Hansard, 2008-02-27

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2008) To (2008) Mr Lee Kuan Yew 27 Feb 27 Feb Ms Grace Fu Hai Yien 04 Mar 08 Mar 21 Mar 23 Mar

ABDULLAH TARMUGI Speaker Parliament of Singapore

Resolved,

That, notwithstanding the Standing Orders, the debate on the Budget Statement and the Estimates of Expenditure for FY 2008/2009 be taken today. – [Mr Mah Bow Tan].

Resolved,

That, notwithstanding the Standing Orders, the Second and Third Readings of the Supply Bill for FY2008/2009 and the Supplementary Supply (FY 2007) Bill for FY2007/2008 may be proceeded with immediately after the conclusion of the proceedings on the Main and Development Estimates for FY2008/2009. – [Mr Mah Bow Tan].

Order read for Resumption of Debate on Question [15th February, 2008],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2008 to 31st March, 2009.”. – (Minister for Finance).

Question again proposed.

Mr Speaker, Sir, I rise in support of the motion.

Sir, sitting in this Chamber for the past two days, I have heard impassioned speeches asking the Government to do more and give more, whether it is about curbing the rising costs of living, taking care of the needy and elderly, helping the disabled, dysfunctional families or single mothers. In spite of greater assistance measures, such as the increased Public Assistance (PA) and ComCare funding, we still ask, "Can the Government do more?", "Can the Government give more?"

I do not doubt the need for the Government to provide the necessary safety nets and measures for the disadvantaged and I do not deny as well

I am not certain what message we are taking to the people. Let us leave our poor, elderly, disabled, sandwiched and sick in the care of the Government? Over the past week, the media has covered the plight of the disadvantaged during this Budget debate. It would have been nice to have Singaporeans coming together, stepping forward to ask the Government how they can help. Throughout the debates, there were many in the gallery who listened to the plight of residents who have visited our MPS, and I wonder if there is a little voice in them telling them to be more compassionate and to step forward.

I fear the degradation of our values and our social capital, if we continue to expect the Government to take sole ownership of our social inequalities. We are already seeing this shift in responsibility today with regard to how some of us treat our families, parents, siblings, ex-spouses, children, neighbours and so forth.

It would be nice if we can get the same fervent support for this noble cause as we did for the Youth Olympic Games (YOG) – the community, the youth, the people and corporate sectors all coming together with the same great enthusiasm. It would be nice if MCYS this time can rally the community to provide the same enthusiastic support for this noble cause to help lift our disadvantaged, above the Government's social safety nets. This is the Singapore that I would like to associate myself with, a Singapore that

Mr Speaker, Sir, allow me to continue my speech in Malay.

(In Malay ): [For vernacular speech, please refer to Appendix A *.] Mr Speaker, Sir, this year's Budget takes a holistic approach. It not only helps the people to face the rising costs of living, but it also contains investments for the future, especially for the low and middle-income.

I see this Budget as killing two birds with one stone. At one level, it deals with the current situation. At another level, it takes into account long-term needs. However, in doing so, we have to make sure that the generous and meaningful handouts, like the educational financial assistance and the Workfare Income Supplement (WIS) scheme, do not make Singaporeans feel that it is their right to receive them. If not, such handouts will always be expected in the future.

I suggest that we look at how these handouts can become more than just an incentive for youths to upgrade their education. For example, the education assistance scheme can be linked to social contributions, ie, youths who want to participate in this scheme can be encouraged to contribute to society. Handouts using this more meaningful approach will help form and instil a culture of a united people for Singapore. It is better than if the Government just gives assistance that only helps to overcome the problem of rising education costs.

This year's Budget also gives assistance in the form of bursaries for university and polytechnic education. It is a correct and timely move, and helps to encourage low-income students to continue their studies to post-secondary

So, I encourage the Malay community to take advantage of these opportunities to increase their children's education level so that we can see many more of our students at least reaching post-secondary level. Any assistance scheme introduced is wasted if it is not used. It is even worse if the target group does not realise the existence of such schemes.

In this aspect, we must have more efforts to increase awareness so that it can reach as many people as possible. Some of the needy and low-income themselves may not follow developments or even read information spread by the mass media. Every one, including the Government, organisations and schools, must help in the effort to spread this information.

By doing so, we can widen the social assistance net and reach the objective to help the poor escape the poverty trap.

that those who are disadvantaged do need the assistance that we should provide. However, I cannot help but ask if we have lost our sense of responsibility as a community to care for our own. What has happened to social responsibility? Have we lost our social capital that the disadvantaged, ie, the needy, elderly and disabled, are now solely the Government’s responsibility?takes responsibility for our own social issues and inequalities, a Singapore ready with its helping hands. level. I applaud the Government's move in introducing this scheme by taking into the account the long-term solution to help the needy. *Cols. 1115-1118.

(In English): Mr Speaker, Sir, much has been said about the concerns of the business community with regard to surging business costs following the significant increases in salaries and higher rentals. However, our attractiveness as a business hub depends on our ability to manage the cost of doing business here and not let the current rises in cost become a permanent fixture in our economy. Many of the cost increases today will take time to correct themselves. For example, leases will generally stand for three years or more, and higher salaries are certainly difficult to unwind. Many employers I spoke to complain that business revenues and workforce productivity have not increased as much as the costs have risen.

We know the impact of high business costs, particularly rentals and higher salaries, especially when we correlate them to business productivity. We assume that our free market ensures competitive pricing and choice, but a small market and geography like Singapore may result in only few strong players surviving the high costs and barriers of doing business, resulting in uncompetitive prices and fewer choices.

If I take the retail sector as an example, there are only a few large developers who are able to afford to set up malls in town and in the heartlands. Within those few developers, you would find that their malls may look different, but the shop mix is pretty much the same. One can walk into almost any mall in Singapore and predict the tenants, the same few large, mass market players, whether you are in the city or in the heartlands.

The smaller players find it hard to survive and set up. Even the large luxury boutiques find it expensive because there is a limit to how much they can grow their top line due to our small market size and yet still cope with high rentals. Consumers then have less choice on the products available and on the costs of goods being offered in the marketplace. This is how many currently describe our retail and shopping scene – a standard template across all our malls – few players, not enough variety, and prices are not very competitive.

Today, one does not need to head to Hong Kong or even Japan for good retail therapy. Our neighbouring cities are providing much more across the luxury, mass market and budget brands. If I compare the scenario to the commercial sector, the situation is somewhat similar. Our smaller businesses also compete with the big boys in terms of office space and

Some of our rising costs today are avoidable, if the Government machinery is working better. For example, when PM announced his vision of a global city for Singapore some years back, MND could have started to release sites so that we could have an adequate supply of office buildings now instead of waiting for two more years for real supply to come on line. I think our marksmanship in this space could be better.

On the effects of cost of living on the workforce, we should be at the forefront of a low tax rate and higher disposable income regime in Asia, if we are to attract top talents. We should not play catch-up with the likes of Hong Kong, but be at the front. If we include the cost of living in Singapore, in terms of cost of homes, cars, transportation and education, versus some of our competitors like Hong Kong, I do not think our executives and workers actually bring in much more. The impression we received, when the inflation index was at 6.6%, the highest in decades, was as though the Government was caught off-guard. Perhaps, using only monetary policy to control inflation is not working so well and our policies could have been adjusted better because I am certain the scenario of us reaching oil prices of US$100 a barrel was something we would have considered and, as a whole of Government, I think we could have planned better.

Sir, we need to be more proactive and strengthen the whole of Government machinery in managing our supply and demand requirements because, if we allow these cost increases, such as office rents and salaries, to creep in and become a structural part of the economy, the high

My final point is that I welcome the Minister's speech that sustainable development remains a key priority for this year's Budget. I urge that when we speak of sustainable development, we should also look at quality growth in GDP and employment, not just in terms of quantity and absolute numbers. A major challenge is how we face up to the competition in the region, and the competition that our workers face against foreign talent at various levels from the low-skill jobs all the way to management positions.

Look at the corporate scene today. We are not the only ones facing competition from our neighbours. There is stiff competition for talent worldwide. Even the top multinational corporations (MNCs) in the US are competing for global talent, too. So, even in the US today, they now have top foreign talents running their homegrown corporations, such as Indra Nooyi in PepsiCo, Virkam Pandit who runs Citigroup as CEO globally, both of whom were born in India.

So, the challenge is here at our doorstep. Today, China's large MNCs are led by high flying CEOs with an average age of 47. We are seeing many from their next tier of talents taking up regional positions with our local and multinational corporations. Young, capable and having plenty of drive. Our talent pool is not only small, but the average age of our workforce talents is not getting younger either. So we need to create a win-win situation, developing the right resources and getting the right talent to ensure our survivability.

In my opinion, the issues of the war for talent, innovation and creating high-quality businesses in Singapore are no longer about budget marksmanship,

The tax rebates on innovation and R&D are a good start to move our companies in the right direction as it is increasingly difficult to compete at the low-end. But we need to ask: is the Government doing enough to accelerate the capability of our workforce up the value chain? Clearly, we need to leverage on our high quality education system and skilled workforce, by creating more high-value jobs. In the short term, we still need to continue to attract MNCs, or even faster, to attract them to set up leading edge R&D centres here. I have to leave nationalistic sentiment of growing national icons and hubs aside because the window of opportunity may not wait for our research hubs to mature into an established state. But these MNCs and leading R&D centres also need to be supported by a whole industry of innovative growth companies producing higher value-added services. Therefore, the SME sector also needs to play a more important role to produce high-value growth and jobs to make the ecosystem more attractive.

If I could take the engineering and infocommunications sector in Israel as an example, I do not think many companies would find it enticing to set up a high-value business or R&D centre in the middle of a war zone. Despite the instability and security concerns, the country still produces many innovative companies in the engineering and infocommunications sectors. And they have large MNCs, such as IBM and Microsoft, to set up R&D centres because these companies are not only attracted by the wealth of high-quality engineering talent that is available, but also a host of innovative SMEs with the capability and talent to support and provide them with a range of leading edge intellectual properties (IP) and technologies. Yes, we

The issue I see is that many of our local businesses in the SME segment lack the understanding and capability to exploit the tax schemes and programmes to promote R&D and innovation. I think the Government tries hard within the MTI family. However, they are only able, given their limited manpower resources, to focus on growth companies to enable them to become strong regional and global companies. But, in reality, the majority of our businesses are not even there yet. It takes hard work and resources, otherwise the amount of money spent on grants and growth programmes will not yield the returns on investments that we expect. It will take a lot of hard work on the ground, but I think the Government needs to do it, nonetheless, by providing sufficient manpower and resources to handhold these businesses to help them innovate and exploit the Government’s tax rebates and market supply policies.

To ensure the long-term and sustainable development of our economy,

industrial parks outside of town, leaving many with little choice but to relocate overseas, while those who cannot put up with the high costs of doing business exit the market. cost of doing business will hamper innovation and choice in our consumer and commercial markets in the long run. business costs or tax concessions but an issue of our survival as a country and as an economy. may have some success stories here, but I believe Singapore needs to do more in providing more cutting edge contributors that can make an impact on the global marketplace to make us more relevant.

and the long-term employment prospects of Singaporeans, I believe that we will have to keep a close watch and measure our performance in terms of high-value economic growth and the quality of the jobs that we create.

Therefore, as the Government pursues its strategies of ensuring Singapore's sustained development, I also hope that it measures its progress with as much focus on quality – the quality of GDP growth and the quality of jobs created – as we do on quantity.

Mr Speaker, Sir, I support the Budget.

Order. On behalf of hon. Members, I welcome the Indian delegation from the Maharashtra State Legislature, jointly led by Hon. Dr Vimal Mundada, Minister for Health and Hon. Shri Ramdas Kadam, Leader of Opposition, Maharashtra Legislative Council, who are present in our Gallery today. [Applause.]

Debate resumed.

12.17 pm

Mr Speaker, Sir, in the last three days, we have heard from cheerleaders and worried ones as well. Some cheered the Budget for the goodies that met their expectations, whilst others worried at the grow-at-all-costs Budget philosophy.

We have been enjoying stellar economic growth that is the envy of many countries around the world. The respected Economist magazine marvelled at our ability to generate third world growth rates while maintaining first world economic development.

Sir, 2008 will be remembered by posterity as the year of price increases. But I urge the Government to make its mark in 2008 and be remembered for casting a net that covers all Singaporeans and taking a step to roll out out-of-the-box solutions and thoughts to sustain our economy and instil ownership of our beloved Singapore.

A special group that this net will reach is the group of Singaporeans who, if given the correct stimulus, can enter the workforce and help themselves

Two months ago, I met an old family friend, in his 70s. He lives in Tiong Bahru and walks six days a week to and fro to PSA in Tanjong Pagar where he works as an odd job worker. I asked him whether there was a direct bus that he could take. He answered that it would be too costly.

At his age, he relishes a hot drink or soup during lunch, though he may be supplementing that with food and water from home. With a meagre salary of $600 a month, if he wants his hot drink or soup, he will have to walk to work and home.

There are many others like this old friend, whose meagre income would not afford them the luxury of taking public transport except jalan kaki sendiri or zi ji yong jiao zou (自己用脚走). With rising inflation and higher transport costs, commuting with their legs seems to be the only viable option for many at the bottom of the pyramid.

This reminds me of my MPS where, among those who came for help, I have probed into why they are choosy about taking on jobs and would not take on those further away from home. This is what one of them told me:

"The salary as an operator is only about $600. I live in Boon Lay and work is in Loyang Changi. I have to take MRT and two buses to get to work. Daily, it costs me $5.72, almost 25% of my daily salary. Cheaper for me to declare I can't work and go on the PA scheme."

Sir, if we want to truly encourage this group of low income Singaporeans who are at the margin to re-enter the workforce, we need to help them "circulate" around Singapore. To look for a job you need to go out and find one.

Let me give an analogy of their situation. It is very much like a condition of colic that many of us would have experienced some time in our lifetime. The only way to ease the cramp in your stomach because of the built up gas is to get off your butt and move about or, better still, run a few good laps to let go of the gas. We burp the colicky babies and massage their stomachs to help get rid of the gas.

What do we do with this group? They are not moving and continue to fester that wind in the stomach, which when it becomes a time bomb, will stink everyone around.

We know that looking at the newspapers and going to MPS is not the solution and referral to the job distribution centres sometimes also requires a fair bit of commuting. To incentivise this group to look for a job and take up even a low-paying job, I would advocate for a work transport pass, to be issued to them for so long as they are on the job and their income is below the threshold of $800.

Such a work transport pass will improve the "circulation" of those at the bottom of the pyramid and benefit them as well as the larger society. This is because we will have more of them finding it meaningful and possible to re-enter the workforce and be less reliant on PA. It is a stimulus that is needed to bring back the zest for work in this group.

Sir, at the heart of Singapore's economic success is its social compact. Since independence, the majority of our citizens, including those at the bottom, have enjoyed a steady rise in living

Emerging global challenges are putting pressure on the sustainability of the standard of living to which we all have become accustomed. Technological development resulting in the outsourcing of services and processes away from developed countries as well as cheaper IT-driven processes have proven to be a cheaper source of business operations than semi-skilled and unskilled labour. In the immediate term, it will result in widespread job losses and income attrition in developed countries and this will hollow out the earning capacity of many semi-skilled and unskilled workers, leaving them stuck at the bottom rung. In Singapore, emerging sectors, such as hospitality, will provide some jobs but, at the same time, the IRs could prove to be a double-edged sword. More money coming into Singapore could have the effect of pushing up the cost of living and those at the bottom will be hit the hardest. So, the sooner we help this group to help themselves, the better off it will be for us all lest they add on to the increasing pool of PA recipients.

A policy framework to deal with the problem of wage stagnation at the bottom rung and a rising cost of living may be one of the biggest challenges that Singapore has faced to date.

