Hansard, 2009-02-05

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2009) To (2009) Ms Denise Phua Lay Peng 05 Feb 05 Feb Dr Loo Choon Yong 09 Feb 13 Feb

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 2009/2010 (Paper Cmd 1. of 2009) be taken today. – [Mr Mah Bow Tan].

Resolved,

That, notwithstanding the Standing Orders, the Second and Third Readings of the Supply Bill for FY 2009/2010 and the Supplementary Supply (FY 2008) Bill for FY 2008/2009 may be proceeded with immediately after the conclusion of the proceedings on the Main and Development Estimates for FY 2009/2010. – [Mr Tharman Shanmugaratnam].

Order read for Resumption of Debate on Question [22nd January, 2009],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2009 to 31st March, 2010.". - [Minister for Finance].

Question again proposed.

Mr Speaker, Sir, I speak in support of the Budget.

This is a bold and forward-looking Budget which seeks to address key challenges faced by businesses and Singaporeans in these trying times and also prepare us to seize opportunities when the economy recovers. Key concerns of businesses at the moment are managing cash flow and costs, and excess manpower as a result of over capacity. Workers are concerned about losing their jobs – about losing their income to support their families.

The Special Risk-Sharing Initiative in the Budget will help companies secure loans to fund their operations and thus save jobs for workers. But from the feedback that I have received and comments by Members in the last two days, there is still much to be done by the Government to encourage and to facilitate banks to lend to viable companies. The Jobs Credit Scheme, SPUR, as well as measures recommended in the recently released Tripartite Guidelines on Managing Excess Manpower, such as shorter work weeks and temporary lay-off, will help companies manage their wage costs and retain their workers.

One of the key aims of this Budget is to minimise retrenchments. This benefits both businesses as well as workers. Businesses that keep their workers with them through the downturn are better equipped to respond to pick-up in demand. There will be savings in terms of time and cost, from not having to hire new workers and train them to get them up to speed. It will also help to keep up the morale of their workers, which could prove to be invaluable in both good times and bad. Businesses can enhance their competitiveness further by taking advantage of SPUR and the downtime to send their workers for training and skills upgrading to improve their productivity and service standards. Here, I would like to urge employers not to shed their workforce too quickly especially with all the measures that have been put in place to help them manage their costs of operation. Having said that, I think it would be wrong to prohibit or strongly discourage employers from retrenching at all, because it will certainly result in possible more job losses if the companies are no more viable. I remember some 10 years ago when South Korean unions fought the government when the latter attempted to do away with a legislation that prohibited retrenchments. The unions were trying to protect the rights of workers to jobs, but the outcome was vastly the opposite as companies were not able to downsize when needed. We must not be tempted to take a similar path.

Workers, on their part, may have to accept short-term sacrifices, such as pay-cuts where necessary, to keep their jobs. They should also adopt a positive attitude towards training to enhance their employability and adjust their expectations. The network of career centres run by NTUC, the e2i, the CDCs and combined self-help groups are doing their utmost to help train and place Singaporeans in available jobs. Those who are earnestly looking and training for work are assisted, if they qualify, through the Work Support Scheme run by the CDCs. I would resist giving automatic financial assistance to job-seekers in the form proposed by Ms Sylvia Lim.

Businesses, unions, workers and the Government will have to work closely to save jobs and to get through this economic crisis together. I must say that this is a source of our pride as much as it is a source of our social strength – this tripartite network that we have established over the years. But this does not happen naturally. As a contrast, just last Thursday, unions in France organised a collective strike across the country to protest against the French government's handling of the economic crisis. Their main grouse was that the French government had spent billions to bail out the banking and auto industries but had not done enough to protect wages and jobs.

In Singapore, we have built up a strong partnership and trust among employers, unions and the Government. This has enabled us to collaborate in a productive manner to deal with past recessions, and we had emerged from these crises much stronger. We should take this opportunity to strengthen this partnership, to overcome the challenges posed by this recession, and emerge from the recession stronger and more united. I would like to encourage employers to be open about the business situation with their unions and workers, and consult them on measures to better manage operational and wage costs to survive the downturn. Retrenchments should only be adopted as a last resort.

While the Budget has generally been well received by the public, some concerns have been raised. I would like to speak on some of these concerns.

There is a view that this Budget, and the Jobs Credit Scheme in particular, help businesses, but do not offer enough help to Singaporeans. I would like to challenge this view. This Budget doubles from last year the GST credit that households will receive. On top of that, for the low-wage workers, the Budget provides for a special WIS payment to supplement their income. I think these two measures alone are very helpful to low-wage workers.

The Jobs Credit Scheme is an innovative scheme which helps workers by saving jobs. Employers receive 12% of the first $2,500 of the wages of each employee who is on the CPF payroll. The more local workers employers keep on their payroll, the more Jobs Credit employers stand to receive. This motivates employers to keep more workers on their payroll and explore other means to reduce wage and other operational costs. I was heartened to hear Nominated Member Dr Loo Choon Yong spoke yesterday about how the Jobs Credit that the Raffles Medical Group, which he chairs, would receive from the Government will enable it to employ a hundred more employees, if needed. I hope the Raffles Medical Group and other forward-thinking employers will consider employing more workers, or at least retain as many workers as their operation can possibly allow and need.

There are suggestions that the Government should give the money directly to Singaporeans instead. Would this be more effective? I do not think so. I think it is more effective to use the money to save jobs. Let us consider the case of a Singaporean worker who earns $2,500 a month. Giving his employer 12% of his wages, which comes up to $300 per month, could help the employer to retain him. By keeping his job, he will continue to receive $2,500 monthly from his employer plus his employer's monthly contribution to his CPF account. This compares much more favourably to the scenario where he loses his job and the Government gives him the $300 a month directly. Nonetheless, I would like to urge the Government to monitor the situation closely and extend more assistance to the unemployed should the job market worsen.

There have also been concerns raised that drawing from past reserves to fund some of the initiatives in this Budget will create a precedent and pressure for the Government to tap on more of our reserves in future. As the Finance Minister has explained in his Statement, this year's Budget comprises extraordinary measures to meet the challenges posed by the exceptional global economic crisis that we are in. Prudent and timely use of past reserves to fund the Jobs Credit and the Special Risk-Sharing Initiative will help minimise the economic and social fallout in Singapore from the global economic crisis, and prevent further problems from developing. This year's Budget should not create expectations that past reserves will be used for future economic downturns, and I would strongly urge the Government not to succumb to pressure to use the reserves as soon as we face another downturn.

