surgical procedure by our local doctors on reshaping the heart to give patients with chronic heart failure a new lease of life. For nearly two-thirds of patients who are waiting, often in vain, for a new heart, this new procedure is a solution. This procedure costs a third of the price of a heart transplant and thus gives us the extra advantage with regard to foreign patients. Sir, our "research culture" had not been great and "clinical research", especially, was never the emphasis. Our public hospitals' priorities are driven by maximising immediate returns. Clinicians, especially the specialists, are incentivised to treat as many patients as possible; they become too preoccupied with the routines and are required to tend to maximal numbers of patients. That leaves them with little or no time to teach the juniors, let alone spend time on research. A lot of changes at our institutions are required to promote, identify and support the different aspects of clinical research. Research activities on the world-wide prevalent diseases should be expanded expeditiously. One good example is the research on prevention, early diagnosis and drug therapies to combat coronary heart diseases. Sir, in order for Singapore to remain competitive, we need to pay attention to the training of the future generation of our healthcare providers. Only by continuing to invest heavily on our undergraduate and postgraduate medical education will we ensure that our doctors will be competent and conversant with the new developments in medical sciences. Thus, our investments on the Health Manpower Development Programme ought to be enhanced. The learning of medicine is an apprenticeship; one cannot be a good doctor just by reading textbooks. We must encourage those who are willing to teach and those who are willing to learn by providing them with the opportunities. Sir, it is worthwhile to include the extension of the service hub to become a training hub, as this will boost our aim of being a medical hub in the region. This will have the effect of promoting collaboration with doctors in the neighbouring countries and of gaining their acceptance of us. Training is a great professional relationship creator. The goodwill and mentorship will continue long after the training period is over. Word of mouth is the most effective form of advertisement of our medical capabilities. It would be far more effective than any advertisement campaign, which might earn the wrath of the authorities in our neighbours. There is also a need for the public sector to involve the private sector as partners of the training and service hub. Only then could we have optimised our strengths as a medical hub in the region. Innovative packaging with other products such as insurance, travel arrangements, hotel and shopping needs should be facilitated to make it more attractive for consumers to come here. The various service sectors will no doubt benefit when the consumers decide to come. A coordinating body that plans and complements the different services to meet the needs of end-users in a mutually consistent way should be formed. Sir, while I am supportive of most of the Economic Review Committee's recommendations on promoting Singapore as the regional medical hub, I do have a differing view on their recommendation on reviewing the regulations in the Public Hospitals and Medical Clinics Act, with a view to relax restrictions on responsible institution-based advertising locally and abroad. Sir, ethical issues have always been of paramount importance in the conduct of our medical profession, especially with regard to advertising or medical services. There is already provision for limited and responsible advertisement locally by individuals and an even wider provision for public institutions. Advertising abroad is restricted by the enacted laws of the foreign countries, thus forbidding others to advertise in their countries. The gamma-knife incident a year ago is a good case in point. The Malaysian doctors viewed the promotion of this new modality to a group of doctors and the public in Kuala Lumpur by a Singaporean doctor to be ethically unacceptable and indeed lodged a complaint to the Singapore Medical Council. Indeed, there were formal complaints lodged with the Singapore Medical Association in the past by neighbouring medical associations that Singapore doctors and private hospitals advertised their medical services in the newspapers and the Yellow Pages of the neighbouring countries. The complainants felt this was distasteful and unethical. Sir, the concerns arising from relaxing advertisement locally by individuals will be the creation of unhealthy demands for certain services by locals rather than attracting foreign patients. The possibility of boosting unnecessary local consumption and over zealous advertisements may also mislead the public. Liberalising advertisments locally may degenerate into enticement or persuasion of the public to use medical services for maximising profits of the doctor. Sir, I do hope that the Finance Minister would consider my suggestions on making Singapore the regional hub for healthcare.

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. 3.40 pm

Mr Speaker, Sir, thank you for allowing me to participate in this debate. Last year seemed to be the "R" year for Singapore - Singaporeans were introduced to many "R" words that they are not usually used to - restructuring, remaking, refreshing, revitalising, renewal. Those are the few that I can think of so far. Actually, these words have one thing in common. They are the base words with the prefix "re". I am not a linguist but these words suggest that what we have been doing previously are no longer relevant. Thus, the need for us to redo them, and we must before Singaporeans get fatigued with the letter "R". Sir, I am going to focus on several aspects related to the issue of Enhancing Human Capital presented by the Minister for Finance and the ERC Report. Like many of my colleagues in the House, I welcome the Government's decision to set up a statutory board to facilitate this process. The first point I want to talk about is the issue of training and lifelong learning. Sir, apart for the "re" words, Singaporeans are also rather fatigued with this constant reminder to train and internalise the value of lifelong learning. Yesterday, Ms Indranee Rajah eloquently argued that Singaporeans should just pull themselves up together and do their part and not expect the Government to do everything for them. Certainly, this is easier said than done. How many Singaporeans are actually hearing the calls made in this House and outside this House by Ministers, MPs, union leaders, etc? But, more importantly, how many in this House are hearing the cries and pleas of Singaporeans? Are we speaking in different languages? Do we understand Singaporeans enough? Are we reaching out enough to the different target groups? We need to understand the deeper and more complex issues that will motivate Singaporeans to accept the need for them to train and continue to train.