Sir, we need to reconcile our response with our tradition of non-welfarism. At the same time, the challenges that are confronting us today are very different in terms of their shape or magnitude from those that have confronted us before. We need to be creative and innovative and to

It is equally important to remember that most other advanced economies are facing the same problem. Fortunately, as a country, we have the human capabilities to deal with the issue. Also, unlike the UK and many of the European countries, we do not have an existing debilitating welfare infrastructure nor have we nurtured a welfare-centric culture. Whatever approach we adopt, it can be designed from scratch or, to put it another way, from the centre outwards. We can customise it and make it compatible with work incentives and human capital investment.

Next, I would like to propose a few out-of-the-box solutions and thoughts. I call them out-of-the-box because they may not be the norm of the Government's way of doing things or thinking.

The first point I wish to raise is about improving connectivity in our transportation. How do we ensure that whilst battling with road congestion through more ERP gantries and hikes, there are adequate interim measures put in place to facilitate connectivity from one point to another point?

Many private operators have put up feeder buses to link MRT stations and bus terminals to shopping hubs. It is in their commercial interest to do it, so as to bring the shoppers to the shopping hubs by creating convenience and accessibility. This in turn benefits the commercial operators.

Private condominiums operate scheduled free shuttle service from their

The Government has never really felt a great need for such intervention as arrangements such as these are purely premised on commercial motivation. However, I would venture to say that such connectivity is very much part and parcel of our transportation infrastructure that the Government should look into providing.

For example, traffic congestion around schools can be improved if there were shuttle services to take students from and to the MRT stations, bus interchanges and major transport routes to and from schools. This could be the tipping point for students to use public transport more frequently. If the Government so wishes to encourage and switch the mindset of the entire nation, to commute by public transportation, then, as in the words of the Minister for Transport, seamless commuting from point to point is the answer.

As an interim measure to prepare Singaporeans to take public transport, I urge the Government to introduce more shuttle bus services to link up terminals and stations to educational institutions, retail hubs, heartlands and private estates. These could be implemented straightaway without having to wait for the completion of the major transportation network.

The second point, Sir, is on how we can have a better communication process through an information databank.

The Government has introduced many good schemes to help Singaporeans. Although many of these schemes were well published in full in the mainstream

Even the most zealous of grassroots leaders trying to help a resident will be greeted with information overload. And this explains how some join the complain camp – because if you cannot win them, you better join them. So the complaints will fester and the misunderstanding of the good intentions of the Government gets more serious.

What is wrong with the current communication process and what can be done to improve it? Our newspapers are very good at reporting a scheme in great details. For example, the recent announcement of the transport policy by Minister Raymond Lim was well covered in the Straits Times. The report was a very comprehensive summarised version of the complete policy paper. It was a useful reference for those who wish to study transportation policy but the message to many readers was that they have to pay more to commute.

Sir, what is needed is to customise the message for a targeted audience instead of a message for all. Let me explain this further. For example, if a resident approaches his community leader to find out his eligibility under the means test or the Budget handout or the policy guidelines applicable to him under the CPF lifelong plan, the resident cannot expect to have a very helpful answer from his community leader unless the community

What is needed is an information databank that can extract a subset of specific information and rules of schemes that are relevant and applicable to the personal profile of the enquirer. The process sieves out the relevant information needed.

eventually. I wish to advocate issuing them with a work transport pass. Sir, the Government has introduced many good schemes to incentivise these marginal workers back to work, such as retraining and re-skilling and the Workfare Income Supplement. Yet, we have not reached this group. standards. This can be attributed to sound fiscal policies and economic planning. The long-term economic future may be rosy but, for the short-term future, more help is needed for those at the bottom. focus upon areas such as fine-tuning the Workfare provision, the retirement benefits, and developing a well-integrated continuing education and training system. Help does not just come in the form of financial subsidies and incentives, it also comes in the form of opportunities and special help for the bottom of the bottomest. condominiums to nearby MRT stations. Alexandra Hospital also operates a shuttle service from the hospital to an MRT station. These shuttle services provide the convenience with better connectivity for those who rely on public transportation. newspapers and communicated through channels including grassroots dialogues, many on the ground still cannot grasp the key intention of the schemes. With so many schemes rolling out, one after another, many are confused with what they are eligible for. Try asking any grassroots leader or MP who is charged with disseminating information and the mechanics of such schemes, and I can say the majority will not be able to tell from the A to Z of such schemes, unless you are the author. leader was involved in the formulation of the policy.

For example, if I wish to find out more about my CPF contributions, Medisave and lifelong policy, I would go to a specific website. I would key in my name and NRIC number. I will be prompted to key in other profile as needed, such as my birthday, gender and income.

The computer will return with specific information applicable to me in that age group. It will tell me all about the status of my CPF account, the Minimum Sum and so on. I would not need to plough through the information that is not applicable and that does not concern me. It can also tell me the level of subsidy that I am entitled to under the means test if I wish to know my subsidy eligibility. This information data bank will complement the general information that is disseminated through the mass media.

Yes, we have the media that reports the macro stuff of the policy or scheme; we have the cartoon brochures to simplify, explain and clarify. But we do not have the customised individual information that you and I and the man on the road would want to know. Perhaps the Government should start looking into a department that will make communication of such information better understood by Singaporeans so that we reach out to every nook and corner. Depending on volunteer grassroots leaders to do the job of outreach is not enough.

A good example is the ComCare Scheme. It is not simply dishing out

The third point is about inflation and our food supply. Sir, inflation is likely to increase relentlessly despite the slew of strategies that the Finance Minister has announced. With food prices going up, the hardest hit will undoubtedly be those who can least afford these increases – lower income families with little produce substitution choices. If they are already eating chicken instead of pork or mutton, will they be left eating vegetables and rice if the price of chicken or mutton increases any further?

We will switch to frozen food, but to what extent will frozen food bring down food prices before price increase catch up with frozen food? For how long can the Government ensure that the frozen food stockpile will stabilise food prices for a while and that our neighbours, whom we depend on for some basic food items, will not take this opportunity to squeeze us further, further aggravating our vulnerability as a country?

Sir, imitation is the highest form of flattery. Our closest neighbour has recently declared that they will be following in our footsteps – our tried, tested and proven method of growth. I, however, fear the day that the politics of envy replaces the politics of imitation. What is worrisome is when our neighbours decide to further increase the price of their food supplies. Is our Government prepared for such an eventuality, and how could such a scenario be countered?

Sir, the fourth point is about our future. As Singapore moves towards our target population of 6.5 million, we are

Our ideal tolerance level should be on par with the Japanese: even in sashimi packed subway trains, tempers seldom flare, and a business-like but not unfriendly amiability is the defining characteristic of that country.

For the longer term, the Finance Minister has shown the way to cope is to build up our capabilities and a resilient Singapore. The key to this is retention. MM Lee recently asked: where have all the bright and young Singaporeans gone? Perhaps we could solicit more feedback from the yearly 1,000 students who study overseas and decide not to return to Singapore.

The renowned magazine, The Monocle, and a survey commissioned by the Hub Culture recently ranked Singapore the 17th city in terms of liveability. Singaporeans used to seeing Singapore at the top of international charts were shocked: why are we a paltry 17, far behind 10th placed Hong Kong? Why, when we rank as one of the top three places in the world to do business, are we so far down the charts in liveability?

These are hard questions about the soul of Singapore we have to ask in the years ahead: is the key to loyalty merely economic, or is there something more to encouraging our best and brightest to stay?

A look at the Hub Culture indices provides an interesting insight into why we only rank 17 in liveability. The survey

Could it be that despite the Government's best efforts, our citizenry still feels uninvolved in the success, growth, and vibe of our country? Could it be that the more our Government does, the less our citizenry feels engaged and involved? Perhaps it is time to consider engineering an engagement innovation with the young, and allow change to occur organically, from the ground. Encourage community bonding, independent thought, social vibrancy, but let people on the ground take the lead.

Is Singapore merely a transit hotel to our very own sons and daughters? The key difference between a home and a hotel is the amount of control you have over your surroundings. In a hotel, the management has the final say, although the customer comes first. In contrast, a man's home is his castle. Give Singaporeans involvement, and attachment will form. Give them ownership of the country's destiny, and they will stay for life. That is the key to making Singapore a home.

Sir, the solutions and thoughts on the four points I have raised are not going to come out of the mill just like that. Indeed, to be Singapore number one, means weaving all the disparate threads of our social, economic, and political policies into a unifying theme that will keep our country ahead. More important than staying ahead is the question of how we want to live.

Singapore cannot be number one in all economic indicators, and still have

Sir, it is by no accident that we won the bid to host the YOG. The entire spirit of the nation has propelled this flight this far. It has to do with a sense of pride and ownership. We have not lost them all and we must continue to kindle them. With this most important of indicators in mind, we can then truly say that we have arrived.

On this note, I support the motion.

money to those who step forward. We need to comb out many who are still in hiding because they would not or do not know how to step forward. Perhaps it is timely to bring in the professional marketers, campaigners and counsellors to do a better job. increasingly faced with the question of what type of society do we want our children to grow up in. As urban congestion rears its ugly head, the slogan 'gracious society' is no longer a platitude: it is an urgent call to arms. Unless we step up efforts to make this a reality and change our attitudes and adjust our way of living, growing up in a city of 6.5 million will be almost intolerable.ranks cities according to 'innovation, change and vibe'. Under the section on Singapore, the survey highlights the Government's good efforts in 'innovation at the macro level and providing economic security'. However, it still begins the section by the familiar caveat: 'Singapore might seem boring'. unhappy citizens with poor quality of life or feeling dissatisfied or feeling the lack of opportunities. What do we do then? Well, Singapore must continue to strive in its pursuit to be number one in liveability, graciousness, consideration and compassion, as I have highlighted in my speech. The litmus test for all Parliamentarians and Singaporeans to use is this: what type of society do we want our children to grow up in?

12.38 pm

Mr Speaker, Sir, my esteemed colleagues who have spoken in the last two days have covered most of the topics. As I was listening, I pondered upon what is the most important question for Members of this Chamber to consider, ie, what are we doing today so that the need for all these social welfare schemes that we are all requesting for can be lessened? We should not be asking for more and more social welfare schemes. We should be asking how can we reduce the number of social welfare schemes, and what individual policies has the Government made now to reduce the reliance on all these social welfare schemes for the people.

How do we measure the well-being of a nation? How do we measure progress – GDP growth, mean income, family, inflation control, control of consumer price

If there was no 2% GST hike last year, will the price of the luncheon meat remain at $1 and not increase from $1 to $3? Will the prices of wheat, rice, other food items, transportation cost and rental not increase to current levels? Will the oil price, which is an important proxy and critical link to energy prices and inflation, remain at last year's price? The answer is no. We are not immune to the global inflationary pressures, as we import all our food, energy needs and sand as well. There will still be increase in prices and there will be inflation.

We approved the 2% GST hike in this House last year and we must not forget why the GST hike was proposed in the first place. The aim is to revamp our tax structure to better equip the Government with additional resources in the future to tackle the widening income gap and provide resources for wealth redistribution through schemes such as Workfare Income Supplement, and the key words here are "in the future".

This year, yes, the Government struck lottery, a big prize. But compared to Hong Kong, we only got third prize. They got first prize.

I think the key question we need to ask is: what has the Government achieved last year? The Government collected $1.4 billion in GST but returned $865 million, in terms of Growth Dividends, and that is 62% of the GST collection. In actual fact, the real increment for the Government for GST is only 0.8%, which means it is from 5% to 5.8%.

How does the Government return this amount of $865 million? It is not uniform, it is not equal. It is targeted and

There are also concerns as to why there is such a large discrepancy in the 2007 budget estimates. But I must say that I am happy that the Government is in a strong fiscal position of $6.4 billion surplus rather than in a $0.7 billion deficit. If the Government had estimated a $6.4 billion surplus and ended up with a $0.7 billion deficit, I think we will be very worried. I think this House has much to cheer rather than to accuse the Government of coming out with the wrong estimates. If we are wrong, Hong Kong is wrong as well. They are four times above their estimates.

With the looming uncertainties in the global financial markets as well as dark clouds in the horizon, I join in the echoes of my fellow parliamentarians to welcome the prudence of the Government for keeping some surpluses for additional contingencies if the need arises. But, at the same time, I urge the Government to be bold in rendering assistance to low income families to help them to become resilient again. The key word here is "resilient". Do not, because of fear of breeding dependency or possible abuse, be paralysed into inaction.

Building a resilient nation starts with building a resilient family. Although the Budget 2008 has provided for almost every individual, ie, the students, the taxpayers, the working adults, average Singaporeans, the elderly and even the rich dead, there is no mention of the family. Strengthening the unity of the Singapore family is the antidote and the prophylaxis to many of the social ills of the future. I would like the Government

One of the ways that we can look at is enhanced childcare subsidy for lower and middle-income families. Through our work in the constituency, we have come across many low income young families with a single breadwinner. The non-working spouse may stay at home to take care of two, three, or sometimes four children. The option for the non-working spouse to work to supplement their family income is attractive but is not a practical one, as the childcare charges for their children can be higher than their income.

index, how inclusive as a society that we are. I think there are many, many measures. And I reiterate again – what are we doing today so that we need less of social welfare schemes?it is tilted in favour of the lower and the middle-income groups as well as the elderly. The lower and middle-income groups gain more from the GST rebates. Now, consistently, they also gain more from the proposed Growth Dividends that are about to be paid out if this House approves the Budget for 2008. to re-examine this and see how we can strengthen the family structure better through fiscal policies. The current tax rebates and incentives given are mainly targeted at individuals.

Today, childcare cost is not low. It ranges from $400 to $800 a month (averages about $650). And the $150 subsidy offers little help to the lower income group, who can probably earn between $800 and $1,000 if they go out to work.

The sums do not work well for these workers. After deducting the subsidy, childcare still costs them from $250 to $650 per child, and it does not make economic sense to encourage them to work.

The current $150 per child subsidy is given to all working mothers regardless of their income levels. The same amount is given to a mother who earns $800 as a factory worker and sends two of her children to a $500 per month void-deck childcare facility and to an executive mother who earns a five-digit salary per month and who can afford a $1,500 per month up-market pre-school/childcare facility in town.

The current $150 childcare subsidy can be revamped to tilt in favour of the lower and middle income groups. If higher subsidy is given, I believe it will

Just like the proposed means testing in healthcare, and the additional housing grant of HDB, this is not the first time we are introducing differential subsidy and grant, which is provided according to socio-economic needs. And, in this case, targeted assistance can be delivered to those who need it most. It will encourage and enhance their resilience for the future.

I hope the Government will revamp the childcare subsidy scheme to make it more attractive for the lower and middle income non-working spouses who are staying at home to care for their children to join the workforce. It will increase their total household income and over time enhance their resilience.

Another point regarding family. I know that the middle income group has been offered 20% tax rebate and that has been tilted towards the lower middle income group (those who are earning less than $150,000 per year). But this is for the individual.

I hope that the Government can consider the breadwinner, the family man who has to support the children as well as elderly parents. There have been calls in this House to review the child relief as well as the enhanced child relief scheme.

The relief for children was last revised in 1998. It was raised from $1,500 to $2,000 for the first to the fourth child. It has been 10 years now. With rising costs and inflation, I hope the Government can revisit the child relief scheme.

Likewise, the relief for the elderly was last revised in 2000. It was raised from $4,500 to $5,000 for children who support elderly parents living with them. For parents who are not staying with their children, the tax relief remained at $3,500.

I urge the Government to increase both the children and parents tax relief to affirm the importance of the family in the Singapore society.

Many Members have raised the issue on home-makers which I had raised it in 2007. The "stay-at-home spouse" could be "mum", and in some case "dad". Their contributions to the family must be recognised and appreciated. They are team mates working in the paddock of an F-1 race. So they are unsung heroes. However, they are also a very vulnerable group. They are the ones who will be most affected in the event of a family discord or divorce. They receive no pay, no CPF, and no Medisave.