We should always remember the moral of the story of the goose that laid the golden eggs, and not kill the goose that lays the eggs. The "goose" in this case refers to our reserves which have come about through our hard work and savings over the past few decades. When this crisis is over, we must ensure that we do not overlook the need to continue growing our reserves, to provide us with the resources to deal with future challenges. To do so, the tripartite partners will have to continue to work closely to create the conditions conducive for economic growth.

Sir, let me continue in Malay.

(In Malay): [For vernacular speech, please refer to Appendix A *.] Sir, I feel that all Singaporeans, regardless of race or ethnic group, must draw lessons from the problems that we are facing now. This is a global problem that is experienced by every country. Nevertheless, Singapore is probably one of the countries that is affected even more by this problem, because we have an economy that is vulnerable to the turbulent changes and challenges around the world. The most important lesson that every individual and family could take from this is the fact that if we have sufficient and intact savings, we will be able to face many challenges affecting our families.

Our savings at the national level, which we have built up for many decades, have enabled us to make use of almost $5 billion to help Singaporeans go through this recession, particularly in order to save their jobs. Imagine the problems we have to face within our families, whether it is loss of income or jobs, health problems and so on, and we are able to make use of our savings that we have built up over the years.

So I hope that the CPF Board and the Ministry of Finance will enhance efforts to assist Singaporeans to gain better knowledge in financial literacy and education. This is very important because some Singaporeans, who are now facing financial problems in their families, are actually those who were unable to properly manage their spending or finances. I hope the Ministry will enhance this effort. Finally, I hope Singaporeans of all races will learn lessons from the problems that we are facing now, and help themselves as well as their families, by adjusting their mindset in order to enhance their abilities to find new jobs.

*Cols. 2067-2068.

12.15 pm

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

Many Singaporeans have commented on measures in saving jobs for Singaporeans, enhancing business cash flow and competitiveness and supporting families as being bold and innovative. This is juxtaposed against a backdrop of continual rapid deceleration in global demand for goods and services, resulting in business failures and massive loss of jobs. We all know that the worst has yet ensued for the world-wide economic meltdown.

Sir, I wish to focus my suggestions in three broad areas; first, job creation for Singaporeans; second, more help for Singaporeans; and, third, infrastructure for an ageing population.

Sir, the Jobs Credit Scheme

is a laudable initiative to cut costs to save jobs. Nevertheless, as one businessman remarked: "There is no point paying 88% of a worker's salary if there is no business in the long run". For the business community, the crux lies in generating greater business demands so that it is commercially viable to sustain and create jobs for Singaporeans.

To help generate businesses demand, Government should remove weekend car park charges for all public car parks. This will drive greater vehicular and human traffic volume, particularly within the town and city centres. This principle is akin to the HDB Family Season Parking Scheme which makes it easier for children to visit their parents regularly.

Government should also consider providing incentives to building owners or car park operators of shopping malls and hotels, to provide a first three-hour free car parking facility. Such is the example of IMM at Jurong East. The first three-hour free parking facility has made it attractive to shop at IMM. Today, IMM enjoys an average of 1.5 million shoppers per month despite the economic downturn.

To further stimulate domestic business demands, Government could also provide incentives for our Public Transport Operators to implement a flat-rate fare pegged at $2, applicable on weekends. A similar scheme in Newcastle, England, has reported an increase of 8% in travel on its buses and Metro in the first four months of its implementation.

Even as the economy slows down, there are still job opportunities in some industries. For instance, the education, healthcare and social service sectors will continue to hire workers. Particularly in both the healthcare and social service sectors, including voluntary welfare organisations and religious organisations, the demand for workers is very likely to be sustained, as our population ages.

To capitalise on their recruiting capabilities, I would like the Finance Minister to consider expanding more attractive Jobs Credit to these hiring sectors, in order to encourage them to employ more Singaporeans.

In the same light, where such industries or private companies hire mature Singapore workers, defined as those above 40 years old, on a contractual or temporary basis, the Finance Ministry could reward their acts by extending more attractive Jobs Credit to them. This shall be a positive inject into the looming job market where fewer companies, logically speaking, are more adverse in employing mature workers.

In short, the above proposals have added another dimension to the announced Jobs Credit Scheme. Besides the emphasis to retain existing workers, it is hoped that the scheme could also incentivise hiring sectors to employ more Singaporeans.

To further build capabilities and enhance corporate governance, Government should seize the opportunity to incentivise social services sector and religious organisations to hire more experienced PMETs, the group which is likely to be affected most during today's downturn.

To encourage PMETs to take up training to equip them for jobs in these sectors, I would like to propose for the Finance Minister to consider extending training allowance for PMETs. Currently, each registered unemployed job seeker enjoys up to $600 training allowance a month from the Career Centre. Since most PMETs who are retrenched or suffered a pay cut are likely to have some savings accumulated from the preceding years of employment, it is suggested that PMETs enjoy up to $300 training allowance per month. This move will encourage retraining and at the same time promotes self-reliance among the PMETs.

More could still be done to help Singaporeans cope with the challenging times ahead.

Sir, despite the S&CC rebates and Utilities Save, some households face legal actions or disconnection of utilities supply resulting from their inability to pay the S&CC charges and utilities bills. Based on the Town Council's experience, 40% to 60% of the households in arrears are those living in 4- and 5-room HDB flats. The use of annual value or HDB room type as a proxy for the disbursement of S&CC rebates therefore does not provide adequate assistance to these households.

Thus, I would like to urge the Finance Minister to consider providing more support for these 4- and 5-room HDB households. In addition, to avoid the disconnection of utilities supply, I propose that the U-Save be disbursed through GIRO on a monthly basis to pay part of the current month's utilities bill. In the same light, the Government should consider restructuring the payout of GST credits and rebates to be on a monthly basis through GIRO. Smaller and monthly payouts would also encourage prudent domestic spending.

Sir, air-conditioning consumes the most energy in every household. Many of the air-conditioning units which were installed many years ago are not eco-friendly.

To promote our sustainable development plan, I would urge the Finance Minister to provide incentives or rebates to households to replace their air-conditioning units to approved eco-friendly models. This could be a one-off goodwill grant similar to the case of repairing spalling concrete in HDB flats. This would not only increase our carbon footprint but would help many households to have savings in their monthly utilities bills.

The looming recession should also be viewed as a window of opportunity for community organisations, such as the CDCs, to instil a sense of positivity and rally Singaporeans behind a common cause, such as promoting healthy lifestyle, especially among the elderly.