3.42 pm Madam, the Ministry of Manpower conducted a study on adult training in the year 2000. Overall, it was found that only a third of the economically active Singaporeans engaged in training. The timeframe was 12 months prior to the study. Also, it was found that participation in training is inversely related to age and educational qualification. The higher educated workers were more willing to undertake training than the lower educated ones, and so are the younger workers compared to the older workers. Of significant importance I think is the finding on the motivations or lack thereof among those two-thirds who did not actively participate in training. One quarter of them indicated no desire to train at all. Amongst those who indicated interest, factors that will motivate them to train include whether the training can improve their career prospects, having more time to go for training, the affordability of the course fees, and when their family commitments are taken care of. A more recent study in 2002 amongst retrenched workers also showed similar trends, especially the inverse relationship between educational qualification and age with willingness to undergo training. In this study, it was found that the educated workers were two times more willing to train compared to the less educated workers. Amongst those who were re-employed, 30% indicated their unwillingness to seek training. More than a quarter of them gave the reason that it is not necessary or that they were not required to go for training - this despite having been retrenched previously. Madam, obviously, there needs to be a targeted approach at different groups. I wonder if we have studied these trends sufficiently. Are we being fair to Singaporeans in asking them to buck up and do their part, when perhaps they have very little idea what is happening and what they are expected to do? I wonder if the Government has an indication how many Singaporeans have actually picked up the ERC Report, whether in the bookstores or downloaded them from the Internet. How many Singaporeans, especially the lower educated, understand what is in the Report? Do they really know where we want them to go and what they are supposed to do? I have argued before in this House the need for Singaporeans to identify and own the problem that we face. We have to make them understand these problems and then own it together with the Government before we can expect them to come up and do their part. I think, so far, all they have heard in the last two years is, "economy is bad, so cut CPF; economy is still bad, cannot be choosy; economy may still remain bad, must go for training and upgrade yourself; must remain relevant, otherwise you will be in trouble." Basically, keep striving; do not be complacent, or else you will be left behind. This leads me to my next point - implications of this requirement to upgrade on the family. The earlier list I highlighted also noted that training was more prevalent amongst workers who are single compared to those who are married. Of course, if we factor the issue of age and educational qualification, we will realise that those who need training most are not getting it. This is not surprising as heavier family commitment could have hindered training participation amongst the married persons. Madam, to many Singaporeans, this is the real issue. The average couple with two school-going children work during the day and spend the evening supervising their children's education, if they are capable of. Some have difficulties even doing so. Some have to work two jobs to survive. Now, we want them to train and upgrade themselves, to develop our human capital. With this growing emphasis for Singaporeans to develop and upgrade to stay relevant and perhaps sharpen their competitive edge, we must seriously consider the impact on the family. Unless training opportunities are available during working hours, most training is often done after working hours. There needs to be a supportive infrastructure to enable this to be part of the living patterns of Singaporeans. Without such infrastructures, many will find the pressures too harsh to handle. We already have problems of latch-key children with two parents who have to work during the day. Can you imagine the phenomenon that will develop when parents have to go for their classes in the evenings? These are systemic effects that will further challenge the institution of the family. Madam, with all these complex demands on Singaporeans and their families, do we wonder why many Singaporeans choose to remain single or not have children? I would like to support the call by Mdm Halimah Yacob yesterday to set up the National Council on the Family to ensure a more systematic and systemic approach at addressing issues affecting the family. A related aspect to the family is that of youths at risk, as we enhance the human capital. As we discuss the impact of this new development on the family, one issue that arises is that of youths at risk. Reports have recently shown the sharp increase in juvenile crime and many experts attribute it to the lack of parental supervision in the family. Can you imagine what it would mean when parents are expected to spend more time in training? What will happen to the supervision of their children? Sir, for those children and youths who are already victims of circumstance and currently undergoing rehabilitation, we must ensure that sufficient resources are allocated to allow them to develop their potential too. Many do find it difficult to fit back into society and may then graduate to be adult offenders. We must prevent this from happening. Madam, we must also do what we say. When we say that every Singaporean matters, we must recognise their potential and facilitate their enhancement, including those who have failed before. The next point I would like to touch on is that of the responsibility of the private sector in facilitating this whole notion about lifelong learning and continued education. We have been asking much of Singaporeans and I think Singaporeans have been trying their best to do their part. They swallowed painfully the reality when told that their employers' CPF will not be restored fully for another two years. Last year, during the debate on the CPF issue, I highlighted the need for employers to do their part. This is even more crucial in terms of training. The MOM study I cited earlier also indicated that workers in the public sector are twice as likely to have gone for training compared to those in the private sector. Madam, the public sector, as I was told, has a policy that every civil servant has the right to 100 hours of training per year. This is very encouraging. But I do not think there is any such policy for workers in the private sector. It is up to the respective employers to facilitate the process for their workers. It is a culture that has to be developed, but if the environment is not conducive, then the value will not be internalised by the people. I encourage the private sector employers to also do their part in making this restructuring work. Much is provided for them in the Budget to facilitate their business but they must also do their part in making it easier for their workers. I encourage the Government to consider mechanisms that will recognise employers who are pro-training, as we recognise pro-family firms. A code in relation to training rights of workers akin to the one in the public sector should be drawn up and implemented in the private sector. Madam, the education profiles of our workers are diverse and I have made the point about the different approaches needed to reach out to them. The educational levels of our workers have also proportionally increased over time. As we encourage the internalisation of the value of lifelong learning, we need to ensure that Singaporeans have the means to upgrade themselves and certainly take personal responsibility for their training and upgrading processes. The Government has allocated much resources in this regard, through the various programmes as well as through the Lifelong Learning Fund. However, in line with encouraging personal responsibility, some of these workers may need to top up the course fees. Another group of workers who may need substantial resources in upgrading are the professionals and graduates. To them, the only way up is to get post-graduate training. Currently, however, there is very little support in this area. I would recommend that the Government consider setting up a separate account in the CPF called the Lifelong Learning Account which can be used for topping up of course fees as well as fees for post-graduate training. This will certainly facilitate Singaporeans' ability to upgrade themselves, especially the higher educated ones who already have the necessary motivations. I recognise that the Government has already raised the tax relief for course fees to $3,500 as well as allow tax relief for fees for seminars and conferences. This is indeed laudable. But the individual Lifelong Learning Account will further enhance the ability of Singaporeans to internalise this value of lifelong learning. The reality is that very few Singaporeans have cash savings to be used for upgrading and allowing them to use their CPF savings will go a long way in this regard. Madam, the "re" words that I started out with imply a constant process of change. Any change will create systemic efforts on the different actors in the equation - from the workers to the families, to the employers and subsequently to the Government. Each plays a critical role. The action of one will affect the others and we need to speak to each other in a language that each understands. We know that we need to enhance our human capital - indeed, I grew up being indoctrinated with this point that human resource is our best and only asset. For the people to accept this, they need to be convinced, and sold too. They need to own it. I encourage the Government not to tell them what to do, rather to share with them what we can do to make this work. My last recommendation is to produce a simplified version of the ERC Report and let every Singaporean have it. Allow Singaporeans to own the Report, the process, and the direction we are heading. Madam, I support the motion.