I would like the Government to review the current policies and propose measures to provide for the future of the home-makers. If left alone, they will be the ones who are left out in the CPF LIFE scheme. The Government can facilitate in assisting the working spouses to transfer part of their CPF funds from the Ordinary Account to the Special Account of the home-makers so as to provide at least some form of retirement funds for them. The Government can also consider increasing the tax reliefs for children and parents but transfer the savings into the Special Account of the non-working spouse directly.

I again suggest that we should reward these home managers – they are all the ministers of home affairs – with incentives that are not dissimilar to the ones that are provided to NSmen, although, administratively, it is difficult. But if any government can do it, it is the Singapore Government.

As I said, everything is going up – wages, rental, inflation, CPI – but productivity is down. We have achieved good economic growth. The output or productivity of our workforce did not match this growth.

According to the headline of the Business Times on 11th February 2008 "Singapore's competitive edge eroding", it reported a US study showing the high hourly wage cost rise for the production staff in Singapore was the second highest among 33 locations. In US dollar term, the hourly wage cost for production workers in Singapore shot up sharply by 17.1% to US$8.55 in 2006. Mind you, that was 2006 figure; the 2007 figure, I am sure, would be higher.

According to the MTI Economic Survey in 2007, overall labour productivity fell by 0.9%, down from the 1.5% gain in 2006. And in the last quarter of last year, overall labour productivity fell even at a more alarming rate at 3.7%.

Productivity in business continued to fall, posting a 5.0% decline in 2007; in manufacturing sector, declining by 3.2% in 2007. If our productivity is dropping, then the question we need to ask is: what is supporting the economic expansion? Is the economic expansion possible because of increase in foreign labour? Can we continue with the over-reliance on foreign workforce to secure good economic growth in the future for Singapore?

I would urge the Government to take a look again at our productivity. To look at means and measures on how we can raise our productivity to propel our economic growth instead of relying on foreign labour. Although the proposed incentives to spur R&D and innovation may increase productivity, I hope the Government can devise measures and to encourage and reward increase in productivity in the industry.

The levy on skill re-training seems to me like running contrary to this productivity drive. Currently, only for workers who are earning less than $2,000, the employers need to pay a skill re-training levy of 1% of their gross salary, which means that employers spend $20 per worker if the salary is $2,000. And there is some motivation for the employers now to want to train the workers so that they can raise the salary to above $2,000, of course, provided productivity increases. With that, the employers need not pay the levy on skill retraining after that.

With the revision of the upper ceiling now from $2,000 to $4,500, I am afraid that will only discourage employers from sending their employees to retraining. So I hope that the Government take a look at it and provide some other incentives so that re-training is possible.

I am heartened to see that the Government is topping up the Life-long Learning Fund to encourage life-long learning. It is a right step towards a resilient nation, a resilient community.

The proposed subsidy for part-time degree programmes at the three publicly-funded universities and the UniSIM for Singaporeans who had not previously benefited from a Government-subsidised undergraduate education is a boost for diploma holders who wish to upgrade to a degree.

But I have received an email from one of my residents asking me to put forward this request in Parliament, one of which I have brought up before. Can the Government allow the use of individual CPF to pay for their part-time degree courses? Second, can the 40% tax relief on school fees of part-time degree courses at approved universities be transferred to the parents or elder siblings who are actually paying and supporting their school fees? And I like his ending statement in his email to me. I quote:

"With the influx of foreign workers into our country, we have to ensure that the sons and daughters of our own land be among the top 50th percentile in earnings of our workforce. We are not asking to be the top, but we should not be at the bottom."

I am not here pushing for a bumiputra policy in Singapore, but I think it is worthwhile to re-look at how our Singaporean workers can gain more from the re-training.

The last point which I would like to touch on is on climate change. With the increase in oil price hitting a three-digit level now, there will be increase in energy costs and I do not think the costs will come down further. It augurs well for Singapore and it makes sense for us to save energy. And the Government had articulated the importance of tackling climate change during the ASEAN meeting last year. Likewise, the same message was echoed at the Bali meeting that we need to speed up the efforts on tackling climate change and there is an urgent need to do so, although we recognise that being a little red dot, even as we stop producing any CO2, we are unlikely going to change the direction of climate change. But I think the green revolution can start from the little red dot. I hope the Government, through its fiscal policy, can initiate some changes. Apart from the

I would like to suggest something simple, which is for the Government to consider introducing a green car COE category and that amount can come from the current COE amount. I am not asking the Government to put more cars onto the road now. It does not need any further Government funding but with green car COE, the market will decide and over time the number of green cars on the road will increase.

As our nation progresses and we achieve happiness and prosperity, we should be more resilient. There should be less and less need for social schemes, such as Workfare Income Supplement, ComCare, Medifund, Eldercare fund, etc, and many of the funds that were quoted by Mayor of North-East CDC, CPR, etc. But I ponder, now that we have more and more of these programmes, are we truly progressing? Are we truly resilient as we introduce more of these programmes? I understand that we definitely need them now. But I would still again urge Members of this House as well as the Government to ponder over what more we can do now so that the need for social programmes can be reduced in the future.

With that, Sir, I support the Budget.

entice the non-working spouse in low-income families to the workforce. It will also help to elevate their household income. Their children will also benefit from more structured pre-school education programmes and social interactions in the childcare facilities. While everything is moving up, there is something that goes down. The key to a resilient nation is a top quality economy as well as a resilient workforce. We have no other natural resources except for human resources. Continual investment in our human resources through upgrading and training is the key to our success in the future.reduction in supplementary tax for diesel-powered passenger car which meets the stringent Euro IV emission standards, the Budget is truly silent on the issue of climate change.

Sir, may I seek a clarification from the Member?

Yes.

Sir, the first clarification. The Member in his speech asked why should we quarrel with the discrepancy in the estimates because we are in a happy situation, as we have a huge surplus instead of a deficit.

Sir, does he agree that he misses a point – the point is not so much of whether we end up with a huge deficit or a huge surplus. The question is, why are the Budget estimates so much off the mark?

Second clarification: he referred to Hong Kong, and he said that if our estimates are off the mark, Hong Kong is even worse than us because they are off the mark much more than Singapore's estimates. I am afraid that if this is the attitude of the PAP, we are going down a slippery slope. We are not so good in estimates, he says, but, never mind, there are people who are worse than us.

Sir, in Mandarin, this is exactly what we call Ah Q jing shen.

May I reply, Mr Speaker, Sir. In fact, when I did a block visit last night, a resident asked me the same question. Why is the Government having such a huge surplus? Did something go wrong in the estimates?

Reading the papers this morning, when Hong Kong reported a huge surplus four times above the estimates, of course, the main reasons given were that it was an unprecedented year, property prices went up, and they got huge transactions in terms of the stock market. Similar phenomenon was seen in Singapore as well. And I told the resident, at the end of the day, the key question for this House is how do we look forward. When the family breadwinner came back and said, "I strike the lottery", you should not, in the first place, be asking, "Why did you strike the lottery?" You should be asking, "How are we going to use the lottery money?" Are you going to say, "Let's go to a restaurant. Let's go and have a holiday and splurge it all."? Or are you going to put some of this money now to buy insurance for your child, to make sure that education is provided for, or to put some into medical insurance as well to

make sure that medical needs are taken care of? I think we should not miss the point. The real issue now is what we can do now to make sure that there will be less and less need for all these social welfare programmes in the future. Look forward and not look backward.

Order. I propose to take a break now. I suspend the Sitting and will take the Chair again at 1.35 pm.

Sitting accordingly suspended at

1.05 pm until 1.35 pm.

Sitting resumed at 1.35 pm

With the consent of Mr Speaker and the general assent of Members present, Question put and agreed to.

Resolved,

That the proceedings on the item under discussion be exempted from the provisions of Standing Order No. 48(8) in respect of the reply to be made by the Minister for Finance. – [Mr Mah Bow Tan].

Debate resumed.

Mr Speaker, Sir, I would like to thank all Members who have spoken and supported the Budget.

I will address the main issues of the Budget Debate in this round up speech. Members had also raised many specific questions related to the programmes of

This Budget is about our future. It will develop our people and our enterprises - the key drivers of Singapore's long term competitiveness. It will create sustainable advantages for Singapore, through advanced education and training of our people and by spreading the practice of innovation across our economy. Ultimately, as Members have pointed out, growth must translate into a better life for Singaporeans. This Budget therefore is also about creating a stronger and more resilient community, one where every Singaporean has the best opportunity to move ahead, and where we help those most in need to keep up with the rest. It is about ensuring that as we grow, we will leave no one behind.

The debate has thrown up issues that can be summarised in three broad questions:

Is the Government taking too much and giving back too little?

Are we doing the right things to sustain competitiveness?

Are we doing the right things to help Singaporeans in need?

Finding the right balance – basic considerations behind the Budget

Before I address these questions, I would like to explain the three key considerations that have shaped this year's Budget:

First, what should our overall balance be this year? Should our fiscal stance be expansionary, contractionary or neutral? We have gone for a small overall deficit this year. It is in fact a neutral position in

This is an appropriate fiscal stance because we expect Singapore to see healthy economic growth of 4% to 6% this year. Singapore and Asia’s fundamentals remain strong. Positive trends on the domestic front, such as a strong pipeline of manufacturing investments and construction projects will also keep the economy going. Our unemployment is at record low, and many jobs go unfilled.

If we had an overheated economy, we should be going for a significant Government surplus this year. However the economy is not overheated, although specific segments of the economy, especially in the office space market, have been facing shortages and rapidly rising rentals.

If we were headed for a recession this year, we should be going for a larger deficit. On current indications, this is unlikely to be the case.

The second consideration is – what should be the balance between measures aimed at short-term relief for rising costs and long-term competitiveness?

The Budget goes for a balance between providing short-term benefits to Singaporeans and building up capabilities for longer term competitiveness and social resilience.

This year, Singaporeans will receive $2 billion worth of short-term benefits (comprising Growth Dividends, Personal Income Tax rebates and the GST offsets that were announced last year but continue to run this year). But we will also

[1] This includes the Fixtures and Fittings Allowance, the R&D tax allowance, further tax deduction for R&D and R&D Incentive for Start-up Enterprises (RISE).

the various Ministries which will be addressed at the Committee of Supply sessions.terms of the impact of the Budget on the economy. If we exclude the Net Investment Income Contribution and our transfers to the endowment funds, which are items that have no immediate effect on the domestic economy, the expected budgetary balance is close to zero.provide a roughly equal amount – $2.2 billion – to build up longer term capabilities and help Singaporeans with future financial security (comprising the PSEA top-ups, CPF Bonuses, Medisave top-ups and tax incentives for businesses[1]).

On top of this, we are putting aside $2.4 billion in the endowment funds and the National Research Fund to cater to longer term needs.

This is the balance we have struck between meeting short term needs and keeping our eye focused on the much larger challenges that we face over the longer term – sustaining our economic competitiveness and our social compact.

The third consideration is, what is the right balance between benefits to households and businesses?

In this Budget, we have provided more significant benefits to households. We know they are facing a challenge in the near term with the rising cost of living.

By providing direct assistance now, we are preventing a spiral of wages and prices from developing, which will affect competitiveness and growth. It is in the interests of businesses that we do so.

But we are also providing further incentives for businesses on top of last year’s major moves. We made significant permanent cuts in corporate taxes for businesses last year, which they will start benefiting from this year in terms of significantly lower tax bills. Large companies and small.

It is not possible to do more for both the short term and the long term, and to give more to both households and businesses. If we did this, it would mean running a larger deficit, in other words an

A balance has to be struck. This is how the Budget has been shaped – to strike the best balance between competing needs, and doing what is best for Singapore, not just for one or two years, but for many years. We have put something aside for the future. Or as Dr Ong Seh Hong said, “putting aside grain for times of scarcity”.

Overall, therefore, this Budget aims to provide the right balance for an economy which continues to enjoy good growth, but is exposed to significant global uncertainty in the year ahead.

While inflation is causing immediate concerns, because it erodes spending power, this is not a crisis. People have jobs. Our surplus sharing must be seen in this context. We are not in a crisis.

Nevertheless, the global economic outlook is less certain this year. The financial markets in US and Europe have been affected by the problem of sub-prime loans, now in fact a broader credit crunch, and there are worries of a recession in the US.

We have retained the flexibility of being able to respond if the economy takes a significant turn for the worse, which we do not presently expect.

I will now address the key questions that have been brought up in the debate. Is the Government taking too much?

Reasons for the surplus

Many MPs have questioned the exceptionally large underestimate of last

Our basic approach in the Budget is to use the best information available at the time. This is what we did last year, when we estimated at the start of the year that GDP growth for 2007 would be 4.5% to 6.5%. This was also in line with private sector forecasts.

Likewise, for the property market which accounted for over $3.5 billion extra revenues beyond what we had projected. I will go into some detail on stamp duties because several Members had raised the issue of why our stamp duties turned out to be grossly underestimated and also because it was the largest swing factor in last year’s Budget.

[Chart 1*] Mr Gautam Banerjee asked why we had expected stamp duty collections in 2007 to be lower than 2006. At the time of the Budget in February last year, we had estimated 2006 stamp duties to total $1.5 billion. On the basis of information we had, we projected the same level of stamp duties in 2007. This was because 2006 was itself already an exceptional year. In fact, the subsequent data for Fiscal Year 2006 based on actual collections for January to March (the data comes out after our Budget), which increased sharply, took the total stamp duty collections to $2 billion, more than the $1.5 billion estimated at the time of Budget.

While we had assumed further price increases in 2007 for the property market, just as the private forecasters did, no one anticipated the surge in volumes of transactions that took place.

expansionary budget at a time when the economy is not in recession, when unemployment is very low and where costs are still rising. Doing so would only over-stimulate the economy, precisely what some Members have accused the Government of doing. year’s revenues. Were we too conservative? *Cols. 1103-1104.

There was also considerable uncertainty at the time of last year’s Budget as to the extent to which the pick up that was taking place

Our stamp duties projections for 2007 were nevertheless significantly above historical collections – more than double that of 2005.

Even then we were wrong; stamp duties significantly exceeded expectations, especially because of the surge in transaction volumes. But should we have based the Budget last year on optimism that was unsubstantiated at the time? And should we now for this year’s Budget be optimistically assuming the same volume of transactions as last year? I think it would be quite imprudent for us to do so.

I agree fully with all the Members who urged us to improve our budget marksmanship. I can assure Members that we do not set 'soft targets' for ourselves, just so we can exceed them. In fact, over the past 10 years (FY1998 to FY2007), we have over-projected revenues for six years and under-projected revenues for four years. Last year, we under-projected. But we are not inveterate conservatives in fiscal forecasting.

However, forecasting will remain inherently imprecise, especially because we are a city economy that is fully exposed to the swings in global economy and the vagaries of our own asset markets. So, as Dr Loo Choon Yong cautioned, we cannot expect too much prescience in the budget planning process.

Hong Kong too faces this challenge. It now expects to run a fiscal surplus exceeding HK$116 billion (S$21 billion) for last year, compared to an originally projected surplus of HK$25.4 billion. Just to put this in perspective, they started the year expecting a surplus of 1.6% of GDP and they ended with a revised figure of 7.2% – in other words, they exceeded

I should add that the Government is not alone in finding economic forecasting a challenge. Ms Sylvia Lim cited Citigroup’s comments about the mistakes we had made in budgetary estimates last year. But Citigroup’s own projections of GDP growth at the time of the Budget last year were in fact the same as ours – 5.6%, which was midway between the Government’s forecast of 4.5% to 6.5%. Some private forecasters did expect more rapid growth for last year, while others were more conservative.

However, the difference between Government and private forecasting of the economy is that we have to set out our plans for the whole country on the basis of our forecasts. This is why we have to try to use the most realistic assumptions when we set out our plans, rather than use the most optimistic assumptions, in the hope that they will come true. I am sure most Members would agree that this is the prudent and sensible thing to do.