The idea of health is wealth is especially true in challenging circumstances. I would, therefore, like to urge the Finance Minister to provide more funding support for the CDCs to promote active and healthy lifestyle among our residents.

The five CDCs shall be publishing a guide titled "Recession and Resilience Roadmap" to help Singaporeans cope with the recession. The roadmap serves as a help directory to Singaporeans who are retrenched, suffer big pay cuts or those who need emotional support. More details on the guide would be shared at the end of this month.

Sir, I support the increase in capital expenditure to expand and accelerate infrastructure spending to build a better home for Singaporeans. There are two areas which I hope the Government would consider in making our built environment more elderly-friendly.

First, our built environment still lacks barrier-free access and facilities. Elderly and the physically disabled are still not able to move freely and independently. The Town Councils have limited financial resources to expedite the construction of these facilities in the HDB heartlands.

I would like the Government to increase the Community Improvement Project Committee Fund (or CIPC) to enable the Citizens' Consultative Committees (CCCs) to take ownership and speed up the implementation of barrier-free facilities in their respective constituencies.

Secondly, we need to expand and accelerate the social services infrastructure.

A study reported by Reuters has crowned pedestrians in Singapore the world's fastest movers, walking 30% faster than we did in the early 1990s. This is evident from the level of stress ordinary Singaporeans face in their everyday life. In my weekly Meet-the-People Sessions, I am seeing more cases of family hardships and disputes, including breadwinners struggling and striving to make ends meet.

To support families at risk, the Government should expand the scope of services by the Family Service Centres (FSCs) and build more FSCs to make them accessible by those who require their expertise. FSCs could be scaled up to be a one-stop centre for counselling, family support, childcare and student care services. Where possible, we should co-locate FSCs with polyclinics or family clinics or integrate healthcare and family care services so that they can complement each other to provide holistic support to families at risks. Sir, family members of needy families could suffer from chronic illnesses which could be hereditary.

By providing healthcare and family care at an early stage, we can help those chronically sick to remain employable and self-reliant. At the same time, we can help their children to avoid the chronic diseases or manage the diseases at an early age. This will definitely reduce the healthcare cost burden of these families and the country. The integration of healthcare and family services should include healthcare and family care education, training of caregivers, counselling and other family support services.

As for the elderly, we should provide more Senior Wellness Centres to keep them active and healthy. The Government should provide more funding to build more Senior Wellness Centres at community clubs and centres. More funding should also be provided to organise fitness programmes for the elderly, such as brisk-walking, qi gong, taiji, etc.

Sir, in these trying times, we must do more to stay united as one people.

Sir, I support the Budget.

12.26 pm

Sir, a few days ago, more than 2,500 global leaders gathered at Davos for the World Economic Forum, to discuss a post-crisis world. From Gordon Brown to Lakshmi Mittal to Bill Gates, the mood was somber. Everyone knew there were clear and present dangers of an economic meltdown. Everyone knew they need to collaborate and guard against protectionism. But, no one had a clue as to how long and deep the recession might be. No one had the magic bullet. Instead, some even turned to the academics for an answer – a sign of desperation. One Harvard professor confessed that he sometimes feels like an imposter, as he witnessed his graduates being handcuffed out of Wall Street, and blamed for the meltdown. He, too, was clueless as to what could be done to save the world.

Sir, I am sharing this insight to illustrate how difficult it must have been for the leadership and the Minister of Finance to draw up Budget 2009. So let us not belittle these efforts. Singapore is the most open economy in the world. Our trade is approximately 3.5 times the size of our GDP. When the global trade shrinks, our man-in-the-street will feel less 'jingling' in their pockets. We must realise that we cannot control external events, but we can manage ourselves. Technicalities aside, in any crisis, we need three boosters: (1) confidence, (2) pragmatic steps, and (3) inspiration for a better future. So how has our Budget team measured up to these criteria?

The recent PWC Global CEO Survey revealed that confidence plunged to its lowest since 2003. Seventy-nine percent do not see revenue growth this year and most are worried about immediate survival. Top concerns are tight credit, sluggish capital market and collapsing demand – precisely the sort of issues that our own SMEs and MNCs face.

So has our Budget evoked any confidence? I think yes. First, our strong reserves give us ammunition to battle the downturn. Second, it is drawn from past prudence and not future money that indebts our population. Third, past reserves target temporary measures in dire straits shows that the leadership knows what it is doing, and not panicking to rampantly inject money into the economy. Fourth, the assurance of more off-Budget measures when the need arises is comforting – although I hope that the measures would be proactive rather than reactive. For example, China has rolled out a two-year $4 trillion RMB investment programme, equivalent to 16% of their GDP 2007, which is accompanied by massive tax cuts, adoption of preferential taxes for SMEs and halting of 100 items of administrative fees. In comparison, our 6% of GDP budget seems small. Hence, while confidence of adequate ammunition is there, the firing power is somewhat muted.

Sir, when a man is bleeding, we have to stop the bleeding first. The $20.5 billion Resilience Budget rightly focused on preserving companies to keep jobs, so that life can be as normal as possible for Singaporeans. Global demand has dried up,

but rentals and labour costs have not adjusted as fast. Many feared that blood-letting season has arrived. So the rental rebates, tax cuts and Jobs Credit Scheme are all quick measures to cut costs. The shortcoming of this scheme is that it leaves out a large number of freelancers, self-employed and no-CPF part-timers, who are a growing segment of our labour force. In fact, part-time workforce has increased from 3.2% in 1998 to 6.8% in 2008, and even more for self-employed and freelancers like taxi-drivers, real estate agents, insurance advisors, and creative workers. I hope the Minister would look into expanding the scheme to help keep them in business too.

Corporate tax cuts from 18% to 17% are useful to those who are still making profits. But, ultimately, cash flow is the lifeblood of businesses. The Special Risk Sharing-Initiative is critical to stimulating bank lending, unlock cash flow blood clots that cause sound businesses to perish, and avoid the downward economic spiral of deleveraging. However, the devil is in the implementation, and I hope the Minister can clarify the steps and assure the House of its timely and generous execution.

Sir, ultimately, businesses exist because of demand. Waiting endlessly for global demand to return is not the answer. I have three suggestions.

First, enhance the SPUR scheme so that we can soak up some excess manpower capacity and upgrade the manpower capacity to get ready for the upturn.

Second, although we are export dependent, whatever bits of domestic demand generated would help our SMEs, our workers and our families to go the extra mile. An obvious and low hanging fruit is government projects. By breaking down billion dollar projects into chewable contract size of less than $50 million for infrastructure and less than $1 million for ICT and healthcare works, it will help keep SMEs humming, and I urge the Government to seriously look into all possible ways to generate demand for our SMEs.

