Hansard, 2004-03-08

Under the provisions of clause 2(d) of Article 46 of the Constitution of theColumn: 550 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: Name From (2004) To (2004) Mrs Lim Hwee Hua 03 Mar 04 Mar 22 Mar 28 Mar Prof. S Jayakumar 03 Mar 06 Mar Mr David T E Lim 04 Mar 06 Mar 23 Mar 24 Mar Mr Sin Boon Ann 04 Mar 06 Mar Dr Michael Lim Chun Leng 05 Mar 07 Mar Mr R Ravindran 05 Mar 09 Mar Dr Balaji Sadasivan 08 Mar 15 Mar Ms Indranee Rajah 08 Mar 13 Mar 15 Mar 19 Mar Mr K Shanmugam 08 Mar 08 Mar Mr Mah Bow Tan 08 Mar 10 Mar Mr Davinder Singh 09 Mar 09 Mar 11 Mar 12 Mar 15 Mar 19 Mar Mr Loh Meng See 13 Mar 16 Mar Mdm Ho Geok Choo 14 Mar 16 Mar Mr Heng Chee How 15 Mar 16 Mar 23 Mar 27 Mar 31 Mar 02 Apr 11 Apr 17 Apr 13 Jun 18 Jun Dr Lee Boon Yang 22 Mar 28 Mar Mr Seng Han Thong 23 Mar 27 Mar Mrs Yu-Foo Yee Shoon 24 Mar 27 Mar Mr Lim Hng Kiang 29 Mar 01 Apr Mr Abdullah Tarmugi 07 Apr 14 Apr Mr Wee Siew Kim 15 Jun 21 Jun

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:

ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Dr Ong Chit Chung asked the Minister for Defence (a) what is the cause of the recent explosion incident at the Armour Training Centre at Sungei Gedong; and (b) whether safety measures have been followed.

Mr Speaker, Sir, on 23rd February 2004, Active Training Wing (ATW) of Armour Training Centre (ATC) conducted a live firing at the range in Area 'D' as part of the unit's course syllabus to practise the gunners in their gunnery skills and knowledge.

During the night live firing, at about 2000 hours, there was a stoppage in one of the 0.5 inch calibre Machine Guns. The gunner carried out the prescribed immediate action drill, but was unable to rectify the stoppage. The bolt of the gun was stuck in the forward position. The Chief Safety Officer and the vehicle Safety Officer were informed of the incident, and tried unsuccessfully to rectify the problem. The weapon was then left in-situ facing the range targets until the end of the live firing session.

At the end of the live firing, the Chief Safety Officer and the vehicle Safety Officer tried again to rectify the problem, but were unsuccessful. They mistakenly assessed that the weapon was clear of ammunition and deemed it safe to be brought back to the armoury in camp when, in fact, there was a round lodged in the chamber.

At about 1100 hours on 24th February 2004, an Officer and three Specialists drew out the weapon from the armoury with the intent of rectifying the stoppage.

They tried to rectify the jammed weapon without knowing that there was a round in the chamber. In the course of doing so, there was an explosion in the chamber of the machine gun.

The preliminary investigations ascertained the following:

there was a current lesson plan for the conduct of the live firing, and the live firing at the range was conducted in accordance with the lesson plan.

Incorrect procedures were adopted by the two Officers at the range to check whether the jammed weapon was free from any ammunition.

The actions taken to rectify the jammed weapon after it was brought back to the unit were also incorrect.

As regards medical coverage, there was proper medical coverage in the unit and the evacuation procedure was prompt and correct.

Four servicemen, a Regular and three Full-time National Servicemen, were hurt as a result of this incident. One of the National Servicemen was required to undergo an operation to remove fragments from his eyes sustained from the exploded weapon. He has been discharged from the hospital, and is recuperating at home. The remaining three servicemen sustained minor injuries and were treated as outpatients. All four servicemen will have their medical condition reviewed by the medical specialists over time.

A Board of Inquiry has since been convened to investigate the circumstances leading to this incident. Disciplinary action will be taken against individuals found to be negligent or to have contravened the established procedures and safety regulations leading to this incident.

Sir, should the officer or men not send the defective weapon to the armourer or ammunition specialists? What lessons can we draw from this particular incident, and can such lessons be incorporated into the training of our officers or men?

Sir, the correct procedure for dealing with such a situation is that if a gun stops and there is a round in the chamber or it is assessed that there is a possibility of a round in the chamber, the gun should be left in-situ. The armourer should come to the range and clear the weapon and rectify the fault in-situ. The officers incorrectly assessed that there was no round in the chamber which led to the string of events.

Dr Ong is quite correct. This is something which should continue to be stressed to the soldiers and officers.

The following Question stood in the name of Mdm Ho Geok Choo -

2. To ask the Minister for National Development (a) what are some of the driving assumptions for policy changes with regard to home ownership; and (b) what will be the tipping point for his Ministry to recognise singles for absolute home ownership.

Question No. 2, Sir.

The Minister who is replying is not here yet. I will go to the next Question.

Later ---

Mr Speaker, Sir, the objective of the public housing programme is to provide affordable housing for Singaporeans. Home ownership remains the key mission of public housing, as it gives Singaporeans an asset and a stake in the nation. As our home ownership policy is premised on the family as the basic unit of society, the existence of a family unit remains one of the basic eligibility conditions for the purchase of an HDB flat.

Over the last four decades, the Government has successfully housed more than 80% of Singaporeans in HDB estates, and enabled over 90% of Singapore households to become home-owners. Nonetheless, there is still a need to provide for the housing needs of the new households that are formed each year, some of whom will have to turn to HDB for a flat. The Government will ensure that affordable public housing continues to remain available to them.

Single citizens are considered as part of a family unit and are encouraged to live together with their families for mutual support and care. Therefore, a single child forming a family unit with his parents is eligible to purchase any type of HDB flat.

At the same time, the Government recognises that there are some older Singaporeans who remain single and who prefer to live on their own. To meet the housing needs of this group, HDB has implemented two housing schemes for citizen singles who are 35 years old or older. Under the Joint Singles (JS) Scheme, two or more singles can jointly buy any type of resale flat, while under the Single Singapore Citizen (SSC) Scheme, a single can purchase a 3-room or smaller resale flat alone. Eligible singles can also enjoy a housing grant of $11,000 or $22,000 under the Single Singapore Citizen Scheme and the Joint Singles schemes respectively.

Therefore, singles are already recognised under our home ownership policy. We will continue to review our housing policies for singles regularly to ensure that they remain fair and relevant.

3. Dr Tan Boon Wan asked the Minister for Home Affairs if he will clarify whether the use of a mobile phone fitted with a speaking-cum-listening extension by the driver of a vehicle is permissible.

Mr Speaker, Sir, currently, it is not an offence for drivers to use a hands-free kit, which is a speaking-cum-listening extension device to communicate while driving.

Nevertheless, I would advise drivers to use the phone with a hands-free kit attached only if they really have to. They should also keep the calls as short as possible. If they cannot keep their calls short, they should pull out of mainstream traffic or get another passenger to answer or make the call.

Mr Speaker, Sir, may I ask the Senior Parliamentary Secretary if he will tell us whether it is an offence for a driver to hold a handphone in one hand and press the button on the keypad?

Sir, under the Road Traffic Act, section 65B states that, "Any person who, being the driver of a motor vehicle on a road or a public place, uses a mobile telephone while the motor vehicle is in motion shall be guilty of an offence..."

Further clarification. What if he is using an extension device? Would he still be committing an offence, in view of the Senior Parliamentary Secretary's explanation earlier?

Yes, he will be. If he is driving and one of his hands is holding the phone and using it, it is an offence.

What is the offence? Is it that he holds the wheel in one hand and presses the button with another hand, or just a mere using of the phone is an offence?

The Member is referring to a driver who is driving a car which is in motion. If he is not using the handphone, he does not have to hold it. So, under normal circumstances, if you are holding your phone in one hand, it is regarded as using it, especially if you are seen pressing the buttons.

Last question, Dr Tan.

I just wonder if a person is not using a handphone, but using one hand to drive, and uses his other hand to press a button on the sound system, for example, he is obviously using one hand and pressing a button.

Please stop wondering and ask your question, Dr Tan.

Would that be an offence?

Sir, currently, we can say that the use of handphone is one of the situations where a driver may take one of his hands off the wheels. But there are other scenarios, like the Member has mentioned, but at the

moment they are not legislated as a specific offence like in the case of handphone. So you can press the air-conditioner button and the other buttons. Under the law, it is not an offence.

Sir, may I ask if the use of the handphone for viewing SMS messages while driving or sending such messages would also constitute an offence under the Road Traffic Act?

Yes, Sir, it is an offence. In fact, if you use the handphone and send SMS, I think you will be a lot more distracted from the road at the point of using it. So, therefore, it constitutes an offence.

A final question, please.

I would like to ask if we stipulate the conditions for use of the handphone with extension - because by the Senior Parliamentary Secretary's explanation the mere use of the handphone, whether with an extension or otherwise, constitutes an offence, and many people in fact use the handphone with the extension cord - are they committing an offence, by his definition?

Sir, I would say that if you happen to receive a call, you press the button and you have a hands-free kit, you can respond by speaking on the phone. That, I think, is quite safe. But if you let go one hand from the steering wheel and keep yourself busy with the handphone, you will be committing an offence.

rose ---

Dr Tan, I think you have asked your questions and the Senior Parliamentary Secretary has already answered them.

Order read for Resumption of Debate on Question [27th February, 2004],

“That Parliament approves the financial policy of the Government for the financial year 1st April, 2004 to 31st March, 2005.” – [Deputy Prime Minister and Minister for Finance].

Question again proposed.

Mr Speaker, Sir, thank you for allowing me to start off this debate.

After the Budget announcement by DPM Lee, our GPC for Finance, Trade and Industry conducted a dialogue session with the members of our Resource Panel and representatives from the chambers of commerce and trade associations. The participants gave us very valuable and pertinent feedback. My GPC colleagues and I shall be raising many issues and suggestions proffered by them during this Budget debate as well as during the Committee of Supply debate. Our GPC wishes to sincerely thank all the participants for their contributions in the dialogue.

This year's Budget is said to be a continuation of past years' budgets. To some extent, this is true. As declared in past Budget announcements, the Government would implement the 2% cut of corporate tax by 2005, and it is implemented. In previous Budgets, the statements mainly covered the details of the Government's revenues and expenditures, before rounding up with the tax and fiscal policies and changes. However, what I find significantly different in this

year's Budget is the extensive coverage of the non-budget topics, including the Government's long-term plans on the three main pillars of Singapore, which are effective Government, strong society and land of

opportunity. In this regard, I view this year's Budget as a very important milestone document, and the plans of the Government in the medium and long term are outlined at some length. It is not a mere short-term annual Budget announcement. It therefore reads almost like the Presidential Address at the start of each session of Parliament. The subjects are wide ranging and have long-term implications.

Since this year's Budget not only touches on budget and tax matters, but covers societal issues and portrays Singapore as a land of opportunity, I shall therefore set out my comments in the same sequence as in the Budget, that is, in the order of (1) effective Government; (2) strong society; and (3) land of opportunity. With the stated plans on these three key pillars, the crux of the matter is how can the Government bring all the people along this path of well-being, wealth, and enlightenment in the land of opportunity. Carrying everybody along is going to be a monumental task to reach this fabulous promised land. The question is how to get there.

First, on effective Government. On the first pillar on effective Government, DPM Lee has enunciated the means to attain effective Government, which is through sound public finance, living within our means and service delivery. However, I feel that the basic tenet of effective Government is mainly the people - people make the Government and the civil service. Therefore, we need to have both strong Government leaders as well as an effective civil service. All great plans and great schemes will come to nought if there is a weak or corrupt government and ineffective and bungling civil servants.

I believe the next step is how to remake the civil service such that it is

enterprising, innovative and ready to consider and accept new ideas and new approaches. Getting good people in the civil service is therefore of fundamental importance. Generally, we agree that Singapore has an enviable strong civil service. As Mr Ngiam Tong Dow, a respected retired top civil servant, said: "In our years of budgetary abundance, we have often mistaken form for substance ... headquarters of Ministries and statutory boards, have been built to heights of elegance more than what their functions require ... As I drive by these gleaming glass palaces, I often wonder whether the learning, teaching and research match the grandeur of the buildings ... in old Fullerton Building described as dark and dim. Its saving grace was that there were some bright minds working in it." I think we need to remake the civil service. There is a need for mindset change.

In recent years, initiatives like the "Pro-enterprise Panel" and "Cut Waste Committee" have resulted in drawing the civil servants closer to the reality of the ground sentiments. Civil servants are rectifying some of the adverse results of Government rules and practices. However, I am still disappointed that often, when faced with a certain new idea or appeal for flexibility on the application of rules which they cannot handle, the civil servants would often fall back on a convenient refrain: "If I allow you this flexibility of rule, then I have to allow everybody else." My retort is that if the rule change is good for my case, what is then wrong for it to be made applicable for all cases? This will be met with a finality: "No, no, no. We cannot do that. It would be rather chaotic then." As a result, a great idea is killed.

More interactions with the ground

Sir, I think that what we need is to get the mighty civil servants to come down from their ivory tower and have more

opportunity to mix with the ground. I believe the Government is already doing that. Perhaps just not enough.

I recall that many years ago, when I was doing my MBA in Insead, France, my Japanese coursemate told me one day in elation that he had been assigned to take care of the Christmas tree decorations back in the office, when he returned for the Christmas holiday. I was surprised, as decorating the Christmas tree was a menial task. But my Japanese friend said: "No, our present Chairman had also been assigned to the task of taking care of the Christmas tree when he was a junior officer. Hence, being given this task is of great importance and significance!" Actually, by being involved in such a mundane task, he had the opportunity to understand ground sentiments of the company better. I think it is time for our top civil servants to come down from their high chairs and try their hand at decorating the Christmas tree!

I suggest that it should be made an essential part of their training that civil servants should spend some time in an overseas assignment (for example, in India, China or elsewhere), as well as spend some time in an operational enterprise or even the private sector to enable them to have a more rounded experience and exposure.

I am particularly heartened to read in the recent Straits Times series on "Recruit - Scholars' Choice 1 to 3". I read the Friday, 5th March 2004, report of the typical example of Mr Simon Ng, aged 26. He is a recipient of the Overseas Merit Scholarship awarded by the PSC. After three years at the Imperial College, London, and a year at Stanford University in USA, he went on to spend another year working in China. This wide experience had moved him up the intellectual, cultural and personal levels. There are numerous other examples of such scholars, like Mr Simon Ng, who are getting excellent all-

rounded exposure. I think it bodes well for our civil service to have such an excellent crop of future recruits.

Creating "Bureaupreneurs" out of current corps of civil servants

However, I am not sure whether our current crop of middle and senior civil servants has gone through enough of such multi-faceted exposure. The world is fast changing and fast moving. If we want to remake Singapore, we have also got to remake the civil service. We need civil servants who are responsive, innovative and prepared to accept change. Perhaps, instead of calling them "bureaucrats", we can coin a new term for them to insert an "entrepreneurial" element in it. Maybe, we can call them "bureaupreneurs" - people who can turn the civil service into an enterprising and responsive organisation.

Butterfly Effect

Sir, I am supportive of DPM Lee's intention to permanently cut by 2% the budget caps of all Ministries, except MINDEF, in FY 2004 and another 2% in FY 2005. This is a very commendable move indeed. However, I just wish to forewarn DPM Lee of the "Butterfly Effect" of such a small 2% cut. There is now a popular movie in the cinemas by the same name "Butterfly Effect". The Effect propounds the chaos theory, that the fluttering of the wings of a butterfly in, say, Africa, could cause a chain effect a month later that affects a tornado in USA, in another part of the world. An interesting theory.

By the Butterfly Effect in the Government budget, I mean to watch out for the rippling repercussions of the 2% cut through the Ministries. The small cut could end in very huge and some strange and diverse results. The 2% cut may look very innocuous, but this cut starting at one end of the Ministry's budget may

result in multiple thousand cuts down the line in the operating agencies. I am more concerned that down the line, some very small but important social projects for the community or the poor may get chopped as a result.

Hence, I truly do not wish to see that the 2% cut for 2004 and another 2% for 2005 for each Ministry will result in numerous small cuts which are crucial in some meaningful and supportive projects for certain welfare organisations and programmes.

"Hurry to Wait" Syndrome

Next, I like to warn about the "Hurry to Wait" syndrome in the civil service. It might well happen if we do not watch closely. This is similar to the resultant phenomenon during each year's National Day Parade where most participants call it "Hurry to Wait". What it means is that while participants (some could be just young primary school children) are taking part in the 15-minute event in the Parade, say, at 7.00 pm, but because the commanders and the persons in charge want to be trebly sure that the participants are not late, each level of instruction adds 15 to 30 minutes of buffer time. By the time the designated time is given to the participants, they usually need to be at the Stadium by 3.00 pm in the afternoon. They are then "Hurried to Wait". It creates inefficiency and unnecessary inconvenience.

Differentiate between citizens and PRs

Moving on to strong society, one of the major tenets of a strong society is a strong citizenry. By strong citizenry, I mean Singaporeans who have a strong love for their country, they have deep-rooted sentiments to preserve and protect the country, they have the care and concern for their fellow Singaporeans.

Naturally, such deep-rooted attachments cannot be fostered overnight. Singaporeans are very pragmatic people. If we want them to be proud Singaporeans, we should have a visible and definitive gap between the benefits of being citizens versus the benefits of being PRs.

Better recognition and compensation for National Servicemen

Currently, many Singaporeans said they do not feel any better than the PRs, who live here and enjoy equal benefits of a clean and well-run city. In fact, many Singaporeans feel that they are disadvantaged due to the fact that legally, they themselves and their children have to do full time national service. They also have to do the yearly obligatory reservist stints thereafter.

NSF and reservists do affect young Singaporeans' career advancement. They fall behind non-Singaporean colleagues by 2 1/2 years of seniority, their yearly reservist disruptions are frowned upon by employers. These are major sacrifices of male Singaporeans. To compensate, I would like to suggest that the Government should do a review of the salaries and compensations of NSF and reservists. Currently, NSF servicemen are relatively poorly paid. At least, they are less paid than their regular counterparts. So, why not equalise or narrow the gap between the pay of the reservists and the regulars, or the NSF and the regulars? Secondly, an arrangement should be put in place to recognise the 2 1/2 years of NSF as a seniority and annual increment comparison with non-Singaporean staff, in both the civil service and in the private sector.

I believe more could be done to demonstrate the benefits of Singapore citizens amply exceed those of PRs. The Government can set down the various benefits of Singaporeans, in terms of

housing, medical, education, immigration and various other citizens' rights. Besides the definable benefits, which I call the pull factors, we should also look at the intangible issues of "push factors". Why are many Singaporeans emigrating? Some people said that they find Singapore too stifling and cloistered up. Is it true? There are numerous jokes about Singaporeans who do not open their mouths. We must do some honest introspection. Does merely allowing bar top dancing and reverse bungee jumps open up the sense of restrictive environment? What more can be done?

Dual citizenship

Should we not revive the proposal to allow dual citizenship? Many countries which are open minded and progressive allow dual citizenship. Is there a genuine risk that allowing dual citizenship will facilitate the flight of good and capable Singaporeans, especially in time of crisis? Is that risk more of a function of how much we have ingrained into our young Singaporeans the sense of pride and love of the country? Would the benefit of dual citizenship outweigh the perceived risks?

I think I have been hesitant in the past about allowing dual citizenship. But now, I am thinking otherwise. With the more mobile and mass communication in the new world, Singaporeans with ability and talent will always be the target of foreign countries. Therefore, allowing them dual citizenship will in fact allow them to retain ties with Singapore. Conversely, allowing dual citizenship will enable us to attract more foreigners to take up citizenship, particularly when we have only 1.26 fertility replacement rate.

Dual citizenship should be a sacred cow that is worth taking a relook. In the past, matters such as dual citizenship and casinos in Singapore are spoken about in hush tones in quiet corners, as though it is a great heresy to voice such subjects.

Raising these subjects imply lack of patriotism. It should not be. I personally do not support the idea of casino in Singapore, but I think the dual citizenship idea deserves a relook.

Joining privileges of the Singapore Club

We have to show to the PRs the plentiful benefits of being a Singaporean. It is quite a package of both tangible benefits and intangible attractions.

These are so-called joining privileges. Being Singaporean should mean joining an "exclusive club". The target is to make it such that everybody is vying to join this "Singapore Club".