Should we have raised the GST?

Many of you including Mr Inderjit Singh, Mr Low Thia Khiang, Mr Gautam Banerjee, Ms Eunice Olsen and Ms Sylvia Lim concluded from last year’s large surplus that we made a mistake in raising GST.

Ms Sylvia Lim in particular said that we raised GST without compelling reasons, and that we could instead have relied on other revenues to fund our expenditures. Let me explain why this would have been the wrong approach.

First, GST was not a revenue raising measure for 2007. GST was raised so that we could introduce the Workfare Income Supplement (WIS), a permanent

These include substantially increased healthcare expenditures and investments in continuing education and training. But it was not just our social expenditures that we were expanding, and which are being primarily funded by our GST, but much beyond that:

Infrastructural investments – the next eight years of spending in this area will be three times more than the past five years;

R&D;

Housing rejuvenation;

Refreshing our downtown; and

And further reductions in income taxes to stay competitive, should they become necessary.

Our GST increase, together with the planned revisions in the rules for drawing on Net Investment Income, will provide the revenues for us to make these investments in our future.

Second, for 2007 itself, the GST increase was revenue neutral and had no impact on our surplus position. Total collection from the additional 2% GST amounted to around $1.4 billion. This was in fact equal to the GST offsets plus the WIS which we paid out in FY2007 alone (this is not counting future years of GST offsets and WIS).

In fact, lower and middle income Singaporeans have received significant net benefits as a result of the GST increase last year. This is because they pay only a small portion of the GST, but receive the bulk of the GST offsets. The bottom 20% of resident households paid only 5% of the total GST collected. The next 20% (in other words, from the 20th to the 40th percentiles) paid 7%, and the subsequent 20% (in other words, from the 40th to the 60th percentiles) paid 10%. Adding up, this means that the bottom 60% of all resident households contributed less than 25% of total GST collected. This is because upper income Singaporeans, as well as tourists and foreigners, account for the bulk of our GST collections.

Let us now look at what Singaporean households are getting back.

[Chart 2*] The chart plots the additional GST paid by each of the household quintiles (in dollar terms) against what they have received in FY07 from the GST Offset package and WIS. As you can see, households in the bottom 60% are getting back much more in terms of offsets than additional GST paid. For the bottom 20% especially, it is quite significant. In 2007 alone, the GST offset package plus WIS is five times more than the GST they paid.

Fourth, given that the GST increase was an essential part of our strategy for funding future expenditures, it would have been quite unwise for us to wait until we have run out of revenues before raising the GST.

Internationally, too, the trend continues, of moving away from direct taxes on income to indirect taxes on consumption. Even in Hong Kong, which today enjoys very strong revenues, professionals and the serious money know that the GST would eventually be necessary in order to sustain their revenues and make the investments they need for the future. Hong Kong’s strong surpluses today are largely due to buoyant stamp duty and land sales collections.

As the Hong Kong Financial Secretary stated in his Budget Speech this morning, “revenues from land premium and stamp duties together will account for about one-third of total government revenue for 2007-08. This is the highest contribution that these relatively less stable revenue sources have made to total government income since 1997–98.”

To sum up, we made the right decision to raise the GST last year and put in place a strong and stable revenue position for the future. We introduced it

Is Government giving back too little?

Let me now examine the question of whether the Government is giving back too little.

Transfers are too small compared to our surplus

Mr Seng Han Thong said that the amounts we are giving out this year are significant. However, several MPs referred to feedback that this year’s surplus sharing package (at $1.8 billion) is small compared to our surplus of $6.4 billion last year. Could we not have afforded to give more, for example, through S&CC rebates and property tax rebates, as Mr Inderjit Singh suggested?

First, to clarify, the special benefits that we are providing to households through this year’s Budget amount to $2.8 billion. This is because, in addition to the $1.8 billion that comprises this year’s surplus sharing package, we will in fact be giving $1 billion of benefits that were previously announced as part of the GST Offset Package.

Second, it is useful to put in perspective the $6.4 billion estimated surplus for 2007. It is, in fact, not large by historical standards, relative to the size of the economy.

[Chart 3*] The surplus is a turnaround from the deficits we have been running in recent years. But at 2.7% of GDP, it is in fact not large

This is why, while we have provided a substantial package of benefits in the $2.8 billion that we are providing to households this year, we are also setting aside resources for the endowment funds that are dedicated to the long-term social expenditures that are necessary for Singapore and for R&D. By doing so, we are ensuring that long-term needs such as Medifund, Eldercare and continuing education obtain a secure stream of funding, independent of the ups and downs of the economic cycle.

at the luxury end of the market would spread to the rest of the property market. their original estimate by 5.6% of GDP. This is just like in our case, where the final budget outturn exceeded the original estimate by 3% of GDP. scheme, not just one-off, to help lower income Singaporeans. The GST increase also enabled us to reduce the Corporate Income Tax rate significantly – by 2% points to 18%. Further, the GST increase was essential for putting in place a stronger revenue structure to fund the increased expenditures that we decided we have to undertake in the next five years and beyond. Third, by introducing the GST increase at a time when economic growth is healthy and our revenue position still strong, we were able to fully offset its impact on the cost of living for most Singaporeans. The last thing we should do is to wait until there is an economic downturn, households are facing financial difficulties, and the Government is facing declining revenues before we raise the GST, because then we would be unable to provide a full offset for Singaporeans. We should never try to game this – to wait until the last minute to raise revenues, or to roll back the GST increase now because we had a good year of surpluses, in the hope that we can raise it again later – as suggested by both Mr Gautam Banerjee and Dr Loo Choon Yong. We could do that if Singaporeans were simply shareholders in Singapore Inc. But they are citizens, and the Government’s job is to anticipate their future needs, put in place the finances that allow us to meet these needs and help Singaporeans with the changes that are necessary by providing them offsets to help them adjust. at a time of good economic growth, although no one expected growth to be as strong as it eventually was. Doing so allowed us to provide substantial offsets to lower- and middle-income Singaporeans, and to put in place the WIS as a long-term programme of income support for our low-wage workers. The 2% increase in GST also did not contribute to the fiscal surplus in 2007. compared to the budget surpluses we were running in the 1990s. There is no assurance that we will continue to run significant surpluses and we do not expect to. *Cols. 1103-1104; 1105-1106.

In total, therefore, when we take into account the amounts set aside for endowment fund top-ups as well as for surplus sharing, we will be spending $5.4 billion. This is a large sum we are putting aside to meet the needs of Singaporeans, both for the immediate term as well as for the future.

Are we doing the right things to sustain competitiveness?

Rising business costs

Many MPs, including Mr Inderjit Singh, Ms Jessica Tan, Mr Gautam Banerjee, Mr Michael Palmer, Ms Penny Low and Mr Edwin Khew have spoken up for local businesses and SMEs. They were concerned that this Budget has not done enough for them.

Local costs are rising because the economy is doing well and there is increased competition for resources, especially labour and industrial and office space.

Mr Inderjit Singh attributed this to what he said was the Government's 'grow-at-all-costs' policy, which he says

It made for very entertaining listening, but it was in fact Inderjit's analysis that is flawed. The Government has not pursued a 'grow-at-all-costs' policy as Mr Inderjit Singh suggested. We ‘went for growth’ not by over-stimulating the economy with fiscal spending (because our budgets have been fairly balanced, and indeed in surplus last year as some Members have complained), but by making Singapore more competitive by building up our capabilities, keeping taxes competitive and investing in infrastructure.

Our whole approach has been to enable our people and businesses, as both Ms Lee Bee Wah and Mrs Josephine Teo have pointed out, so that we can take advantage of opportunities for growth when external conditions are good.

This is why, for example, we cut corporate taxes last year, which Mr Inderjit Singh in fact strongly supported – although we did not cut Personal Income Taxes, which he had called for and continues to call for now. We wanted to provide the best conditions for our enterprises to seize opportunities and grow, not just for one or two years, but over the long term.

We know that growth will be volatile – strong in some years and weak or even recessionary in other years. We cannot avoid these cycles because it is part and parcel of being a global city. But we have to take advantage of the opportunities when external conditions are favourable so that the good years can offset the down years when the global cycle turns.

Our economy has grown at an average 5% over the past 10 years. But this is only because we grew rapidly in the last four years, by close to 8% on average. If we had not had this strong growth in recent years, we would not have made up for the very weak growth in earlier years and would in fact have performed below the economy's potential over the last 10 years.

There is another reason why we should be prepared to take the opportunities when they come. The significant opportunities come in cycles – chemical crackers, once every seven to eight years. When they are ready to invest, and we say no, they go elsewhere. If we miss them, we miss the whole cycle.

And we lose not just one investment. We lose the whole cluster – the critical mass necessary for the industry to be in Singapore.

We could have rejected leading manufacturing investors or turned away financial sector players when they wanted to expand in Singapore, in the name of avoiding rapid growth. Would Singapore today have been better off if we had done so? Would food be more affordable? I am sure most Members would agree that Singaporeans would be worse off today if we had adopted that path.

Mr Inderjit Singh had in fact claimed that our growth policies had led to lower-income Singaporeans being worse off. This is plainly wrong. It is precisely the rapid growth that we have seen in the last few years that has turned things around for our low-income households and allowed them to enjoy positive growth in real incomes after the very difficult period

In the last two years, our strong economic growth has increased the number of employed persons amongst lower-income households. And as Ms Cham Hui Fong pointed out, 2007 was also a good year for low-wage workers because we had the lowest retrenchments since 1994.

This is why the bottom 20% of (non-retiree) households saw their incomes grow by 5% in 2007 in real terms (over 7% in nominal terms).

This is before taking into account the substantial Government transfers to the lower-income group which has further boosted their incomes.

Our SMEs too have been better off because Singapore has grown well in the last few years. Many of them are involved in the domestic market rather than exports and their businesses have picked up because of the strong growth in Singaporeans' incomes. Costs are higher, but so is the overall demand for goods and services.

Our approach, therefore, is to provide the conditions for Singaporeans and our companies to succeed and to grow over the long term. We will help our companies to move up the value chain so that they are more competitive in a higher cost environment, and help our people to acquire the skills and competencies they need to earn a good living. In the short term, however, we address the bottlenecks.

The key constraints that we face today are that of labour and space. To ease pressures on the tight labour market which MPs like Ms Penny Low and Ms Lee Bee Wah have asked about, the Government has allowed more flexible access to foreign manpower:

The Dependency Ratios (the number of foreign workers companies can hire for every local worker) have been raised for the manufacturing, services, construction, process and marine sectors from January this year.

Office space, on the other hand, has seen a serious shortage – much of it due to the rapid expansion in the financial sector in 2007, when it grew by 17%. Businesses have found rapid rises in rentals unsettling. I have set out in the Budget the measures the Government is taking to address the temporary shortages in office space until the large supply of new office space comes on-stream in 2010.

Industrial rentals too have risen significantly. Since the resumption of the industrial Government Land Sales programme in 2003, MTI has been putting out an orderly release of industrial land, which will result in a significant supply coming on-stream in the next year or so. This will be close to twice the quantum of industrial space added in the last two years, and is expected to ease tight occupancy rates and relieve pressure on rentals.

Land sales policy

Mr Inderjit Singh suggested that the Government was responsible for driving up property prices because we have had a land sales policy that has sought to time the release of land to get the best price for Government, instead of providing a steady long-term release of land.

Our land sales policy has been a responsible one that is market-led. We ensure that enough supply is made

[2] Between 2001 and 2004, there was a net conversion of around 120,000 sq m of office space to other uses.

had overheated the economy and has been the cause of our inflation in business costs and prices of consumer goods, including even food. In other words, the problems faced by businesses and households are the result of a flawed growth policy.This is how we assure Singapore of healthy long-term growth through good years and bad. they went through in the earlier part of this decade. (a) MOM has increased the quota for mid-skilled foreign manpower (S pass holders) from 15% to 25% in January 2008.available to meet basic demand through the Confirmed List, and let the market decide whether it wants to develop more sites through the Reserve List. No one anticipated the strong surge in demand for office space in the last two years coming right after the 2002-2004 period, when market conditions were very weak. In fact, some owners were converting their office space to other uses then [2].

Mr Inderjit Singh said that the Marina Bay Business and Financial Centre (BFC) could have been released for development two years earlier. I think everyone in town would like to take this view with the benefit of hindsight. But let me remind Members that when the Government was actively planning the sale of the BFC site in 2003, the feedback from the industry was very negative. Nevertheless, the Government went ahead to make the site available for sale on the Reserve List in 2004. The site was eventually sold in 2005, after much marketing.

Mr Inderjit Singh and Ms Jessica Tan also suggested that we give rebates to businesses to address their short-term cost pressures.

We had indeed done so back in the past, such as 1999, 2001 and 2002. That was however in response to economic downturns rather than problems caused by strong economic growth. Businesses then were suffering because of weak demand rather than rising costs.

Today's situation is very different. The economy is expanding. Providing rebates would not solve the imbalance of supply and demand, which is the source of the problem. In fact, it might even accentuate the problem.

In an environment of strong demand for rental space, it is quite possible that

The real solution is to relieve the bottleneck in supply, which is what the Government has been seeking to do.

MTI will also be addressing the issue of rising business costs and supply constraints at their COS.

Providing an attractive tax environment

We will continue to ensure that Singapore remains the best place for businesses to start, grow and mature. We have provided an attractive tax regime for all our companies, having made decisive moves in last year's Budget when we reduced the Corporate Income Tax rate from 20% to 18%, and enhanced the Partial Tax Exemption scheme to benefit SMEs.

This year's further tax moves to promote productivity and innovation will complement the reduction in headline rates that we announced last year.

The Fixture and Fittings Allowance together with the R&D incentives will cost us a total of $380 million every year. Of this, about $150 million will go to SMEs – much more than Mr Inderjit Singh's estimate of about $50 million. This is on top of the $160 million that SMEs will benefit from the Corporate Income Tax rate cut and partial tax exemption changes that were announced last year, which will take effect this year. So that makes a total of $310 million for SMEs.

[Chart 4*] These incentives will make Singapore one of the most compelling locations for companies to start, grow their companies and engage in R&D activities. A company with about a million dollars of profits – in other words,

This is our focus – we will provide a conducive and attractive tax environment for companies to build sustainable competitive advantages through innovation.

the outcome of Government giving tax rebates on rental costs will drive prices up further, because it would stimulate demand for rental space without adding to the supply of space. still an SME – and which spends 1.5% of its turnover on R&D in Singapore would have an effective tax rate of about 6%. This is comparable to that in Ireland despite their much lower headline tax rates, and much lower than that in Hong Kong. *Cols. 1105-1106.

But it will take time. As Mr Zaqy Mohamad, Mr Ong Kian Min, Dr Amy Khor and Ms Denise Phua have pointed out, we will have to nurture an entire culture of innovation, especially among our smaller companies. There is a lot of work ahead in spreading the message amongst all our companies and helping them to take advantage of the incentives we have provided.

They do not have to be in the high-tech sector. Mr Gautam Banerjee had asked about this. The definition of R&D that we currently adopt for corporate tax purposes is in fact a broad one, and is consistent with that in countries such as UK and Ireland.

Providing the best workforce

We are committed to providing the best workforce, this is why companies will continue to invest here, establish themselves here.

CET – Learning at all levels

Many Members, such as Dr Lily Neo, Mr Ong Kian Min, Mdm Ho Geok Choo, Mr Heng Chee How, Mrs Josephine Teo, Mr Zainudin Nordin and Mr Yeo Guat Kwang have strongly supported our investments in retraining and CET.

Mdm Halimah Yacob asked if we can consider opening individual learning accounts (ILA) to mitigate financial barriers that individuals might face in

Adult training is already heavily subsidised. Workers who attend re-training continue to receive subsidies of up to 80% of course fees (for older workers, 90%). This is regardless of whether they attend courses by themselves or are sent by their companies. This year, the Government has made it easier for individuals to obtain tax relief for the cost of re-training and has also agreed to fund up to 40% for part-time degree programmes.