Three, what about reallocating excess capacity to growing sectors like the social economy? Here, I declare my interests. We should be bolder and think out of the box. Sir, the social economy, as a whole, forms the fifth largest economy in the world, and demographics have it that it will be a growing sector. In Singapore, much of its work has been termed either as charity or under Government welfare. There have been hybrid models in the world and I am very grateful that Minister Tharman recognises the contributions of social enterprise in his main Budget speech.

In growth years, the social sector suffered from unaffordable manpower and space costs. Now, many will be in a crisis mode due to shrunken capital pool and cashflow blues. Yet, the downturn itself shores up demand for social services and gives the social economy the ability to soak up private sector redundancy in manpower, commercial space, production lines, and so on.

There is another reason to grow the social economy. Sir, in my constituency, I have a widow with three young children. Her husband passed away suddenly. With low education qualification and three children to care for, it is hard for her to take on any job. Using the Household Benefits Calculator from the Budget website, she will obtain $1,199 from GST Credits and Resilience Package. I assured her that more help will come, as the beefed up ComCare funds and my grassroots schemes will ensure that she does not fall through the cracks. But she tells me that taking money is no dignity. She wants a handup, not a handout! She wants to work from home, and be a good role model for her children. Sir, I admire her spirit. If all Singaporeans are like her, our collective resilience will see us through the ebbs and flows. We need to cultivate this spirit, by making available self-reliant avenues.

Growing social enterprise and the social economy are critical steps. Yet, the Budget provision for the social sector is paltry and largely limited to IPCs, compared with the billions of dollars set aside for Jobs Credit or Special Risk-Sharing Initiative schemes, which can be applied across the board. I urge the Minister to put serious money to leverage on this golden opportunity to build capacity and expand the social economy. There are many ways to do this, from fiscal incentives to Government becoming an "aggregate buyer".

For example, instead of companies employing people with no work to do, the Government can fine-tune the Jobs Credit Scheme or introduce new schemes to redeploy excess staff to do capacity-development in Non-profit Organisations (NPOs) and Social Enterprises (SEs). Professionals like accountants, operation managers and supervisors can be redeployed on a part-time or full-time basis, share their experience and expertise, and infuse the social sector with ideas, strategies and corporate governance. Stints at NPOs can also be invigorating for these professionals, creating new perspectives to life. Companies that engage in such schemes can enjoy higher employee morale, customer loyalty and strengthened government relations.

I concede that the pure capitalistic model of development is not sustainable in the long term, as it promotes greed, inequity and anomie. Businesses, as corporate citizens, must work side by side with the Government and communities. Social enterprises, as bottom-up organisations, can also help Government deliver social services more effectively. In this crisis, we can view our national needs from a macro perspective, think out of the box and find opportunity to reallocate our resources, as well as build a value-based social contract among the people, the public and the private sector.

The third criterion is whether we have an inspiring vision for our future.

Sir, people move in the general direction of our currently dominant thought. So I agree with Mr Lim Swee Say that if we focus on the negative, we will get negative energy. So we need to set our minds to think positive and, in fact, think big. For all the multi-billion dollar investments we have, we are short on what Americans call a big, hairy, audacious goal that can excite, inspire and galvanise Singaporeans towards a moonshot.

To illustrate, in 1961, John F. Kennedy rallied Americans to dream the impossible to put a man on the moon. This fired imagination and inspired a whole generation of space engineers. In 1969, Apollo 11 landed on the moon and Neil Armstrong became the first man on the moon. In 1963, Sir Martin Luther King called on America to "hew out of the mountain of despair a stone of hope to transform the jangling discords of America into a beautiful symphony of brotherhood". In 2008, Barack Obama became the first coloured President of America, changing history forever.

Sir, let us not underestimate the power of dreams. It is the only thing that inspires us to break through the seemingly impossible, and reach new heights. So, what could our 'moonshot' be? I would like to offer two possibilities.

One, perhaps Singapore can be the happiest home on earth. Imagine, year 2025, Singapore is the happiest home on earth. Earth-friendly products and high-touch technologies are being developed here, responsible corporates look after the communities they operate in, and people are employed in happy environment where worklife balance is achieved. Impossible? But, currently, many corporate and government leaders are rethinking the free market system and no country has occupied this growing niche yet.

We can take the lead to rally leaders in this field to develop a centre of excellence for businesses that do good and do well. This can be accompanied by developing a stock exchange for businesses with double bottomlines (social and economic), a hub for financing such businesses and a magnet for talented and compassionate technologists and capitalists. Jobs in this industry will create positive energy that invigorates the workforce and brings meaning to life. Just how big is this market? Takaful funds, green-tech investments, microfinance, social enterprise will all add up to easily more than a trillion dollars worth. So this is not child's play.

Second suggestion – what about making Singapore into a silicon valley for assistive technology? Imagine a place where both the old and young can play side by side and the disabled can participate equally in the socio-economic development, not hindered by impairments. How do we do that? Singapore can be a silicon valley for "Imagineering", which is the imaginative application of engineering sciences in assistive technology. Not only is the market opportunity huge, but history has shown us that assistive technologies can often make huge impact in everyday life. For example, in 1808, Pellegrino Turri built the first typewriter for his blind friend, Countess Carolina Fantoni da Fivizzono and, in 1972, Vinton Cerf, hearing impaired since birth, developed e-mail-like text-messaging protocols for the Arpanet, which is the precursor to the Internet. These technologies are now part of everyday life.

Currently, there are exciting developments in this field. From the powerfoot for amputees to outrun a normal athlete – which is, by the way, why it was banned in the Paralympics – to supershoes which help elderly walk effortlessly, to intuitive mouse technology that understands its users with a blink of an eye. Assistive technology espouses great social good that can anchor Singapore into the rapidly growing trillion dollar industries. With ageing population worldwide, the demand can only grow.

To illustrate, there are 500 million people worldwide over the age of 65, with 200 million suffering from severe sensory, emotive, cognitive or physical disabilities. They can benefit from affordable machine-assisted memory aids or prosthesis. Over 1.5 billion people suffer from brain and nervous system disorder, and neural circuit repair tools are currently being developed in MIT to overcome these challenges. Worldwide, millions of amputees, cerebral palsy and elderly can also enjoy the 'powerfoot'.