Whilst we want to attract more people to become Singaporeans, we must be mindful not to alienate certain segments of the people. As our society progresses, it is inevitable that some groups may feel marginalised. These are the poor, aged and under-privileged. There should be adequate attention and resources allocated to help these groups. Remember my earlier point about the "Butterfly Effect"? Do make sure that the 2% cut in budgets does not result in some benefits going to these groups being curtailed. The butterfly effect may cause some down-trodden people to be axed, if we are not careful.

Care for the marginalised segments

In fact, besides the old, aged and underprivileged, I wish to voice my concern on a special group. These are the people in the 45-62 or so age group. They face an impact of treble whammies. First, those in this group will have their CPF reduced. Second, they may face pay cuts or retrenchments. Third, they will face higher medical and hospitalisation costs as they grow old.

Many professionals in their 50s find that, because of changing circumstances, they are replaced or retrenched. Most of

them are still able-bodied, with good minds and wide experience. They have some good years to run. Many are not finding employers who are prepared to give them full-time employment. As a fall-back and to preserve their dignity and pride, they go around carrying a card saying they are consultants. I strongly urge the Government to think of some schemes or mechanism to help the people in this group. Perhaps, there can be a central agency. This agency can match their professional skills and experience against prospective clients. The clients may need certain of these professionals on an ad-hoc or contractual basis. These professionals can be tasked to lead or join in local and overseas assignments. This pool of senior executives is growing. We have to find means to ensure that this useful and substantial resource pool is not put to waste.

Procreation policies

A major part of the Budget Speech is devoted to the problem of procreation. Our Total Fertility Rate (TFR) has fallen to 1.26, below that of many foreign established nations. It is widely acknowledged that procreation and how to encourage young couples to marry earlier and have children earlier is a very complex and emotive issue. It requires a holistic approach. It is a big subject. I hear that many MPs will touch on this, especially our lady MPs. One report said that Dr Lily Neo has 28 ideas on how it could be done. Let us hear from her. Given such wide interest, I do not intend to dwell too deeply into this subject. Let this space be given to other more qualified persons, especially our female counterparts, to debate on it.

I just wish to reflect on some concerns of employers that if we were to increase maternity leave to a longer period of six months, there is the worry of employers

that besides heavier salary costs, there is the added problem of disruption to work schedules and of staff covering duties. This is an aspect that Mr Lim Hng Kiang and his study team have to consider when coming out with their recommendations.

Land of opportunity

In his Budget Speech, DPM Lee stated that he sensed palpable optimism in the market. This view, in the short term, may be correct. In fact, all of us wish it so. However, I am not sure whether the same can be said of the medium and long term. Is there palpable optimism in the medium and long term? I think we do not know yet.

Look overseas for the land of gold?

I like very much the heading of the third pillar as the "Land of Opportunity". How many Singaporeans truly feel Singapore is or will become a land of opportunity? In a land of opportunity, our streets should be paved with gold. In typical Singlish, some may retort: "Where got gold?"

Nowadays, we hear many Singapore businessmen saying that doing business and making money in Singapore is difficult. Not really, as some are still making money, but many truly find the going difficult. Several have resorted to going overseas to China, India and other parts of Southeast Asia to find their fortunes. It is very ironical. In the olden days, our forefathers came from China and India to seek their opportunities here. After over 100 years, the tide is reversed. Singaporeans are going to India and China to seek their fortunes. Things do move in cycles. There is an apt Chinese saying: "feng shui lun lui zhuan".

With the changing of times, the diminishing reliance on clan associations, tontine funds and trade associations, and the move to rationalise the banks and

finance houses, there are increasingly fewer avenues for the people in temporary need of funds to get help. Many went to loan sharks as a result. As graphically depicted in a scene in the movie "Money No Enough", one loan shark in the movie proudly proclaimed that he was providing a much-needed service to the community of providing loans to the poor, which our banks would not do. I would like the Government to consider seriously how more forms of financial help and related assistance can be given to the poor and unemployed to tide them over their temporary troubles so that they would not get into more troubles by borrowing from loan sharks and the like.

Honour the self-help groups and VWOs

Could the self-help groups do more and reach out deeper into the community to target these desperately poor? I do not mean to lend them money like the loan sharks, but to give them aid in terms of food provisions, temporary job assistance, retraining, transport, schooling expenses, and such like. On this note, I truly wish to commend the NTUC Fairprice for recently giving out food vouchers to be distributed via the grassroots organisations to the poor and needy. We can encourage more to be done by social and community groups like the Lions Club, Rotary Club and other voluntary welfare organisations to step forward. Encourage more thrift and loan cooperatives to be formed to fill in the vacuum left by the banks and finance houses mergers. Those who give generous donations should be recognised, eg, VWOs and social volunteers as well as philanthropists may be considered for National Day Awards.

Perhaps, it is time to review whether we should continue to assign the major and centralised fund-raising effort to Community Chest. This has a dilutive effect on the choice and target groups of each charity to source for its own

donations. It also weakens the strength of each charitable body to go out and seek donations on its own. This is a matter that perhaps MCDS may wish to review.

Pro-competition - help the small businesses

In the Budget Speech, DPM Lee said that the primary stance of the Government in its economic policy is pro-competition. I would like to voice a view that this policy cannot be taken to the extreme. Singapore is a small country. Our market is very small to carry this policy of pro-competition in every arena. I would advocate a degree of flexibility. It is a fact that we have openly and unabashedly given long years of protection to the local banks. The constant crying for help by SMEs cannot be crying wolf all the time. At times, they are really in need of help, for example, in getting some preferential treatment in certain types of non-strategic and non-critical Government procurement contracts. It is practised in many countries, even in the USA. It is also time to recognise that GLCs do occupy some of the business space in Singapore and they compete against SMEs. The GLCs tend to leverage on their size and connections.

We know that this is a pro-business Government, which is done for national benefit. Nobody denies that. There has been some disappointment that this year's Budget is again too pro-MNCs and pro-large local companies. For example, the pioneer status for foreign investors is increased from 10 years to 15 years. When the Government does give something to small local companies like start-ups, it only gives parsimoniously and grudgingly. Let me demonstrate why.

The Budget announced that local start-up companies are given a new tax relief of $100,000 of profits over the first three

years of operation. This incentive is not of much help. Most new companies struggle to make money in the first few years. Those which can make profits in the first few years are in the minority. So, why offer an incentive that most local companies cannot enjoy? It is like dangling a plum in front of them to merely tease them. I would like to suggest that the Government consider varying the scheme to allow for companies to enjoy the first $100,000 profit offset as from the point of the first year of profit of a new start-up, ie, first year of profit, not in the first three years alone. If we can be so generously giving 15 years of tax-free status to MNCs, why not a small gesture for these small new start-ups?

Help the individuals

Another complaint, Sir, is: why is the Government more generous to companies as against the individuals? The Government is favouring corporations versus individuals in the 2% income tax cut. The Government has said that it cannot fulfill its promised 2% cut to 20% target for both corporate and individuals at the same time due to budget constraints. If so, why not share the misery between corporations and individuals? Why not allow for a 1% cut each in both the corporate and personal income taxes, rather than give all the 2% cut to corporations and then ask the individuals to wait for a few more years?

Towards a more open society

Sir, to achieve the end of creating Singapore as a land of opportunity, it is very valid that we must have effective government and strong society. Effective government is easier to achieve, but strong society is much harder. The two routes to creating a strong society are either to create steadfastness and

homogeneity, or flexibility and diversity. In the old world, I think steadfastness and homogeneity could work. But, in modern Singapore, where we have mass instant communication with the outside world, I firmly believe that flexibility and diversity are the right choice. I strongly feel that to create a strong society, we should encourage people to open up and speak up more freely. Any stone is worth turning over now and then for a re-look. There can be gems underneath. At the most, if it is not time yet, we can place the stone back gently.

Hence, we must allow the establishment of a more open society. There is a saying that great men think alike. In the new world, great men do not have to think alike. No one and no country has the monopoly to great ideas. In many instances, it is quite valid that "the unreasonable man maketh the world".

I am heartened that we are indeed moving towards this direction. Over the weekend, it was reported in the newspapers that the Acting Education Minister, Mr Tharman Shanmugaratnam, wishes the Ministry of Education to focus on how to nurture original thinkers. He said:

"We will not succeed if we produce young Singaporeans who are too regular, or too much of the same mould ... We need Singaporeans with different talents and different ways of thinking ... willing to test new ideas and approaches with each other and with people from the world ... We have to nurture more Singaporeans who want to do something exceptional and stand out from the crowd."

I fully agree with Mr Tharman Shanmugaratnam. Blessed would be the day when he could achieve his aim. Let us not summarily dismiss ideas. Let us have more open debates. Let us find what we can learn from others, or strike out on our own.

Mr Speaker, Sir, allow me to conclude by quoting a Chinese saying by a famous Tang dynasty poet called Wang Le: "wu hua tian bao, ren jue ti ling". It means to describe a fertile place where precious assets and talented minds can flourish. We hope that Singapore can be such a place, a land of opportunity, a fertile place of men of talents.

Mr Speaker, Sir, this is another occasion in Parliament that I have made a rather long speech. You know that I do not make lengthy speeches.

You have 30 seconds left, Mr Leong.

Thank you. I am just about to conclude. In the other occasion, during the debate on a motion that I moved on the GLCs, I had quite a few things to get off my chest, here I did the same. Thank you for bearing with me. I thank you for your indulgence, Sir.

Sir, the previous speaker has trawled the whole Budget Statement, so I do not think I can compete with him to cover all the other points. I promise to be short in my case.

This year's Budget is pro-business, and there is little for the middle-income and lower-income households. Corporate tax has been reduced to 20%. This is welcome by all businessmen in Singapore. However, personal income tax remains at 22%, with a promise from the Government that the personal income tax rate shall eventually be reduced to 20%. I hope the delay shall not be too long.

As regards the lowering of the corporate tax to 20%, whether it is sufficient incentive for those MNCs which are already here to remain here and to attract more new ones to come to our shores to do business, is another matter, because MNCs can now go elsewhere

where land and operating costs are cheaper than those in Singapore. The challenge is for the Government to keep costs down. Rentals in certain sectors, especially in the food and retail sectors, are still very high. At my last meet-the-people session, an applicant

complained that he and his wife had to pay monthly rentals and service charges amounting to $10,000 for a food stall at a shopping mall in Yishun. I thought to myself: Singapore is supposed to be a first world country and people here still have to slog for 16 hours a day, seven days a week and 52 weeks a year, except probably for four days of respite during the Chinese New Year. I thought that only workers in the third world countries have to work that long hours to earn a living.

For a start, I call on the Government, which is the biggest landlord in Singapore, to set an example by lowering rentals of their properties to a fair rent, especially to people who carry out food business in Singapore, hoping that other landowners can follow suit. High cost in doing business in Singapore has its problems. The Government says that foreign direct investments are still attracted to Singapore at about $9 billion a year, but only to open up mostly high-tech industries which are not labour-intensive. This means that they do not employ that many workers. Those workers who are unemployed shall not be very happy when they learn that fewer jobs shall be created. At the moment, the unemployment rate in Singapore remains at about 4.5% or about 800,000 workers. The Government looks to the service sector to mitigate the unemployment problem.

The Budget Statement says that the Government is developing established services, such as trading and logistics, info-communications, technologies, financial services and tourism, while trying to expand emergent services such as education, healthcare and the creative

sectors. As far as I can see, Singapore should have no problems expanding the education and the healthcare sectors. We have the infrastructure and the talent to make Singapore the education centre and the health hub of the region. We may have already become the education centre and the health hub of the region. Healthcare costs in Singapore are too high and we may lose out to other countries in the region who are quickly learning from Singapore to establish hospitals to compete with us. We, of course, must make sure that we do not lose out to them.

As for developing a vibrant creative sector in Singapore, I have not much confidence in that, after over 30 years of strict PAP rule, the majority of Singaporeans have become compliant, obedient and docile which are not conducive to establish the creative sector, in particular, the film industry. Hong Kong and America are more open and liberal societies than Singapore and they have successfully built a vibrant, successful film industry there which employs hundreds of workers and gives them lucrative returns. Singapore can also establish a successful film industry if we are willing to open our society and to be more liberal. I hope that I can see that day come about.

I shall briefly mention the procreation policy. Last year, our TFR dropped to the lowest in the world, at 1.

26. We had only 36,000 births and we require something like 50,000 babies to replace ourselves. The big question is what is to be done. Many suggestions had been forwarded and most probably are all valid. However, I would like to draw the Government's attention to the complaints of mothers with multiple births. Apparently, from the letters written to the local press recently, they have been unfairly discriminated against. I wish the

Government could look seriously at their complaints and to try to put things right for them. I know they are only in the minority but the fact that the Government goes out of its way to help them, other mothers will take note that the Government is really sincere in helping mothers to have more babies and that will give mothers in Singapore more confidence. Who knows, the birth rate will climb in Singapore! I appeal to the Government to look into the complaints of mothers with multiple births to make sure that they are not discriminated against.

On foreign maids, the Government imposes a tax of $345 for each foreign maid employed in Singapore. I would like to suggest that the Government uses part of that large sum of money collected as levy to employ qualified psychiatrists to carry out compulsory psychiatric screening of each maid before she can start work in Singapore. This is to ensure that every maid who works in Singapore is psychologically sound. We have read of maids killing the child she is made to take care of, or even recently, a case was reported that a maid, together with another friend, also a maid, killed her own employer. Such murders are probably committed by maids who are not psychologically sound. Those mentally sick maids, when under stress in their jobs, can break down psychologically and can commit violent acts or even murders. Therefore, to prevent such crimes, the Government should use part of the levy collected to screen those maids who wish to work in Singapore and declare them sound before they can take up a job here. I think that would be money really worth spending.

Mr Speaker, may I seek some clarifications from Mr Chiam?

Mr Chiam said that after 30 years under the PAP, Singaporeans have become obedient, compliant and docile.

Can I ask if he is also like that? Is he experiencing that himself? Otherwise, how can he make such a sweeping statement?

I should say the majority of Singaporeans, not every Singaporean.

But does that mean he is not obedient, compliant and docile as the majority of Singaporeans? I just want to clarify his position on this.

Sir, the learned hon. Member should know that there is, in fact, no film industry in Singapore, so to speak of, as compared to Hong Kong or Hollywood. Perhaps he can explain why.

Sir, I want to clarify whether being obedient is docile. I wonder why he thinks like that of Singaporeans. Is that how he looks at his fellow citizens?

Sir, film making is a creative art. Normally, if we want to be creative, we must show initiative. We must have no element of fear in us. We must be spontaneous. Whatever comes into our heads, with new ideas, we are willing to express those ideas in terms of art. Most Singaporeans do not seem to do that. I have given the reason why we are not creative.

Sir, thank you for allowing me to join in the debate.

Sir, I support the motion. First of all, I would like to say that I had very low expectations of the types of initiatives the Finance Minister would be announcing in this Budget, given that the economy is at the recovery stage. Against these lower expectations, I am, in fact, pleased with the range of initiatives the Finance Minister announced this year, particularly

in the area of entrepreneurship support. I now feel very comfortable that the Government is well on its way to making entrepreneurship an important agenda of our economic development. Of course, the first signal of its seriousness was the appointment of the Minister in charge of Entrepreneurship, Mr Raymond Lim, and with its support of the many initiatives recommended to promote entrepreneurship, it gives many of us, who have been advocates of an entrepreneurial economy, confidence that we finally have the 'ears' of the Government, which, up to recently, looked like a half-hearted support.

Some of the initiatives which the Finance Minister announced, like the Entrepreneurship Investment Incentive, the tax changes to support asset securitisation and the tax benefits for start-ups were all moves in the right direction. Before I go on, Sir, I would like to say that recently, I was asked by a journalist as to what I will be bringing up during the Budget debate. I mentioned to him the issues that I would be raising and he told me that it was actually a waste of time and it was pointless, as the Government did not seem to listen. I would like to state here that I disagree with this observation as I have, over the years, seen significant improvements put in place as a result of the suggestions made by many of us in this House and by other advocates of changes from the private sector and from organisations like the Action Committee for Entrepreneurs (ACE). I am very happy to see the three initiatives supporting entrepreneurship I mentioned. These have been the recommendations that have been made by many of us and they are finally being implemented. Of course, they were not implemented the day we asked for them but, over time, they happen. I would like to say, like any entrepreneur, never give up. We will continuously bring up those issues. We will be spontaneous, as Mr Chiam wants us to be, and while we are

obedient, we will still come up with suggestions for changes. This is one thing that really needs to happen, that is, a Government to listen a lot more because, as the results have shown, over time, what many of us said has turned out to be something that should have been done and, if the Government could implement this faster, we would have a more interesting economic development ahead of us.

Sir, the one area that the Finance Minister glaringly missed out this year was in the area of helping local companies, not start-ups, but those SMEs who are already in business here. Instead of helping these companies, in fact, we added costs, with the increase in the ceiling for the SDF and the increase in the skilled workers' levy. The private sector, particularly the SMEs, felt left out this time - that we did not address cost reduction issues. These are the few things that I would like to bring up this year.

First of all, the area of cost reduction and business costs. As I mentioned, this was really missing this year. We have been hearing statements from the Government that the cost reduction efforts and the cost issues continue to plague the Singapore economy. The only one thing that has been addressed in this respect is the area of wage restructuring

which is important to make Singapore companies competitive. But the question is what is the root cause of these high wages in the first place? Many of us have raised this many times, ie, the cost of living continues to be high, that every Singaporean here needs to have wages high enough to support even their basic lifestyle. What is more, Singaporeans at this stage should expect better than the basic lifestyle, but the costs are just too high. So, if we want to restructure wages, we must also restructure the cost of living in Singapore. For companies to

remain competitive, there needs to be a restructuring of cost for businesses too. So, may I ask the Finance Minister: what has happened to the cost reduction effort?

I was afraid that at the first sign of a recovering economy the Government will forget about the need to do more about restructuring and reducing costs. While there is a realisation by the Government, and my impression is that we have run out of ideas about what needs to be done, I think this could be quite detrimental to the economy. I know of my local companies which still suffer from cost competitiveness as compared to their competitors around the world, particularly from around the region, and they risk going out of business. Also, there are still a number of multinationals based here in Singapore who will not slow down their plans to relocate out of Singapore as they still do not see long-term cost reduction actions. I have brought this up many times before about the Government's approach of temporary rebates and subsidies, which will result in the cost going up again once the Government decides that times are good again. We, therefore, seriously need to look at long-term cost reduction and assurances from the Government that costs will go down or will remain low.

I would like to remind the Finance Minister about the seriousness of this issue and it was also raised by none other than the Senior Minister, Mr Lee Kuan Yew, who at one of his speeches published in the Business Times on 31st January 2004, headlined "Cost too high in Singapore". The report quoted the Senior Minister as saying, "While the economy may be bouncing back, Singapore still has a long-term problem of high cost structure to deal with." In his speech, he said, "Wages, rents, fees, taxes, have become too high compared to not only China and India, but also to our immediate neighbours. Singapore requires basic

changes in cost structures and, unless this happens, many industries here will relocate to China and elsewhere." So, again, I ask the Government not to relax too soon at the first sign of the economy recovering. We need to seriously address these issues and to take this opportunity of good times to go about seriously addressing and reducing costs further.

And what are the areas that we should look for? These have been brought up many times before and I would repeat them here. First of all, permanent rental reductions, as well as lowering industrial and commercial property prices, to be benchmarked not against the commercial value of, say, Raffles City property, as what we have heard Mr Ngiam Tong Dow recently talked about the benchmarking approach that we have taken. I think we should be benchmarking against the prices of properties in our competitor countries. On utilities, while the energy market is being relaxed and it is coming down, I think it is not the most competitive in the area of power supply and also in other utilities. So we need to address these as we move forward.

There are many other costs like hidden taxes - as I have mentioned before, the many taxes that we have, higher port and aviation charges - in fact, have seen us losing our business from Singapore to our neighbouring ports because of this issue. The bottom-line is that the Government has yet to do a good job in addressing the cost competitiveness issues other than the good job it has done in the area of wage reduction, which is, of course, at the expense of harder times for Singaporeans if the rest of the cost issues are not addressed.

The second area which is related to cost is one of cost of Government. This is an area that surprised me that we seem to be operating in a "Fantasyland" where it continues to operate as if the economy is growing at a 10% rate. We have seen,

since 1997, that this can no longer remain the case. Why do I say "fantasy"? While I mentioned the part on the cost of business problem and in the area of high charges and rates which the Government charges to businesses, I understand the principle of cost recovery, which is good, since this principle assumes that the Government would not make a profit when charging the people and the companies, and with the hope to keep such costs low. But, if the cost of providing these services is high in the first place, then there is little hope for us in reducing costs to the users. In this respect, I feel that the Government has not done enough to reduce its own costs.