The ILA concept is an interesting one which we will study. Our survey of ILA schemes overseas has shown that there are problems of abuse and workers who end up experiencing poor quality programmes. We will need to study carefully the issues and potential in introducing an ILA scheme.

In the meantime, our focus is centred on building capacity, further developing the Workforce Skills Qualifications (WSQ) certification framework and improving the quality and span of CET programmes as a whole.

Sustainable development

Many MPs like Ms Jessica Tan, Mr Gautam Banerjee, Ms Penny Low, Dr Lim Wee Kiak, Dr Teo Ho Pin and Mr Edwin Khew, were disappointed that we did not announce more incentives to promote green business practices.

They are right that the Budget delivered no new initiatives on this important issue. However, we are addressing the whole framework of sustainable development comprehensively. This is why the Government has set up two Inter-Ministerial Committees, one on Climate

We are embarking on a comprehensive study of the measures we should take to support environmentally friendly development. We want to look at this holistically, and avoid rushing into schemes that would increase costs for businesses and consumers without real impact on the environment.

Our strategy has always been to focus on areas where we can make practical, effective and impactful contributions. With this approach, we have managed to achieve good economic growth, while sustaining a high quality environment.

We are a small player, contributing very little to global emissions. But we want to play a meaningful role where we can.

However, we are not starting from scratch. Singapore is today widely recognised as a clean and green city. Indeed, as Mr Kevin Hydes, Chairman of the World Green Building Council has noted recently, on a per capita basis, Singapore probably has one of the highest incentives to encourage green buildings [3]. We are also developing a cluster of world-class players and R&D capabilities in the green industries.

[3] The Business Times, 23rd February 2008.

pursuing adult learning. Dr Teo Ho Pin also asked for incentives for education institutes and training allowances to encourage lifelong learning.Change chaired by DPM Jayakumar and another on Sustainable Development co-chaired by Minister Mah and Minister Yaacob, which will be looking at our domestic strategies. Minister Mah and Minister Yaacob will be elaborating on the issue of Sustainable Development during the MND and MEWR COS sessions.

Mr Edwin Khew also noted that we were already in the lead in environmental initiatives but he wanted to make sure that we did not lose the momentum of what had been started. I can assure him and Dr Teo Ho Pin and the others who

This year, we will be taking a few further steps to encourage energy efficiency. MEWR and MTI will elaborate a bit more on these areas during their COS.

Are we doing the right things to help Singaporeans?

The third broad question that has come up in the Debate – how do we ensure that we are doing the right things to help Singaporeans, especially those in need?

Cost of living for households

Despite the good growth, there are still many Singaporeans who are struggling to make ends meet. Many Members such as Dr Teo Ho Pin, Ms Ellen Lee, Mr Ong Ah Heng, Mdm Cynthia Phua, Mr Zainudin Nordin, Ms Indranee Rajah and Dr Mohd Maliki Osman spoke passionately about the less privileged groups, particularly:

Lower-income groups who are fearful that the growth in their wages will not keep pace with inflation;

The sandwiched middle class who often have dependents, both young and elderly; and

The elderly retired and the disabled, who have no regular source of income.

I agree that we should be concerned about each of these groups. Our whole approach has been designed to help these Singaporeans in a sustainable way.

Increases in the headline inflation rate

Members have all seen the latest January CPI numbers, which show inflation at 6.6% compared to January

The Government's forecast of inflation remains at 4.5% to 5.5% this year. As I mentioned in the Budget Speech, we expect inflation in the first half of the year to be higher before declining in the second half of the year, due to the wearing off of one-off factors such as the GST increase.

Helping households

As I explained in the Budget Speech, however, we cannot avoid global inflation, but we are mitigating its effects. Our efforts to diversify our food sources and our policy on the Singapore dollar exchange rate have helped mitigate the effects of inflation. Dr Teo Ho Pin and Mr Liang Eng Hwa have supported this move to diversify our food sources to build resilience of our food supply and encourage competition among suppliers.

We are also helping Singaporeans directly. First, by helping them own their homes, which provide a large hedge against inflation. This is why, as we have explained before, although the revision in the Annual Value of homes has raised the CPI number, it has no impact on most Singaporeans. The 95% of Singaporeans who own their homes are not affected by inflation in the rental market, which is especially worrisome if you are a retiree household.

In fact, the AV revision simply recognises the fact that HDB flats have

Second, by helping needy Singaporeans directly. Because we had a large surplus last year, we have been able to provide a substantial package of benefits directly to Singapore households. It will in fact exceed the cost of living increases that most lower and middle-income households will experience.

[Chart 5*] I will show three examples that describe typical households. The first example shows a 2-room HDB household comprising a retiree elderly couple. The total amount that 2-room retiree households spent last year would have been about $980 per month on average, or $11,900 per year. This year, their total spending could go up by about $650 for the year because of inflation (this assumes the top end of the forecasted inflation range of 4.5% to 5.5%). However, they will get around $3,100 in benefits from this year's surplus sharing package and the GST offsets that they continue to get – more than four times their increase in cost of living.

The second example is a typical 4-room household – a couple with two children, one in secondary school and the other in Polytechnic. Their total increase in expenditure due to inflation in 2008 is about $2,200, and they will receive around $4,100 in benefits from the 2008 transfers – almost twice their cost of living increase.

The third example is a 5-room household – a family with two children (one in primary and one in secondary school) and one grandparent. Their total expenditure arising from inflation in 2008 is about $3,100, and they will receive around $4,400 in benefits from the 2008 transfers – more than their cost of living increase.

The Government's package of measures has therefore helped to offset the impact of higher prices on most households. This will have to be taken into account by the National Wages Council (NWC) when it considers its recommendations later this year. It will not be in the interest of either businesses or households if we end up with a spiral of wages and inflation chasing each other.

The inflation resulting from higher food and energy prices means we are indeed seeing some impact on the living standards of consumers, and on the profit margins of companies.

But as Dr Lim Wee Kiak pointed out, the only real solution is to raise our productivity. Mr Yeo Guat Kwang also said that the only lasting way to help low-income Singaporeans cope with rising costs is to improve their employment prospects through training. If we try to remedy the problem caused by inflation by pushing up wages to catch up, or by companies pushing up prices to maintain profits, we will end up chasing our tail. The only reliable and sustainable way to address this problem is for both workers and companies to improve productivity, so as to justify a higher standard of living for ourselves.

Let me now move on to other suggestions from Members on how we could mitigate the impact of inflation.

Zero-rating GST on essentials

Mr Inderjit Singh and Ms Sylvia Lim had asked if we could exempt GST on certain essential items to help the lower-

The argument to zero rate essentials has always had great emotional appeal. As Mr Inderjit Singh pointed out, lower- income groups spend a higher percentage of their incomes on essentials compared to the higher-income groups.

There are two reasons why exempting essentials from GST is not an effective way of helping the lower-income groups:

First, most of the GST revenue collected on essentials comes from the higher income households and foreigners. They contribute the bulk of GST on essentials, just as they do for all other types of expenditure.

Second, the bulk of consumption by the lower income is not on essential items, but on other items. As I showed in the Budget Debate last year, the eight most commonly cited essential items make up only 5% of the expenditures of the bottom 20% of households. Even if we take all uncooked food into account, it is only one-eighth of the expenditures of a typical household in the bottom 20% of the income ladder. And if we add their spending on public transport and utilities, the total comes to around one-quarter of their expenditures.

spoke about this that the Government will not be complacent on this issue. 2007. MTI has explained the reasons for this increase, which largely have to do with the unusually low level of prices in January last year. (In particular, there were one-off factors such as the S&CC rebate that was given in January last year, but not in January this year. The schedule for S&CC rebates has been changed so that the rebate was given in December 2007 instead. Fuel prices were also at a two-and-a-half year low in January last year). become more valuable. It does not mean that homeowners are worse off. These illustrations, I have to emphasise, are before taking into account the increased wages that working households would experience in a growing economy.income group. I had explained fully in last year's Budget Debate why this is not a good idea, especially not for lower-income Singaporeans. It is still not a good idea today. *Cols. 1107-1108.

Therefore, it is far better for the lower income groups that we help them directly in a targeted manner and allow them to decide on how best to use the assistance we provide for their household expenditures. Exempting GST on essentials will benefit mainly richer Singaporeans and foreigners and leave less to be provided to lower-income households.

Exempting certain items from GST is also not cost free. It will mean the need

In sum, it is far better that we provide help to lower-income Singaporeans directly, so that we can target the assistance and provide help in much larger quantums.

Government fee freeze

Mr Inderjit Singh and Mr Michael Palmer gave a long list of price hikes Singaporeans have faced on the ground. Mr Inderjit Singh says many were factors that Government should have watched and prevented, including even prices of certain non-Government entities. I notice their lists were remarkably similar to a blog posting that has been making its rounds for quite a while now.

First, let me clarify that, taken as a whole, Government taxes, fees and charges, other than GST itself, contributed only 0.1 percentage points to the 2007 CPI inflation of 2.1%. If we look at the January 2008 numbers, the Government related contribution (excluding the GST increase) was also about 0.1 percentage points out of the total CPI inflation of 6.6% [4].

[4] This includes Government charges in the transport sector, ie, ERP, road taxes, COE and ARF. It does not include taxi fares, bus fares and MRT fares which are charged by private companies, not the Government. The latter contributed 0.15 percentage points to 2007 average inflation and 0.5 percentage points to January 2008 inflation. Electricity and gas tariffs which were also not included above contributed negative 0.1 percentage points to the 2007 average inflation and positive 0.3 percentage points to the January 2008 inflation.

to impose higher GST rates on other items over time, in order for the GST to generate the same amount of revenues as before. This is in fact what has happened in several other countries which have exempted essentials from GST. It will affect Singaporeans across the board if we were to do that, including those in the lower-income groups.

We announced a one-year freeze on Government fees starting from July last year when the GST was raised.

We have decided to extend the Government fee freeze till end of 2008 to provide further reassurance to Singaporeans, at a time of rising prices.

This will include fees charged on all Government-provided services (for exam

Regulatory charges, such as those in the transport sector and the development charges applied in the property market, will not be frozen. They must continue to serve the purpose of regulating demand. (For example, the increase in ERP charges which has to be seen together with the decreases in road taxes and Additional Registration Fees that comprise part of the Land Transport Review).

The Government fee freeze has not applied to fees charged by non-government entities, such as the universities, restructured hospitals and town councils. These entities have to make their own decisions on whether or not they will raise fees. I would however urge the town councils to consider holding their S&CC charges unchanged this year.

In the case of the universities, fee increases have been announced, but they apply only to first year students in 2008. They will face a once-off 4% increase in fees this year, with no subsequent increase over their next three years in university. So, the once-off 4% increase works out to only 1.6% a year.

However, while we have to allow our universities to raise fees from time to time, so that they can cover their cost and raise their quality, what the Government is doing is extending further support to lower as well as middle-income students.

Members have lent their strong support to this move. Dr Ong Seh Hong had also asked why the new MOE bursaries for polytechnics only applied up to the 50th percentile of household incomes, whereas the university bursary was being extended to the 66th percentile. The reason is because

We are extending the Government fee freeze for the whole of this year. However, we cannot do so indefinitely. We should not change our basic practice of charging realistic fees so we are not faced with ever increasing subsidies on public services. This is the only way we can provide the quality services that people want, whether in healthcare or other areas.

If fees are not priced realistically, someone else will have to end up paying for the cost; which means taxpayers in general. Not only that, but there will be over-consumption of public services that are provided either for free or on a highly subsidised basis. This is what has happened in many developed countries and is why they end up with extraordinarily high taxes to compensate.

This is the case in the Nordic countries, for example, where education and healthcare are free. Denmark’s top marginal personal tax rate is 59% and their VAT (which is their GST) is 25%.

Our practice of charging realistic fees on public services is what allows Singapore to keep our total taxes, fees and other charges collected from the population, at one of the lowest levels in the world [Chart 6*].

Our approach is working well – a low overall tax burden, realistic fees that only users of the public services pay, plus financial assistance targeted at the poor. This is how we will continue to provide

Addressing the needs of all Singaporeans

Disabled

Several MPs have also made points about groups they feel deserve more attention, especially the disabled and women. Let me deal briefly with each of these in turn.

Dr Ahmad Magad, Ms Denise Phua and Dr Teo Ho Pin are concerned with how we are helping the disabled.

MCYS will be addressing this more fully in its COS. Let me however say from a budgetary perspective that we are substantially increasing our spending to provide better support for the disabled.

Between FY2007 and FY2011, Government expects to spend up to $0.9 billion on disability programmes such as funding on special education (SPED) schools as well as SPED classes in mainstream schools. This also includes various MCYS programmes for the disabled. This is double what we spent in the previous five years.

On top of this, MND and MOT will be spending about $200 million over the next five years on barrier-free access - in our public housing estates and in public transport – and to encourage private building owners to retrofit their buildings with basic accessibility features for the disabled.

L-Bonus

Several Members like Dr Lim Wee Kiak, Mr Ang Mong Seng, Dr Amy Khor, Mdm Cynthia Phua, Prof. Kalyani, Mr Yeo Guat Kwang and Mdm Halimah Yacob have highlighted the special challenges

Housewives were one of the reasons why we decided to offer the L-Bonus to those who wish to participate in the CPF-LIFE scheme but who have less than $40,000 in their Minimum Sum. Dr Amy Khor had asked about what contributions this group of CPF members would have to make in order to receive the L-Bonus. We will extend the full L-Bonus to those whose balances are below $40,000, as long as they have at least $20,000 in their Minimum Sum. As they have smaller balances, however, they must be prepared to receive lower monthly payouts than those with $40,000 or more would receive.

We will also offer the L-Bonus to those whose balances fall below $20,000, but on a pro-rated basis, if they wish to participate in LIFE. If they top up their accounts to $20,000, they will be able to qualify for the full L-Bonus.

The L-Bonus will therefore provide strong incentive for husbands, children and other family members to top up the accounts of our housewives. It applies across all income groups. And this is also why we have also enhanced the tax relief given to those who top up their family members' accounts so as to encourage those with middle incomes and above to do so.

But the L-Bonus is not itself the solution to the problem of low balances of housewives. I think Members will agree that Government’s role should not be to substitute for the responsibility of husbands and children to provide for their wives and mothers.

Nevertheless, there will be some CPF members who have low balances and limited family support. The CPF-LIFE scheme may not be the best way to help them if they have trouble meeting even immediate retirement needs. We will have to find other ways of helping them.

The Lease Buyback Scheme, which will enable elderly people to monetise their HDB flats to provide them with more retirement income, will be a significant measure for the low-income aged. Minister Mah will be addressing this more fully during the MND COS.

Minister Ng Eng Hen will be addressing comprehensively the issues Members have raised with regard to CPF-LIFE during the MOM COS.

Design of surplus sharing system

There have also been suggestions on how we can improve on the way we share our surpluses.

Ms Jessica Tan, Mr Ong Kian Min and Mdm Halimah Yacob suggested using other means of approximating wealth so that we do not penalise needy families living in bigger HDB flats or, in a few instances, in private property. One suggestion was to look at the number of dependents living in the household.

I agree that home type is only a proxy for the household’s wealth and it is an imperfect proxy. But it will be both difficult and extremely intrusive to design a national scheme that takes into

In practice, however, families with more dependents do get more benefits. This is because of the PSEA we have given to young Singaporeans as well as the additional Growth Dividends and Medisave top-ups that we have given to older Singaporeans.

There will however be cases of families who do not qualify under the criteria but who are truly in need. This is why we have provided additional funds to the CCCs and CDCs, self-help groups and the VWOs. They are in the best position to assess the needs of such families in detail.

This is a fair and workable approach – to apply simple, consistent criteria at the national level, but provide targeted assistance at the local level for those who need more help.