Given our ageing population and advance IPR, R&D and financial hub status, plus innovations and experience in the NUS Mixed Reality Lab, Singapore is well placed to become a silicon valley in the development and commercialisation of assistive technology that transforms human disabilities into abilities, and enhances us on the road to be a creative, intelligent and compassionate nation.

In conclusion, Sir, perhaps it is in times like this that provides us an opportunity for us to rethink our priorities and values in life. All said and done, the economic storm will one day blow over. The right question is not 'when will it be over', but 'how would we want to emerge from this storm – as a person, as a corporation, and as a nation'? The right lessons must be learnt. The era of privatising gains and socialising losses must pass. Greed, blind self preservation and pure capitalistic behaviour without hope for tomorrow will only cause us to shrink and emerge as a selfish people. A small step for man, a giant backflip in social cohesion. On the other hand, Sir, even the weak become strong when united. Big ideas can spur imaginations and rally the nation towards collaborative innovation, and the answer lies within us.

Sir, I support the Budget and call for it to further evoke confidence in the present, deftly execute pragmatic measures where reality bites, and inspire and rally Singapore towards a moonshot. Sir, united we stand.

12.43 pm

Mr Speaker, Sir, I rise in support of the generous Budget announced by the Minister for Finance. It is indeed a challenge for me to speak as the last speaker, as I will be effectively scraping the barrel for pertinent, yet uncovered issues after having heard 52 other speeches before me. Nonetheless, as the Chinese saying goes, hao xi zai hou tou (好戏在后头) or , literally translated, "The best is yet to be ".

2008 has been a tumultuous year. The world economy has gone through a roller-coaster ride, starting from a high point of booming trade, skyrocketing stock indices and property prices to one of doom and gloom towards the second half of the year. What started as a sub-prime crisis in the US has swiftly cascaded to the rest of the world, to one of global financial meltdown and sinking into a deep recession – likely the worst since the last Depression in the 1930s. Many economists and analysts have coined this crisis, financial tsunami or economic Pearl Harbour, aptly reflecting the true severity of the current situation. I certainly hope that the world economy will not deteriorate into an economic Hiroshima.

Our Government has done an appropriate thing in bringing forward the Budget Statement and announcing a generous Budget totalling $20.5 billion to help the Singapore economy and Singaporeans pull through this unprecedented time of difficulty. Previous speakers have already eloquently articulated and argued the salient features of this year's Budget.

I will not attempt to repeat the points already so well put forward in this House over the past two days. But suffice to say, in all, the Budget is generally an all-encompassing one, with the sole objective of saving jobs and helping the low-income families. Unfortunately, there are a few blind spots which I would like to highlight. Some of the less fortunate and vulnerable groups of society have often been left out of the radar screen, left to fend for themselves, both in good times and in bad times. I would like to bring up the predicaments of two such groups – the handicapped (many from old age and sicknesses) and the single parents. They are are often sidelined as our country strives towards economic growth and prosperity. Indeed, these vulnerable groups are likened to the remnants of burnt rice stuck at the bottom of the rice cooker, often avoided because of its bitter taste and rough texture, even though it has similar beginnings as the much appreciated fragrant rice.

Being one of the fastest ageing populations in Asia, Singapore faces the continuous challenge of developing public policies to accommodate this shift in the population demographics. As a result of improvements in sanitation, medical technology, and public health awareness, life expectancy has risen in Singapore to 78 years old for men and 81 years old for women; and this is expected to increase further in the next few decades.

The Government has done a wonderful job in addressing the potential issues of financial security, employment, housing and affordable healthcare for the elderly. MOH is also stepping up infrastructural development such as building more rehabilitation centres, nursing homes and step-down care. However, what is severely lacking is the emphasis on social independence and improving the quality of lives of the handicapped and the sick and aged who want to contribute to the society and continue to stay in their own homes respectively. More funding should be allocated to the provision and research and development of assistive technology for the elderly and handicapped.

The use of assistive technology to improve the lives of the elderly and the disabled seems to take the back seat in Singapore compared to many of our first-world counterparts, such as the Nordic countries. The provision of assistive technology to people with disabilities is among the cornerstones of policy on disabilities in the Nordic countries. In countries such as Sweden and Finland, disability policies strive to bring about a society which makes it possible for people with disabilities to be fully active members of society. The fact that all people are equal is a basic starting point with regard to how society should be formulated, and people with disabilities are citizens with exactly the same rights and obligations as everyone else.

Assistive devices are products which people with disabilities need in order to prevent future losses of function or ability and to compensate for impaired or lost function ability to cope with day-to-day life. Assistive devices can assist individuals to carry out the many simple and basic tasks (many of which we normal people take for granted) themselves or with the help of someone else. These would include getting dressed, eating, moving around, communicating with society, finding their way around and to taking part in normal leisure and recreation activities.

As disabilities become more common as people age, the elderly will inevitably use assistive technology to a great extent. One reason why assistive devices are becoming more important is the fact that the number of elderly people has risen, as has the number of extremely elderly people, ie, those above the age of 80. As Singapore ages, care services are being dominated more and more by diseases and injuries that affect the elderly, such as dementia, impaired mobility, impaired vision, impaired hearing and "general frailness". Therefore, the demand for rehabilitation and assistive devices will increase, particularly among extremely elderly people.

In Singapore, there is currently no centralised agency that specifically addresses the assistive technological needs and requirements of the elderly and the handicapped. Available services, such as those provided by SPD and SAVH are generally very fragmented and there is very little knowledge and awareness of the availability of assistive technology. The assistive technological support offered is generally very basic, compared to what is currently available and commonly prescribed in the western countries, such as in Europe and the United States.

Just take, for example, the Swedish Handicap Institute (HI) is a national resource centre on assistive technology and accessibility for people with disabilities. The Swedish Handicap Institute works to promote full participation and equality for people with disabilities by ensuring access to high quality assistive technology, effective provision of assistive devices and an accessible environment. It encourages research and development, tests and procures assistive devices, assists with the development of knowledge and methods and provides information and training.

Many elderly and the handicapped want to live their lives independently and with dignity. Some may need a little basic assistance whilst others will request technological ingenuity to overcome their physical challenges. There is a poem that best illustrates this sentiment, and I read: "Some say I am disabled but you know that it isn't true. I simply have a challenge a little different from you. My slight inconvenience has taught me things they could not know. Each obstacle is a victory enabling me to grow. There're really not many differences. I cry, I laugh, I snore. I do not want to be treated as if I am not a person anymore."