While I was encouraged by the Finance Minister's comments that the Cut Waste Panel has made progress, and about the efforts to limit the budgets of the various Ministries, I am not convinced enough has been done to reduce the cost of running the Government. This was the hunch that I had because I have yet to see the cost coming down in these areas. I went back to the past five years of the Budget books and I looked at the details. To my surprise, the data shows that the cost of running the Government had continuously increased since 1999. If we look at only the running cost items, not counting the development expenditures, which are capital and long-term investments in nature, the line items called "running cost" had continued to rise from $13.59 billion in 1999 to $17.05 billion in 2002. Then it is estimated to be at $17.35 billion in 2003 and planned to be $18.05 billion in 2004. Now, if we take out the military spending, which is strategic in nature, then the numbers under the operating expenditure section of the Budget book looks like this: all non-military expenditure in 1999 was $1.89 billion, and this continues to go up, with the $2.38 billion expected in 2004. And, if I look at the manpower cost part of the Budget book, in 1999 the cost was $2.87 billion and this continues to go up

to a planned $3.47 billion in 2004. In fact, if my analysis is not wrong, then the 2004 cost of running the Government would be the highest in our recent history.

These numbers surprised me, as I said, and therefore I think that we really need to get out of this fantasy world, because the whole world has changed around us in the last five years, particularly after the Asian financial crisis. I have been involved in a number of companies and have been looking at what was happening around in the private sector. In the real world, particularly in the private sector, they have restructured themselves and many companies have to do drastic cost reduction just to survive. We have seen many companies in the private sector reducing cost by as much as 20-30% over the last two years. In contrast, we are seeing the cost of Government continuing to go up and, therefore, there is little wonder that we continue to see business cost not coming down.

While we did well in wage reductions, who contributed to this? They were the people of Singapore. The companies have played their part too, and I feel it is now time for the Government to play its part seriously. I think there is an urgent need for the Government to put in place cost reduction targets for the sake of boosting our economy. Unless clear targets are set, like what the Senior Minister suggested, as a 20% cost reduction target for Singapore Airlines, that was what he said, I do not think any serious cost reduction would take place in the Government. The Cut Waste Panel would have limited success because it just looks at wastes. What the Government really needs to look at are real structural changes, which may not be obvious as wastes, but which can be structural changes and which can be re-engineered to achieve big improvements.

In the area of cost, the Government needs to play its part too. It should learn how the private sector got more productive and more efficient. The companies which restructured their costs survive and they became stronger. We need, therefore, the Government to be also productive and efficient and to become stronger.

The one thing related to the issue of cost of Government is the issue of budget deficit which we have been talking about. First of all, the budget deficits of the past years were really a result of specific transfers which the Government made for various reasons. And, some of them were very good reasons. At the operating level, we have not really seen a budget deficit. The real deficit was really in the year 2003, where, before transfers, the deficit was about $1.16 billion. In fact, at the operating level in 2004, we would still not see a deficit budget. In fact, there is a surplus of $0.16 billion. In any case, my real point is that there are two ways to balance a budget. The first, of course, is to bring in more revenue, which is in a way not controllable. While we have fixed taxes, companies may not make profits, individuals may not make income to pay taxes. But, the second way is to reduce costs. So, if the Government can really work harder in reducing cost, I am sure we will have a surplus budget. I think this again needs to be addressed quite seriously.

Sir, the third area is one of the Government's interference and dominant role in GLCs and TLCs. I feel that the Government should shed its "I know best" attitude when it comes to the management of these companies. Many a time, many Singaporeans have given feedback to the Government, the latest being the recommendations by the ERC, where the recommendations are for the Government not to interfere and be involved in business. While there was seemingly good reception by the

Government, the outcome does not show it has, and will let go. While many of them are already listed companies, we continue to see a strong influence of the Government, including giving helping hands to some of these companies, hence creating an unlevel playing field in the perception of others and, I think, this is to the detriment of the private sector. Of course, it took the USA, through its FTA, to pressure the Government to back off from playing a dominant role in the Government-owned companies, I feel that the Government could have reacted earlier, but I guess we have to thank the US FTA for this, that the level playing field may be created very soon.

Sir, two examples which stand as cases where the Government is being directly involved in the affairs of the Government-owned companies are SIA and PSA. In both cases, we see very senior Ministers getting directly involved, despite the fact that both of them supposedly have strong management teams and boards running them. This is not a good signal and is not in line with what the Government has been saying about its role in managing its Government-owned companies through its investment arms.

Another example I can remember is the proposed merger of our transport companies. In that case, again, the Government, through a Minister, jumped the gun to go public with his suggestion that the companies should merge into one entity. Both companies are listed and it should have been their own decision. Of course, the Government could advise these companies, but this could have been done, not publicly, I believe. They could have a private discussion, rather than to come out in the open. Sir, my point is that the signals that we are giving are not good, not just to private companies in Singapore but also to other countries, about the dominant role that the Government is playing.

Similarly, I feel that the Government continues to have a dominant role in financing companies. Currently, I feel that there is too much money in the hands of too few people, particularly held by the Government funds and Government economic agencies. We all know that money talks and, therefore, by giving money to a few people to manage, we created a lopsided outcome as to how and where the money gets invested. This is particularly so because of the type of people who are appointed to the agencies managing the money. They mainly come from the same background, being Government-appointed. I suggest that the Government change its approach by spreading the money around and by giving it to more agencies, both Government agencies as well as non-Government agencies. I have seen a number of Government agencies which were so limited in funds that they are not able to do what they really want to do effectively, whilst some other agencies have lots of money and, therefore, they continue to support one cross-section of industry that we should be supporting. We could learn from the USA model where the Government deploys some of its funds to organisations like the Small Business Investment Corporations (SBICs), or we could deploy some of our funds to be managed by some successful Singapore businessmen for investment in private companies, whether start-ups or established companies. I am sure that the overall return will be more interesting than what the Government has been able to derive from its current investment arms. This would then go a long way in resolving the financing problems of our local entreprenuers and companies.

Sir, in conclusion, having said the above, I would nonetheless thank the Deputy Prime Minister and Minister for Finance for giving his support to the entrepreneurship drive in Singapore by announcing the few initiatives in this year's Budget. What is not so obvious is

that the Government has been very receptive to a series of recommendations made by private sector groups, and I have been involved in some of them. We have recommended a number of initiatives which we hope would make Singapore a very vibrant place for entrepreneurship and for financing entrepreneurs and start-ups, and also for financing of local companies. The Government has agreed to many of the recommendations. And now, the action crucible for financing, which is subgrouped under ACE that I am heading, is working to implement as many of the recommendations as possible and I am glad to note that the Government is very receptive and I hope it continues to do so, because I believe if it can implement these things we will really have a change of landscape in Singapore.

Sir, I had a wish-list which I presented during the 2002 Budget debate. I still stand by those items but I do not want to spend time talking about them down here. Most of those items were related to cost reductions and I hope that the Government could seriously get back on track and walk the talk in really addressing the cost issues in Singapore so that we could attract and retain long-term companies and investors into Singapore, thereby creating more jobs for our fellow Singaporeans. The economy is recovering and optimism is in the air, but we all need to realise that while we would see good times again, sooner or later, we would again face tough times as the economic cycles shorten. If we start resting on our laurels and fail to address these issues I highlighted, the next time it may be too late for us. So I hope that the Deputy Prime Minister and Finance Minister would seriously look at the recommendations that I have made, particularly in the area of cost reduction.

Sir, with that, I support the motion.

Sir, let me begin by expressing my support for the strategic initiatives outlined by the Deputy Prime Minister in the Budget Statement. I would like to devote my speech to what I see as the challenges of translating two of these initiatives into concrete results, the first of which is the ramifications of the budget cut, virtually Government-wide, and secondly, the key considerations when drawing up the procreation initiatives.

Firstly, the austerity drive. Sir, the move to cut the budgets of Government Ministries by 2% for each of the next two years is commendable and reflects a very responsive approach to changing circumstances. As elaborated by my colleague, Mr Leong, however, the key question is really how the Ministries would achieve these cuts. Would it arise from a careful review of recurrent practices, or of new projects and not from the scrapping of social programmes, or the passing on of its own expenditure to the private sector?

Allow me, Sir, to illustrate with an anecdotal possibility. Supposing trees in the divider of an expressway are trimmed once every two weeks, to save cost, the tender is now modified for a trim once every four weeks, presumably at the same absolute charges. There are now two likely consequences. Firstly, I am told that trees do not stop growing from the third week of trimming. So overgrown trees can create unnecessary road hazards.

Secondly, I am also told that the amount of trimming effort needed varies directly with frequency. So, effectively, contractors will be squeezed if they have to make do with the old rates. The contracts handed out by most Government departments are usually so material that suppliers cannot afford to ignore them. Their bargaining position is poor. Hence, what is likely to happen is, effectively, the passing on of the cuts to the private sector.

I would like to humbly suggest that a lot of cost savings could perhaps be realised through better coordination between Government departments. Let me recount a live example within my constituency. As part of a private estate upgrading programme (EUP), which my residents are extremely grateful for, the old drains were replaced and covered. A walkway is then built over the covered drains. In the very old area of Serangoon Gardens, some roads are extremely narrow. So, for years, residents have parked on grass verges. As such, after the drainage improvements, these narrower roads cannot have regular kerbs. My grassroots leaders had conveyed to the relevant departments their experience that regular kerbs would not work for other similar stretches for the rest of the estate. They were told that improvement works were not imminent. So, it came as a real surprise when not only were improvement works carried out on these stretches, but regular kerbs were also constructed. The residents, of course, cried foul as they could no longer park outside their homes on these stretches and, regrettably, the kerbs would now have to go! If there were better coordination, much time and money would not have been wasted.

Towards this end, can the Deputy Prime Minister reassure the House that the burden of the budget cuts would not manifest itself as either sub-standard service or mindless efficiency that targets the more dispensable social programmes or an indirect outsourcing of not services but costs to the private sector?

Will the Deputy Prime Minister also assure the House that each Ministry will not take the easy way out but will scrutinise its "must-have" programmes, as I believe the 2-plus-2% cut must really presume to be permanent. Will he also ensure that Ministries adopt a proactive attitude towards structural reforms in the way they do their business and towards cutting waste instead of leaving the Cut

Waste Panel to handle suggestions or complaints in a reactive fashion?

Ultimately, the budget cuts should be achieved without a deterioration in performance and service standards.

Next, on procreation initiatives. Sir, before I dwell on the various aspects and make specific recommendations, I would like to place strong emphasis on the need for Government to be consistent in all its messaging and signalling. I recommend that the Government bear the following in mind when mapping the overall strategy:

Firstly, do not just blame the women. The procreation challenge is not a women's issue or problem; the notion of shared responsibility for childbearing between the husband and wife must prevail. It is not helpful that many of the current liabilities revolve around women being expected to carry the burden, literally, economically and socially. By the same token, I look forward to active participation in this debate by my male parliamentary colleagues.

Secondly, do not blame their career aspirations. Women do not set out not wanting to get married or to stay childless after having gotten married. Neither are women so career-minded that childbearing takes a permanent back seat. Many simply want to be responsible and good mothers. But they have to make real trade-offs, as they would like to remain economically engaged as well. So, if there are too many hindrances and very little moral support, not having a child becomes the default option.

Thirdly, do not prescribe what is ideal. A pro-family message must necessarily be pro-children, regardless of the number of children. It used to be "Stop at 2" and then "Have 3 or more, if you can afford it". The decision on the number of children is a rather personal one and many couples are increasingly uncomfortable

with the Government's prescriptive approach. Until recently, couples with three or more children unwittingly get stigmatised as they struggle to get leave following childbirth or have to explain to their own child why there is no Edusave balance. Even worse still are multiple births, where entitlements get reined in for subsequent children. If ever there was a reason to be liberal in interpretation, then surely celebrating multiple births amidst a declining replacement rate must be one.

Instead, I would like to recommend that the Government undertake three broad initiatives:

Firstly, change mindsets. Launch extensive public education on a long-term basis to highlight the value of children to a marriage, to glamourise motherhood; mothers should not be viewed as economic nuisances, just as men are not viewed unfavourably for their reservist obligations, and to emphasise shared responsibility between husbands and wives in childbearing and child rearing.

Secondly, provide the necessary support systems:

Allow for longer maternity leave of up to six months on a voluntary basis, with Government picking up the tab beyond the existing, mandatory eight weeks (and not two months, if I may respectfully correct the Deputy Prime Minister). Every extra week is precious to a working mother who is on maternity leave. The Government may want to pay in full up to the end of the fourth month and support at half-pay for the remaining two months.

Facilitate the setting up of more affordable infant care services through subsidies.

Allow for a declining maid levy so that employers can retain good help over a longer period of time without having to bear higher employment costs.

Extend tax benefits to husbands so that women are not compelled to return to work just to 'enjoy' the benefit.

Ensure a minimum level of ante- and post-natal care, as well as of pediatric care so that childbearing and rearing can have a pleasant start.

Provide support for young couples who may need help to conceive.

The third initiative revolves around Government setting an example. Being the largest employer, the Government should take the lead by walking-the-talk and implement family-friendly policies, such as longer maternity leave, introduction of paternity leave, in the hope that the private sector may do likewise eventually; provision of childcare facilities and developing more flexible work arrangements across more Ministries. These should include working from home and job-sharing, especially to facilitate the re-entry of mothers into the public sector.

Sir, ultimately, the ideal scenario is one where a couple can choose how they would want to care for their child and are not unduly limited by mindsets about stereotype roles for the mother, or by inflexible work arrangements, or unfriendly corporate policies, or limited and expensive infant care. It must also be one where the woman is not placed at a disadvantage when it comes to employment. In short, the overarching principle is one of no gender discrimination in employment on account of family formation.

One final point, the procreation challenges require a multi-pronged approach because the considerations are

varied and often emotive. Yet, it would appear that the Government committee charged with this heavy responsibility is under-represented by women. How would the many men know what women really want? With all due respect to the Minister and his committee, would we end up with stereotyped solutions that leave us scratching our heads, again? I propose that the Deputy Prime Minister review the composition of this committee and enlist the help of many more women, including the women MPs in this House, who will be more than willing to help address a national challenge.

On that note Sir, I thank the DPM in anticipation of a holistic approach to addressing the procreation challenges.

Mr Speaker, Sir, thank you for allowing me to join in the debate.

The Budget statements these past few years have focused on tackling the economic challenges, easing the pain of transition and setting the stage of sustained growth for the future. With the economy now on the mend, let us press on with these efforts and not slacken in our efforts to transform our economy and systems and to invest heavily in skills upgrading and employability of our workers. Only then would we prepare and position ourselves well in an uncertain future.

This year's Budget Statement appropriately addresses another key fundamental, which is that while we seek to create a bright future, we also need to make sure that there will be enough Singaporeans to inherit and populate that future. Last year, only 37,000 Singaporean babies were born. The overall birth rate was only 1.37, much lower than the replacement rate of 2.

1. If this goes on unchecked, then we will eventually disappear from the face of the earth. But even before we truly decimate ourselves, I

think there are other serious implications that will befall our society and which we will have to face. For example, with fewer babies born each year, will there be enough Singaporeans to defend our country, notwithstanding our aggressive use of technology in the SAF? And with fewer babies born each year, will there be enough skilled workers to attract investments and anchor jobs here?

If the birth rate drops with time, then the rate of population aging will increase. At present, some 7% or 8% of our population is above the age of 65. We project that it will become around 20% by the year 2030. If the birth rate keeps dropping, then our society will become elderly-heavy even faster. Then how will we support and take care of the elderly? Who will pay for the taxes or foot the bill for such care?

Sir, these are not idle questions for some distant generation to answer. Many of us might still be around in 2020 or even 2030. It is therefore in our own best interests that we begin to turn the tide now sooner rather than later.

More babies

The most direct approach is, of course, to encourage Singaporeans to have more babies. I say it is direct, but it is not simple. From the feedback I got from union leaders, grassroots leaders and some of the ideas being talked about, such as longer maternity leave for mothers, higher subsidies for infant care and childcare, flexible family-friendly work arrangements, should all be helpful. By enabling more time for the mother to bond with the child and by lowering the cost of care for the household, it will lower barriers to child-bearing and rearing. So, the direction is the right one.

The question is over cost-effectiveness and who should bear which part of the cost. Clearly, employees

would want any additional maternity leave to be paid leave. They would also like to see significant increases in infant care subsidies so that the net cash outlay on their part is roughly similar to the current net cash outlay for childcare and the gap can be substantially narrowed.

Equally clearly, employers will see any such move as imposing an additional cost and operational burden, because they see it as having to cope with an employee's longer absence as well as having to employ a substitute in the meantime.

From the perspective of Singaporean couples who have children, they would want to avail themselves fully of any new initiative. From the Government's standpoint, initiatives should be targeted at encouraging increase over the "natural" outcome - net increases - rather than huge deadweight costs. There is no simple solution. If it were so simple, it would have been solved already. And these are delicate balances to strike, and I can appreciate that. If a workable compromise can be achieved, then we can, hopefully, stem the decline of our birth rate. But at the same time, if the balance is struck wrongly, it could be a huge waste of money and it could have adverse effects on business and employment. I therefore do not envy the job of the Minister in this regard.

In considering the various measures, I do urge the Government to give priority to items

that are within its more direct control, such as infant care and childcare subsidies. In the so many measures that are being talked about, not every one of them is easy to get a settlement on. But those that we can make an earlier decision, I think we should. And therefore in this way, there is no need to hold up all things just because some things cannot be resolved readily.

At the same time, I urge employers to take a longer term view to these efforts. To the extent that the efforts succeed, you would have better assurance of a larger pool of workers in the future. Hence, you can look upon this exercise as one of investing in your company's own future labour supply, rather than just an immediate increase in cost.

To my fellow Singaporeans, I appeal to you to also look beyond the immediate to your own longer term needs. While it is good to be able to enjoy better subsidies and incentives, we must also remember that we are ultimately the ones who decide the kind of life and family environment we live in now and in the future, and we ourselves must be responsible for the consequences of our own choices.

Reducing infant mortality further?

Sir, I also look at different ways in which we can increase the net supply of babies. I look at the infant mortality rate. In 1960, it was 34.8 per thousand births. Over the decades, reflecting improved economic circumstances and healthcare, that has been greatly brought down. According to MOH statistics, it is now below three per 1,000 births, and it is amongst the lowest in the world and it is on par with the most advanced countries. So, infant mortality rate reduction will not yield us many more births in this regard.

Fewer abortions?

But there is another area that we should examine, and that is abortion. According to the Ministry of Health's Annual Report 2001, total abortions in Singapore totalled around 13,800 each year from 1997 to 2000. I do not have the figures beyond the 2001 report. But assuming that they have been around the same these past few years, then it is a large loss of births in relation to total births of only 37,000 last year. For every

three babies born, one other baby is aborted.

Sir, I recognise that abortions are done for many different reasons, ranging from medical, social to economic. But, perhaps, not every abortion is unavoidable. By examining the factors behind the abortions in even greater detail than we have done so far, we might yet be able to bring down that number. And if we can reduce these abortions by a third, or maybe even a fifth, it would make a significant difference.

More adoptions?

And even as some Singaporeans abort their pregnancies, there are others who are not able to conceive and who would want to adopt children.

According to a Sunday Times' article on 7th March, it says and I quote, "There is no ballpark figure of how many people are in the queue at adoption agencies. But in the last four years, Singaporeans have adopted an average of 700 children a year. In this regard, we can study how adoption processes can be adjusted or reconfigured to facilitate adoption and matching, especially amongst Singaporeans.

As for the many childless couples who have sought to adopt children from outside Singapore, I also note from media reports that in respect of adoptions from China, two voluntary welfare organisations have been appointed to manage the processes and pilot new processes, and I hope that this pilot will provide useful learning points on how these processes can be made both more responsive and robust at the same time.

The sandwiched class

Sir, as we home in on the measures directed at births, we must also recognise that couples make decisions about

childbearing, taking into account a wide variety of factors. One of those factors is the pressure felt by the sandwiched class - people who have to support both their parents' generation and also their children. This pressure has physical, financial and emotional dimensions. It is accentuated by a low birth rate, because each succeeding generation has fewer working adults to support a larger number of elderly, while concurrently having to face the rising cost and stress of bringing up the next generation.