(In Mandarin): The Deputy Prime Minister, in summing up his Budget Statement, said that, "In a rapidly unfolding situation, all work must be done onboard ship while we are sailing and battling the elements. There is no safe harbour where our ship can shelter to rebuild and refit, before heading out to sea." This statement has clearly spelt out the core spirit of the Budget Statement this year, that is, the Government has the means to formulate many strategies to deal with and resolve every crisis. However, the best medicine for us to ride the storm is to enable our people to emerge from every crisis stronger, more resourceful and resilient, so that Singapore could become an entrepreneurship and creativity hub. We never doubt the Government's wisdom in facing with any economic predicament and the courage it has to fight all the odds against us. On this occasion, all the various cost-cutting measures and the pro-business environment that is created are all very familiar to us. Many MPs have spoken about these and I would not repeat these points. Today, I would like to raise three points: firstly, to intensify the concern for small and even micro enterprises; secondly, educate the people on the importance of promoting entrepreneurship; and thirdly, to tell how difficult it is for the Government to be a caring parent to us. The Government places much importance on the large enterprises. There is nothing wrong about it. In each and every Budget, special consideration is always given to them, and quite rightly so. But the small and even micro enterprises among us seem to have attracted relatively less attention from the Government. In the initial stages, many of these small or micro enterprises gave full play to the fighting spirit of the entrepreneurs to become the sources of future large entrepreneurs. But the road to success is inevitably full of hardships and difficulties. In the process, many of them lost steam and phased out. If we want more large entrepreneurs to be born, should we not show more concern for the sources from which these large enterprises were evolved? I suggest that some dialogue sessions be conducted for these small and even micro enterprises, to find out the needs and achievements of these enterprising fighters who had started off in a low profile, so that they could make bigger contributions to society earlier. At the same time, we should introduce their entrepreneurial spirit and success stories to our people, and inspire the growth of an entrepreneurial spirit among our people. Of late, we frequently read in the newspaper reports of young people starting off new ventures and the perspective of advocating entrepreneurship, as though starting new business ventures is the best way to overcome the economic predicament. In fact, what we need more urgently is to cultivate the entrepreneurial spirit of Singaporeans. A professor of Business Administration from the Royal Melbourne Institute of Technology, Australia, spoke at a youth leadership forum recently that to encourage the people to venture into business, we have to start by reforming our educational system to inculcate in our young people the spirit of entrepreneurship. What is the spirit of entrepreneurship? To possess the spirit one must dare to take risk, be responsible, creative, farsighted, have the will-power and perseverance. Do we provide the kind of training to equip our young school children with such a spirit? I suggest we compile the subject materials into a drama that can be performed in schools and case studies to be debated upon. All the events happening in our society should also be compiled as case studies for brainstorming by our students in the secondary schools, junior colleges and universities. At the same time, we could invite entrepreneurs of various age groups to hold dialogue sessions with the young people, and train our students during their schooling days to adapt to any kind of situation and environment. On the surface, these activities may appear to have nothing to do with the economy but, on the contrary, it is precisely the spirit that is most needed in times of economic difficulties. The spirit of entrepreneurship is the key spirit for Singapore to brave the wind and the waves. We should start cultivating this sort of entrepreneurial spirit among our people as early as possible. Thirdly, it is difficult to be parents. Yesterday, Ms Indranee cited the example of this collision between a motorcar and the MRT train. She felt that people should ask: what on earth was the Mercedes doing on the MRT track, rather than blame the Government for not taking enough preventive measures? I am raising all these examples to remind Singaporeans that they should not be like the fourth type of Singaporeans as described by Mr Seng Han Thong, that is, those ignorant people who know only how to complain, to blame others but never to blame themselves. Let me quote another example. Two days ago, I was visiting my residents in Radin Mas. The owner of a garment shop complained to me that the Government had allowed some other people to sell dresses near his shop and stole away all his business. He also commented that the HDB should have taken some measures to create a wave of people passing by the area where his shop was located. I was a bit curious. So I went to take a look at the dresses that he was selling in his shop. The answer was obvious. The designs of his dresses were so outmoded that even my mother would think that they were old-fashioned. Who would buy his dresses? So, rather than complaining, why does he not think of ways to resolve his problem? Likewise, Singaporeans should learn to be more self-reliant. In his Budget Statement, DPM Lee pointed out the way for Singapore to go. At the same time, whatever can be done for our people has already been done. Dr Wang Kai Yuen has rightly pointed out that Government is not a magician. I think it is time for Singaporeans to make contributions. Ask not what the Government can do for you, but what you can do for yourself. We have to be more realistic in our expectation in life. Which other government in the world has this habit of distributing ang pow to its people? Which other government would subsidise its people to attend courses and upgrade themselves? I think ours is the first in the world. It is very difficult to be parents. I firmly believe that, as parents of our people, the Government will continue to take good care of our people, to help and guide them. I also believe that, as children, the people of Singapore should also appreciate the good intentions of our parents. We should be responsible. We should know what is right and what is wrong, and be responsible citizens of Singapore. I support the motion.