Mr Speaker, the Government has emphasised the need to spend on R&D to spur Singapore's economy to the next phase of growth. However, many of these R&D spendings are on products with high economic value such as pharmaceutical, life sciences and technology. What is lacking is the R&D spending on products with high social value, such as assistive technology. The Government should seriously consider investing in this area to address the current and future needs of the elderly and the handicapped.

Another vulnerable group that may have fallen through the cracks is the single-parent family. This year's generous Budget fails to give this group a boost, especially in difficult times like this.

Mr Speaker, in Mandarin, please.

(In Mandarin): [For vernacular speech, please refer to Appendix A*. ] Singapore's social policies espouse on strong Asian or Confucian values and place great emphasis on traditional family structures and self-reliance. Under this system, the society's overall good generally takes precedence over an individual's rights. The position of the Singapore Government is premised on the belief that specific social security programmes for single-parent families will create a potential moral dilemma that encourages dependency on the State as well as the promulgation of undesired alternative households resulting from divorces and pregnancy out of wedlock. Our Government is worried that these not only undermine its "Asian values", and erode "the family foundation of nationhood" but also drain State resources.

The single-parent has to serve a dual-parent role, making up for the deficit, both in physical as well as in the financial support. It is tough indeed to raise children and maintain a career at the same time for the single-parent family. This is especially so in Singapore, where many of our Government policies are staunchly pro-family in nature. I believe single parenting is not a choice many people would intentionally make but a consequence, many a time forced by circumstances and desperation.

Contrary to what our pro-family policies serve to achieve, the number of these family structures is on the rise. Population census data shows the number of single-parent families increase from 13,000 to 18,000 households between 1990 and 2000.

Single-parent households are generally at a higher risk of poverty than two-parent household. A survey of 20 countries confirms this belief even after factoring in social security benefits and direct taxation. This risk is higher in liberal welfare countries such as the UK, USA and Canada. Indeed, their experience demonstrates that poverty amongst single mothers is likely to be more persistent than the national average. Data for Singapore in 1990 illustrated that about half of single-parent households earn less than 50% of the national average monthly household income.

*Cols. 2069-2070.

(In English ): Sir, as a matter of fact, single-parent families are not specifically targeted by social assistance policies in Singapore. Even during the best of times, single parents face many difficulties – financially, socially and emotionally. So in the face of the global financial turmoil, the issues they faced would be much tougher and more complex.

When faced with financial challenges, these families have to compete with other vulnerable groups for means-tested social assistance. Even then, many assistance programmes have eligibility conditions that disqualify such families. In many aspects of public and discourse, single-parent families are viewed as undesirable alternative household entities to be frowned upon and thus excluded from some social services that are available to "normal" two-parent families. For example, public housing applicants in Singapore must be a proper "family nucleus", comprised of a married couple, in order to be eligible for a Government-subsidised apartment. This excludes unmarried single-parent families by default and has significantly disadvantaged such families in their attempts to apply for affordable subsidised public housing. Another example is the pro-natal Baby Bonus, a Government cash grant for newborns of married couples, for subsequent use towards childcare purposes. Disadvantages are also found in tax policies. For instance, tax relief granted to married parents to employ domestic maids is unavailable to single-parent households. Thus, instead of being helped, single-parent families are often discriminated or disadvantaged by our pro-family policies.

Indeed, hardship cases involving single-parent families are not uncommon during our MPS. Many MPs would have seen such cases in their constituencies and can offer no long-term solution to their problems. If the Government fails to assist single parents, there would be potentially dire social consequences that would affect the opportunities for their children. In order to help, or rather, not make life more difficult for this vulnerable group, social assistance programmes should be non-discriminatory to benefit both single-parent and two-parent families in Singapore.

Mr Speaker, Singapore is going through very challenging times ahead. The elderly, physically handicapped and the single-parent families have not been spared from the pains of the current economic crisis. As companies scale down on their hiring plans, disabled and elderly workers often find themselves on the losing end. The Government has and will always look after its citizens in good times and in bad. However, more could be done to alleviate the hardships faced by the vulnerable groups in the society.

Let me end by quoting Hubert H Humphrey, ex-US President:

"The moral test of government is how it treats

- those who are in the dawn of life, the children;

- those who are in the twilight of life, the aged; and

- those in the shadows of life, the sick, the needy and the handicapped."

And also allow me to add on to this evocative quote. Not forgetting:

- those in the abyss of life, the mentally ill; and

- those in the mirage of life, the single-parents.

On that note, I support the Budget.

12.58 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 thank all the MPs who have offered their views and ideas in what has been a very stimulating debate, and most of all for supporting this Budget.

I have listened to every speech; in the one instance which I missed, which is Ms Irene Ng's speech, I read it afterwards. Members raised many issues and I would not be able to address all of them in this speech. This is the customary practice each year. Many Members have raised issues which rightfully belong to the Committee of Supply's debate and they will be taken up there. With regard to MOF, some issues like Government efficiency (which was raised by Mr Baey Yam Keng) and environment-related tax issues (which Mr Edwin Khew raised) will be taken up during the COS.

There were many issues raised but they are all ultimately about whether this is the right Budget for the times.

In particular, whether the Budget is of the right size to address the crisis; second, whether it is directed at the right objectives and whether we have designed the measures right, for maximum impact, and they will therefore be effective in helping Singapore through the crisis; and third, whether the Government is making the right move in tapping on past reserves to fund part of the Package. I will respond to the various issues raised in the debate, under these three broad themes.

First, is this the right size? All governments are now focused on fiscal policy interventions to try to support their economies. It is a severe recession, and we are seeing continuing momentum of the decline, week by week literally. So, there is a consensus internationally now that fiscal responses have to be larger than in normal cyclical downturns, and further, that they must be focused on speedy implementation so that a real impact can be felt in 2009. The package we are implementing is large, timely and front-loaded so as to have a significant impact this year. The basic deficit of 6% of GDP is a major injection of Government money into the economy. On top of this, the Special Risk-Sharing Initiative (SRI) will help sustain bank lending to our companies. The quantum of loans that we are extending is not included in the basic deficit of 6% of GDP. It is on top of that.

Our Resilience Package and the fiscal deficit resulting from it are, in fact, very large compared to most other countries. In the US, the Obama administration is seeking to get an $885 billion package approved by the Senate. However, in its current form, less than 30% of the package will be implemented within the first year. By some estimates, not much more than 20%. Its impact is therefore estimated at 1.8% of GDP for 2009. Germany's package amounts to 1.25% of GDP in 2009 and another 0.5% of GDP next year (in 2010). China's package of over four trillion yuan will be spread over a few years, and is therefore estimated to be about 2% to 3% of GDP for this year. The UK's £20 billion fiscal package amounts to 1% of GDP in 2009. Taiwan's NT$500 billion economic stimulus package, equivalent to about 4% of its GDP but implemented over four years, translates to about 1% of GDP each year.