Younger couples may therefore ask themselves whether there will be enough money, and enough people, to responsibly support such care to the generation before them and the generation after them. In the overall calculations, there will be trade-offs. Nuclear families make these questions even more pertinent because there is a loss of inter-generational bonding, mutual help and economies of scale that the larger family group can supply. So there is a double whammy with growing needs for both childcare and eldercare.

My point here is that we will have to further step up our actions with regard to enhancing the employability of older workers and addressing eldercare needs, as part of our total efforts to get better results at the birth end. And by providing concrete ways forward on the issue of enhancing the employability of older workers, eldercare and fostering intergenerational bonding and mutual support, we will help lower the overall pressure on the middle generation, and that might further increase the chances of their having more children.

Top-up through immigration

Sir, notwithstanding actions to increase and save births, I believe that it would still be a very uphill task to achieve replacement rate in the immediate future.

For this reason, I think it would be necessary for Government to consider additional ways to increase immigration. Of course, we are not interested in just bringing in the numbers. All along, the policy of the Government has been to be careful and selective about granting permanent residency and citizenship, allowing only for those who can and will add value to our society, and also being very clear that if you are not desirable, then we do not want you here. I support such a prudent stance. However, we should examine further to see if there are ways of integrating our processes more closely to induce more potentially eligible foreigners, such as those who study and work here, to take up permanent residency. As Singapore's drive to becoming an education hub takes shape, there should be more opportunities for us to do this. Australia, for example, is able to benefit by augmenting its talent pool through tapping on its large body of foreign students.

The road from permanent residency to citizenship will certainly not be a straightforward one. We should review holistically the slate of benefits accruing to citizens versus permanent residents, and ensure that there is a significant difference. This is to give a stronger incentive to eligible permanent residents to seek our citizenship at an earlier rather than later time.

Anchoring Singaporeans

Just as we must try all means to minimise the attrition on births and induct valuable immigrants, we must continue to do our utmost to retain the hearts of Singaporeans in their country and its future, wherever they may work. Indeed, the Prime Minister spent a good part of this National Day rally speech last year driving home this point.

Being pragmatic, I think, is as in-born a Singaporean trait as you can find one. So I believe that in the overall scheme of things, it ultimately boils down to how we make this place a land of opportunity where talent and effort unite to make hopes and dreams come true, and this is the very subject of this and previous Budgets.

Let us move ahead

Sir, Singapore has overcome many obstacles in our journey from third world to the first. At every turn of the road, we encountered new challenges and tough choices. Each time, we tackled the problems head-on with sound logic, always planning ahead, placing the long-term interests of our people first and adapting with the times. That was how we forged ahead and succeeded. We must now move with equal resolve and speed to tackle the twin challenges of low birth rates and a rapidly aging population, and thereby secure a better future for Singaporeans.

Sir, I support the motion.

(In Mandarin) : Mr Speaker, Sir, I support the Budget Statement by the Deputy Prime Minister and Finance Minister. This Budget actually lays down the long-term policy of the Government and DPM Lee's personal political ideal. DPM Lee mentioned three main pillars to support the future prosperity of Singapore. Because of time constraint, I will only speak on how to build up a strong society, and on how to cultivate our next generation, ie, the "baby challenge".

Senior Minister Lee and Prime Minister Goh have already mentioned this before. Now, DPM Lee brings up this subject again in his Budget Statement and he is treating this issue as a sort of national crisis. Our total fertility rate now is 1.26, the lowest ever! He stated that,if

Singaporeans are not producing enough babies to build and protect our nation, we will face serious problems in the future.

Ever since this subject was brought up by DPM Lee, many people have debated over it. Some are optimistic; some are pessimistic. But I personally feel that, as a nation, we should look at this matter with more confidence and optimism as we face this very tough challenge. I think the simplest way is, of course, to import talents from other countries. This can well be an immediate solution to this matter. We welcome new immigrants to join in the process of our nation building. But I fully support the Deputy Prime Minister's appeal to Singaporeans to produce more babies ourselves. I look at this as a mission or a cause.

I shall look at it in two ways, ie, a tangible one and an intangible one. The tangible one is that we should look at it as a societal movement. It should not be just the Government's effort, but a societal movement. With globalisation and the highly competitive economic environment, how to reduce costs, improve productivity and add value to everybody's work is of paramount importance. I think we should create such a conducive environment, then this problem can be solved. I do not want to spend too much time on analysing the various factors, because much has been said and many views have been expressed in the newspapers.

Just now, Deputy Speaker Mrs Lim Hwee Hua said that we should not blame the women alone for the low fertility rate. This is not just the women's responsibility. It is the responsibility of everybody, every family, and the whole society. So, we should look at it as a societal movement.

First, change our mindset. If you have time, you should view the Discovery

Channel on TV. From the documentaries on the animal kingdom, you will discover that, in order to survive, the animals have to compete against one another. Sometimes, they even have to attack their competitors in order to mate with the females and produce offsprings. The salmons have to swim against the current to lay eggs at the upstreams of rivers and sacrifice their lives in the process.

For our Singaporeans, there is a very urgent call to produce more babies, so that we can have people to succeed us. As the ancient sage Mencius has said, "Of the three forms of unfiliality, the worst is to have no descendants." So, if you have no children, you are considered a very unfilial son. Of course, some people may say this is old-fashioned thinking. But I think giving birth to children and to have people to succeed us is one of the most important objectives in our lives. How are we going to, once again, call upon all the people of Singapore to keep this very important message of human survival in mind? Members have called upon the schools to spread this message to our young Singaporeans. Yes, we want to survive, we want better skills, we want to learn how to earn a living. However, in the schools today, the emphases are on studies and school work. Can we revamp our curricula to include subjects, such as how we deal with people, how to start a family and how to plan for our future generations? For the girls, we could strive to cultivate not just good career women, but also good mothers. For the boys, we have to cultivate good workers and also good fathers.

I think the Government and the people should have this consensus. This consensus is that we must look at this challenge as one of our Singaporean values. In the schools, in our family, in society, we must look at this responsibility as our shared value. If we do not have this consensus, this shared

value of giving birth to more children for our future generation, then how are we going to accomplish this cause? I look at the individuals, the family, the community, the employers and the Government as the five stakeholders, and these five stakeholders must arrive at this consensus. If they do not have this consensus, no matter how you talk about it, you will not come to a solution, because we should know first what we have to do.

Recently, we mentioned a lot of facilities, a lot of measures to promote procreation. I would like to touch on a few points. First, apart from changing our values, we need to change our mindset on our emphasis on the pursuit of economic development and work performance. Before I talk about the fiscal incentives and facilities, another change we need to make is on our work. If everyone of us wants to be an outstanding worker, do we have the time to also become an outstanding family person? We are not machines, we are not deities. How are we going to keep on working 24 hours a day? Another thing is on how we evaluate the work performance of a person. We cannot use the old standards to evaluate the work performance. We should also look at the quality of the work that he produces, his output, the quality of his work, to evaluate. Just because a worker starts work from 7.00 am and goes home only at midnight, we cannot jump to the conclusion that he is a good worker. We should not look at it in this way. We should only look at the quality of his output.

We need to change the mindset of Singaporeans. Firstly, we have to look at the bearing of children as one of our shared values. Secondly, on the economic side, from the Government down to the employers, we should change the criteria of evaluating the work

performance of the workers by tying it with their family lives, so that there will be a good work-life balance.

Now, let me look at the intangible measures. Just now, I mentioned that, in fact, in the last few days, I have looked at the various incentive measures, and there are more than 50 of them. In fact, the Government has already done a lot in tax reliefs, in public education in the schools, and creches. The Government has made a lot of arrangements. But there is still room for improvement for these arrangements, for example, in work arrangements. In the past, as a trade unionist, I was quite sceptical about the five-day week idea. Recently, after visiting some MNCs, such as IBM, AT&T and Shell, I dropped my reservations on the five-day week. Take Shell, for example. They function 365 days a year and 7 days a week. But most of their workers work only a five-day week. So, we should not hesitate in the move towards a five-day week arrangement.

We should have more flexibility, with the Government in the lead. Our quasi-Government departments and statutory boards should restructure themselves, so that we can adopt the five-day week. Just now, I mentioned about this flexible work arrangement. Now, we have the computer, fax, email and video conferencing. We can use these new technologies to re-engineer our work.

Recently, I attended a conference where an American professor gave a talk. Physically, he was in Japan, but we could raise questions with him and have real time discussion through video conferencing. In some countries, they even use the video to conduct lectures. They do not have to be physically present in the lecture hall. Now, we have people all rushing to work at the same time. Why can we not arrange to have flexible working hours and staggered time for our workers?

I think we should all sit down and feedback to Mr Lim Hng Kiang and his committee our suggestions as MPs, Mayors, employers, or Ministers. Everyone should play a part. For example, you say, if I want to start an enterprise, everyone should tell the Minister what they want to do, and not tell the Minister what to do.

In a family, parents help their children to look after their children. So, in a family, you can say, "Young people go ahead, have more children. When I retire, I will help you to look after your children." In our community, we should have more facilities, such as childcare centres and even baby-care centres. Now the Government provides subsidies for childcare centres. But I think the facilities for the care of babies are still not enough. I will raise this during our Committee of Supply on Health and MCDS. But I think the Government has not given any subsidy for the cost of looking after babies at home.

Another aspect is on education. Personally, I am very proud of our education system. Whenever I am overseas, when people ask me, "Which policy in Singapore are you most proud of?", I would reply that I am most proud of our education system in Singapore. Because, in Singapore, every child, irrespective of family background, whether rich or poor, has the chance to go to school and the opportunity to make full use of their potential. Even then, I cannot say our education system is perfect. We can still look at rooms for improvement. We want to cultivate our children into useful citizens. This is again a question of output. Do we want to cultivate an engineer, a lawyer, a technician, a doctor or an all-rounded person? We want to cultivate the children, so that they can make full use of the potential in every aspect, eg, in the arts, sports and even in hotel catering, in

business, science, law and leadership quality. Everyone has different talents.

I support the views expressed by the Acting Minister for Education in an interview by the Straits Times. I think we should make every child give full play of their potential, so that they can have the opportunity to express themselves. We can say that all parents in Singapore place great emphasis on the education of their children. We should give priority to school enrolment for the third child. I think this would be even more attractive than fiscal incentives. Now, we have given more autonomy to the schools and universities to enrol the students, I think it is very good. I think we should also give this autonomy to our junior colleges and secondary schools. If they want to go for one session, full-day school, and for schools to have childcare centres, we should help them.

Every family's need is different. When we want to take these measures, we should not think that, by giving a Baby Bonus, everything is resolved. That is not good enough. This time, we are suggesting extended maternity leave. Will it solve everything? It may be a good measure, but not a perfect solution. It is not to say that everyone will take the six-month maternity leave. Some would say we want to breast feed, so we may have to take six months' leave. But some females may have siblings or parents to look after the baby, they may not need such a long maternity leave and they would prefer to convert this maternity leave to family leave so that they can take leave in a more flexible manner. We should look at this maternity leave issue in a more flexible way. Just now, I mentioned about this Baby Bonus. For this fiscal incentive, we give bonuses for the second and third children. Some families do not even have the first child. Although money is not the absolute factor to encourage child birth, I think this would, in some way, help to cut down on their

financial costs. I also feel that there are too many rules, eg, you must give birth within a certain period, etc. So, if late birth is not an issue, why should we make it so complicated? So long as you produce the birth certificate, whether you have a second or third child, I just give you the money, that is all. Why all these terms and conditions? Maybe we should not give them cash, lest they misuse it. Maybe we could have a trust fund for medical fees, education fees, etc.

Another issue is on marriage itself. I think marriage itself is a problem. If you do not get married, how do we have babies? So, I think this is very important. The MCDS has already started the Public Education Committee to promote this, through the schools, the religious bodies and the clan associations. Talking about the clan associations, recently, the Minister of State Mr Chan Soo Sen said that the clan associations seemed to have nothing much to do nowadays. To this, I would say that there are a lot of things they could do. They can help to promote marriage and the bearing of children. I hope that the clan associations will encourage the young people to get married, and get married early.

Perhaps, my suggestion will also have to take into consideration the fact that the boys have problems because of National Service, although I fully support National Service. Some people say that the best time to start courting is when you finish your 'A' levels or polytechnic, and that it is the best time to start courting! We should give them a "gap year" after the 'A' levels or the polytechnic, so that the young boys could catch up with the young girls to do some social, charitable or welfare work together. This need not be confined only to Singapore. They can even go to other countries, so that they can cultivate the relationship, to experience social contacts with the

opposite sex. So, I feel that we could look into the possibility of providing for such a "gap year". Maybe the Ministry of Defence and the Ministry of Community Development and Sports could look into how to create more chances for the young people to socialise.

We should have this motto: "We are behind you!" Now, a lot of young people are worried. They say, "You want us to have children, but we do not even have a steady job, what certainty can we have for our future?" If we can say "We are behind you", not only the parents will say it, our friends and relatives should also say it. Our siblings, if their children are grown up, we should also help our younger brothers and sisters to look after their children. The employers should also say, eg, "All right, if you want to take leave, we can do this, we can do that, and we will support you." And for those young people who are just married, we should show that we are behind them. Give them the assurance that help is available, as and when they need it. So, with this national effort, ie, the parents, siblings, families, Mayors, MPs, we can show the young couples that "We are behind you". Let us do it.

With your kind permission, Sir, I too would like to join in this Great Baby Debate.

Sir, last year, I came across this very interesting report. This is a 2003 global survey on sexual attitudes and behaviour conducted by Durex, a condom manufacturer, and it covered over 150,000 people in 34 countries. The survey found that Singapore adults were the least amorous in the world. For once, we did not turn out to be Number 1 in a survey. Not only did our results rank last in the world for the number of times that our adults had sex in a year, we were also the only nation where the number fell below what the survey called the magic 100 mark - to be exact, only 96 times a

year. Some of us may want to take the Durex report with a pinch of salt. But it is one more way of looking at the problem of declining births. If Singaporeans are, firstly, not inclined to be passionately romantic, how are we going to produce babies?

Sir, amidst all this search for schemes to make sure that our young adults produce babies, I think we may have to start from the starting point. I cannot be more colourful and more graphic, but how can we get them to be more romantic and to be more passionate about romance and, hopefully, then allow nature to take its course? But, as they say, Singapore is not a very romantic place. And how can you blame them? If one were to take a walk past some of our office blocks at night, one might not be too surprised to see how many offices are still lighted up. One will find young accountants auditing their books in order to meet quarterly reporting deadlines; lawyers scrambling to have agreements drawn up because their clients have to complete their deals by the morning; and bankers dealing with financial markets that are still open elsewhere because of differences in time zones. So, small wonder that many couples, young or old, rarely find the time for one another, let alone think of having a child. Most are too exhausted after a long day and night at work.

But this has been a society which urges everyone to work hard or you would not survive. Strive for excellence, compete or perish. This has been the Government's mantra for decades. Nothing wrong with this, mind you, except that, faced with this kind of stress, parents do not want to have children who will also have to face the prospects of their own rat race in the future. So, it does not take much logic to reason why many opt to have just one quality child who can take on the world when his or her time comes. They can then focus all their resources on that one

child, and that includes paying for all types of private tuition needed to make sure that little junior scores straight A's in his examinations. A Straits Times survey recently found that it costs $77,000 just to pay for a child's education from pre-primary to university level.

What can we do to make couples change their minds and have at least two children? That is the burning question we have to deal with. We tried financial and tax incentives but have found that they do not work. And I am not so sure that rolling out more taxpayers' money is the only solution to our problem.

Neither is providing more paid maternity leave the panacea for our ills. Much has been made of the reservations expressed about extended maternity leave, not just by employers but even by some women employees themselves. And I do not wish to repeat them here. But let me just add that extended paid maternity leave is a tried formula in many countries that has brought only mixed results. In Italy, for example, a woman gets 20 weeks of paid maternity leave; in Austria, 16 weeks; Hungary, 24 weeks; Spain, 16 weeks; Japan and Germany, both have 14 weeks. Yet, all these countries have Total Fertility Rates (TFRs) close to or below ours. Yes, there are a few countries with long periods of paid maternity leave and higher TFRs. But none has reached replacement fertility. Interestingly enough, the United States and New Zealand are two countries with unpaid maternity leave: 12 weeks in the US, and 14 weeks in New Zealand, and the US has a TFR of 2.11 and New Zealand, 2.01, close to replacement rate.

Sir, there are women who feel that long maternity leave is in fact disruptive to their work and careers. Paternity leave has been suggested too, but I think this is probably not a good solution. If our male citizens have to do reservist training for up to 42 days in a year, any additional

days off from work would be highly disruptive to any organisation. Many people, Sir, would prefer, say, half a day off or a day off mid-week to spend with their children, in other words, a move towards more flexible working arrangements. Perhaps we might want to make a national move towards a 5-day working week, so that all of us can spend more quality time with our families.

Other policies can also be relooked. A case in point is the foreign maid levy, a policy to contain the number of foreign maids working in Singapore. Sir, with 140,000 maids in Singapore, each attracting a levy of $345 a month, it has actually become a very convenient cash cow for the Government to milk. But then it is parents who suffer because, with the levy, a maid today can cost between $600 and $700 a month. This is no small sum for a young couple. Do they turn to parents for help in raising the child? Not likely because, in many instances, some parents and in-laws would probably still be working. But if we really want to ease the worries of young working couples who need someone to take care of their children when they are at work, then we must lighten the burden of hiring someone. It is not the ideal solution, I agree, to have someone else, not least a foreigner, bring up one's child. But the Government must examine its priority in this area: whether to continue with what is viewed by many as a revenue-raising measure, or whether it wants to achieve a larger social objective. If it is to be the latter, then the Government must be prepared to bite the bullet on this and consider lowering the levy.

Sir, while we are talking of foreigners, let me just add how painful it is, as an MP, for me sometimes to come across cases of Singaporeans who are denied permission to marry the person they love

because their desired spouse happens to be a work permit holder. On the one hand, we lament the low rate of success of the Government's match-making agency, the Social Development Unit, but we readily deny those who find love on their own, just because one partner happens to carry a card that says, "You are here to work only, and you cannot marry a Singaporean." Or what about the many Singaporeans who have foreign spouses, but we tell the foreign spouses that "Marriage to a Singaporean does not confer on you the automatic right to live in Singapore"? Many such couples want to start families in Singapore, but our rigid immigration rules do not even allow them to live together. Sir, if we want to make every baby count, we need to re-examine the rationale behind some of these rules and find ways to relax them.

Sir, there is another area I am concerned about in the Budget Statement, and this is the intention of the Government to raise fees for university students. While it may be a simple solution to suggest that students need not worry too much about the coming increase in fees as they can always pay later when they are working, the Government may be unwittingly adding to our procreation blues. Can you imagine that we would end up having young people who will already be in debt the day they graduate? Repaying their study loan will of course have to be their priority. This means delaying their ability to marry early and start a home and their family, because there would be the mortgage to think of, and you do not want to think of another loan until you have got the first one off your back. In fact, one would-be parent in his 30s put the problem to me in another way. He said, "If I have a son and I look after him, I will have to look after him for actually a quarter of a century because, by the time he completes his NS and he graduates, he would be close to 25 years of age and I will be close to 60. If I have a second

son a few years later, that would take me to over 60 years of age, and I shudder to think if I also have to help them pay their university loans. And the Government is telling me that there is no such thing as life-long employment, and I am seeing many of my friends becoming unemployed in their mid-40s. So, I think having one child is already dicey enough."

Sir, there are many changes that we can make to encourage couples to have children and, no doubt, we will hear many more ideas in the next two days. It is a serious problem we are faced with, and I find it disconcerting to read stories in the newspapers that seem to glorify those who do not want to have children. Sir, last week, the Straits Times ran a series of articles over some days. One story last week showed a couple looking very happy with the headline saying: "No rushing the stork". Next to this was a picture of another couple with their child and it read: "One is enough for now". Then, a few days later - to be exact, last Saturday - there was another

story of a journalist smugly proclaiming that although she loved children - other people's children, that is - marriage and having babies were just no-no to her. Another story the same day had another reporter who simply said that she could not stand bawling babies around her, forgetting that all of us at one time or another must have been pesky little kids to another generation of adults. Not only that, she said that having babies would surely put paid to her plans for going on holidays and there was no way anything the Government could do to make her change her mind about having a child.

Sir, I think such stories are not helpful to what we are trying to achieve. I think what we need to have is more pro-family stories. Let me say that as one who is a parent, there is nothing more fulfilling than having and bringing up your own children. Both my wife and I have had to pursue our own careers but we have

shared the joys of parenthood. In raising our children, we had been through their ups and downs with them and we had shared their trials and tribulations. There have been times when they have made me angry but there had been many more moments when they have made me happy and proud.