Addressing the widening income gap

Let me now address the challenge of a widening income distribution which many Members, including Dr Lily Neo and Mr Zainudin Nordin, have spoken about.

As set out in both last year’s Budget and this year’s Budget, this has to be a key concern for Singapore. As Dr Lily Neo puts it, if those at the bottom end of the income ladder stagnate, or see declining living standards, Singapore’s social compact will be at risk.

This is why we have embarked on major new initiatives in the last two years to help our lower-income workers with their income, their savings, their job prospects and the upgrading of their skills.

Workfare is a major addition to our social security system – it will give those

Several MPs, including Mdm Halimah Yacob, Mr Christopher de Souza and Mr Zainul Abidin Rasheed, had suggestions on how to improve the Workfare scheme, including broadening its reach amongst informal workers. Mr Inderjit Singh also suggested raising the WIS ceiling and increasing the quantum of payouts.

WIS is a new scheme – the first payments were only made in January this year. We should not be changing the basic parameters so quickly. The current ceiling of $1,500 captures the bottom 30% of the working population. In fact, the scheme was targeted at the bottom 20%, but was extended up to 30% so that there would not be a sudden fall off in benefits for those at the margin.

We will need more time to see how well the scheme is working and whether it should be refined. We have committed to review the scheme by 2010.

ple, school fees, ITE and polytechnic fees, charges in public carparks, and all licence fees).polytechnic fees are already much more heavily subsidised by the Government. Polytechnic students therefore pay relatively low fees of $2,100 per year, which are about a third of the fees that university students pay. Moreover, polytechnic students up to the 80th percentile are also able to take loans. the quality services in health, education and other areas that matter to Singaporeans, including our lower- income Singaporeans.facing women, especially housewives who do not have much in their CPF accounts and who face the prospect of outliving their husbands. We agree this is an important issue which everyone should address. The topping-up of housewives’ accounts will require concerted effort in education and persuasion. NTUC is already moving. As Mdm Halimah said, it has embarked on a programme specifically aimed at encouraging husbands to top up their wives’ accounts.consideration the profile of needs of every household. at the lower end of the workforce a strong incentive to find a job, stay employed and save for their future. But as Ms Cham Hui Fong pointed out, Workfare should not be the end game for any worker. Our objective should be to help our low-wage workers up-skill and graduate out of WIS. *Cols. 1109-1110.

I should add that Workfare is not simply a means to supplement the income of low-wage workers. As Minister Lim Swee Say put it during last year’s Budget Debate, another important objective of Workfare is to encourage as many people as possible to join the CPF system.

We know this will take time, and will take considerable effort. But getting as many workers as possible to join the CPF is the only real way we can more adequately address their needs, through the OA (for housing), the MA (for medical needs) and the SA (for retirement), and now the CPF-LIFE scheme.

Keeping a progressive fiscal structure

Workfare is part of a broader fiscal system that supports Singapore’s social compact. It is a highly progressive fiscal system, despite our very low rates of tax on the middle and upper-income groups.

The Singapore system is one that provides targeted help for the needy, while keeping the overall tax burden low so that we reward work and enterprise.

[Chart 7*] The next chart shows what households pay to the Government in taxes and receive from the Government in benefits this year. However, it does not include our housing, healthcare and education subsidies which are in fact much more significant for lower-income households.

Members can see that up to the 40th percentile of households, Singaporeans are getting a positive net transfer from the Government this year. This means that these households are getting back more than they are paying to the Government.

Households in the second decile, in other words from the 11th to 20th percentile, will obtain a net transfer from Government that is equal to about 25% of their incomes this year.

However, while the bulk of Government revenues come from the top 20%, the burden on them is not high. The top 10% pays to Government about 13% of their income on average, including not just personal income tax, but also motor vehicle tax, foreign maid levy, property tax and GST.

Even after this year’s surplus sharing benefits, and after the GST offsets are fully paid out in 2011, there will still be the permanent scheme of Workfare to support lower-income families. In net

Conclusion

Mr Speaker, Sir, the most important debate in the last two days has been about the basic ethic that we want to sustain in our society. We all aspire to help and uplift the less fortunate members of our society.

Mr Siew Kum Hong made an impassioned speech. He says that the Government is only concerned about not eroding the work ethic, rather than caring for Singaporeans, and so we tend to provide the bare minimum to Singaporeans in need such that they have just enough to survive. His description does not square with the reality of Government interventions to support the lower-income group. Through Workfare, through our housing subsidies, through our CPF subsidies and top-ups, through the support we provide the poor with Medifund and the many flexible schemes that ComCare offers, we are providing substantial support for lower-income Singaporeans. His desire to see nobody left behind is noble and shared by us all. But his exhortation that we should ignore waste, ignore deadweight loss, ignore disincentives to work is reckless.

As Chew Chu Ching pointed out in his Zaobao column today, commenting on Mr Siew Kum Hong’s speech, “if a country does not care about creating wealth at all, it is big question whether it could survive in the real world." [Chart 8*] The cartoon accompanying his commentary expresses it more pithily.

To be able to help the poor, we must first create wealth, grow our GDP and provide every incentive for Singaporeans to strive and work to improve their lives and that of their families.

The real issue is how we can keep our economy productive and vibrant, and how we can keep our society resilient and caring, not just now or for a few years, but for many years to come. Will it be achieved by Government giving more and more and handing out more and more goodies, which MPs like Mr Sam Tan, Dr Ong Seh Hong, Mr Baey Yam Keng and Dr Lim Wee Kiak cautioned against?

As Chua Mui Hoong put it in yesterday’s Straits Times, “it is timely to recall that the Finance Minister is not the God of Fortune, and that not all calls for spending have merit. Even if there is a $6.4 billion surplus”.

Our basic philosophy has been and must remain what Mr Zaqy Mohamad, Mr Zainul Abidin Rasheed, Dr Lily Neo, Ms Lee Bee Wah, Mrs Josephine Teo and Dr Lim Wee Kiak expressed – we must keep alive the incentive for every Singaporean to strive and maximise opportunities to do better for themselves and their families.

This Budget has given Singaporeans something to tide over their present difficulties. But far more important is what we are doing to help every individual upgrade himself through education and training, to stay in a job and keep advancing his skills, and to save for retirement.

We have embarked on new initiatives, and there is much more work ahead. We will stay focused on this central task. As Mdm Halimah Yacob summed up, it is what we have to do so that this continues to be a place where everyone has the

This is the philosophy which will keep Singapore going through good years and bad, which will ensure that prosperity will last more than three generations, as Mr Seng Han Thong hoped. And above all, which will make this a society where every Singaporean can be proud that they are playing their part, not just by doing better for themselves, but by contributing to Singapore. [Applause.] Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 2008 to 31st March, 2009.

terms, the bottom 20% of families will still receive a positive net transfer from Government after the GST offsets have run out. If our policies harm that, for the noblest of reasons, we will be in serious trouble, as many other countries have found. Instead of helping the people we all want to help, we will be doing worse for them. opportunity to fulfil his dreams through hard work and can look forward to the future with hope. *Cols. 1111-1112; 1113-1114.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.25 pm.

Sitting accordingly suspended

at 2.56 pm until 3.25 pm.

Sitting resumed at 3.25 pm

1ST APRIL, 2008 TO

Order read for consideration in Committee of Supply [1st Allotted Day].

Main and Development Estimates of Expenditure of Singapore for the financial year 1st April 2008 to 31st March 2009, contained in Paper Cmd. 2 of 2008.

For convenience, I shall take the totals for each Head of Expenditure in the Main and Development Estimates as they appear in the last columns of the schedules of estimated expenditure under the Main and Development Estimates Outlays for FY 2008 on pages 6 and 7 respectively of the Command Paper.

A total of 401 amendments to the Estimates of Expenditure have been submitted this year. The guillotine times for the discussion of the Heads of Expenditure under Standing Order 92(7)(a) have taken into consideration the earlier commencement time of the Committee of Supply for each allotted day. I must remind hon. Members that the total time for discussion of each Head of Expenditure includes the replies from the front bench. With the assistance of the digital timer in the Chamber and Members’ vast experience last year, I trust that hon. Members will be able to keep to the speech times indicated against their amendments. I would urge honourable Members – both from the back and front benches – to adhere to their time limits, as I intend to keep to these agreed times.

I shall deal first with the Heads of Expenditure in respect of which amendments stand on the Order Paper Supplement.

Head U – Prime Minister's Office

Head U – Prime Minister's Office. Dr Lily Neo.

Integration

Sir, I beg to move,

That the total sum to be allocated for Head U of the Estimates be reduced by $100.

Sir, immigration can mitigate the negative economic slowdown from the

process of ageing and the shrinking of population. What is the progress on the attraction of immigrants to Singapore? What are the efforts to integrate new immigrants well into our society to maintain a cohesive and harmonious community? For foreign students in Singapore, who may be children of immigrants or here on their own, is there any effort to encourage them to stay and contribute? Are there avenues to engage foreign students in both the Government and private schools?

Integration of Expatriates, PRs and New Citizens

Sir, I would like to ask the Deputy Prime Minister about the progress in our push to encourage integration amongst expatriates as well as PRs and new citizens.

This issue of integration is not new. It is something that has existed for many centuries. Three years ago, my secretary gave me a book on Alexander the Great. She obviously thought I did not have enough to read! Alexander the Great was a Macedonian. He pushed forward out of Macedonia and Greece towards Asia, conquered Persia and pushed towards Afghanistan. But he had a problem with integrating his Generals. In the course of it, he also wanted to retire some old Generals. His troops rebelled. He had to calm them down, which he finally did. Then, he sat down and had a dinner. And the first ring around the dinner were the Greeks, followed by the Persians. When I read that, I was thinking this sounds exactly like an Inter-Racial Confidence Circle to me. The idea that in 300 BC, this issue of integration was something that posed a challenge at that time was remarkable because it is an issue that we still face today. On the ground, there are concerns by Singaporeans about integrating with foreigners.

So, I would just like to ask the Deputy Prime Minister about the status and what efforts we have made and the progress in the past year.

Population Integration

Sir, all new citizens have different motivations in choosing to be Singapore citizens – some for their own career advancements, some to grow their investments or expand their businesses and some for their children's future. New citizens come from various ethnic, religious and cultural backgrounds. As such, it is a challenge for new citizens to first settle down in Singapore, and then bond with fellow Singaporeans in a multi-racial and multi-religious society.

With a growing population of new citizens, we need to do more to integrate our population. The setting up of the Integration and Naturalisation Champion (INC) at each constituency is a first step in the correct direction in integrating new citizens. However, feedback from my INC shows that many new citizens do not understand Singapore's history and heritage, do not understand our political system and achievements, and also do not understand our cultures and living habits.

Sir, we need to provide resources to support the integration efforts of the INC. New citizens should be encouraged to participate in community activities and play an active role in community bonding and integration.

Sir, one barrier to integration is actually language. I would like to urge the Government to consider providing free or subsidised language courses, especially English or Chinese, for new citizens. This will definitely facilitate communication and integration.

I wish to ask the Minister the following questions:

What are the key initiatives implemented to integrate new citizens with existing Singaporeans? How do we measure the effectiveness of these integration programmes?

How do we measure new citizen integration?

What are the plans to develop a sense of identity and ownership among all Singaporeans?

Population Policy

Sir, the Government wants to achieve a future population of 6.5 million for Singapore. I can understand the rationale for having a higher population than the current, but is 6.5 million the optimum number for the future? The question is: when is this future date?

I feel that in planning such a population growth, the Government may have adopted an "instant tree" mentality where after setting a goal, we want to achieve it tomorrow.

We have been ramping up the population relentlessly in the last couple of years. It is like we want a tree, but we are not willing for it to grow, for the roots to go down, the tree to go up, and for the ground to adjust. Our "instant tree" mentality is pushing the pace of population growth at unrealistic rates.

It has created a massive strain on available infrastructure, be it trains, property, food centres or our common spaces. Foreigners have also contributed to the fuelling of our property prices, as I mentioned in my Budget speech. Infrastructure will take time to build. I do not disagree with our policy to bring in talented foreigners here, but I cannot

I suggest that we slow down the intake, be patient about when we want to achieve the desired optimum population level. This way, we could also have managed our infrastructure growth better, adjusting the supply to match demand for homes, cars and our common spaces better.

Another problem with such influx is that with many foreigners here, we are creating the issue of integration. I spoke about this last year. Society needs time to adjust and to absorb the newcomers, and the newcomers need time to make themselves feel at home.

If we do not keep this trend in check, we may be closer to the New York or the London model, with many groups coming with all sorts of values, with everyone covering their own space. This may likely compromise our social cohesion that we cannot compromise on.

agree with opening up the floodgates and letting in so many, so quickly. We should have planned on a much more gradual increase of population in line with our ability to absorb and sustain it. And what if we got the 6.5 million number wrong and perhaps that it should be 5.5 million? We might then have overdone things and making it difficult for us to reverse if we try to bring in so many so quickly.

Exciting City of Opportunities

Sir, I particularly like the strategic intent of the Budget where the Finance Minister spelt out how his Budget would "create new advantages and fresh opportunities for Singapore in a competitive world".

He rightly acknowledged that infrastructure is only the enabler and the key to our success will be our people and our enterprises. In the Finance Minister's words, and I quote, "whether we hold our

Twenty-six years ago, I moved to Singapore from London because I saw Singapore as a city of opportunity. Today, it continues to be one, but 20 years from today, will Singapore still be a city of opportunity?

I believe that while competition to be a city of opportunity is getting more intense, with rapidly growing cities in Asia and other parts of the emerging world, challenging established leaders such as London and New York, Singapore has what it takes to be a leading long-term player in the premier league of global cities, but this is not without its challenges.

What makes me confident about Singapore's future and what are some of the challenges we are likely to face going forward? My confidence in Singapore's future stems from the fact that we have chosen the right strategy. Our ambition is clear, we want to be a global city, that is, a centre of commerce, finance and investment, a magnet that attracts companies, entrepreneurs and others engaged in global business and trade. We have set ourselves a target to have a disproportionately high share of corporate headquarters located in Singapore and we know that as a country, we have to offer distinct advantages for doing business in a global economy.

At the beginning of the 20th century, conventional indicators, such as port capacity and manufacturing capabilities, together with physical size, would have been used to define a city of opportunity. While still significant, such indicators have given way in the 21st century to technological factors such as broadband

In fact, Singapore is well into its journey of developing into a global city of opportunity. Some years back, we took some key strategic decisions on diversifying our economy, making it more broad-based and less dependent on a few major economies such as the US and Japan. Today, we have a growing service and knowledge economy to complement our high-end manufacturing base, our global schoolhouse initiative is beginning to have an impact and we have made bold moves to boost the leisure and tourism sector with iconic investments in lifestyle assets, such as the two Integrated Resorts and the Sports Hub, not to mention our museums, art galleries and our world-class National Library. Hosting events like the F1, the APEC meeting next year and the Youth Olympic Games in 2010 will add to our credibility as a global city.

So what are the challenges we are likely to face if we are to avoid relegation

For a small nation state like ours, to slow down in the race is almost as good as dropping out. We simply cannot afford to take the foot of the gas pedal, thinking that we can always come back at a later stage to forge ahead of an increasingly competitive field.

Yes, the needs of our heartlanders are very important, but we must not forget the pressing need to attract top talent and top quality enterprises to drop anchor in Singapore. We need a Budget for the common man as well as a Budget for the other stakeholders in our global city of opportunity. We need to address bread-and-butter issues for the less well-off as well as attract and retain the finest chefs for our world-class restaurants.

Sir, I submit to you that the future of our country will depend on how passionate we are in wanting to develop Singapore into an exciting global city of opportunity for not only our home-grown Singaporeans, but also for our expatriate population, some of whom may well sink their roots here. For Singapore to remain a city of opportunity, we must remain first and foremost a global city.