The deficit we will run is not just large compared to others. What we are doing is also different from that in most other countries, because they will have to borrow to fund their deficits. Their taxpayers will have to bear the burden in future. Singapore does not have to borrow. As Prof. Koo Tsai Kee, Mr Gautam Banerjee, Mr Ong Ah Heng and Mr Christopher de Souza and others have all emphasised, this is our key advantage in Singapore. We have designed our Package so that the measures could be rolled out quickly – in 2009 itself – to achieve broad-based impact across the economy.

In particular, the Jobs Credit was designed to put money in the hands of all businesses quickly, and to be simple to administer. We had, in fact, considered giving a rental credit in combination with the Jobs Credit. But it would have slowed implementation, because a rental credit would have required declarations by companies and subsequent verifications. It is much speedier to implement the Jobs Credit, and at very low administrative cost, because it is based on readily available CPF data. We therefore decided to do away with the rental credit and increase the Jobs Credit to 12% of wages – so that the total impact and benefit to businesses would be roughly the same as if we gave both credits, but delivered much faster. Likewise, for GST Credits and the WIS Special Payment, both are given out in the form of cash and put money quickly into the hands of every Singaporean. The first cash payments will be made in March this year.

So, when Members consider the other measures that they wanted the Government to have taken in this Budget, we first have to bear in mind that this is already a very large Budget, much larger, in fact, than most other countries are putting in place. Some of the suggestions proposed by the MPs do have merit. But we cannot implement every meritorious proposal without carefully considering what we are able to afford. For instance, if I were to take all of Mr Inderjit Singh's proposals, it would have cost an additional $5 billion. This is a ballpark estimate but probably not far off. It would increase our deficit by more than 50%, from $8.7 billion to about $14 billion. I am sure Mr Inderjit Singh does not expect us to take in all of his proposals, but I use this to illustrate the point.

With a basic deficit of 6% of GDP in FY2009, we believe that this is the right Budget for the times. To do more along the lines of some of the proposals, including some of the meritorious proposals, that have been raised in this House, would mean having to do less of some of the measures that we are implementing in this Budget. And that is the fundamental point in the design of any Budget.

Our Package is a large intervention in one year. It already factors in a continuing decline in the global economy this year. We predicted growth of -2% to -5% for 2009 before this Budget, and that is still our projection for the year. Some MPs have asked for an off-budget package this year, even before this Resilience Package has been passed. Having just debated and not yet passed the Resilience Package, we should not be thinking of further measures in the near future. Of course, the Government will track events closely and, depending on how things develop, we are ready and able to do more over the course of the recession. Our mindset should be for a long campaign and not a quick downturn to be cured overnight.

So, that is the first theme – have we sized the Budget right? Is this the right impact, especially the right impact for this year? And it is. Second, are we focused on the right objectives? Are we directing resources for maximum effect? The key decisions we have had to make in this Package are which objectives to focus on and where to put the most resources, so that we get the maximum bang for the buck. It is important for us to focus our resources on the key objectives, and design our policies such that the best multiplier for the economy can be achieved. This means that some areas have to get less. If you want your key objectives to be achieved, they have to be forceful. This means that other objectives, the secondary objectives, have to get less. Trying to be as comprehensive as possible will dilute the impact of the Package, and those who need it the most, both amongst businesses and households, would get less.

Ultimately, the Resilience Package is about Singaporeans – helping our people now, and securing the future for Singapore. We have shaped the Budget to focus on three key objectives, aimed at helping Singaporeans where it matters most. First, jobs for Singaporeans. This is the first and key objective and it is about helping businesses so that they can preserve jobs to the maximum extent possible in this recession.

The largest part of the Package, therefore, comprises support for businesses through the Jobs Credit and SPUR, through the many tax measures, through the SRI to sustain bank lending to companies, and through our Government spending initiatives, which will create demand for our businesses. We are also creating jobs through substantially expanded Government hiring of 18,000 jobs. That is the first objective. Ultimately, it is about jobs for Singaporeans, working primarily through support for the business sector.

Second objective – direct help for households. We are helping households directly, with something for everyone, but more for the lower and middle-income groups.

Third objective – confidence in the future. We are preparing for recovery and to emerge more competitive for our next phase of growth. When we come out of this crisis, Singaporeans will continue to have good jobs, and enjoy good income growth for the years ahead.

In each of these areas – preserving jobs for Singaporeans, providing direct help for households, and preparing for the future – we have chosen our measures to achieve maximum impact on the economy. In other words, we have chosen fiscal injections that have the best economic multiplier.

For the first and key objective of helping businesses so that they can help preserve jobs, we have taken a broad-based approach. Our aim is to help businesses in all sectors, both small and large companies, so that we maximise the support we provide for Singaporeans' employment.

Ideally, we should not be giving equal support to all businesses. Some MPs have argued that we should be giving less support to the profitable businesses, and more support to the weaker ones. This would not be the right approach. If we do this, we will only be weakening the ability of the business sector to create employment, not just now but in the future, and we will be weakening the strength of the recovery in the economy.

Every crisis is an opportunity for the re-allocation of resources from weaker players to the stronger ones. It is an opportunity for the business sector to be restructured in favour of companies with the most viable business models, the most sustainable cost structures or products, which are growing in favour in the market place. We should allow this re-allocation and not hold it back. It may even mean the movement of jobs from weaker players, who are unable to sustain their jobs, to the stronger ones. That is how we emerge fitter as an economy, and better prepare for growth when the recovery in the global economy comes.

We would like to identify viable firms those that are most likely to keep their workers through the crisis and grow employment thereafter. We would like to identify viable firms and focus our support on them. However, there is no workable way to sift out such businesses under current circumstances. Even good businesses can make losses in the recession and, indeed, many are making losses in the recession. So, we cannot, for example, look at companies that are paying corporate tax to identify the viable and strong businesses, because even good companies can make losses in a recession and may not be paying corporate tax. The best approach therefore is to go for simplicity and provide broad-based support to all businesses, regardless of whether they are profitable or loss-making, through the Jobs Credit, SPUR and the tax measures that we are introducing, such as property tax rebate and the loss carry-back scheme.

Our approach, therefore, is to provide support to all businesses, including the stronger players because that is how we best enhance our chances of recovery. But we will also help loss-making enterprises so that those with viable businesses will be helped through their short-term cashflow difficulties and have a chance to turn around their businesses.