To those who still eschew the idea of having children, let me ask them to look some 30 years into the future and ask themselves what kind of Singapore will we then have. Would it not be a Singapore lacking the vibrancy that we now have? Let me ask them who is going to look after them when they can no longer look after themselves?

Sir, there is no one size solution to fit all in this issue. Mr Lim Hng Kiang and his Committee have an unenviable task to find the solutions, and they may not even find them all by National Day but he deserves our support. The problem is such a perplexing one, and it is so crucial for our long-term survival, maybe even more so than Dr Ng Eng Hen, he needs to have his bonus pegged to how successful he can produce babies for us. Sir, no pun intended, of course.

Mr Speaker, Sir, I agree with the previous speakers that this is indeed an interesting Budget. It deals not only with specific issues of concern to the economy but, of equal importance, it sets important outlines on issues of significance to us as a society.

In terms of economic issues, the focus of this year's Budget is on enhancing Singapore's competitive edge. In this respect, this year's Budget continues with the process that was started last year to put in place some of the key recommendations of the ERC. Some Singaporeans have expressed disappointment though, that there are no goodies for the individuals, except for the

Medisave top-up for those above 50 years of age, whereas many incentives were given to companies. To the extent that this Budget will help to further strengthen companies and attract more investments, I hope that there will be a trickle down effect, and ultimately all Singaporeans will benefit.

Let me now make specific comments on some aspects of this Budget.

On the issue of halting the falling birth rate, I agree with DPM that a comprehensive approach is needed. To me the issues that we are confronted with can be categorised into three areas: cost, time and supporting infrastructure. In NTUC, our Women's Committee had conducted dialogue sessions with a few hundred women leaders and activists. The feedback that came across loud and clear is that cost is still a major factor affecting a couple's decision on whether or not to have children and, if so, how many. In this connection, many had said that they were not looking at just the cost at the time of the birth of a child, but to them, it is a whole process from infancy to adulthood. On the issue of time, many women also pointed out that there were insufficient alternative work arrangements, such as part-time work or teleworking, to widen their choices after childbirth. Currently, their only choices are to stay at home to look after the children or to remain in the workforce. Additionally, many also felt that there is a need for a more supportive environment at the workplace for working parents. In this connection, of course, we have been working very closely with the MCDS in order to promote work-life balance at the workplace, and we are happy to say that there are some positive results but more could be done. In Japan, for instance, there is a good percentage of women doing telework. In the Scandinavian countries where there is a high female

labour force participation rate, there are many flexible work arrangements for working mothers.

Sir, the proposal to lengthen their maternity leave, despite many misgivings, is an important one to me as it will also partly overcome the problem of lack of affordable infant care facilities. But the issue of discrimination against women will have to be dealt with, as many women are concerned about how the improved benefits will affect them in the job market. The point to note here is that in most of the countries where there are generous benefits for women to take care of the family, there is also legislation to protect their right to keep their jobs after they return to work and to provide a system for women who are discriminated against to file a complaint. It will be interesting to see whether without such a supporting legislation the measures that are put in place here will be effective to prevent discrimination against women. In this context, I would like to suggest that even if the Government is not prepared to consider legislation at this point of time, nevertheless, it needs to put a mechanism in place to monitor the impact of such policies, otherwise the market will take care of itself. Women will not avail themselves of the longer maternity leave and have more babies because they fear they may lose their jobs. As one employer had put it in a newspaper interview recently, if it was just too troublesome he would not employ women.

The other way of ensuring that there will be no discrimination against women if they avail themselves of the longer maternity leave is to extend this benefit to fathers as well. I am not saying that fathers will now start conceiving but what I am saying is that we could describe this additional period of leave as parental care leave which can be enjoyed by either the father or the mother. In this way, the disruption to the workplace and cost to the employer will be spread out. At the

same time, we also encourage fathers to assume greater responsibility over child-rearing and family responsibilities. Over time, this will by itself create a momentum, in terms of changing of society's norms and perceptions about work and family.

Sir, I would also like to add that we should not view this issue of procreation from a narrow, temporary perspective of how many babies will be born to support our economic growth or contribute to our GDP. If we cast this entire debate and put all our efforts to boost the birth rate solely from a purely economic angle, we may see some results in the short term, but I doubt that it will be truly sustainable in the long term. Economics and society are inextricably bound and intertwined. The policies that we adopt do shape our society. They are a reflection of our values, and they send important messages to our youths about what we value. A society that values children, parenthood and the family is far different from a society that does not.

The ongoing debate that we are having today is healthy as it enables more people to buy into the idea. Through this process, we can then develop a consensus on the kind of society that we want and what we are prepared as Singaporeans - the Government, employers, workers and everyone who has a stake here - to put in place to support these values.

Sir, how to address Singapore's declining fertility rate is not an easy issue. It is a complex and intricate issue involving many facets. The current approach however has serious limitations as they are ad-hoc and it is not multi-agency except when a problem crops up and a committee is set up to deal with the issue as we are now doing. I would like to suggest therefore that the Government seriously consider setting up a multi-agency body that will champion issues

concerning the family and would also act as a sounding board for all policies or programmes that will impact on the family.

Sir, let me now come to the other points in the Budget.

The Deputy Prime Minister and Finance Minister has given us an overall assessment of the economy. Singapore continues to remain as a competitive manufacturing location especially for high-tech, high value-added activities. However, in the same breath, we are also told that the manufacturing sector is not likely to generate many more jobs as MNCs are shifting to higher value-added, less labour-intensive activities, and will increase output per worker rather than hire more workers. Hence, to create more jobs for Singaporeans, there will be strong emphasis on the services sector. But looking at the trend that is taking place today, there is cause for concern. Many companies are outsourcing their services. In the past, only blue collar, manufacturing jobs are outsourced but today outsourcing involves white collar and higher value-added jobs as well. Even the Government is outsourcing, a trend which the Finance Minister has stressed will continue and in fact even intensified through the Best Sourcing Directive of the Ministry of Finance.

In this light, my question is where are the jobs coming from? Will the number of jobs that are created be enough to cover the number of school leavers entering the job market and soak up those who are retrenched or unemployed? What more can be done to encourage companies that are based here to try and retain the jobs in Singapore, and even if they have to outsource, to do so to local companies? Has there been an assessment of the impact of outsourcing on our economy and jobs and with the growth of India and China, what will be the future implications? Will outsourcing intensify

and, if so, which are the more vulnerable sectors? I think it is important that we address these questions as the concern down the ground continues to be whether enough jobs will be created - a concern which is further compounded by the announcement that we will be making permanent residents here much more attractive in order to attract more foreigners to sink their roots here.

Sir, I can also see a certain contradiction in our policies. On the one hand, the focus is on creating more higher value-added jobs for Singaporeans. But at the same time, the policies affecting the employment of foreign workers are made more liberal. I am referring specifically to the new category of "S" passes that are being created to replace the Q2 passes. Unlike the R passes for skilled and semi-skilled workers, and the P passes for professional workers, the "S" passes are meant to attract the middle-tier skilled workers with diploma and post-secondary level education. The feedback I have received is that Singaporeans fear that the "S" pass workers will pose a direct competition to our polytechnic and university graduates. It is not competition per se that Singaporeans are concerned about. Rather, their concern is that they may pose an unfair competition with Singaporeans because they can be employed at much lower cost than Singaporeans, as their minimum salary is only $1,800. There is also no restriction on their countries of origin compared to the previous Q2 passes that are now being abolished. This concern has some basis as last year's retrenchment figures show that a higher proportion of those retrenched are executives. With the presence of the "S" passes, this will be the category that will find it even more difficult to get employment if they are retrenched. I note in particular that the "S" passes will now be open to the healthcare, IT, aerospace and

pharmaceutical sectors. These are high value-added industries and, if Singaporeans have to compete with foreigners even in these job sectors, I wonder how that would impact on the employment prospects of diploma holders and university graduates.

I remember reading last week's report in the Straits Times that one in five polytechnic graduates ends up in a part-time job. I would therefore like to ask the DPM and Finance Minister, if he could kindly give an assurance that Singaporeans will not be displaced by foreigners and that our policies will continue to give priority to Singaporeans for good, high value-added jobs, now that the gates have been opened even wider. Although there is a limit of 5% imposed on the number of "S" passes, based on past precedents, we know that it will only be a matter of time before employers agitate for an increase.

I am particularly curious, Sir, why we have a shortage of such manpower that is now the target of the "S" passes, considering that we now have 5 polytechnics and two universities and we aim for a 60% rate in terms of the cohort entering university by 2010. Does this indicate that our planning and manpower projections are not as effective as it should be in meeting the needs of the various sectors of the economy? What more can be done to systematically identify areas or sectors in the economy where jobs are being created and to prepare Singaporeans for these jobs so that we will not have a situation where even higher value-added jobs end up with foreign workers?

Mr Speaker, Sir, I strongly support the decision to raise the Skills Development Levy's salary ceiling from $1,500 to $1,800 in line with the increase in the number of training places that is projected from now onwards. Training and skills upgrading is of critical importance to our

workers to enable them to remain employable and this increase is, in fact, long overdue. However, there are limitations to the current system. Workers continue to complain that employers are not prepared to train them for skills that are not relevant to their current job. Workers, on the other hand, are concerned that if they stick only to job-related training, they may not be prepared for other jobs when they are retrenched. Workers are prepared to go for training at their own time even, but do need assistance in funding.

In this regard, I would, therefore, like to urge the Government to consider some means of assisting workers who wish to attend non-job related training but which will prepare them for other sectors of the economy. We have mooted the idea of individual learning accounts on several occasions but somehow this has not received much support. I would, therefore, like to ask for Government support again for this idea of an individual learning account for workers, in line with our focus to develop lifelong learning. The Government can consider opening an account for every working adult with a CPF account and regularly topping this account much in the same manner that it has done in topping up the Medisave account for those above 50. In my view, this will go a long way towards promoting lifelong learning and employability. It also sends a strong signal of Government's support for individual efforts at improving themselves.

Let me now come to the next point, Sir. This year, there will be a 2% cut in the budget for all the Ministries except MINDEF, and this will apply for FY 2004 and FY 2005. Sir, I understand the rationale - revenues have become increasingly constrained because of the growth volatility and the reduction in corporate tax and other incentives given to companies have also affected the

revenue stream. Nevertheless, my concern is whether this would have an impact on the Government's social expenditure. Will this have an impact on the social assistance programmes run by the Ministries for the poor and needy and will these affect subsidies for services such as health and education? I understand the need to balance the budget and to reduce deficits, nevertheless, my concern is how this will impact on help for low income families as there are still many who need help. Although the retrenchment rate is expected to be lower this year, the rate of unemployment is still high and many Singaporeans continue to need help to secure jobs. And, even those who are working will require support since their salaries may not be sufficient to meet basic needs.

Next, Sir, I come to the point on Best Sourcing. This requires public sector agencies to undertake "market testing", so as to compare the cost of providing their services in-house against the cost of having private sector vendors provide the services. If private sector vendors can deliver the service more economically, they will be engaged to do so. The public sector will then discontinue doing the function. The public sector agency will then discontinue the function, and either redeploy or release the affected staff.

Sir, the rationale for Best Sourcing is understandable, nevertheless, in view of the current economic climate and the still high unemployment rate, there are concerns among public sector employees. The older public sector employees feel particularly vulnerable. Many fear that they will not get jobs so easily if they were retrenched as a result of Best Sourcing, particularly since employers today are still biased against older workers. Many have also asked whether there is a need for the Government to also behave like the private sector, particularly

when the job market is still soft. Some were also concerned that when jobs were outsourced these may invariably end up in the hands of foreign workers. There were also concerns that some public sector management may invoke the Special Gratuity Scheme instead of the Special Resignation Scheme in order to remove surplus staff. The payment under the Special Gratuity Scheme is much lower compared to that under the Special Resignation Scheme, although the Special Gratuity Scheme is not meant to cover redundancy situations. These concerns, Sir, should be addressed so as not to affect the morale of public sector employees. As far as possible, all efforts should be made to redeploy affected staff. If it is not possible to continue employing them, then they should be informed in advance and assisted in securing alternative employment or to undergo training in order to prepare them for other jobs. I would appreciate, Sir, if these concerns can be addressed.

Public sector employees perform an important role in our economy. The public employment practices have undergone tremendous changes over the last few years, the most recent one being the revision of the SRS, and last year there was a major restructuring exercise at the HDB. Public sector employees are aware that they can no longer expect an iron rice bowl, and public sector unions have been at the forefront in bringing the message of change to their members. Public sector employees are also aware that employment practices cannot be fossilised and they must expect greater alignment with the private sector. Nevertheless, it is important that, in the face of the budget cuts and the push for Best Sourcing, we ensure that public sector employees continue to feel confident that they have good career prospects and their concerns for stability and job security are addressed.

Sir, I see expenditure in education as an important and necessary investment in our people. I am, therefore, concerned that if the universities are allowed to set their own fees, university education may become too expensive and out of reach of low and middle income Singaporeans. True, we should get students to pay a higher proportion of the fees but we should not kill the Singapore dream where everyone aspires for a better life through education. Although there may be loan schemes available, I wonder whether it is really good to have so many young Singaporeans, like Mr Tan Soo Khoon said before me, burdened by a high level of indebtedness when they leave the university. Again, like Mr Tan, I also wonder how this would affect their decision to get married, buy a house and have children.

Hence, I would like to urge that we continue to ensure that university fees remain affordable to Singaporeans. I do not see university education as benefiting the individual more, compared to investments in primary or secondary education. We are a small country, Sir, and people are our only asset, coupled with the fact that many of the investments that we are bringing in are high value-added ones, there is certainly a need for more people with university qualifications. It was not so long ago that Mr Philip Yeo who said that in the life sciences sector, those who have the first degree are only fit to wash test-tubes. Hence, I would like to urge the Government to ensure that university education will continue to remain affordable and within the reach of the average Singaporean family.

Sir, on means testing for hospital care, I agree with the principle that we need to focus subsidies on those who need them, and so make the most of our healthcare budget. However, usually the devil lies in the details, and I would like to urge that before we introduce any means testing for

hospital care, we should study the issue very carefully. I know that means testing has already been applied for step-down care and in a few other services, but hospital care is a different kettle of fish, as the cost involved is much more and, for those suffering from catastrophic illnessess, the medical bills are huge.

Singaporeans who are really poor, and the upper income, will have fewer problems, but those caught in-between may face difficulties. Likewise, those who suffer from a prolonged illness, even though they may be enjoying a certain income level, will have their savings wiped out and little monthly income to support their medical needs. We also have to bear in mind that we are an ageing society, and we now want families to have more children. If, as a result of the new means testing policy, they have to pay more in terms of hospital care, then our efforts at promoting procreation may be affected if families feel that they have to incur increased liabilities in meeting the healthcare needs of their children.

Many Singaporeans today are saddled with multiple responsibilities. In addition to taking care of their own children, many have the responsibility of taking care of old and sickly parents. If we use income alone as a yardstick, it may not be very helpful, as a person may be earning a certain income but it may not be sufficient for him to take care of his multiple needs. Policy-making, Sir, is not an easy process and there are risks associated with any policy. We do not want to see a situation where, because of certain policies, people do not seek treatment or they neglect their aged parents. I do urge the Government to study these issues very carefully before proceeding with means testing, as healthcare is an issue which is close to the hearts of many Singaporeans. Means testing should not be the only way in which we control healthcare cost in Singapore. A lot more has to be done to

ensure that healthcare remains affordable, particularly, continuous efforts like identifying and addressing the areas which had caused the cost of hospital care to balloon over the years.

Sir, I rise to support the Budget.

The measures as proposed will continue to position Singapore as a land of opportunity for businesses, as well as for enterprising individuals. The proposed 2% budget cuts for most Ministries will steer effective government, with expenses closely in check. I am confident that with the structural adjustment in place in our tax system for businesses, thereby enhancing our competitiveness, we will be able to take advantage of the positive change in the economic environment, raise our sails once again and capitalise on another rising tide in the global economy in the coming years.

Notwithstanding this cautious optimism, however, one has to be realistic. The global economy and indeed the geo-political landscape have changed in complexity significantly in the last decade. Economic business cycles have become much shorter. Shocks have become more periodic, and even endemic, as in the case of terrorism. Global competition is especially keen with the emerging economies of India and China, a great opportunity for the nimble, but a threat for economies which rest on their laurels.

Just as the private sector has had to adjust to the new economic realities, to be nimble, flexible and cost-efficient, it is imperative that our public sector also responds in kind so as not to crowd out private initiatives. I, therefore, applaud the DPM and Finance Minister for further cutting the size of the public sector.

Sir, I noted, and more so as Chairman of the Estimates Committee in this House,

that reducing the size of the public sector has been a deliberate policy of the Government over the past years, and rightly so. However, it is clear that this long-term task is even more relevant in an era where Government revenues have been increasingly constrained by shorter business cycles and volatile growth since the financial crisis in 1997, in contrast to the robust high growth era between 1987 and 1996. Indeed, according to the Institute of Policy Studies, the cost of government, as measured by the ratio of operating expenditure to the GDP, has hovered around 10% since the 1990s, down from 15% in the 1980s, while tax revenue looks set to dip below 8% in this decade. Government social expenditure, which accounts for close to 44% of the budget, is likely to impose further burden on the economy. This is because of our ageing population trends, and especially in terms of healthcare and old-age related welfare costs. Our increasingly vocal electorate also has a tendency to demand rebates and subsidies as a right from time to time.

Whilst we have consistently taken the rational practical approach, one has to recognise that in addressing some of these demands from time to time, a further stress on Government's coffers can be expected. Singaporeans have to recognise that there is no free lunch all the time. We cannot continue to expect more handouts and tax reliefs over time if we are seeing a falling revenue trend and if there are no corresponding cuts in Government expenditure. Ultimately, Sir, the cost of running an over-sized government has to be funded from higher taxes, public debts, further privatisation of Government assets or dipping into accumulated reserves.

Sir, whilst the Government has been proactive by proposing another budgetary

deficit of $0.7 billion in this year's Budget, I believe the principle of achieving a budget surplus over a business cycle must be maintained.

I believe this is a right-thinking philosophy that will enable Singapore to steer clear of structural budget deficits in the long run. We must guard against increasing demands from all sectors of society for handouts and wean Singaporeans away from a dependency mindset.

In line with this philosophy, I would like to urge the Government to continue with the implementation of means testing, not just in healthcare but also move away from across-the-board distribution of social handouts. Instead, we should have a more coordinated approach in delivering social assistance schemes, so that distribution will reach only those that really are in need of them.

I note, for example, that the revenue impact of GST, raised in stages from 3% to 5% over the years, has been more than offset by handouts in the form of rebates and subsidies. However, Singaporeans, some genuinely burdened by difficult economic conditions and others who are happy to free ride along, are both beneficiaries of mass distribution. Indeed, some have even considered that it is a right entitled to them. Sir, this perception that rebates and subsidies are rights that can be given in perpetuity has to be corrected, or it will add an ever increasing strain on our fiscal drawers.

Correspondingly, I support the various initiatives that have been taken by Government, directly and indirectly, to support education for consumers and citizens from personal financial responsibilities and discipline. As a longer-term measure, perhaps the Education Ministry should also consider how such concepts, including public fiscal prudence, can be inculcated among our young in schools.

Sir, on the overall Budget, the 2% budgetary cut across-the-board for all Ministries except MINDEF, in my mind, is a step in the right direction. The cut does serve as a wake-up call to all Government Ministries. It is no longer business as usual. However, I would like to ask if it does go far enough.

The current budgets in individual Ministries have evolved over the years, in many cases, in response to ad-hoc policies for social expenditure of specific needs in the Ministry, implemented as a right policy at that time but not necessarily the most relevant now, or necessarily well-targeted or coordinated with other Ministries and schemes.

The Ministry of Finance, in allocating the budget, looks at the previous year's annual expenditure numbers and sets a target for growth or contraction of the Ministry's budget on an overall basis, leaving individual Ministries to allocate within, by and large. Hence, with a 2% cut to be implemented, we could end up micro-managing Ministries.

Ministries could end up focusing on cutting stationery, staff amenities and benefits and other perceived easy to tackle "wastes". This is likely to lead ultimately to a reduction in civil servants' morale, whilst allowing for the potential perpetuation of out-dated schemes and programmes, or indeed processes which are inefficient or obsolete.