(In Mandarin): Mdm Deputy Speaker, since 1997, we have been living under the shadow of the Asian financial crisis. After the September 11 event and the Bali bombing in 2002, we are further faced with the problem of terrorism. It is difficult for us to predict how the future will be. In this extraordinary time, the Government of Singapore is proposing a $1.2 billion deficit budget, with lots of utilities and SC&CC rebates, plus another $500 million set aside for training programmes. These are very good measures. The Government has done all that it is expected to do. But the main concern now is to keep the jobs for the employed, and train the unemployed so that they improve on their employability. Mdm Deputy Speaker, I would like to speak on the problem of unemployment and the entrepreneurship mindset of our young people. Our unemployment rate has not come down. The forecast is that it would be between 4.5% and 5% this year. It is now difficult for those who are retrenched to find another job, especially those who are not well educated and above the age of 45. Having to compete with younger and better-educated workers is indeed an uphill task for them. I hope that the Government would do something to encourage the employers to take on the older workers, apart from providing training and retraining opportunities for these workers. In good times, of course, we think of automation, computerisation to improve productivity and reduce labour cost. But in this difficult time, can we not change the employment attitude? Under the premise of not increasing the cost of labour, we can look into how we can create more jobs for the people. Let me give one example. In the past, car washing at petrol stations was almost all done by automatic car-washing machines. Nowadays, I observe that many petrol stations have switched to manual washing. Two years ago, a certain petrol station at Jurong West Street 93 was planning to install a car-washing machine. But, because of the recession, the petrol station proprietor gave up the idea of automated car washing, and decided to invite the residents nearby to provide manual car washing for his customers, working on a two-shift basis. They charge $5 for every wash, the same as in the automatic car washing stations. For every car washed, $1 would be paid to the petrol station, while the remaining $4 will be shared by the workers. With 60 to 80 cars washed daily, each car-washer will get some $1,500 a month. The petrol station proprietor earns $2,000 a month, without having to commit a capital outlay for the automatic car-washing machine. If every petrol station can have about 10 people working as car-washers and with some 200 petrol stations in Singapore, some 2,000 jobs are created. I think this kind of idea can only be generated in the private sector. Borrowing from this concept, I would like to make some suggestions for the public sector. For convenience and easy administration, the canteens in most schools are let out to contractors on a tender system. The successful tenderer would then sublet the various stalls to the individual hawkers at a higher rate. Many stalls remain vacant as the hawkers could not afford the high rental. In good times, this may be a good way of management. Now, with the high unemployment rate, can the Ministry of Education consider changing the system by renting the stalls directly to the individuals, preferably the residents nearby, so that they will not have to pay higher rents to the canteen operator. In this way, more people will get the chance to earn a living at a lower cost. Of course, administratively, it will be a bit difficult but it can create more jobs for Singaporeans. Next, I would like to talk about building up team work. Globally, the global political and economic scenes have changed. We can now sell our Singapore brands to the world market, and this is one way for our SMEs to survive. The GLCs and some of the larger private companies have already gone into China, India and Vietnam for their development. But, in respect of encouraging team work and entrepreneurship, we can do better. SIA, PSA, JTC, HDB etc, have already become well known brands in Asia and all over the world. These GLCs can take the lead and leverage on their experience and reputation to take on the role of matchmaker to take our SMEs into the international markets, such as China, where every businessman would aspire to enter. It is a big market, full of attractions for everybody. But in order to have a competitive edge in China, we must first of all satisfy three preconditions: financial capital, energy and a team. You must have large capital, you must have a team which you can depend upon and you need to have the entrepreneurial spirit. When we invest in China, we compete not only with the Chinese traders but we compete with the world. So China has become a centre of contention for the whole world. One example is the Taiwanese investors. They have their people in Guangdong, Shanghai, Jiangsu and the Suzhou Industrial Park. They work as a team. They have a good financial funding system for international investments and development. They have this kind of entrepreneurial spirit. Their projects are closely watched and esteemed by the Chinese Government. But the Singapore SMEs do not have this advantage when they go over to China. Our investors tend to play solo when they venture into China without the support of a team. They lack capital, and they cannot do much to develop and establish themselves. Singapore has built the Suzhou Industrial Park (SIP) which is now well known throughout China. Recently, I visited Qingdao in the Shangdong province. An official there told me that he and many of his colleagues had gone to the Suzhou Industrial Park to learn. I asked what they were learning from the SIP. He replied that they were there to learn the Singapore management system and the Singapore experience. Our endeavours at the SIP have created a good impression on the senior officials throughout China. When asked further, he said that the Chinese entrepreneurs learnt from Singapore about planning, administration and management; from Taiwanese they learnt how to make money; and from the Hongkongers they learnt about entrepreneurship. Having learnt from them, the Chinese now have all these three pre-conditions to success. They will be able to break through their old framework and make a lot of money. Their economic growth was around 8% every year for the past five years. So, we must seize the first available opportunity to go to China, preferably within the next five years, otherwise we will miss the boat. In Singapore, we have already good management, planning and experience. We should next learn from the Taiwanese how to make money and learn from the Hongkongers about entrepreneurship. After having acquired all these, then can we make a world for ourselves. With very keen global competition, we want to be able to create products and services to compete with the world. Then we must be able to strengthen our entrepreneurship. To promote entrepreneurship, overall efforts are required for a sustained period of time. It depends on not just the Government, but also on the kind of social culture to promote entrepreneurship and to change the mindset of the individuals. Government departments must also change their mindset, so as to create a good environment conducive to the cultivation of entrepreneurship. Senior Minister Lee spoke at the Nanyang Technological University that Singaporeans must turn away from the existing mindset of over-dependence on the Government if they want to continue to enjoy prosperity. I think it is a very important message. The GLCs should not depend too much on the Government. They must take the lead to help our local enterprises to go out of Singapore and into the world, to sell our brand overseas and not just to stay on in Singapore and compete with our own SMEs, sharing the very small pie with them. To become a globalised city and to promote entrepreneurship, we must be able to step into areas that others have not developed before. Social problems. Young people in Singapore are very lucky. They are born in a very comfortable and affluent society. They enjoy a good living environment, good education and are able to learn from the information technology such as the Internet. They thus get to learn from information from all over the world. It is apparent that the young people nowadays have better opportunities than we did. There should be more consciousness of national patriotism. But they are apathetic to politics. They are not interested in national and current affairs. They are indifferent to the threat of terrorism and to the possible effect of the war in Iraq, or even the souring of the Singapore-Malaysia relations. Yet, they chase after their favourite pop stars, such as the F4 and the 5566 . They are simply crazy over these idols. On a more serious note, according to a survey, more than 10% of our students in the institutes of higher learning do not know who the Prime Minister of Singapore is. I think this is some mindset that we cannot accept - young people who care only for themselves and the world around them. They think only about where to travel to, but do not care about major national events. They are simply bo chap - they do not care. These are all very serious problems for the nation. The young must take this matter very seriously. We cannot allow this to deteriorate. Mdm Deputy Speaker, I support the motion. 4.18 pm