One of the consequences of globalisation is that talent is very mobile and is not constrained by national borders. Consequently, many of our talented Singaporeans are now living and working overseas. This trend is likely to continue, even increase. In the private sector, we find that our most talented young Singaporeans are hungry for overseas experience, attracted not only by the learning opportunities, but by the buzz, excitement and lifestyle of cities

However, we need to remain connected with them and eventually, woo them back home, or, at the very least, we should encourage them to be good ambassadors for Singapore in their adopted home countries. The Government has already recognised this and has started on some worthy initiatives, but more can be done perhaps in partnership with the private sector.

The mindset and aspirations of young Singaporeans also need to be considered in the talent development programmes that the Government operates including its very successful overseas scholarship schemes, which are presently accompanied by long periods of bonding back in Singapore. Set formulas like these have worked in the past but may not be successful today unless we tweak and refresh them.

The optimal population size of Singapore has been debated before. Regardless of whether it is 4.5 million, 5.5 million or 6.5 million, one thing is certain – based on our low birth rate, the bulk of any future demographic growth will have to come from overseas.

Compared to yesteryears, our "expatriate landscape" has changed. Singapore is not merely attracting the doctors, scientists and expatriates who belong to the financially privileged group. There is a growing group of "middle income" foreigners, often described as "expatriates on local terms" because they enjoy little or no fringe benefits. The reason why they are here is that Singapore can offer them good career opportunities, an attractive lifestyle with the charm of a multi-cultural society, top–class education and recreational facilities for their children and a safe and secure environment. They find that most Singaporeans are warm and friendly and

However, they face some dark clouds and anxiety on the horizon. Like other Singaporeans, this group is also affected by spiralling housing rentals and rising costs of living. The inflation rate is high which is eating into their income and curbing their purchasing power. They are frustrated with the long waiting list to admit their children to international schools. But they also have another big concern, that is, how will they be perceived by Singaporeans in the long run?

In recent years, our economy has experienced a good run but what if we have a slowdown and our employment opportunities dip? Will Singaporeans perceive foreign talent as a threat or a catalyst for economic recovery? Will the issue be played up and as a result our foreign imports feel less than welcome? Does our education system give sufficient mention to the contribution of our foreign imports? Do our schools teach our children and youth to appreciate the contribution of this group of potential Singaporeans? Do we dare to be more generous in our fiscal policy to attract and retain foreign talent?

Whilst our economy is still performing well, we should proactively do more to address the needs of our imported talent and seek to retain them.

Sir, I do not pretend to have the solutions to this potentially tricky issue which will almost certainly resurface at some stage in our political and social agenda. What I do know is that we

In conclusion, I would ask the Government to step up its efforts to attract and retain talent, both home-grown and foreign. Otherwise, our efforts to build the infrastructure for a global city will be futile. Without quality human capital, who will give us this global dimension, this excitement, diversity and vibrancy that is essential for Singapore to be a global city of opportunity?

place in the top league will ultimately depend on whether our people and enterprises are top quality, in every job and business they do". I cannot agree more with him. availability and telecommunications infrastructure and to cultural characteristics such as diversity. These changes suggest that in addition to being a global city in the conventional sense, a city of opportunity in the 21st century must offer more. But what? PricewaterhouseCoopers and the Partnership for New York City undertook a study to find answers to that fundamental question. The results of this study, which was published in 2007, found the requirements and features of 21st century cities of opportunity have changed – and will continue to change – in areas that impact new economy competitiveness and attractiveness: areas ranging from intellectual capital and transportation assets to such fundamental requirements as safety and security. These new indicators and variables, according to the study, better reflect what it takes to succeed in a vibrant knowledge economy. This is good news for Singapore because it plays to our strengths. from the premier league of global cities? My biggest fear is that when the Government is faced with domestic issues and concerns, perhaps brought about by an economic downturn, it may change course and slow down our efforts to become a global city of opportunity. such as London and New York. Many of them are not in a hurry to come back.they feel safe and welcome even though they are a minority. After a while, some of them become Permanent Residents. Several years later, they may find themselves so well integrated into the life in Singapore that they decide to become new Singapore citizens. A happy story so far. should pay more attention towards attracting talent to Singapore and address the issues that deter them from settling here. We should also help our home-grown citizens appreciate the role and contribution of our foreign residents and help these non-citizens to integrate into Singapore society. This is a sizeable group of people. If they have a good life and contribute more to Singapore, collectively, we will all have a better life. If they do not find it meaningful to live in Singapore, we will all lose in the long run.

Immigration

Sir, our Prime Minister announced in his 2006 National Day Rally speech about promoting our immigration programme overseas and further attracting foreign talent to our shores. While we welcome foreigners who can contribute to our society, we also need transparency in our immigration policies.

According to the Department of Statistics, foreign population has crossed the one million mark and has seen a 14.9% increase from a year ago, compared to 9.7% increase in the previous year. This represents the highest jump in at least seven years. Singapore is the fourth most densely populated country in the world with over 6,000 people per square kilometre. With the swift growth of the urban population, there could be an augmented strain on our

The City of Toronto, Canada, with a population of 2.48 million people is fairly similar to Singapore in terms of area mass at 630 square kilometres. It is already beginning to show signs of growing pains, such as traffic congestions and an inaccessible public healthcare system. I would like to ask the Minister: will the rate of foreigners coming to Singapore continue to increase? And, if so, what are some of the necessary steps we have to take to ensure our services – infrastructure, health, education and transport –can cope?

Housing prices have escalated due to market forces. And according to today's Today article, foreign students are already starting to feel the effects of the rising prices. The Straits Times has also reported that there is a shortage with the number of places in international schools as a result of the increase in expatriate population. I would like to ask the Minister if we are moving at too fast a pace. And are we giving our services and infrastructure enough lead time to cope with population increase from immigration?

Apart from infrastructure, another area of concern is our social and community integration. Social integration does not only include economic integration but also cultural integration. It requires an open society where there is acceptance of differences. In the same 2006 National Day Rally speech, the Prime Minister also commented that there are Singaporeans who may have reservations about immigrants and that they are worried about the competition that comes with them. I would like to ask the Minister how the Government intends to cultivate

Sir, while we are focused on luring and recruiting foreign talent, we may lose our own at the same time if we are not balanced and prepared in our approach. With the rising cost of living and the widening income gap, Singaporeans will feel the pressure squeeze and be tempted to flee abroad as already evident with the rate of approximately 1,000 people leaving per year.

Sir, Singapore needs foreigners, but Singapore will always need Singaporeans. I hope the Government will be able to allay our concerns with regard to our immigration policies.

city's resources, facilities and services. Demands on our physical and social infrastructure such as public transportation and housing will intensify. As it stands, the Circle Line will not be ready till 2012. integration and an inclusive environment with the expected number of immigrants. Will Singaporeans be able to identify with them and vice versa?

Social Integration

Sir, Singapore is aiming for a population of 6.5 million. What will be the projected ethnic make-up of this 6.5 million? What proportion will likely be citizens, as opposed to PRs and foreigners? This will have important implications on social cohesiveness and managing race relations in Singapore.

There are two types of risks, Sir, which foreign workers may pose to Singapore's national security.

Singapore's social make-up is still very fluid, and we are vulnerable to racial and religious tensions. No doubt foreign workers contribute to the success of our economy, but they may have had bad experiences back home which developed racial bias. The bulk of our foreign workers are probably not racially antagonistic, but there may be a small fraction of them who are dissatisfied with their experiences here. If these foreign workers are not smoothly assimilated into our society, tensions with other racial groups may influence them to spread their

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dissent to others from their hometowns and this could escalate into racial conflicts. Good work done over the years to make Singapore a cohesive multi-racial society could be undone quickly. What can the Government do to ensure that this does not happen?

Mr Speaker, Sir, at last year's Committee of Supply, I talked about the three key strategies of tackling our population challenges: promoting marriage and parenthood, engaging overseas Singaporeans, and encouraging immigration. This year, several Members have spoken on the issue of immigration and raised questions and suggestions on how to attract and retain foreign talent without weakening our social cohesion and eroding our national identity. These are important matters and I want to thank all Members who have spoken on these matters. Today, I shall focus on this particular area of our population challenge.

Mr Gautam Banerjee talked about Singapore being an exciting global city of opportunities and the need to attract and retain talent. We will continue to be a great city of opportunities if we do the right things, and do it rationally. Indeed, in order to stay competitive in this global economy, Singapore must be a great place to live, work and play for both Singaporeans and foreigners. Only when people are confident and comfortable with their living environment, will they consider major decisions such as getting married and raising children. Similarly, for those who have just come here, such an environment will strengthen their resolve and commitment to call Singapore "home".

Singaporeans today enjoy good infrastructure, reliable healthcare services,

Singapore has been cited by various international surveys and articles as one of the best places to be in Asia. The UK's Telegraph carried a glowing testimonial on 28th November 2007 on the "buzz" and excellent infrastructure here. Last year, the ECA International named Singapore as the best city in the world to live for Asian expatriates, while Mercer Human Resource Consulting ranked Singapore as one of the world's most liveable cities.

Singaporeans I met abroad have also told me that they have learnt to appreciate Singapore more now that they are based overseas. Some of them have come back to Singapore after spending many years in other countries. They returned home for the economic opportunities in Singapore, the high quality of education for their children, and because they miss their families and friends. We must continue to engage them. Following the very positive responses from the 6,000 overseas Singaporeans who turned up at the inaugural Singapore Day in New York last April, we will be organising Singapore Day

For now, Singapore is a talent magnet for many. However, the global competition for talent is very intense. Whether we like it or not, those who are capable and talented will be drawn to places where there are better opportunities and where they feel welcomed. And if Singapore does not welcome them, they will simply look elsewhere and they will then compete against us.

When Chinese Premier Wen Jiabao visited Singapore last November, he applauded Singapore's "无墙文化", or "no walls culture". He said that China had benefited from an open policy and likewise, "a small country like Singapore becomes big only when it embraces the world". His views were echoed recently, just a few days ago, by the Renmin Ribao (人民日报), which congratulated Singapore on our amazing capacity to take on major projects and bring in global talent in spite of our small size. If a big country like China can see value in opening its doors to the world, what more this "little red dot"?

Since broadening the immigration criteria in 2004, we have seen an average of 52,500 PRs and 12,800 new citizens granted every year. Last year, we had 63,600 PRs and 17,300 new citizens. In comparison, we had just 760 more babies last year compared to 2006. While the increase is heartening, we are far from raising our total fertility rate back up to replacement level.

Locals alone are not enough to meet our manpower demands. Contrary to Mr Inderjit Singh's suggestion that the rate of immigration is too fast and unrealistic, we

Last year, when 236,600 jobs were created, many companies had to turn to foreigners to fill the positions. For example, the financial and business services sector saw a net employment growth of 65,000 jobs just last year. While the majority of the jobs were filled by locals, we had to make up the shortfall with global talent. A number of businesses and investment opportunities have passed us by, simply because we are facing such an acute shortage of manpower and office space. Once lost, these businesses may not come back to Singapore, as they have gone to places where there are opportunities. Members have heard Mr Tharman speaking on this earlier.

Indeed, as a small city state with no other natural resources, we need others to join us, become part of us, and contribute to our community. However, Singaporeans must remain as the core of our population. We do not want to be like some Middle Eastern countries, where non-resident foreigners far outnumber the indigenous population. For Singaporeans to remain at the core, we must have more babies and encourage more suitable immigrants to become Singapore citizens.

Mr Singh, Ms Eunice Olsen and Mdm Ho Geok Choo have also raised concerns over whether we can cope with the influx of immigrants in such a short time. I understand their concerns and I agree with Mr Singh and Ms Olsen that we must plan ahead to ensure effective and efficient use of land.

So far, we have done well in this area, and we will do more. We had the Minister for Transport talking about expanding our roads and rail

A few Members mentioned the 6.5 million population as a target. Let me stress that 6.5 million is not a population target. We have never set that out to be a population target. What we have said is that it is a planning assumption, and we will build up our capacity to accommodate more people should the need arise. Our long-term population may well be less than 6.5 million. What is important is that we must be able to sustain a viable and diverse population, one that can help us to continue to grow our economy and preserve our Singaporean way of life.

Let me now address the Members' specific call for greater social integration. Like Singapore, many other developed countries compete aggressively for talented people from around the world in order to increase diversity and augment the population. However, they have paid less attention to the integration of the newcomers into the local society. This has resulted in clashes and disputes between communities in countries such as Australia, France and even the United States. Such problems can also arise in Singapore if we do not make the effort to integrate our immigrants.

In this regard, I think we have fared better than most other countries. Our migrant roots have, in a way, enabled us to be more understanding and welcoming

Mr Singh suggested that we have been opening the floodgates and letting in too many foreigners. We need to distinguish between long-term immigrants and the more transient foreign labourers in Singapore. Many of the latter are here because of the demand created by the resurgent economy in the past few years. They help us fill the jobs in industries where there are not enough Singaporeans. Indeed, without them, the problem of inflation that Mr Singh highlighted earlier, might worsen, as our companies still struggle to fill jobs. Whether they are long-term migrants wishing to make Singapore their new home or transient workers helping to keep our industries buoyant, we must be more understanding and accommodating to those who are here to contribute to our economy. We should welcome them. We do not gain from adopting a closed-door policy.

But integration is a two-way street. Integration of people takes time and it is a never ending process. Ms Indranee Rajah just now mentioned the example of the time of Alexander the Great. Those Singaporeans whose parents were immigrants will remember how long it took for their parents to fully integrate into Singapore's society. As we achieve economic progress, we can also do better to cultivate a more gracious and accommodating society. Just as the Chinese saying goes, qian li zhi xing, shi yu zu xia (千里之行, 始于足下), we must take the first step towards this goal. This is what Minister Mentor meant when he wished for Singapore to reach the level of

Locals and newcomers must reach out to one another, to bridge gaps and narrow differences, and to build on our shared beliefs and vision. There is no scientific formula for integration. It is about people-to-people relations; we must encourage integration everywhere – in schools, at the workplace, in the neighbourhood and the larger community.

Dr Lily Neo, Ms Indranee Rajah and Dr Teo Ho Pin asked for an update on our efforts to integrate new citizens. Let me now elaborate our efforts in this area.

The school environment is a natural setting for close daily interaction between our young immigrants and Singaporeans. Through the formal curriculum and co-curricular activities, our schools help students to better appreciate Singapore's history, culture and community, and give them opportunities to learn and play together. The Ministry of Education has recently set up a unit to enhance the integration process in our schools.

We have many immigrant teachers and students who have adapted well and are contributing in our schools. Teachers like Mr S. Ponnalagu from India who not only teaches the Tamil language but is also an active grassroots member at his Residents’ Committee (RC). Another teacher, Madam Zhou Liang, was so impressed with the environment and security in Singapore that she took up Singapore citizenship in 2006. There is also Mr Simon Charles Reynolds, an Assistant Director with the MOE. Originally from Britain, he became a PR more than 15 years ago, married a Singaporean and they have three teenage children - all Singapore citizens. Among the students, Sri Thiri Tun from Myanmar and Kim Jin Ju from South Korea, are

The workplace is another important platform for integration.

clean air and water, and an efficient transportation system. We invest in our people, giving top priority to education. We have the Esplanade, and the Integrated Resorts and Sports Hub are to come. We have staged many international conferences, such as the IMF/World Bank Summit, the Shangri-La Dialogue, the International Bar Association Meeting and, most recently, the Singapore Air Show Aviation Leadership Summit. More such events will be staged here. The world's first Formula One night race will take place in Singapore in September this year. We also succeeded in our bid to host the inaugural Youth Olympics. That such major events are held here reflect the trust that people have in our ability to deliver what we promise.2008 in Melbourne this October. This event will allow Overseas Singaporeans in Australia a chance to get updated on the many exciting developments in Singapore, and rekindle and renew their connections with home and friends. still need more people to sustain our economic growth. Mr Banerjee is right to say thatwe must not slow down our ability to attract foreign global talent, just because some people feel uneasy about it. infrastructure, and MND will provide more space for Singaporeans, in terms of greenery, parks and housing. Singapore's excellent living environment has become our competitive advantage to root residents and attract investments and talent. MND is confident that, with creative planning and technology, Singapore can accommodate a larger population without compromising the quality of our living environment. While there will be trade-offs among different land use options, we can meet the needs of a larger population if we plan and invest ahead now. towards newcomers, but we should not be complacent. There are some Singaporeans who still harbour unwarranted fears and insecurity. Instead of being fearful, we should be more confident of ourselves and our future.Austria in 10 to 15 years, ie, to reach their quality of social graces, culture and lifestyle. Head Prefect and Prefect respectively at Yu Neng Primary School.