Sir, one also hears of anecdotes where some Ministries, close to the end of the fiscal year, should they be under-budget, go to great lengths to "spend" the balance, so that they will not have their budgets cut the following year. This is a real waste in itself and needs to be avoided.

For the next FY 2005/06 Budget, I am therefore proposing that the Government conduct a zero based budget review

across-the-board for all Ministries. The review should include a revisit of the mission, objectives, programmes and resource needs of all Ministries. The result should enable a streamlining of Government activities, including subsidies, social assistance programmes and schemes. It should also enable greater efficiency all round, if there is duplication across the Ministries for shared services. If there are indeed expenditures for programmes no longer required, they should be terminated, thus incurring further cost savings.

Sir, I believe the last time the MOF did a zero based budgeting exercise was many years ago. A zero based budget review exercise conducted this year and subsequently once every five years will serve to ensure that the public sector remains vigilant, efficient and relevant, and delivers targeted services in tune with the times. Who knows, the review might end up with a cut greater than the proposed 2% cut for the next fiscal year.

On a related matter, I would also like to propose that the Government also review its annual grants to statutory boards with a fine tooth-comb. The grant should be tied to a set of performance criteria and the level of accumulated surpluses, particularly where there is no more strategic use for the surplus.

Sir, I recognise that the trimming of the Ministries' budget and a close check on Government expenses, if not properly managed, may create a morale problem among civil servants. Indeed, I believe that it is already happening, based on initial feedback I have gathered from my constituents and grassroots leaders. I want to ask whether the Government is ready to face this challenge and whether its personnel policies are geared to address this concern.

In conclusion, Sir, in crafting Singapore's long-term competitive

position, our public sector's size and role is significant. To be successful, we have to stay focused and be more efficient in delivering our public services, whilst realigning the expectations of future generations. We should not overlook inefficiencies in our public sector and continue to lay the platform for greater flexibility whilst maintaining fiscal prudence in the face of keener economic competition globally. Only in this way can we continue to ensure effective government in a land of opportunity for all.

(In Mandarin) : Mr Speaker, Sir, the Lianhe Zaobao described this year's Budget as a "Budget Focused on Long-term Goals." Yes, we should look at what the Government's long-term goals are, examine their impact on our ordinary citizens and the implication on what lies ahead in the future.

As before, this Budget was delivered in flowery language with barrels of reasons and principles, but with no regard for the people's livelihood. And yet, concealed behind the vague and flowery language are many sparkling spectres. Let us examine what are the financial policies and fundamentals that are laid down by DPM Lee.

Firstly, DPM Lee said that in order to build an efficient government, he would cut by 2% the budget caps of all Ministries, except MINDEF, for this financial year, in order to reduce revenue shortfall and to attain a balanced budget in FY 2005. On the surface, reducing the Ministries' budgets and maintaining high efficiency appear to be reasonable. But, what would be the reaction of the various Government departments when their budgets are slashed?

To start with, the Ministry of National Development has already informed all the town councils that they would no longer support any HDB flat maintenance items which require heavy expenditure. This implies that the cost for town councils will be significantly increased. When the town councils can no longer afford such increases and start to run into deficit, would they not resort to raising the conservancy charges? Once the conservancy charges are increased, then the meagre rebates granted by the Government over the years will be wiped off.

The falling of one leaf heralds autumn. With this, who can guarantee that the other Government Ministries will not increase their charges in order to compensate for this cut in the budget allocation? Will the 2% cut be a catalyst for Government's productivity to go up? Or will it directly result in the Government departments turning to the ordinary citizens and increase their charges to bridge the gap? Will this also spark another round of business cost increase, resulting in our competitiveness being eroded? Let us wait and see.

The Government's expenditure for FY 2003 amounted to 17% of the GDP, and it is the biggest consumer in our domestic market. Will this 2% reduction bring about a chain of reaction that would affect our economy? We know that this is a deficit budget, but the Government should also consider that the present economic recovery is not across the board, the unemployment rate is still high and the Government can well afford to use the surplus accumulated during its term to finance this deficit. Why is the Government in such a hurry to withdraw this 2% of expenditure (which amounted to about $450 million) from the economy now? Is it because that the Government suffered a setback in its investments last year, and that the NII was $1 billion short of the original forecast and it needed to

make up for this loss? Can the Government explain why the NII on investments was 33% short of the original forecast?

Secondly, DPM Lee said that we should encourage our people to be self-reliant, to be responsible for their own living and to build up a strong society. To achieve this long-term goal, the fundamental of Government's fiscal policy is reducing the subsidy on university education and adopting means test to decide the amount of health care subsidy to each individual. The Government said that maintaining the current ratio of subsidy on tertiary education will result in a squeeze on the resources for the primary and secondary schools. It argued that university education will only benefit individual in securing employment and earn a higher income, whereas the secondary and primary education is more beneficial to the society as a whole. Therefore, the current formula in university subsidy should be reviewed. The reason of social benefit sounds grand, but behind it, it is simply the Government's unwillingness to continue to undertake the current subsidy of university fees for our people.

When defending its foreign talent policy, the Government says that foreign talents play a key role in our economic development. With them, we are able to strengthen our competitiveness to attract foreign investments, thus creating more job opportunities for our people. The Government has actually spent a lot of money and resources to attract foreign students. The Government, including statutory boards, spend public fund by providing them with tuition grants, bursaries and scholarships to study in our universities. The increase of foreign students in our universities has also brought about higher cost to the manpower, facilities and financial resources in our universities. Now when we need more taxpayers' money in

developing our own talents, the Government turns around and says that university education only benefits individuals in securing better employability upon graduation and, as such, they should pay more fees. Could DPM Lee enlighten us what kind of logic is this?

Is the Government saying that only foreign talents can bring benefits to our society and hence it is worth the while spending on them? For our own students, university education only benefit them as individuals, therefore they have to be laden with debts the moment they graduate and start paying back with an expected lowered starting salary. Is the Government saying that in our new knowledge-based economy, the role of our university graduates is only to secure higher salary for themselves? The Government's message is simple, that is, our local talent is not good enough. We need foreign talents. So, we could only cultivate foreign talents. As for our own people, if they want to be recognised as talent, either parents have to foot the bill or they will end up with a heavy debt after graduating from university.

DPM Lee also said that our social safety net must be carefully targeted and must not undermine our will to work and improve ourselves. As such, subsidies should be focused on those who need them most and in areas which yield the most public good. Means testing will, therefore, become an important feature in providing public services and social assistance.

Mr Speaker, Sir, there is nothing wrong to encourage our people to be self-reliant and to make optimal use of our resources. But what is the Government's responsibility to the people? Should means testing be used as a norm to decide payment of basic public service is debatable. When the Government says that subsidies should focus on those who need them most, any person who has

social justice at heart will generally accept this broad principle. However, judging from the PAP Government's governing style, I am afraid this is going to be another trick with the real motive concealed. The question is, who are those that most needed such subsidies? Are you saying that only those families whose income is less than $1,000 should be our focus, and those with $1,001 will not require the same level of assistance? No doubt, we do need to help the lower income people, but what about those who are unemployed and those whose assets have devalued and the "new poor" in the middle class who are squeezed? Do they not need the help too? Will the use of means testing to decide the medical subsidy not result in higher medical costs for most of the patients? If this is the case and the margin of increase is higher than the actual subsidies given to the needy, is the Government not benefiting from means testing? If this is in need either in short term or in long term, would it not extend the norm of means test to other public services such as education? Under the disguise of a broader objective of re-distributing public resources and building of a strong society, the middle-income group will be the ones who are squeezed most.

Mr Speaker, Sir, what I would like to put to you is the fact that, regardless of whether the economy is good or bad, the burden of cost of living of our people in Singapore has never lessened, it has increased. When the times are good, the Government will say, "Well, you can now afford it, so all the fees and charges will be increased!" When the economy is bad, the Government will sit by and watch, and only step in when the people are in a state of extreme hardship. Even then, the support they give to the people is hardly sufficient in helping them to tide over the difficult times, and the Government even rubs salt into the people's wounds by

emphasising how important it is to import foreign talents. Now our economy has yet to be fully recovered, but the Government is already in such a hurry to withdraw the various rebates and to plan for a new fiscal landscape. This budget has laid down the foundation of collecting more fees from the people by introducing means test in healthcare service and reviewing university subsidies in the name of building an efficient government and a strong society.

DPM Lee in closing his Budget speech said, "Together, as one Singapore, we will build a future of opportunity for ourselves and our children." However, if the Government is to adopt such financial principles and fundamentals I described above, then the future of ourselves and our children will be one that is full of stress and heavily laden with the burden of life. They will be weighed down with the high cost of living and constantly struggling to live a life. Under such circumstances, how many people will have the courage to have more children?

(In Mandarin) : Mr Speaker, Sir, the Member for Hougang said the Deputy Prime Minister and Minister for Finance was giving a lot of reasons and principles on the macro economics but did not notice the changing trend that impacts our ordinary citizens. What is the current trend in the market? The current trend is one of outsourcing in the manufacturing sector. Many manufacturing industries in the developed countries are outsourcing many of their production to other low-cost countries. Even our Singapore companies are outsourcing. Therefore, DPM's budget is targeted at addressing this trend.

There are many people who are asking what care and concern this Budget gives to the ordinary people. In the past few years, we had given them a lot of rebates, reliefs and assistance. The main thing is that as leaders of a government, we

should discern the mega trends. Unfortunately, although Mr Low and Mr Chiam have seen the main trends, they could offer no solution to help the people. Mr Chiam said that foreign investors had gone to other low cost countries. He did not tell us how to retain these companies in Singapore. Mr Low does not agree with our policy of attracting foreign talents. He seems to be jealous of the foreign talents. We believe that with foreign talents, we can attract foreign investors to come here to set up factories.

Another trend is that of contract workers. Whether in the education field or in the financial sector, how do we protect our contract workers? This is most important. Because contract work has become a trend. One of my residents complained to me, "Why can I only get contract work and not a permanent job? And the contract is renewable after three years." This is a trend, an inevitable trend. Another resident told me that he was lucky to get a three-year contract work, because "no contract, no job". So this is the trend!

The bigger trend is globalisation. The whole world is looking for talents. Therefore, we should try our best to attract foreign talents to Singapore. We are competing with the other parts of the world for rare talents. They will help to contribute to our economy. At the same time, we have not neglected our local talents.

The recent S Pass issued by MOM is a good measure. But other people are afraid that this may deprive them of their jobs. In fact, the S Pass is given only to a special category of semi-skilled workers in the healthcare service, the pharmacists and nurses. Although we have highly talented people to handle the jobs at the higher plane, we still need other types of talents to cover some jobs in the middle and lower echelons. Although on the surface, it may appear that the issue of S

passes may lead to more foreign workers coming in to compete for jobs with our locals, they actually help to fill the vacuum in our service industry. With these semi-skilled workers around, we may enhance the confidence of the potential investors, and tilt the balance in our favour when they decide which country to invest in, thus creating more jobs for our workers in the other areas.

We must spare no efforts in establishing our creative industries. However, Mr Chiam said that our film industry cannot be developed because of our PAP Government's rigid regime, which has made the people docile. But, he offers no help to turn it around. The Indian film industry has been thriving because of its own particular background. We should understand what makes the Indian film industry so successful. In fact, the film industry in Singapore is now taking off. Jack Neo has just produced a few movies and the last one, Home Run, was particularly successful. One of the young actresses won a prestigious Golden Horse prize. I understand he is embarking on a new film called The Best Bet. I sincerely hope that he would win the best bet!

Just now, Mr Low has said that the Government departments are reducing their budgets and many people are concerned about it. I am concerned too. But I think we should first understand the motive behind this move. The Government, as a whole, is trying to reduce expenditure. Deputy Speaker, Mrs Lim Hwee Hua, mentioned just now that she hoped the reduced budget would not result in the Government departments' efficiency being compromised. One resident told me recently that he used to cut his hair once in three weeks, and now he is cutting his hair once in four weeks. I said, "Why don't you buy a pair of scissors and cut your hair yourself? Then you will save more." So, when the Government department has to cut its

budget, it has to find other ways to improve productivity so that the same, if not more, work could be done. This must be the spirit.

Let me take Mustafa as an example. First of all, I must declare that I have nothing to do with Mustafa. I am not related to any of its owners. Recently, I visited India, and many people whom I met there told me that whenever they visited Singapore, they would go to Mustafa. Mustafa has become a very famous brand name. Their business philosophy is to be honest, do not cheat on customers, be humble and not arrogant. I visited Mustafa myself and I noticed that the jewellery and silverware department was open for business in the late hours of the night. The sales persons were very knowledgeable and polite. Just imagine, even in the middle of the night, they were still selling the gold ornaments. Not only Indians are patronising the store but many Singaporeans as well. They enjoy shopping in Mustafa because the prices are reasonable and the service is good. It does not mean that with a 2% cut in the budget the sky will fall down. They can still offer good and effective service if managed prudently.

In the past, people had said that Singaporeans are arrogant. But my conclusion is that Singaporeans are not arrogant. Many people said that because in the last few years Singapore had progressed very well, the economy was well and they were all very proud of themselves. I think Singaporeans are simply confident of themselves. This is an important quality which we must maintain. MOM and WDA have put in a lot of efforts. Last year, in order to encourage the people to take up skills development and skills retraining, they went all out to promote the concept of re-skilling for better employability. We

should change the mindsets of our people. This year, I do not know what would be MOM's new theme. I suggest they should use the theme of "Let us show our best! " So long as we are prepared to learn from the basics, improve ourselves, and promotion is waiting for those who have successfully completed their courses."

Because many citizens feel that the situation before us is hopeless, we must help them to clear this hurdle. We should impress on them that there is hope in skills training, so that they can look further ahead and keep moving on. Let me quote you one or two examples.

In our economy, there are many things that our people do not understand. I read in the papers that now, many big companies in the west are outsourcing their call centre to India, but they do not want their clients to know that the call centre was operating from India. In order to get these jobs in the call centres, many Indians are learning to speak better English and get rid of their Indian accent. Now many Indian ladies are working in the call centres, speaking impeccable English. They earn a lot of money, just as telephone operators, so much so that their parents are worried, thinking that their daughters were working as "call girls"! "Why are they always working at night and earn such a lot of money?" But now, they understand. They are all encouraging their daughters to learn and speak good English to get these lucrative jobs. This is a breakthrough!

If we want to develop our service industry, if we want to embrace the new economy, we must change our mindset. We should explain this new phenomenon to the ordinary citizens so that they would understand. Otherwise, they can have a lot of complaints, but no solution to the problem. As political leaders, we should look for the solution and help the people, rather than moaning over it.

DPM Lee has proposed this Budget under the present circumstances so that we would be prepared to face the future challenges, and that we could seize the opportunities that come with the new economy. We want to compete with India, with China, with all the emerging economies. This would depend on our employers and our employees and, with our political leaders, we are all in the same boat. We should help one another.

2.18 pm

I support the Budget Statement of the Government. It is a budget of prudent spending that nevertheless offers us a bold vision of reinforcing Singapore's position as a vibrant hub for businesses and talents to come and seek their opportunities.

I would like to touch on three groups of issues - the first is about the making of a vibrant hub, the second about prudent spending, and the third about some points of details in the Budget Statement.

On a recent business visit to Boston, I was sitting at a sidewalk cafe in the business district and decided to do a quick and rough survey of the people who walked past. On average, out of 10, I counted three whites, two blacks, three Asians (Chinese, Japanese or Korean, I could not tell), one Hispanic and one Indian. We are still some way to go before having that kind of mix that is prevalent in other major cosmopolitan cities of the world.

But as we open our doors to welcome talents of all races and as our people spread their wings to spend more time in foreign lands, we all believe we have to have a strong society.

Building a strong society

Sir, in making a strong society, Singaporeans must take pride in

Singapore and what we stand for, that is, our national policies. Travellers to Australia and New Zealand will tell you that these two countries are very particular in controlling the importation of foodstuff and organic matter. Golfers will know that, on arrival, their golf shoes must be clean without traces of organic matter, plant or soil matter. And, the authorities can be very pedantic about this.

Scandinavia has very low limits and stiff penalties for drink driving. When the Scandinavians go out for dinner, one will be rostered to be the driver for the night. He or she will abstain from consuming any alcohol and has to stay sober the whole night in order to drive his friends home safely. In some places in Australia, I am told that, when stopped at police road blocks, suspected drink drivers who are just below the legal limit, are made to sit by the roadside under a banner that reads "Drinking and Driving? You must be an idiot!" for half an hour until they sober up. Other passing motorists can then see who these "idiots" are.

But if you criticise any of these policies in the presence of the average Scandinavian, Australian or New Zealander, he or she will define it to the bone and explain why such policy is necessary. This stems from their firm belief that the stance taken by their society is for the good of their society. Or, they may just be defending their country against the criticism of a foreigner.

What do we Singaporeans say when we are called upon to defend our policies? Take the world-renowned Singaporean ban on chewing gum. Many Singaporeans, when asked by foreigners about this policy, cringe in embarrassment. Do they see these policies as being imposed by the Government or do they see them as being for the common good? Ask my daughter about her experience. Recently,

we came back by coach from a church camp in Malaysia. On the way back, she bought some confectioneries and these were in a thin transparent pink-coloured plastic bag. When this bag of her goodies went through our Customs or security checks at Tuas, the officer noticed the contents of the bag and unilaterally, without notifying her confiscated two tubes of Hi-Chew. Now, if you do not know, let me tell you that Hi-Chew is not chewing gum. It is actually a chewy pastille that dissolves totally in your mouth. My daughter was totally upset. First, the officer was poor in his product knowledge and, second, he was high-handed in confiscating the Hi-Chew without informing her. You can imagine what she will say the next time someone brings up the subject of our chewing gum ban. In the meantime, I am working on her.

How can we motivate our people to believe wholeheartedly and passionately in what we stand for? Singaporeans are law-abiding in nature and will obey new policies that are set. However, convincing them of the reasons behind each policy is a challenge that each Government department must be mindful of. It will require education, careful listening and addressing of feedback via multiple channels, much patience and relentless perseverance, and sensitive enforcement to convince them that the policies are not without meaning nor purpose.

Vibrant society - Danger of being regarded as a mediocre city

Last week, I flew to Beijing and back. On arrival at Beijing Airport, I was one of the first few coming off the plane and saw a row of five Chinese girls waiting to receive their foreign guests. This is the airport's visitor receiving service; nothing

special. They were elegantly dressed, in dark green cheongsam with gold embroidery, with their hair tied back. Each of them held a small placard with the name of the visitor being received neatly printed on the placard. A Caucasian man in front of me indicated he was one of those being received. The girl stepped forward and in polished English said, "Welcome to Beijing, Mr Hopkins." On my return to Singapore, when I arrived at Changi Airport, I would not say anything more. You should take a look for yourself. Her business jacket was a size or two too big and the visitor's name was scribbled with a marker pen on the whiteboard placard.

Fortunately, the vibrancy of our city is not judged by this alone. But a common complaint by Singaporeans is that there is little to do in terms of leisure in Singapore. One Friday morning, I was listening to FM98.7 in the car while sending my children to school. Daniel Ong, the DJ, asked one male listener, "What are you going to do this weekend?" The listener replied, "Catch a movie." Daniel Ong then remarked, "How come every time I ask my listeners what they are going to do, they say catch a movie? Is there anything else to do?" After a pause, the listener replied sheepishly, "No. There isn't anything else to do." Daniel Ong replied, "Ya, there isn't anything else better to do in Singapore."

Sir, is Singapore as bland as some make it out to be? This cannot be true. One only has to visit East Coast Parkway during the weekends. There, cyclists, young and old, are breezing up and down the cycling pathways which are full of roller-bladers whizzing past, watched in fascination by families who have set up tents of all sizes and all degrees of sophistication. A quick informal survey has revealed activities as diverse as radio-controlled model aeroplane flying, fishing, sailing, football and tae-kwondo.

What about leisure activities for those who prefer to stay indoors? Besides our state-of-the-art movie theatres for movie-goers, there are people who indulge in all kinds of sports, cooking, bowling, dancing, karaoke, folk art, pottery, just to name a few. At the Esplanade, we may be treated to art exhibitions, concerts, dance performances and theatrical events. How come there are still Singaporeans who have nothing else better to do during the weekends, than to catch a movie? And, who laments that there is much to do in other countries? Perhaps, it is just that the grass on the other side of the fence is greener, or perhaps there is not enough information and publicity, giving Singaporeans ideas on how to have fun and enjoy life, or perhaps we are just plain lazy and just want to crash out and do nothing. We should wipe out our dowdy image of a nation and a people obsessed with only economic success. The goal should be for every Singaporean to work hard, work smart, play hard and have fun. As the Nobel Prize winner in Literature in 1911, Mr Maurice Maeterlinck said, "Tell me how a people uses its leisure and I will tell you the quality of its civilisation."