Thank you, Mdm Deputy Speaker, for allowing me to join in this debate. I will not belabour on some of the points already raised in this House over the Budget, except to say that I fully support the calls made earlier to make sites more affordable for businesses to thrive, to look deep into what brands Singapore and makes us unique in this area in a globalised world, and to identify what are the key performance indicators. To follow up on what the Senior Minister of State, Mr Khaw Boon Wan's point that we believe truly that we do not confuse us being good with what really makes us great, because that affects our performance and how we aspire. Having said that, I would like to raise three main points. Firstly, on training and retraining programmes. It is commendable that the Government is pumping $500 million into the Lifelong Learning Fund, bringing the total to $1.5 billion. It is equally commendable that the Ministry of Manpower has also pumped more money into the Skills Redevelopment Programme. These are pro-active measures. However, sometimes one has to be a little bit cautious in getting consoled over sheer numbers. The programmes we have are: (a) Skills Redevelopment Programme; (b) NTUC Education and Training Fund that provides union members training; (c) IT Literacy courses to equip workers with IT skills; (d) BEST/WISE programmes; (e) Critical Enabling Skills Programme; (f) Certification courses for those in technical fields; and (g) Workskills Training Programme, etc. The list is quite long, the website is quite interesting. However, my concern here is: is this information going down to the retrenched worker or any worker, so that he knows what is this buffet of courses that is available, and what each of these courses gives him in terms of a better job prospect or a better skill-based kind of training that will take him further? Therein lies my main concern. The changing dynamics facing a worker today puts more onus on the worker than the employer to know what is out there, to pick up the courses that are relevant to him to make him a better worker and, more importantly, relevant, so that he can feed himself and his family. In this case, it is gender-neutral. I am talking primarily about a change in mindset, in how we administer these training programmes. If ownership is in the hands of the employee, then he or she can attend training courses with the blessings of the company. For this to work, it is important to develop independent industry-focused career development units, rather than company-based human resource development units. This way, the worker can be counselled on his particular industry, beyond the company's needs. To expect employers to work out good strategies for employee development can only go so far, as the employer will, at the end of the day, be more interested in his or her own profits for the company. Though the Ministry of Manpower and the unions have enforced a number of good practices where development/enhancement of workers is concerned, at the end of the day, the sourcing and development of new programmes is not happening fast enough, as it has been dictated by the demands of the employer. An employee-demand on programmes cuts through this problem also of encouraging workers to attend training courses and help them to take total ownership over their whole career. Let me also qualify that I make this suggestion in the hope that it can be applied with a greater thrust to the younger workers right now who are more nimble and can ascertain for themselves what they want where their work life processes are concerned. In this aspect, I also endorse what has been raised by Mrs Lim Hwee Hua, especially when it concerns the younger workers, that we do not think about it anymore as an end-point of retirement age at 55 or 62. The earlier we put such practices into reality for younger workers, perhaps it will not be so severe for them in a world that is making more demands day by day. Much has already been said about Mr Sim Wong Hoo's piece entitled "NUTS" and the need to nurture creativity and entrepreneurship. I would just like to add one important point of view here. I feel strongly that more space must be created by middle and top management levels to allow workers to try out new initiatives. What do I mean by "space"? It is important to allow for mistakes to happen. Hopefully, it will not be too costly, but part of that creative process is to make mistakes. In finding new solutions, when it comes to mistakes, that in itself is a creative process. It is easy for institutions and companies to be lulled into a state of complacency when many of their employees are in WITS programmes and other sub-committees. That is fine and well. But what is more important is the daily interaction within the office space, eg, how the middle or top management layer or even the immediate line supervisor reacts to the worker in the field, what are the suggestions that are taken on board, because each suggestion is a creative process. But we do tend to fall into this trap of a box. When it is time to think WITS, we wear our creative hats. Outside of WITS, we think of how can we follow the rules. Rules are guidelines to direct an outcome in a consistent manner. Perhaps, sometimes it is good to follow what I heard from a certain CEO: "Just go ahead and do it. If it is wrong, then ask for forgiveness later." So, being bound by rules, the fear of making mistakes has crippled quite a lot of us into not being able to think creatively. I think the Minister of State for Entrepreneurship will have to take this on-board in how to make us less fearful of making mistakes. In my view, this has become one big dampener in trying to create an environment that will help people to think differently and try out new areas. My third point is with regard to job losses and retrenchments. Like Mdm Halimah, I am concerned if enough has already been done internally within an institution first before the decision to shed jobs was arrived at. One example I can think of here is Ikea's philosophy. For a long time, they have always looked at wanting to make their furniture affordable to the income bracket that they are targeting at, ie, the middle income earners. One way that they have gone about doing it is to ensure that even top management staff do travel economy class. Sometimes, in a far-reaching event like this that we are faced with today, when we have to go through the process of retrenchment, it is also good to relook at the processes within a company, to see whether they have been cost-effective enough from top-down. If not, perhaps it is time to have certain guidelines for public and private institutions that will ensure longer term employability for a good workforce that is keen to keep up with skills training, rather than the bottom-end paying the price for the top-end, or for bad cost-effective structures that were put into place in the company. The other concern I have about job shedding is: how many of our employers have really explored job sharing and flexi-time management schemes before the decision to shed workers was arrived at? Perhaps, such an accountability, that this has not really worked, will help us to understand why quite a number of workers have had to lose their job. This is also perhaps a good time for such companies to be persuaded to pick up such schemes and to put them in place. Many companies have, for a long time, felt they do not want to get into these schemes because they are messy, they complicate administrative processes, especially job sharing and flexi-time. Next, I applaud the initiatives of South West CDC and North East CDC in their joint ventures with various Ministries to retrain retrenched workers into child minders and into caring for the elderly. These are, right now, gaps in our services. To fill up that gap with people who do need jobs, retrain them is an excellent idea. In my opinion, there are also other opportunities in other services if we can get enough training funds and trainers, eg, assistant teachers in special education schools, more administrative support for schools, more estate management staff in hospitals. The older and more mature retrenched workers can be trained as para-counsellors too, so that they can help families in crisis. I am concerned that we do not forget the number of workers with inactive CPF accounts. I think Dr Jennifer Lee has also brought this up - the self-employed, the homemakers and some disabled members. For the homemakers and disabled, this will be an even harder time to return to or enter into the workforce for the first time. Some of them may have dependants with them. I think we should not forget that they would be finding it difficult. Also, how do we keep them on the radar screen? The Minister for Finance has also offered rebates to help residents, based on house types. That is well and good. Perhaps, may I also suggest that we go a little bit further and take into account retrenched residents who may have a tough time finding a job, because they may be living in 5-room flats, etc, so that they can enjoy such rebates at least for a while longer. Lastly, much has been said yesterday about a budget deficit. I think we can live with one, as it is more humane to help people get along with their lives, and it is also the right thing to do. The right thing to do here also is to be mindful of the charities scene, as hard-hitting times usually mean less money flowing to beneficiaries. With that, I support the Budget Statement.