There are already several ongoing efforts by companies. I am told that PricewaterhouseCoopers (PwC) tries to familiarise its foreign staff with the local culture and make them feel at home. Only last week, they were treated to a Chinese New Year "Lo Hei" lunch and given insights into the significance of tossing the "yusheng". Why does PwC do this? I think the answer is quite simple – an integrated and motivated workforce is a more productive one. The value of such initiatives cannot be underestimated.

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I would like to see more employers follow PwC's lead and organise such programmes for their staff. For employees, whether Singaporeans or new immigrants, I hope they will put in more effort to get to know their colleagues better; they can easily do this at corporate events like the year-end function, during after-office drinks or even over a simple meal at lunch.

At the community level, I am encouraged by the many integration initiatives involving locals and newcomers themselves.

As Dr Teo has mentioned, the People's Association initiated the Integration & Naturalisation Champions (INCs) programme, to reach out to newcomers and engage them in local activities. Since November last year, the PA has appointed 690 INCs to spearhead integration efforts in the 84 constituencies. The focus is on reaching out to foreigners and helping them integrate through community activities. I am also heartened to see many Singaporeans, such as Mr Richard Hoe and Mr Bob Shaw, who have taken the

Likewise, many immigrants reciprocate by being involved in community and grassroots activities. There are 900 PRs here who are volunteers at our grassroots organisations, including Englishman Mr Anthony Fulwood of Bukit Panjang, Chairman of Zhenghua INC Committee; and recently-naturalised citizen, Mr A Swaminathan, who is the Secretary of Jurong Green CC Indian Activity Executive Committee. For them, lending a hand is their way of giving back to the community which once helped them settle into life in Singapore.

Local community organisations, such as the Singapore Federation of Chinese Clan Associations (SFCCA) and Singapore Chinese Chamber of Commerce & Industry (SCCCI), have also stepped up efforts to integrate new immigrants through activities in their areas of interest. The SFCCA is organising a seminar with new Chinese immigrant clubs during the Chinese Cultural Festival next month to discuss how new immigrants can better integrate into and contribute to our society. New immigrant associations, such as the Kowloon Club, Tian Fu Club and Hua Yuan Association, worked with the SFCCA to host a Chinese New Year's Eve Reunion Dinner earlier this month for Singaporeans and new immigrants. The Kowloon Club also joined in the Chingay procession for the first time this year. Efforts are also underway by our Indian community leaders to reach out to and integrate the Indian immigrants into our society.

I welcome and support more of such ground-up initiatives. It is through such efforts that we can promote greater interaction, understanding and, ultimately, integration of locals and newcomers. We have to work together to break down barriers and dispel unwarranted biases.

Sir, attracting immigrants to Singapore is and will remain a key strategy for our long-term growth and prosperity. As Singapore becomes even more globalised and cosmopolitan, more foreigners will want to come here to live, work, study and play, with some settling down permanently to eventually make Singapore their home. So let us open our doors, minds and hearts. We must work together, be welcoming to new immigrants and help them integrate into our community. There is a need for mutual acceptance, adjustment and respect. We can then live as one harmonious family to create even greater possibilities for ourselves, our children and future generations to come.

initiative to reach out to new immigrants. Mr Hoe engages new citizens and PRs through fruit parties and dragon-boating activities in Punggol East while Mr Shaw organises cricket matches in Marsiling. The PA will soon introduce a host of family programmes whereby foreigners will be paired with local families to enhance mutual understanding and integration.

Election Process

Sir, the smooth conduct of an election is vital to the democratic process. When an election is called, the country is in a state of transition. The nation's leadership has completed an old term, a contest begins for a new term. If any disruption should occur during the election process and the election is not seen to be carried out to its satisfactory conclusion, then it will affect the legitimacy of the new leadership and be even detrimental to the overall confidence level in our society.

Since our independence, we have gone through 10 general elections and three presidential elections. Every one of them was conducted smoothly. But I do not think we can therefore conclude that future elections will always be uninterrupted like before. I can think of

Climate change is causing chaos in the weather patterns in many parts of the world. We here have seen severe storms in recent years, leading to roads become impassable to traffic due to floods and fallen trees. If this should happen during the critical period of 11 am to 12 noon on Nomination Day, and some would-be candidates cannot get to the nomination centres on time, thus leading to their disqualification, it would certainly be seen as unsatisfactory by all the political parties and the voters too. Similarly, should severe weather occur on Polling Day and many voters cannot go to vote, it would also lead to undesirable outcomes.

A disruption can also be caused deliberately by hostile elements. It can be in the form of a localised bomb hoax or a major terrorist attack. Individual neighbourhoods or large areas of Singapore may have to be cordoned off during the election time affecting the smooth movement of candidates, election agents, officials and voters, and the conduct of election activities.

I would like to ask the Prime Minister's Office whether it has contingency plans to deal with the disruption to the smooth conduct of an election and whether rules will be introduced to take into account such disruptions should they occur to ensure that law and order pertaining to the election will be quickly restored and upheld, and be seen to be upheld.

the possibility of disruption caused by natural forces.

Mdm Cynthia Phua is not here.

General Election

Sir, over the years, the social landscape in Singapore has changed. And I feel that the Prime Minister's Office should do an overall review of the current General

Due to globalisation, there will be an increasing number of Singaporeans who will work and live overseas. I am sure that they will be happy to be given once in five years' chance to cast their votes.

Elections system, especially a review of the registration criteria for overseas voters.

Election Matters

Sir, a first-time candidate in the last General Election, I found that not all voting centres are barrier-free and elderly-friendly, with nearby amenities. Many elderly voters in my ward had to be assisted to make their way to the voting centres. Some had difficulty voting due to either lack of literacy or simply poor eyesight.

I ask the PMO to be more voter-centric to include these Singaporeans.

Sir, I also saw in the last General Election the predominant use of traditional media and methods, such as the hard copy newspapers, brochures, TV, radio, posters on selected lamp posts and garung guni type lorries and loudhailers.

Singapore is one of the most plugged-in and Internet-savvy countries in the world, a world of blogs, SMSes, podcasts, webcasts and vodcasts. The benefits of new media are an extensive reach and access, anytime and anywhere. Overseas voters can also gain access to administrative details, candidate profiles and platforms.

The downside, of course, is the potential inaccuracy of information and possible turning of General Elections to Hollywood stages where the most telegenic and persuasive get viewership. But there is no turning back of this trend of use of new media.

So I ask the Government to consider starting the use of a more progressive blend of old and new media in the next election.

Sir, I want to thankMr Matthias Yao, Ms Lee Bee Wah and Ms Denise Phua for their comments.

Ms Lee Bee Wah suggested that the Prime Minister's Office do an overall review of the electoral system and processes. This has always been done after every General Election (GE). Following the 2006 GE, I appointed a Committee to review the conduct of the election, including issues concerning overseas voting. I will highlight the more significant changes and improvements that will be implemented for the next election.

Overseas voting was conducted for the first time in the 2006 General Election. With more Singaporeans going overseas to work, study or to be with their immediate family, we now have a significant diaspora of overseas Singaporeans. They would want to have an opportunity to vote at a General Election. That being so, the Government will further liberalise the criteria to enable more Singaporeans overseas to qualify to vote while maintaining the spirit of the law that only those who continue to keep their links back home should be entitled to vote. The Government has decided to shorten the residential period requirement from the current two years out of the last five years, to 30 days out of the last three years before the cut-off date for the registers of electors. This will be the only residential period requirement for an overseas Singaporean to meet in order to vote. An overseas Singaporean who meets this residential period requirement must also maintain a local address with the Immigration and Checkpoints Authority (ICA) in order for him to have his name included in a constituency's register of electors.

Some Members mayask, why 30 days out of the last three years? We believe that it is reasonable to expect overseas Singaporeans to come home to visit their families and friends for at least 30 days over a three-year period, giventhat most citizens working abroad would have an average of 21 days of annual leave. We expect that they will spend at least half of their leave at home in Singapore. A three-year period is also considered a reasonable base period to use for the computation of the residency requirement. This is a good balance between a one-year period, which can be perceived as too tight, and the current five-year period. The 30 days out of the last three years residency requirement, together with the need for an overseas Singaporean to maintain a local contact address with ICA for his name to be entered into a register of electors, will ensure that the eligibility for overseas voting is extended to only those Singaporeans who maintain links to Singapore. All overseas Singaporeans who wish to vote will just need to fulfill this single, new and more liberal residency requirement, regardless of why they are overseas. There will no longer be any separate eligibility for SAF personnel, Government officials and Government scholars on full-time service or full-time study overseas, Singaporeans employed overseas by approved International Organisations, and their immediate family members.

When the registers of electors were last revised in early 2006, we learned that the United Kingdom (UK) has a law requiring foreign residents from the Commonwealth countries, for which we are one, to register themselves in their electoral registers. As a result, some Singaporeans residing in the UK have unwittingly found their names appearing on the UK electoral registers.

Our election law currently disqualifies Singaporeans as electors if their names are entered in the electoral registers of other countries. The rationale for this provision is to exclude any citizen who could be a potential participant in the political process of a foreign State. However, our law does not make any distinction between those who volunteer to be included in the foreign electoral registers and those who are included as a matter of course. The latter has become prevalent in foreign States facing a declining voter registration trends in the recent years. Our provision will be refined to remove this disqualification for overseas Singaporeans who, by reason of their residency status in a foreign country, find themselves included involuntarily in that country's electoral registers.

Sir, the current registration process for overseas electors requires an applicant to submit a completed and signed registration form, either by hand or registered post, to any overseas registration centre or to the Elections Department directly, within a 21-day period. This registration procedure will be simplified. The Elections Department will provide for online registration via the Internet, and eligible voters can use their SingPass to authenticate their identity in place of their signature.

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Those who want to restore their names on the Registers of Electors will also be able to do so online. The Elections Department may ask them for supporting documents for verification. This online facility will make it more convenient for Singaporeans, especially those who are overseas, to apply to restore their names on the Registers of Electors.

The introduction of such online facilities for registration of overseas voters and the increased use of

Currently, every overseas elector is assigned an overseas polling station to cast his vote. This assignment is done at the time of registration. To cater for situations where voters return to Singapore or relocate to another country, overseas electors will be allowed to deregister or change the assigned overseas polling station at any time, up to when the writ of election is issued. This will allow changes to be made in time for updating the registers for the Polling Day. It will not be advisable to allow changes when the election period has already started, as it will pose a lot of operational difficulties.

Sir, while we try to have more overseas polling stations to allow more Singaporeans overseas to access to vote overseas, the selection of a city for overseas polling must take into account several factors. Firstly, there should be a critical mass of Singaporeans living in the city and country. Secondly, the city must have Singapore Government managed facilities which enable the officials to exercise operational command and control, bearing in mind that it is not Singapore. Thirdly, in order to ensure that we are able to optimise our limited resources, the city and country should not be nearby where Singaporeans can travel back to Singapore to vote on the Polling Day with relative ease.

Based on these considerations, the cities where we can site overseas polling stations are those where we have Consulates or Missions. So far, eight cities where overseas polling stations can be set up in our Missions are Canberra,

Ms Denise Phua asked about voter education and especially helping the elderly take part in the election process. The Elections Department will take a proactive approach to educate our voters. A mix of electronic services and traditional media channels, such as the Internet, mobile phone platform and mass media like the newspapers and TV will be used.

During the election period, educational brochures on what are required of the voters in order to cast their votes, and the "Do's" and "Don'ts" of the voting process will be mailed to every household. Softcopies of the brochures will also be emailed to overseas Singaporeans who have registered themselves as overseas voters. In addition, educational videos explaining, in simple language, on the voting procedures on Polling Day and how the secrecy of vote is ensured throughout the whole election process will be produced for television broadcast, video streaming from the Elections Department website and for distribution to community centres, community clubs and RCs. The Elections Department will also study the various locations where polling stations are conducted so that they are easily accessible even by those who need help because they have physical disabilities or they are old.

Sir, from the next election, the Elections Department will engage a professional call centre operator, operating 24 hours during the election period, to handle queries from local and overseas voters in the four official languages.

To supplement the call centre during the election period, members of the public

Ms Lee Bee Wah called for better interface between candidates and election agents. Sir, the Elections Department will improve its customer interface with candidates and election agents during different phases of the election. According to feedback and enquiries received by the Elections Department at previous General Elections, it is clear that some candidates and agents are simply not sure about how certain rules and procedures operate and how they govern the election activities. To help them better understand such rules and procedures, the Elections Department will produce a guide for candidates and their agents. The guide will be made available on the Elections Department website and will also be printed in booklet form for distribution. However, I must stress that this guide is only a "guide" and not a legal authority or document. While we try to provide as much accurate and useful information as possible in the guide, the publication is not a substitute for the law. Candidates and their agents should refer to the Parliamentary or Presidential Elections Act and the relevant regulations for a detailed description of the law and seek advice from the lawyers, when necessary.

Sir, the Elections Department will also enhance its e-services to allow candidates and election agents to perform certain transactions online as far as practicable and allow them to download softcopies of the relevant forms which they need to use during the election from the Elections

To tighten the procedures and workflow for accepting and tracking submissions from candidates and election agents, the enhanced computer system will capture applicants' data upon receipt of the applications. This will ensure that the applications are processed in good time. The system will also print out acknowledgement receipts for all submissions received.

Sir, Mr Matthias Yao asked about contingency planning in dealing with the scenarios he sketched out although none has happened in past elections. I am pleased to say that the Elections Department has started to identify possible threats such as natural calamities or other circumstances that may disrupt the conduct of elections during nomination, polling and counting activities. The Elections Department would develop appropriate plans and measures to deal with each of them. And when these are ready, it would be presented to Parliament in the form of an amendment in the law.

The current election laws and regulations do not cater for crisis situations, such as adverse weather or bomb hoax. The Elections Department officials have a very limited range of responses to deal with any such contingency adequately. Legislative amendments will therefore be required to enable the Returning Officer to relocate

The Elections Department will consult the Attorney-General's Chambers on the legislative changes to effect these improvements. When ready, the Amendment Bills will be presented to Parliament for approval.

information technology and systems in the backend processing will enable transaction and processing time to be significantly shortened. The registration period for overseas voters can therefore be longer than the current 21 days. The registration period will be extended to the date when the writ of election is issued. Tokyo, Beijing, Shanghai, Hong Kong, London, Washington and San Francisco. We will now add New York to the list. can also go to or phone up the community centres for any queries on the election. They can also visit the Elections Department website for information and e-services, send an email to the Elections Department's Feedback Account or send an SMS using their mobile phones to check on their voting eligibility and the location of their assigned polling stations. Department website. In addition, it will also improve the application software on the "CD-Registers of Electors" that candidates can buy. Improved version will contain more user-friendly features, such as allowing the user to save all entered information for subsequent editing. More forms will be added to it, such as forms to apply for certificates from the Malay Community Committee, the Indian and Other Minority Community Committee and the Registrar of Political Donations. the venue of an election activity or to defer the activity deadline by either abandoning or restarting the activity or suspending and resuming the activity later. This will give us the flexibility to respond to contingencies that could disrupt time-sensitive election activities on Nomination Day and Polling Day, while protecting public safety and ensuring the integrity of the election process.

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