Self-reliant society

Next, on self-reliant society. As we continue to develop into a modern vibrant society, we should move away from relying on the authorities to handle everything. One example can be found in our neighbourhood environment. As our HDB residents live in close proximity to each other, there will inevitably be minor disputes between neighbours over such day-to-day matters as dripping mops, curry being thrown out of the window, noise irritation and things cluttering up the common corridors. Such cases are on the rise and residents look to the relevant authority, the town council or HDB, for redress and enforcement of regulations. This situation is far from satisfactory. Instead of having to seek the intervention of the town council or HDB every time a

dispute arises, we should allow more autonomy and self-determination at the local level.

In order to foster a sense of belonging to the community and to encourage autonomy, the residents should be given some authority to make rules on local issues by majority decision, such as whether to censure the particular resident for behaving unreasonably. In the US, the management committee of the apartment building can stipulate, for example, whether babies or young children should be discouraged in the building or they can prohibit flushing of toilets in the middle of the night.

Prudent spending - Living within our means

Sir, next, I would like to touch on the second group of issues centering on prudent spending. On living within our means and HDB upgrading programmes, the HDB upgrading programme was launched during the years of plenty when we enjoyed strong growth, rising property prices and budget surpluses. Now, we have to tighten our belts and cut back on non-productive expenditure, and sensibly so. We have to live within our means. In every housing estate, you will find some precincts that were fortunate to be selected at that time and did in fact undergo upgrading, be it main upgrading, interim upgrading or lift upgrading. By contrast, just a stone's throw away, the next precinct that is not so fortunate is still standing forlornly waiting for its turn. Its residents are looking wistfully across the road, watching with envy their neighbours who are enjoying lifts that stop at every floor and upgraded common areas, and asking when it will be their turn.

Across the country, there are many precincts and blocks of flats that have not been upgraded. Realistically, are we able to upgrade them all, and over what

timeframe? What is the capital expenditure required? If our resources will be better deployed to fund other priority projects, I think we should start re-orientating the expectations of our residents.

Restructuring for affected Singaporeans

On a related issue on restructuring for affected Singaporeans and what I call the four-roomer's problem, we went through a period of high growth with escalating property prices. Now, we are faced with structural unemployment where some jobs may never return. There are those who had geared too highly during the boom years and bought properties that are now beyond their means. Their income has been slashed; some with income so low that they cannot even meet their daily household needs. The cost of living remains high and they have accumulated arrears in HDB loan repayment, electricity bills, SC&CC, school fees, etc. Although there is the need to retrain and upgrade their skills, some simply cannot get out of the rut.

What are we doing to help them? We are offering small hesitant measures of help - restructure their HDB loans for a few months, short-term financial assistance, subsidies for school fees, for fear that if we are too generous, more and more people will choose the easier option, leading us down the slippery slope to become a welfare state with an over-reliant population. But these small measures are unlikely to solve their problem.

Their main problem is housing. They had made a major mistake and bought too big a flat which they cannot now afford due to their changed circumstances. They need to downgrade to a smaller more affordable flat. Even if they want to sell at the present market value, they will

not get much back after repaying the loan.

Even if they sell their present flat, with their present low income and with the new rules on HDB housing loans, it is unlikely that they will get a loan from the HDB or the commercial banks to buy the next flat.

When it comes to means testing, they tend to fail. Once the assessor sees "4-room" as the room type, their application for subsidy is put on one side.

Sir, realistically, what can they do to get out of this rut? Can we help them to downgrade, wipe their slates clean, lighten their burden, so that they can start afresh and move on? We can do this as a one-off exercise to apply these measures to clear the historical cases, and are not applicable to new cases if we fear that more people will fall into this group and be reckless in making property purchases in future, thinking that the Government will always bail them out.

Next, I would like to comment on some of the issues DPM spoke about in the Budget Statement.

Procreation - next generation of Singaporeans

Many Members before me have spoken about more babies to be the next generation of Singaporeans. I would like to also touch on this issue. The declining birth rate has been discussed, debated and deliberated upon for a long time not just in the Government but also among the public. Not replacing ourselves is a serious problem not just for the country but also the individual families. Although we cannot over-emphasise the effects of the declining birth rate on our nation as a whole, we must also consider its negative effects on individuals and the family unit.

To illustrate, let me tell you about a documentary I once saw on China Television about China's one-child policy.

China, as we know, has the reverse problem of controlling her population, but the consequence of having only one child is similar in all countries. In one segment of the programme, a young woman in her 20s was interviewed. She said she had just started working and earning an income. Being an only child, she has to support two parents and four aging grandparents, ie, parents of her parents. If she married, her husband would probably be from a one-child family. Hence, the two of them would have to support not only themselves but four parents and eight grandparents, and a baby, if they were to have a child of their own. She said she was very depressed by the thought of that prospect. This has serious financial implications on the young family and the state.

Enhancing competition: Power industry

Next, on enhancing competition and the power industry. Business people have been lamenting about our high electricity charges that add to the high cost of doing business in Singapore. We rely on imported fuel oil and natural gas to generate electricity, and the prices of these commodities are beyond our control. We do not have cheap domestic sources of coal or oil, nor large rivers to tap hydro-electricity, nor nuclear power stations.

Sir, since the introduction of vesting contract on 1st January 2004 based on 65% of the system demand being allocated to the four generation companies, the vesting price for the month of January 2004 was $94.24 per megawatt hour (MWh) and the average pool clearing price was $66 per MWh. The wholesale price of electricity, which is the weighted average of the vesting price and the pool price, had therefore fallen. But given the high capital costs of the power plant and equipment, and the intrinsic costs of running and maintaining a power station, is such a low wholesale

price sustainable over the longer term? Should the consumers be overjoyed and can they now revise their financial budgets with the expectation of lower charges for their electricity?

Most of the large commercial and industrial contestable customers, including many of our SMEs, which had embraced retail market liberalisation, exercised choice and elected to be supplied by independent retailers were surprised to see their electricity bills in January. Under the new electricity market rules and the contract they entered into with their retailers, payments for any excess volume under the vesting contract will be charged to them. For the month of January, they ended up bearing an additional 12% on their bills.

Under our market settlement rules, the extra payment that these contestable customers have to bear is paid to the generation companies. The largest beneficiaries are the three large Temasek-owned gencos, one of them being Senoko, of which I am an external director. But, in the longer term interest of our new electricity market, we are not overjoyed by this extra profit. In fact, there are some industry concerns that the Government is trying to increase the profits of these gencos so that Temasek could get a better price for their divestment. Sir, such speculation is detrimental not only to Temasek's divestment efforts but also to the good reputation of Singapore.

Foreign-sourced income

My next point is on foreign-sourced income. It is a good move that we are exempting individuals' foreign-sourced income. Any money kept outside Singapore will not benefit Singapore. Any money brought in, whether to invest in stocks and shares or to spend on a BMW, will contribute to our economy and bring about other benefits, direct or indirect,

whether in the form of vehicle taxes or adding more liquidity to our capital markets.

To encourage the in-flow of this offshore money hitherto kept overseas, our rules have to be clear as to what is regarded as income earned in Singapore and, hence, subject to tax. Otherwise, there will always be the fear that a few years after the offshore income is brought in, the tax authorities may question whether it was in fact earned in Singapore. Such a risk would discourage people from bringing in their foreign-sourced income.

Tax exemption for new companies

Sir, my next point relates to tax exemption for new companies. When we allow full exemption from tax for the first $100,000 of normal chargeable income, excluding Singapore dividends, for each of the first three years of assessment within YA 2005 to YA 2009, we should be mindful of the risk of abuse. In other countries where such "3-year tax free and 2-year half tax" exemption is available, businessmen have been quick to incorporate new companies to park their profits for the three years and, towards the end of the 3-year period, set up other new companies and divert profits to these newly set up companies to continue to enjoy the tax exemption. Once the older companies have exhausted their 3-year exemption, they are then wound up.

Withholding tax on royalty payments

My last point relates to withholding tax on royalty payments. I fully agree that exploiting new knowledge and ideas is important for Singapore companies to compete internationally. But why limit ourselves to using other people's ideas and intellectual property? We should be bolder still and more optimistic about

Singapore-based companies' abilities to generate new ideas, and plan for the situation where Singapore companies will own and hold their own IPs, and other companies from other countries have to pay royalties to our Singapore IP owners.

Presently, such royalty payments are subject to withholding tax in the country of the payer and are also taxed as income when the royalties are received or brought into Singapore. This has forced many companies to engage creative tax advisers to park their IPs in tax haven countries and keep their royalty proceeds offshore. This is not healthy.

We should, therefore, have measures to encourage both Singapore homegrown companies and foreign companies that choose to use Singapore as their IP centre to own, hold and register their IPs in Singapore, thereby bringing revenue into our country.

Sir, I support the motion.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.00 pm.

Sitting accordingly suspended at 2.38 pm until 3.00 pm.

Sitting resumed at 3.00 pm

Debate resumed.

Mr Speaker, if I may, I would like to approach this debate from a slightly different point of view to talk about some of the emotional aspects of policy-making.

Sir, in our nation's next phase of development, we will need to harness everyone's economic contributions - from student to entrepreneur, from policy maker to homemaker. To do this, we must make sure that our economic policies are right; and the provisions in this year's budget move us in that right direction.

But to overcome the challenges we face, we need more than just the right, rational policies. We also need the emotional buy-in from everyone so that these policies can be effective. Take, for example, a topical subject that has come up several times today and will come up again, that is, about making babies and raising children.

Many good ideas have been raised about how to increase the number of babies born each year. But the fundamental and most important question to address is whether young adult Singaporeans want babies. If we want to look for reasons today why young couples do not want babies, there are many. Essentially, they boil down to cost, time and lifestyles. But how do we counter these reasons? Logic will not. Incentives cannot. But emotions can.

Incentives can raise birth rates, at least temporarily as our own experience has shown. But at best, incentives can only make it easier for parents to have babies, and lower the cost of raising children. And at worst, more and more incentives may leave young couples with the idea that children are a burden, and not a joy. So I agree with Mr Tan Soo Khoon that the only compelling reason why we should bear with the pain, and the cost, and the inconvenience of having babies is the joy they bring. This is an emotional motive, not an economic rationale.

When my children were young, my happiest moment was when I came home

from work, they were there, rushing to the door to greet me. Now as they grow up, my greatest joy is to see them mature - to see how they have become kind and sensitive in dealing with people, how they are confident of themselves, how they are able to argue perceptively.

Sir, if we see babies as another claim on time, or an addition to costs, or an interference with lifestyles, then we will clamour for more and more incentives, and still they would not be enough. But if we truly believe in the joy of children, then incentives help, but should no longer matter the most. But even if we believe that we should have children because they bring us joy, there is a second consideration. And that is whether we believe that we can give our children joy. If we are honest with ourselves, the answer to this question depends on whether we are ourselves happy with our lives. If we are, then we can believe that our children will also have happy lives. But if we believe that life is getting harder, rather than better, then we would not think that our children's lives could be happier. These are fundamental questions of belief that each person must decide.

The measures we are putting in place to restructure our economy are sensible and will make us stronger and more able to compete in the years ahead. We have the skills, and systems and institutions to do many and great things, if we believe in them. But we will achieve far less than our potential if our emotions are not right, and our heart is not in what we do. It is not just about making babies. But it extends to every area of public policy and governance. Our students need to feel that learning is a joy, not a subject to be passed, or a drudgery to be endured. Our entrepreneurs need to feel that they are heroes and not left-behinds, and be motivated by this feeling to attempt great things. We need a civil and a civic society, where people believe that this is where their heart and home is.

Such outcomes are helped by the right economic policies. But we also need to develop our emotions as a nation. We can achieve this by factoring in practical measures to uplift emotions in our policies. These need not necessarily be big, radical policy shifts for now, but rather sensible adjustments to our existing robust frameworks. We could encourage babies, for example, by the Government moving quickly to a five-day workweek, and building more family oriented infrastructure for weekends, so that we can enjoy our children, and our children can be happy and enjoy our company.

The most important need we have today as a nation is to nurture the heart of our people. We can do this by using the money and the resources we have set aside in this budget in practical ways that uplift our emotions and human spirit.

Sir, I support the Budget.

Mr Speaker, Sir, thank you for allowing me to join in this debate.

Sir, I rise in support of the Budget for FY04. To me, this Budget is significant not so much for its specific announcements on expenditure and taxation policies, but more on the Finance Minister's outline of some core fiscal policies which will underpin the Government's public finance approach going forward in its stage of new development and competition that Singapore will face. In the course of the next few minutes, I hope to address some of those underlying principles.

Sir, a recent report by a Morgan Stanley economist was headlined, "The FY 2004 Budget - extreme conservatism is puzzling". I can understand that analyst's puzzle if you will, because he compares the surpluses that the

Government has accumulated over a period of growth to the deficits that it has run in the last three or so years, and draws the conclusion that the Government can spend more from its reserves and other sources in order to create more of a domestic economy. Some data that have been cited include the average surplus for the period FY1993 to FY2003, has been in the order of magnitude of about 13% of GDP for 2004, compared to the average deficit for the period FY2001 to FY2004 which is about 3.5% of 2004 GDP. Put in another way, accumulated surplus was in the order of magnitude of about $130 billion, whereas the deficit was only in the order of magnitude of about $6 billion. So why can the Government not spend more?

Sir, I think there is some sympathy for that perspective both within this House and also in the general economy. The Finance Minister himself has made an eloquent case as to why fiscal prudence has been the hallmark of this Government. He has stressed the sound public finances which underpin Singapore's economic growth and resilience. He has also highlighted the Government's willingness, in a sense, to have temporary deficits, as it has been the case in the last few years, without falling into the trap of permanent structural deficits. These are sound principles which I fully support. They are going to become even more important, especially the aspect of maintaining balanced budgets in an environment where competition is going to get more intense, having downward impact and pressure on the Government's revenue whilst expenditure needs are going to continously increase with an aging population and other social needs in the country. Is a $0.7 billion deficit, which is about 0.4% of GDP 2004, extreme conservatism or is it a cautious first step with additional spending due with procreation-oriented measures and other policies that will be unfolding in the course of the year?

My own view is that it is better to be cautious. But I would like to hear the Finance Minister's elaboration on the Government's policy of fiscal prudence, and especially in managing it at a time when the economy is at the turning point and rising for growth.

In the Finance Minister's outline of the policy on building a strong society, there were a few key themes which ran through all aspects that he addressed - education, healthcare, building the next generation and also on the aspect of saving for retirement. I thought one of the key themes was the balance between the State and the individual in taking responsibility for one's own affairs. We are at an important juncture where there has been a great deal of presumptions on the part of many Singaporeans where the State will intervene, and intervene in many cases quite quickly, in order to look after their interests. In an environment which imposes greater onus on the individual, not just take responsibility for himself, but also in terms of going out and creating wealth and opportunities in our country and beyond, that model is not relevant. Indeed, we must expect that the centre of gravity must shift from the State to the individual, not precipitously, but in gradual measured steps, but certainly the direction must be clear. I think that has become quite evident in the slew of underlying principles that the Finance Minister has announced in the course of this Budget debate.

The second aspect is where does State funding go? The key point is that State funding should go where there is greatest benefit for Singapore as a whole. In economic terms, it will be called the positive externality, meaning there are benefits that go beyond just the individuals, but to society in general. A good example of that is primary and secondary education and basic healthcare. Continued expenditure in this area and even increasing expenditure in this area is

an important plank for the Government in its future policies.

The third theme that ran through is helping those who are in greatest need. Hence, the discussion on the healthcare system and, in particular, means testing to decide whether and how much an individual should be entitled to in terms of subsidies from the Government. These are all sound underlying principles to achieve social equity and economic efficiency in public finance. But there are a few key concerns that I have because we are managing a transition from an economy in a high-growth phase with Government playing a very dominant role to an economy in a more challenging phase, and Government empowering individuals and corporations more to chart their destiny.

In that context, one key element in all this change must be the preservation of choice. Singaporeans must be free to choose. If we take healthcare as an example, what level of healthcare do they want so that they can decide on how to spend their dollar? Whether it is full cost, private, "A" class in our Government hospitals or subsidised healthcare at "C" class or some intermediate arrangement, all these options must be available to Singaporeans. Then they can make rational choices as to how they want to allocate their budgets.

In that context, I was quite heartened to hear that the Government will ensure that even the well-off can use C-class wards or will access to C-class wards, although they may not perhaps enjoy the same level of subsidy.

The second dimension is providing support. When we make changes of this nature, asking individuals to take more ownership and responsibility, it is inevitable that some will fall through the cracks, and this is not because of any lack of trying or ill-intent on their part. It could just be the result of the

circumstances that they find themselves in. It is important, for example, in the context of university education, that we have adequate measures in place to help those who are going to have difficulties meeting their financial obligations, especially if they have to bear a higher portion of the cost. We have talked a lot about loans and bursaries. But for a young university student, at the age of, say, 20-21, taking out a loan, even if it is for a few tens of thousands of dollars, is a huge ball and chain around his or her neck and it can affect morale and perhaps even the choice of whether to go ahead with tertiary education. The question is whether there are alternatives we can examine. And what I would like to ask the Government to consider is the model that the Australians have adopted, which is to impose a tertiary tax on those who go through the university system so that for a period of time after they have graduated and when their earnings are about certain levels, they will pay a tax until they are deemed to have fulfilled their own financial obligation to the university education that they received. That might achieve the twin objectives of, on the one hand, imposing greater financial ownership on individuals for their tertiary education and, at the same time not over-burdening the individual student, psychologically or financially, at the very outset of his or her tertiary education.

The third aspect, Sir, I would like to highlight is, keeping it simple and fair. We have a system which is quite complex. Buying a car in Singapore involves, for some people, quite complex econometric modelling - trying to anticipate COE prices, their movements, and how various Government policies will have an impact on these. And, really these are very simple choices we should be allowed to make in our daily lives. From that context, when we talk about the means test, it should also be simple,

but fair. What do I mean by that? When we consider some of the past Government assistance measures that have come in place, like CPF top-ups and so on, we have used housing type as the proxy for one's economic well-being and so the smaller your housing type, the greater the top-up you receive, or no top-up depending on how high the housing type is. That is at best a crude measure and certainly when we are looking at it in the context of things like healthcare we should be very careful how we administer such criteria.

Specifically, I would say that we should not be looking just at assets, we should be looking at flows of income that people have, in deciding what category they fall into in terms of socio-economic groups. A good example would be older generation Singaporeans who might be living in landed property, but old landed property in some of the older estates in Singapore. For these individuals, to make an argument that they are asset rich and they could also sell their house and pay for their medical cost - economically rational, but I think socially quite difficult to communicate and convince people. So I would say that we need to strike a balance between the two, not totally disregard one's asset holdings, but find the way to strike a balance between that and the real income flows that individuals have, so that whatever means test we ultimately administer, will be seen as one that is fair.

Sir, if I can just move to the point on building the next generation and procreation policies. By outlining the Government's thinking on some underlying principles, but leaving out the details or specifics for later, the Finance Minister has, in the manner of speaking, left us all with a pregnant pause. Fortunately, we only have to wait six months, till August, not the usual nine months, before the delivery of the full package. But, Sir, I fully support the

principle that the Finance Minister has underlined and, in particular, the policy of aiming to produce the next generation of Singaporeans is vital because ultimately the thing will serve us not so well to have generated a whole group of young generation Singaporeans unless they have a deep commitment to this country and our future, which is collectively held. But I do have some thoughts on what can be done in this respect. Mr David Lim said that it is an emotional, not an economic issue. I agree. But this is the Budget, and since we are talking about dollars and cents, let me just share with you a quick back of the envelope calculation.

If our procreation policy is able to generate 5,000 more births a year, and each of these children goes on to contribute to the economy at the average GDP per capita, let us say, S$20,000 a year, that is quite conservative, in fact, the number is higher. And, let us say their working life is 30 years, a quick ballpark calculation, that cohort would contribute something like S$3 billion to our economy over a 30-year life-span. I think this is a conservative number. So investing about 10-15% of that future benefit in a generation of young Singaporeans today is not bad mathematics and I would, therefore, urge the Finance Minister to give the Minister-in-charge maximum latitude to exercise his discretion in this respect.

Quite apart from the future benefits, the other point to note is spending in this particular sector is likely to be more domestically oriented because a lot of services are generated within the economy here. So the multiplier for the local economy is also likely to be far greater than in some other fiscal policies.