Mdm Deputy Speaker, I rise in support of the Deputy Prime Minister and Minister for Finance's Budget for FY 2003. I am glad that we are realistic and bold enough to have a deficit budget. Whatever the amount, it is still an effort to deal with the current economic situation. I also strongly support the idea of the Ministerial Committee on Services headed by Deputy Prime Minister Lee, and having Minister of State, Mr Raymond Lim, to take charge of the Government's effort to encourage entrepreneurship in Singapore. I congratulate the Ministry of Manpower for setting up a statutory board for Continuing Education and Training to coordinate training and employment assistance efforts for workers. We are indeed facing challenging and difficult times. We see greater global competition, retrenchments, unemployment and restructuring. It must be one of the most difficult times for us since independence. I am confident that we will pull through this period just as successfully. I say this because in the last 35 years, we have diligently built up our competencies. Singapore itself is a reputable brand. Our competencies reside in our GLCs, our advanced technologies, our local businesses, our SMEs, our educated workforce and our management expertise. I think we should not feel sorry for our strong GLCs and also our strong management expertise. This is our comparative advantage. Our growth has been described as a miracle. 35 years ago, without any resources, we succeeded. Today, we have built up so much experience and expertise, we have no reason not to continue to succeed. To move forward, we must all consolidate our competencies. ERC has not left any stone unturned, and the Government has accepted the ERC's recommendations. So, instead of pointing fingers at each other, we must now find ways to work hard and fast together. Like Senior Minister of State, Mr Khaw Boon Wan has said yesterday, we need to work fast and find strength in unity. Both the private and public sectors must find synergy to deal with the challenges. We must identify our strengths and weaknesses and move ahead. We must not be afraid to ride on the economic growth of other countries, such as China, India, Japan, Southeast Asia, Europe, USA and Australia. We already have Free Trade Agreements (FTAs) with a number of them. To succeed, we need special ingredients. I am referring to a fighting spirit to overcome the economic challenges. Now, what we must have is the will to win. Domestically, we should also strengthen our economy. As our economy matures, our spending and consumption patterns become more diverse, corresponding to different levels of disposable income. I perceive these as falling into three tiers. At the top tier are high-end enterprises selling high-end luxury goods. In the middle tier are mid-priced brands with a mass-market appeal. At the lowest tier are very basic consumption goods served up in modest surroundings, with minimum packaging and no frills. They are usually associated with traditional small local services-based enterprises, like old-style kopitiams, market stalls or small neighbourhood shops. They serve to build and strengthen the character of local communities, and also help to preserve the arts, crafts and also cuisine that form a part of our cultural heritage. More importantly, these local traditional enterprises all share humble beginnings. Their very existence reminds us daily that as long as one is determined and prepared to work hard, any self-reliant Singaporean can make a decent, honest living. Thus, more importantly, the third tier enterprises also create jobs. I think the entrepreneur, Ms Olivia Lum, is one good example. Mdm Deputy Speaker, I believe there is much merit in taking a closer look at this third tier of small traditional local enterprises, and ensuring that they too benefit from the Government's measures to help businesses. Without them, we would be left with a much duller and bleaker landscape that bores and disappoints residents and visitors. I urge the Government to preserve the existence of such enterprises and trades in suburban areas, such as Tiong Bahru and Little India. As far as possible, we should avoid resettling or relocating such businesses, even if it means the urban landscape becomes a little less tidy and neatly demarcated. I am heartened to note that discussions on the importance of retaining "old-world charm" has become more prominent in public forums, and that the Government has taken the views of the public into consideration. However, not everything about the old world is charming. I support regular maintenance and upgrading of the operating premises of such businesses, and improving public safety and access. In doing so, we should take care to retain the original character of the place, and make sure that operating costs for the enterprises do not rise by too much. The refurbishment of the Maxwell Road Food Centre is a successful example of upgrading. The hygiene, ventilation and lighting have improved, while the original open-air character and original layout have been preserved. Mdm Deputy Speaker, I have discussed some ways of ensuring that this third tier of small local enterprises does not erode away. I believe it is also important to ensure that those Singaporeans who wish to enter this tier to start small businesses and micro enterprises can do so with minimum costs and minimum red tape. The concept of providing one-stop services to help businesses establish themselves in Singapore is not new. EDB has been employing this strategy to attract big businesses and MNCs to locate in Singapore. The Government's on-going efforts to reduce red tape have also benefited private enterprises. For instance, the one-stop Public Entertainment Licensing Centre helps operators of entertainment outlets obtain all the necessary approvals from multiple licensing agencies at one go. I think the Ministry of Home Affairs has done a good job here. However, more can be done. I urge that this regulatory model and supportive mindset be extended to all forms of businesses and trades. To give an example of red tape, the setting up of the NTUC Foodfare kiosk of about 140 square feet at Jurong East MRT took more than one year, and involved working with as many as seven different Government agencies. Large organisations may have the resources and the patience to wait for administrative details to be sorted out with the relevant authorities. But small businesses or individuals may feel frustrated and discouraged as their livelihood and survival is at stake. Every day spent waiting means another day of lost opportunities. More generally, I also urge the Government to look into promoting all parts of the services sector. The Government has already announced plans to introduce measures to promote the high value-added segments of the services industry, such as financial services and telecommunications. However, not everyone who wants a job in these high-value added segments will be assured of one. I urge the Committee to consider targeted measures to help Singaporeans enter the more conventional segments of the services industry, such as becoming nurses, home helpers, hairdressers, retail sales personnel, waiters, entertainers, security guards or hawkers. This is especially relevant to those workers who have been retrenched from the manufacturing sector and are prepared to consider working in the services sector. I also wish to urge the Ministerial Committee to consider how best to attract young talent from all over the world to come to Singapore to provide services in joint ventures with our local youth. For example, in the areas of accounting and management, water treatment, environmental management, early childhood education, preparation for examinations, food, property management, logistics, hotel management, entertainment, music, design, etc, many may have good ideas but lack funding and resources. How do we ensure that the same kind of investment support that is available to manufacturing, the IT industry and the biomedical cluster is available to start-ups in the services industry? Even though the economic outlook is uncertain, I feel confident that Singaporeans will be able to find niche markets in the services sector and do well. For instance, there is a group of Singaporean musician-entrepreneurs who have been making waves in the regional Mandarin pop music industry. I am not only referring to famous pop stars like Kit Chan or Stefanie Sun, but a group of producers and musicians like Li Si Song, Li Wei Song and Xu Huan Liang, who have produced numerous hits and impressed listeners and fans in Taiwan, Hong Kong, Malaysia and China. I am told that a long line of regional pop stars are queuing up for our local singer-songwriter Tanya Chua to write their next hit. Meanwhile, I have also been told by friends returning from visits to major Chinese cities that every other shop seems to be playing the latest hits of A-Do, our latest male pop export. We also possess some of the best equipped and professional music studios in the region, attracting scores of stars to record albums here. What is the secret of these musicians' success? It is not in copying or imitating pop music industry workers in Taiwan and China. In fact, it is precisely their unique Singaporean characteristics that create demand. Singaporeans are prized in the industry for being thoroughly familiar with Western as well as Eastern pop music and being able to interpret the latest global music trends quickly and creatively for a regional audience. In other words, they serve as an effective bridge between cultures and add value while translating trends. This is a direct result of our exposure to the West as well as to the East, in a multi-racial and multi-cultural society. If our musicians can play this role in the region, surely this inspires other professions in the services sector. I urge the Ministerial Committee to highlight and promote other such examples of new engines of growth within our services industry. Now, I would like to touch on the area of use of scarce resources. With the economic uncertainty ahead of us, it is prudent for us to re-examine the uses to which we put our scarce resources and ensure that help goes to those who need it most. In this respect, I support the Government's move to further expand the use of means testing to allocate healthcare subsidies. The means testing framework that the Government has introduced for step-down care three years ago has benefited patients and their families. I would like to congratulate the Ministry of Health for this effort. However, the Ministry of Health is not the only Government agency that administers subsidies to needy individuals. Other agencies, such as MCDS, MOE, MinLaw and CDCs, also administer subsidy schemes, all with different criteria and requirements. I propose the Government consider streamlining these subsidy schemes and apply a common means testing framework. This will reduce the need for those who need financial help to make frequent and multiple income declarations, and also to reduce duplication of work between Government officials in processing their applications and auditing their declarations. I would also like to applaud the Government for establishing a portable medical benefits scheme to help workers pay for healthcare even when they are in between jobs. This is a welcome addition to our existing social safety nets. I would like to ask for how long is the medical coverage planned to last for each insured person while not employed. Still on the issue of scarce national resources, I have observed constant improvements made by the Government in allocating resources amongst Ministries. We have moved from Budgeting for Results to Managing for Excellence and now Resource Accounting. However, I think it would be beneficial for the House to learn more about the budgeting principles used by Ministries to allocate resources to various projects and programmes. How does each Ministry prioritise amongst different policy areas of concern and measure the effectiveness of each programme? In the last few years, large inter-ministerial committees involving the contributions of large numbers of Singaporeans have been set up. Are there any plans to monitor the effectiveness of their recommendations? Mdm Deputy Speaker, I would like to conclude with some thoughts on the next step for Singapore in maintaining our competitiveness in the global economy. Much has been said about measures on economic restructuring to ensure that our fundamentals remain sound. However, competition in the global economy is waged on many fronts. It is as much about being a choice destination for people all over the world, as it is about effective governance, having a flexible labour market, competitive cost structure and a safe and secure environment. What is it about Singapore that makes people want to visit us, to work and to play here, or to sink roots here? What is it about Singapore that makes our own citizens want to stay here and to contribute? To this end, I urge the Government to consider more creative ways to shape the vision for Singapore as a choice destination and the best home.

Mdm Deputy Speaker, thank you for giving me the opportunity to raise some of the issues regarding Deputy Prime Minister Lee Hsien Loong's speech on the Budget. There are many speakers ahead of me who have brought up various issues regarding the Budget on manpower training and promoting private enterprise. I come to you at this late afternoon to put a little more personal perspective into the issue of private enterprises and its development in Singapore. I represent the business community and both the Singapore Business Federation and the Singapore Chinese Chamber of Commerce and Industry had made responses to the Budget Statement, and both these associations have welcomed the Deputy Prime Minister's pro-business budget. This is a budget that has signified that the Government is responding to the appeal of the private sector for lowering cost of doing business and giving opportunities for SMEs to develop in Singapore. Many of the Singapore SMEs have struggled since 1997 when the economic crisis hit Singapore and the rest of Asia. Many of us in the private sector have felt that the support from the Government is very much welcomed, but for many of the business sectors in Singapore, we have gone from a stage of relative strength in 1996 to today where many in the private sector are in a very weak stage. The effort to reduce the cost of doing business is welcomed, but we are also talking about Singapore now in the stage where there is reduced demand, where the market is not growing, demand is not increasing and where many people are much more cautious about consumption because of their fear of employability and financial security. So, the private sector welcomes the lowering of cost, keeping the CPF lower for the next two years, but we are now struggling with issues of how to transform our businesses and make it more viable. We listen to the Government's earlier encouragement to go regional. But we also realise that businesses have to be strong in their home economy before they are able to have the resources and the capacity to go regional. In Singapore, many of the companies, the ones that I represent, also do not find it easy to grow. May I use this opportunity to also illustrate a very personal experience. When the recession hit Asia in 1997/98 we see, at Health Management International (HMI), much fewer patients from the region coming to Singapore. We are a medical group and we see fewer foreign patients. We also see many of the patients, who used to come to use our facilities, now going to restructured hospitals. They are going to restructured hospitals because their income is going down or they fear for their own job security. So they are moving to restructured hospitals where the services are good and where they are able to receive subvention. There is no way for a private sector hospital group to be able to compete with the subvention of restructured hospitals. For this reason, our performance, as a commercial enterprise, dipped significantly, especially last year, as we got weaker. Last year, we hit a very difficult patch and HMI lost money. It is not news. Many of the members in the business sector were in the losing position the last two years. What do we do in helping local enterprises restructure and respond, and how can we ensure that our local enterprises are able to build their strength in the local economy and move out to compete regionally? As we restructured, many of us in the private sector felt that our local banking system has not been most encouraging. As SMEs restructured and struggled with the need to transform and re-engineer, we