Where should the money be spent? First, a plea. Please do not distinguish between the first, second or third child. Neither should the parents of children of

multiple births be penalised. Every child is precious, not just to the parents, but to all of us. For the parents, each additional child adds to their responsibilities and challenges, almost exponentially. I speak from very recent personal experience when I just have my third child. And, whoever coined the phrase, "sleeping like a baby", clearly had no idea what he is talking about. So what more when you have multiple births! When they have two or three children of the same age, demanding their attention, I think we should empathise with those parents and make it easier for them.

Another point is whatever policies we announce in August at National Day, I would hope that we can backdate those policies so that we do not penalise the people who act in good faith and respond to the Government's plea today. I think we should also spend where it counts. Spending in the early months after a child is born is probably the most challenging. Whether the father or mother, they would all agree with this readily. So, if we can help out in terms of whether it is maternity leave, which is fully covered, or paternity leave, and also the infant and childcare elements, I think all of these should be considered quite seriously. But I would just like to make one comment on this point of maternity leave. I have heard in different feedback from some employers in terms of their attitudes towards employing women, if maternity leave of up to 6 months is contemplated. Part of this is borne out of ignorance, not understanding the overall needs of their workers and the community in general, but we cannot leave it as a fiscal incentive, we must work with the employers to educate them, to help them understand why such policies are not just in the national interest, but ultimately even for them as an employer, their ability to attract good people to come and work for them and to have workers who are motivated and productive, these measures would help them.

So on that note, Sir, I would like to support the Budget.

Mr Speaker, Sir, I support the motion.

Sir, I would like to make just three points. First, maintaining the competitiveness of the economy. Many speakers before me have raised the question of the high cost of our economy and I share their concerns because when I speak to the businessmen in my constituency, most of them raise the question that it is too expensive for them to do business. Sir, we have addressed wage competitiveness but, here again, it is not just reducing wages per se but rather making wages flexible to be able to respond to changing competition and also to relate wages to performance. We should pay our workers what is due to them based on their performance and based on their productivity.

Sir, land cost has been one of the unhappy points. Our policy is to value land based on opportunity cost. There was the suggestion that perhaps we should value land for industry based on what is the competition, that means the value that is being accorded to similar land in countries which we are competing with. As to what are the implications we should look at them. Land cost, rentals, utilities, Government charges, these add to the cost of doing business and we should address them as we address wage competitiveness.

Sir, on the flexible wage system, in the unionised sector, NTUC and the unions have been explaining to their members and workers what is the impact, why this is necessary and also how this should be implemented. Trust and confidence is the critical factor. In the non-unionised sector, employees are very

concerned because they do not have a voice that represents them. I told them that they could if they are general branch members, seek advice from the unions. I am sure the unions would give them the advice, or they should go to the Ministry of Manpower in case they have problems with the employers, but still I think many of them are concerned that employers may take advantage of them since they have no one to represent them and, therefore, they fear the impact of the flexible wage system. I have helped to explain to them that we must be competitive or otherwise they will have no jobs.

The next issue, Sir, is the employment opportunities for older workers. Sir, in the CDCs we have our job plus centres where we help workers who are retrenched, looking for jobs, who come to us. For the younger workers, our matching rate, our placement rate, is pretty high, but for older workers, even those with relevant skills and experience, it is tough going. So I hope the Government could look into this. Can the Government provide more incentives for companies to encourage them to employ older, mature workers? Some of them have experience; they have skills and we should not put their skills to waste. I know there is the People-for-Jobs Traineeship Programme that gives certain sums of money to companies to cover wages of the older workers. Maybe more schemes like this would be useful.

Sir, finally, let me touch on the next generation, the procreation programmes and activities. Sir, in my father's generation, the social expectation was to have large families. So my family has eight children. My peers, most of them have four or five brothers and sisters in their family. When it came to my time the message was "Two is enough". I did not believe it, so I have three. I was speaking to my Mayor colleagues and most of them have three. Mayor Zainul is the most

hardworking, he has four. Mayor Yu-Foo has three, Mayor Teo has three. Only Mayor Heng has one. But I think he is young enough. I asked him just now if he would mind if I mention that he has one.

He said, "Well, there are lots of reasons why I have only one." I will leave it to him to explain.

I think it is a fundamental issue. I believe in having three because the larger the family, the happier the family. Because brothers and sisters have companions within the family. They fight, but they also joke together, and they find life a bit more interesting. If they have a problem, sometimes they consult their parents but they also consult their brothers and sisters. I get to know more of what my children are doing by talking to my children. Sometimes they talk to members outside the family. This may create some problems. I think three is a good number. Some may want to have more. The next message is, "Three or more if you can afford them". I agree that we must have the ability to afford more than three, not only the cost but also the time we spend with them because we want to make sure that they have the best that we can offer.

Some people have fed back to me that the message is not quite clear enough. Why is it three or more if you can afford them? After all, for the next generation, 80% of our students will go to the polytechnic and universities or have tertiary education. I am sure that they would be able to afford if they want more than three, provided they can give their time to the children. So, the signal which the Government gives to the population is important. It is more a social issue than an economic issue. It is fundamental. It is emotional, as Mr David Lim has said. But I think that Mr Lim Hng Kiang's committee will look at all the things that are necessary - pro-family enterprises, 5-day week, extra maternity leave. But at the end of the day, it is the social attitude

that is important. If people are happy that they can have more children and give them the best that they can and it adds to their life, I think they will have more children. I think we are realistic here. I do not think we are going for 2.1 as the replacement rate. I think we are going for 1.

96. So, we have to attract immigrants, obviously quality immigrants. But whether they will stay here after having become permanent residents and to become citizens, it is something that we are not quite sure. There is the point made in the Budget speech that we need Singapore citizens to give birth and their children stay here, because they are more in tune with the way we live, the way we work and the way we play.

Sir, let us look at this and try and change the way people think about the family while, of course, giving them incentives to do this will always be helpful. But I think that incentives alone will not solve the problem.

Sir, on this note, I support the Budget.

Mr Speaker, Sir, I rise to support the Budget presented by the Deputy Prime Minister and Finance Minister Lee Hsien Loong.

Sir, this year's Budget has the conspicuous absence of rental rebates and S&C subsidies to HDB households. Instead, there is the top-up of $104 million into the Medisave accounts of older Singaporeans and injecting another $100 million into the Medifund.

I am pleased with this shift in emphasis away from dishing out wholesale subsidies to our people. Our population is aging fast. A lot more medical and healthcare resources are required to meet the growing needs of the elderly. With Government budget getting tighter each year, we need to find better ways to optimise the limited public funds to the areas of greater need. I therefore

welcome the approach to target public subsidies at the segment of the population who needs most help.

Sir, for some time, the Government had been reluctant to use means testing to determine those Singaporeans who are deserving of public subsidy in healthcare cost. Means testing was ruled out because we were told that the system is cumbersome and not cost effective to administer. It is out of necessity that we now have to use means testing to prioritise the most deserving cases for larger healthcare subsidy.

There are many elderly citizens living in my Kampong Glam constituency. For those who are aged single and poor, help is easily available. There is, however, a sizable number of elderly residents who have little or no CPF savings but find difficulty in getting Government subsidy. Though these elderly citizens have grown up children, their children who earn barely enough to support their own young families could not at the same time contribute to their aged parents' financial needs. This category of elderly feels helpless.

I am concerned that with means testing, we may unwittingly deny this marginal group whose circumstances are really in need of Government help. I hope the agency handling means testing would be sympathetic to the needs of the elderly Singaporeans who could not obtain support from their children. Certainly, we do not wish the very young from the lower income group with grandparents to support to suffer in the process. The children require nurturing and attention as they have a long future ahead of them.

When the Government revised the CPF savings rate, it was stated that CPF was not intended to be all-encompassing but cover the vast majority of our working

population. This would mean that there would always be a small proportion of working adults with little or no CPF savings set aside for their old age. If that is the principle adopted, we have acknowledged that there will always be a segment of Singaporeans requiring public assistance and subsidy. I wish to ask how stringent is means testing to be, and would it impose additional financial burden and hardship to the poorer segment of our population.

I wish to commend the Ministry of Health for encouraging the use of day surgeries and community hospitals thereby reaping substantial savings in the healthcare cost of Singaporeans. We must continue to find innovative ways to minimise the use of costly infrastructure and expensive medical technology. We should intensify our efforts to provide home nursing care for the non-ambulant cases and greater use of Neighbourhood Day Care Centres for rehabilitation to reduce healthcare cost.

In this year's Budget Statement, the Finance Minister announced that the Ministry of Education is reviewing the limit set for Government subsidy in university education, and this is a fundamental change in Government expenditure to the different levels of education. The undergraduates would, in time, have to bear a larger share of the cost of university education. I can appreciate that university education is becoming more common as more and more young Singaporeans are receiving university education. We have also seen that many parents are willing and prepared to incur substantial expenditure in sending their children for overseas university studies and incurring a tidy sum of money. There is also an increasing number who enrol in private institutions conducting undergraduate degree courses for overseas universities as full fee paying students. It is therefore timely to review the current level of subsidy in university

education with the additional cost to be borne by the students. After all, these students are the main beneficiaries of the university education with the prospect of better paying jobs when they graduate.

By putting a cap on university education subsidy, I hope the Government would be more generous and transfer the funds to our neighbourhood secondary schools. The neighbhourhood secondary schools still constitute a substantial proportion of our school population. More teaching and support resources are needed to help the large number of Normal (Academic) and Normal (Technical) secondary school students. Many of them are disadvantaged by family circumstances. The value and returns in investing in these students would bear fruit and bring positive outcome in the long run. These Normal (Academic) students will be better equipped to face the future with hope, serving as disciplined, motivated and skilful workers, and able to lead independent lives and raising strong families of their own.

The Government is bracing itself to operate with leaner budgets and Ministries, other than MINDEF, have been told to cut their expenditure budget by 2% each year. I hope the less privileged in our community will continue to receive their fair share of public funding. As it is, the higher income groups are already enjoying favourable tax treatment, but the lower income groups still have to bear the brunt of GST for their consumption of goods and services for basic essentials.

This year's Budget also highlighted the need to build the next generation of Singaporeans. Without people, there is no country and nation to speak about. It would be useful for us to pause and ask ourselves what has led to the sad state of affairs that has resulted in the serious decline in the birth rate in Singapore. I am afraid that, in the past, we were too

caught up with quality and lost sight of the need to ensure that quantity was not affected in the process. We might have presumed that if the better educated were catered to, we are able to bring the number of births up. It is apparent that even the not so highly educated do not contribute their fair share of number of births. In formulating the new fertility-friendly policies, I hope the Government will address the root cause of the problem and find the sustainable solutions over the long term.

Child bearing and bringing up children are personal choices and affected largely by individual circumstances. Though the Government can help make it easy with financial incentives and provide conditions conducive to the building up of spousal relationships, people still need to be guided as to how they should spend their money, time and choice of pursuits. Unfortunately, our people have been chasing academic and material success at the expense of love and joy in building relationships, to having children, nurturing and developing them.

We need to develop a positive attitude as a society towards spousal, parent-child and interpersonal relations. Healthy relationships require skills and knowledge to nurture, develop and sustain. It is best when it is inherent and become natural within us. Here, all those who are in leadership positions have to set a good example for the young to follow.

We all know that procreation is a normal natural human instinct. Unfortunately, we are seeing the phenomenon of unnatural same-sex relationships happening. This will become an added challenge. But the Government must be forthright and state clearly our stand on spousal relationship and protect the sanctity of the family unit. We need to cultivate and strengthen family relationships and to value and treasure them. Just consider the type of activities

Singaporeans participate in and the amount of time individuals spend on them. Do they contribute to building spousal and family relationships? I hope the Government, employers and community organisations can take stock and organise more programmes of activities

that promote boy-girl, man-woman and family relationships. At least, whatever marriages and the number of births we already have do not become casualties of the adverse tide that is plaguing society today. Many developed countries have lost their fundamental values on families. We, in Singapore, want to ensure that our children are secure, growing up in a loving environment. They can then face their future with confidence because they are well prepared and equipped, ready to face the challenges of the world, ensuring the continued survival, progress and development of Singapore.

Mr Speaker, Sir, thank you for allowing me to join in supporting the motion.

Singapore faces a major problem with a low birth rate and current measures seem to have lost their attraction. Issues that affect a low birth rate will require changes in policies across many Ministries. The first most important step in this whole exercise of procreation is being able to produce babies without medical hindrances.

There are two groups of people that we should target. Firstly, those who want to have babies but, because of medical reasons, they have difficulties in having babies. This is what I call the sub-fertile group. This is the group that is motivated to having babies, and they need support for them to be able to get babies. Sub-fertile couples need to be subjected to ART - not as in drawing, colouring or

painting. ART is a new acronym for Assisted Reproductive Technology. It encompasses various types of methods such as superovulation where women are given hormones to increase the chances of producing eggs, in-vitro fertilisation where the egg is assailed by thousands and thousands of sperms, or intracytoplasmic sperm injection (ICSI), which is a more elegant method of fertilising the egg, blastocyst transfer, pre-implantation genetic diagnosis, and a host of other techniques. The numbers are not small. As many as one in five couples, after one year of marriage, are not able to have children. And the success rate of assisted reproductive technology is about 45% success rate of pregnancy. However, the take-home baby rate is about half of that.

The ravages of the economic turmoil the last few years did not only strain our financial institutions but also left our egg bank and our sperm bank broke. With the lack of incentives, not many were willing to donate their eggs or sperms. A colleague of mine told me that in the past, people were quite happy to do so, if you just reimbursed their transport cost. But currently, this is not sufficient to incentivise anybody to donate their eggs or their sperms. Just in case you think that it is all the ladies' fault, this is not the case. In the sub-fertile cohort, male factor problems account for about 40-45% of the problem. It could be because of insufficient numbers, poor motility or the shape of the head of the sperm is not right.

Government should consider paying or co-paying for ART treatment. I was pleasantly surprised to read in the papers just in the weekend that the United Kingdom government has considered moving in this step. We should also consider increasing the Medisave deduction for ART. Sub-fertility is a true disease. It is not plastic surgery where you are there to improve your external

facade. Many young couples do not have much disposable income, but have money in their CPF. They have to pay for their housing loan, their car loan, their monthly bills, and they have to give money to their parents. Therefore, they are not left with very much money. The cost of an ART cycle can be up to $10,000, depending on the type of drugs used and the media used. Maximum Medisave deduction is about $4,000. Therefore, there is quite a substantial amount of money that the couple have to come up with for them to go through this cycle. After three cycles of failure, they are usually advised to consider egg donation. I think we should put in measures to incentivise those who have it in abundance to donate their eggs and their sperms. Again, what measures should be considered, I think these we will leave it to the different Ministries. But, certainly, we should look seriously at encouraging people to donate their eggs and sperms.

Currently, we do not allow egg donation if the donor is more than 35 years of age. This would be about the time when they have completed their family and probably that will be a good time for them to donate their eggs too. So we should also review the age limit for egg donation as well.

The second big group is those who are able to have babies medically but do not want to have babies. I think here there are two sub-groups - those who are still single and those who are married. The first group would be what I call the SBC (or Single, Busy and Career-minded) Singaporeans. They are very concerned about their career, they want to climb up in their career path, they are concerned about the cost of housing and financial independence. These factors have led many to live life as singles. Government should look at incentives to encourage young couples to get married earlier. Because if they get married late, which is a trend that is being seen now, at the age

of 35, the risk of an abnormal pregnancy can be as high as one in 300 pregnancies and continues to increase as the age increases. So, I was a bit concerned when I saw in the news that the school had reacted with alarm at a 15-year old school boy who had boy-girl relationship. I am not sure whether that is the right signal that we are sending to our young that they should not have any boy-girl relationship until perhaps they have finished their university days.

The other group is what I call those who are MBA (Married, Busy and Alone). These are young couples who are so busy with their careers that they spend whatever precious time they have between themselves. They have no time for babies. I think we should look at incentives for them. In addition to tax rebates, it was mooted that the Government wants to consider giving paid maternity leave of four to six months. Well, it may be good for those in the civil service. It may not be the best option in the private sector, especially if the person is very career-driven. The reality is that if this person holds an important post in a company, being away for four to six months can have a major impact on the company, and it is unlikely that in a job market like this that a career-minded woman would like to take this option.

Of course, there is no one size that fits all. The sum that the Government wants to pay for the extra paid maternity leave can also go into another scheme, perhaps what I would call "infant care centre fees" for maybe six months to one year. This will give these mothers who want to opt for other choices to opt for this option as well. I think Government should consider giving adequate subsidies and incentives for infant care centres to be started up. Starting an infant care centre is not the same as starting a childcare centre. It is a totally different ball game. Perhaps a preferential rental charge, increased subsidies, assistance in

employment of trained staff will encourage more to set up infant care centres. If both parents work, they will also need to hire a domestic maid, if their parents are not willing to assist or unable to assist them in looking after the baby.

I think the Government should review its income ceiling on hiring domestic maids for young couples who have just had babies, and make it easier for them to hire maids to look after their babies. I would even go further to suggest that for young couples who have babies and want to hire a maid to help them look after their babies, the Government should also consider waiving the foreign maid levy for the first three years when the couple have a baby.

We also need to review some of our manpower policies. A patient of mine was rather concerned because she said that when her children brought their children, in other words her grandchildren, to her house, they would usually bring their maids along because they could not cope with all these little children running around. So the maids would come together with her children to her house. But I understand, and I checked with the Ministry of Manpower, that apparently this was not something that was considered right. It was something that was not according to our manpower policy and, in fact, they could actually get into trouble with the law. I think we need to review this as to how we can allow young couples, when they bring their children to the homes of their parents, to bring their maids across without any fear that they may run afoul of the law.

Finally, to ensure that Singapore couples do not cease at two children, Government must then make making babies a breeze and put their minds at ease.

3.55 pm

Mr Speaker, Sir, I congratulate the Government on proposing yet another prudent and forward-looking Budget that is both pro-business and pro-future-generation. Singapore is going through a very difficult transition in an unpredictable global arena.

As I see it, the churning of the economic restructuring process, the relaxation of political and cultural controls, the emphasis on creative learning in our schools, the encouragement of a participatory civic culture, and the opening up of our borders not only to trade and investments but also to foreign labour, are all inter-related in ways that produce positive outcomes in some situations, but could also be perceived to be negative in other senses.

Sir, I propose to touch on three aspects of the change process that are upon Singapore. The first aspect has to do with demography in general, and a declining birth rate in particular. The second aspect has to do with the aging population, and the third aspect is on the professionals, managers and executives group.

Sir, demographic changes in the population are an ever recurring theme in the life of any nation. What is critical though is the idea that demographic forces ought to be shaped and brought under certain degrees of control in order that certain long-term national objectives may be met. However, national objectives can conflict with individual objectives. It is important that the Government treads softly and gently in finding modes of reconciliation between long-term national needs and the immediate term preferences expressed by individuals. So, before we even begin to find ways and means to decide whether our procreation policies need revising, we

have to first and foremost satisfy ourselves that such a reconciliation is possible.

At first glance, we may brush aside the need for such an exercise, and simply argue that we should just plunge straight into tinkering with our policy tool-kit. However, if we do not ask ourselves some fundamental questions over this most fundamental of issues, we would simply repeat the same mistakes of the past.

In the past, we had tried to fight the decline of our birth rate by taking out what we thought was the most effective weapon in our armoury - financial incentives. Yet, this approach has not provided the results we have been looking for. From 1.7 in the 1980s, we are now at 1.24 children born to each female. That makes us wonder why a supposedly materialistic citizenry has not responded to incentive schemes that were financially driven. An immediate analysis would be that financial incentives are not enough. And, indeed, that is what some Singaporeans are saying, judging by the feedback of participants at feedback forums. And these Singaporeans may be right! But, in my view, only partly so!

For the chasm between the national imperative and individual ambitions is more profound than a simple two plus two equation. At the national level,

we are well aware of the need to rejuvenate our economy. We need a certain critical mass of a citizen base that is intelligent, productive, educated, and committed if we want to maintain our competitiveness in the new economy. We need that mass to nurture our local small-medium enterprises to maturity before they take to the jungles of an ultra-competitive global market-place. We also need a critical mass of able-bodied male soldiers to help guard and defend the sovereignty of this nation. At the same time, we also need that critical mass of productive

Singaporeans to help constitute the tax base upon which the infrastructure of the nation continues to be of such standards as to appeal to the global investment community. We also need that critical mass of solid-base citizens whose tax revenues ensure that we maintain healthy fiscal balances.