find that the banking sector has not been supportive. And they have not been supportive also because there are fewer banks to work with. So, as local businesses restructured, we find a less than supportive banking sector, where the banks are more concerned with how they get their money back than how they are able to fund promising local SMEs and how they are able to help these local SMEs transform and grow again. Second, manpower issue. Private sector companies are competing with GLCs, statutory boards, Government sector and MNCs for the same small talent pool. But, private sector enterprises are not able to compete and offer such high salaries, good benefits, as well as opportunities for growth as the larger organisations in the public sector, the MNCs and GLCs. Hence we see that the main problem of running local SMEs is that we are working with very, very small manpower resources. Is the Government able to help us? Yes, I think the recent budget allocation for manpower upgrading and all that will be able to help us recruit more talents into our workforce. But, for many of us in the local SMEs, this has been, and will continue to be, most challenging. Third, many of the SMEs are struggling to create new businesses out of a very difficult local operating environment. Many of us in the private sector have to contend with regulatory measures and Government agencies to seek the required support, permits, licensing, to get our businesses done. Many of the speakers before me have mentioned that the Government agencies have been very bound by rules. Whilst I applaud many in the civil service have been trying very hard not to bend the rules but to help SMEs get along with the approval processes, this has been time-consuming. If we are running a big enterprise, if we are running a big organisation, with lots of resources, whether it is manpower or financial, I think the process of waiting for approval to happen would be okay. But if you are running a SME with very little human resource, very small human resource capability, and with very thin financial capability, you find that the process of approval takes so long and it is a very expensive process, and SMEs would find it most difficult to be able to finance the waiting process of all these regulatory approvals. Let me cite some recent experiences. When the hard times hit HMI, we decided to transform our business from a health services provider to a trainer of healthcare workers. The logic is very simple. When you cannot do the business in one sector you quickly transform into a sector where there is more demand. We have transformed out of the services sector because of the competition that we have from the restructured hospitals and the shrinking foreign and local patients to the private sector. I think that is fine. In businesses we have to switch our course fast. But when we hit on the idea for training, and we still believe that it is a good concept because the healthcare sector has a huge demand for healthcare workers, so we thought that would be something that is worthwhile doing. And because of the recession, many of the people who would normally not enter the health service workforce have come forward and apply for opportunities to be trained as healthcare workers. So we have a situation facing an SME where you have identified a new business sector where the demand is clear, meaning people who are trained for the healthcare sector actually do get employed. The employability rate is very high. We are talking about 75-95% employability after training for a healthcare career. So what problems did we face as a private sector? The problem we face was that though the Government has been very encouraging in its efforts to provide training and upgrading opportunities for the unemployed and retrenched into service areas where they can find jobs - I think the general support has always been there from day one - what was difficult was the different agencies that were involved with this approval process, for example, my experience with the approval process for one course, the "Enrolled Nurse Training". Singapore has used a lot of foreign workers to staff the lower levels of the workforce in terms of patient care. So many of us, when we go into restructured hospitals or private hospitals, feel that we could be anywhere, in the Philippines or China, due to the sheer number of these foreign workers in our hospitals in Singapore. So if we were to train our locals, what do we do? We went to the Ministry of Health. We went to the Singapore Nursing Board and said that we have this idea and this is the curriculum. We want to train enrolled nurses because there is a huge demand for them amongst our local hospitals and, as we see it, many Singaporeans who are retrenched and unemployed would like to come and train for a career that has potential for further development as well as stability and fairly good income. The approval process from the Singapore Nursing Board took more than six months. And, as we waited, there were many changes to the structure. We need the Nursing Board's approval before we can get the NTUC and the Skills Development Fund to approve the courses for training and subsidy. So all these approval processes took six months, nine months, and we are still working on it today - many, many months after we had started. I spoke to our colleague, Dr Ng Eng Hen, earlier and he said to bring it up in the House. I said yes, I will. I threw away my prepared script and speak from my heart and from my experience because I am not the only example in Singapore. I speak from my experience with my colleagues in the Chinese Chamber and the other business sectors. Whilst we want to encourage local enterprise, we want to encourage creation of new jobs, new businesses, new opportunities, I think the Government needs to look not only at reducing business cost. I hate to be ungrateful when I said that, because the business community has been urging the Government to reduce business cost, and now that they have done it, we say that is not enough. It is a very important gesture to reduce business cost but also to look into all the other circumstances that create a very difficult operating environment for our SMEs and for the SMEs to transform, to grow into strong enterprises so that we can move regionally. Again, using my own examples, I take the Government's directions with very serious belief, conviction and consideration. The Government said the market here is small, go regional. So as an enterprise we went regional, not very far, just 300-400 km north of Singapore, we went into another country to operate a hospital. All is well, except that local SMEs find it immensely difficult to raise funds in Singapore to invest outside of Singapore. And this is why earlier I said we have got to groom our local SMEs to be financially strong, to have a significant market share, to develop human resource and accumulate financial resources in order for them to compete well in the region. So my experience has indicated that there are terrific market opportunities for healthcare service out of Singapore, but as a local SME how do I go there? Local banks do not lend to SMEs who go regional. They lend to SMEs not on your projects outside of Singapore, but on your capability to borrow in Singapore, which again boils down to your financial resources within Singapore. What is there that you can collaterise? What is there that the banks will find it worthwhile to lend you in your Singapore operations? Not what opportunities you have and the future stream of income you can bring back to your headquarters in Singapore because of your wise and good investments into opportunities out of Singapore. Therein lie the problems that SMEs face and SMEs are still confronted with. Many SMEs, whilst waiting for pro-business measures to come from the Government, have been weakened and will continue to weaken if some of these measures do not come fast enough. When these measures and policies come, if the civil service, the administration arm, does not implement these measures fast enough, we will see many, many more SMEs failing, falling on the wayside, before things get better.

We will stop here today. Mr Wong.

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

Resumption of debate on what day?

Tomorrow, Madam.

So be it.

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