The impact of the Jobs Credit and property tax rebates alone can be significant. We have looked at many real examples. We have sat down with the companies and actually looked at their projections for the year, following the measures that we have introduced. I will just give two quick examples, both small companies with about 15 to 20 staff. The first is in the packaging business.

It will get Jobs Credit and property tax rebates totalling about $70,000 this year, which will increase its profits by about 10% this year. These are the company's own projections.

The second example – and these are fairly typical examples – we chose a loss-making company. This is a real estate agency that is expecting losses this year. It will get a total of $97,000 this year, which it estimates will allow it to reduce its projected losses by 40%.

So, that is how the broad-based measures work for the profitable companies as well as companies that may be viable but are making losses this year. On top of these measures, however, we are providing further incentive for companies that are investing for the future, whichever the sector of business they are in.

We have allowed companies to accelerate write-downs of investments. We have made quite significant enhancements – we are more than doubling the capital allowance that the company gets in the first year after an investment – so the company can write off 75% in the first instance, up from 33% currently. In the case of service enterprises which are refurbishing their outlets, we are giving a 100% write-off in the first instance.

We had also just enhanced our R&D tax incentives last year, which makes Singapore now one of the most attractive places for companies big and small to invest in innovation. This is on top of the many schemes that the Government has to support start-ups, which includes grants, risk capital and generous tax allowances.

This way, we do not just preserve the status quo of our economy but we also give more support for the most dynamic and forward-looking companies.

As both Mr Zaqy Mohamad and Dr Muhammad Faishal Ibrahim have emphasised, we have to do more to foster a business culture that promotes innovation, even in the recession. We need this in every sector. Dr Lam Pin Min was just talking about assistive technologies for the aged and the disabled. I asked Mr Khaw Boon Wan, and he agrees that more has to be done by the Government working together with industry to develop these technologies. Mr Lim Boon Heng's Committee for the Aged is in fact looking at this. They have a sub-committee on the Silver Industry.

I agree, too, with Dr Faishal that we should consider how we can be even bolder in our incentives, given the challenges that our start-ups and growth enterprises face in the difficult environment that we will see in the few years ahead.

This is therefore our approach – broad-based assistance for all companies, but additional support for those that are looking forward and are most likely to take Singapore through to the next upturn.

Jobs Credit: A key fiscal intervention

The key support that we are providing to all companies, within the broad-based measures, is the Jobs Credit. Almost all MPs have expressed their strong support for the Scheme as a way of reducing job losses in the recession. Mr Low Thia Khiang and Mr Siew Kum Hong were the only ones who disagreed. Mr Low in particular felt that the Jobs Credit should not be given to profitable companies. Both he and Mr Siew felt that the 12% grant on wages will not help to prevent retrenchment.

Their views are not shared by the vast majority of our businesses, especially our SMEs. Many have given feedback that the Jobs Credit would make a difference to what may otherwise have had to be a significant plan for retrenchment in this recession. The companies that are still profitable and preparing for growth are also thinking of hiring more workers. As Dr Ong Seh Hong said, this is why we must give the Jobs Credit now to profitable companies. Our labour MPs and union leaders have also strongly endorsed the Jobs Credit. They call it a pro-worker move, because it provides the best chance of securing employment and the feedback that they are getting from the employers has also been positive.

Dr Lim Wee Kiak had asked why we had provided the Jobs Credit to companies instead of giving it to the employees directly, in other words by co-paying the employers' CPF contribution. Let me explain this issue.

We are giving a Jobs Credit to the employer directly. This means the employer pays the CPF, and the Government provides a cash grant to the employer through the Jobs Credit after the employer has paid CPF. In substance, the Jobs Credit is equivalent to the Government paying the employer's CPF contribution. As I explained in the Budget Speech, the 12% Jobs Credit has the same impact for the employer as the alternative approach which would be for the Government to cut the employer's CPF contribution rate by 9%, and the Government then top up the employee's CPF account. Same impact. Both approaches keep workers' wages and CPF intact. There is absolutely no difference for the workers' CPF accounts. Both approaches help employers with their wage costs. For the employer, in cash terms, the amount of relief is the same, which he is then able to use wherever needed.

However, the Jobs Credit approach has some important advantages: first, it provides greater benefit for lower and middle income workers' employability. The Jobs Credit of 12% up to $2,500, which is the median wage (the 50th percentile), is structured to give employers more incentive to retain lower income workers - which is where the threat of retrenchment is also higher on average. For a worker earning $2,500 or less, the Jobs Credit would effectively mean a CPF employer's contribution cut of 12%, from 14.5% down to a mere 2.5%. That is the effective impact of the Jobs Credit for the low income workers - for anyone below $2,500 in wages. So, that is the first advantage - it gives more to the low and middle income workers.

Secondly, the Jobs Credit has much greater simplicity. Unlike CPF contributions, which are tiered by age and wage, the Jobs Credit gives the employers the full 12% of wages for all workers on the CPF payroll.

Thirdly, for the same reason, the Jobs Credit also provides older workers in particular with much greater support in terms of their employability, compared to if the Government had instead paid for the employer's CPF contribution. This is because the employer contribution rates for workers aged 50 and above are below 12%. For older workers in the lower-income group, especially, it is well below 12%. For example, for a worker between 55 and 60, and earning $900, the employer's contribution rate is 5.3%. This means that if we chose the approach of the Government paying for the employer's CPF rate, the Government putting money directly into an employee's account, the employer would receive only 5.3%. With the Jobs Credit, on the other hand, the employer receives the full 12% of the older worker's wage. This provides a better incentive for employers to retain and hire older Singaporeans. By doing this outside the CPF contributions scheme, we are also making clear that this is a temporary scheme to address the crisis, and can be lifted once the global economy picks up and business confidence is restored.

Mr Low Thia Khiang and Mr Siew Kum Hong had in particular questioned the effectiveness of the Jobs Credit.

The Jobs Credit is a large fiscal intervention in the economy. It is first and foremost a large fiscal intervention in the economy. At $4.5 billion, it is almost 2% of GDP, which means that the Jobs Credit alone is larger than the total fiscal injections made by most of the other countries that are tackling this crisis. The Jobs Credit alone is a larger fiscal intervention – more Government money being put in the economy than what most other countries are doing for their entire fiscal packages. The Jobs Credit is also equivalent to a 50% reduction in total corporate taxes. For the SMEs, because their effective corporate tax rate is actually well below 17%, in fact 8 to 10% typically, receiving the Jobs Credit effectively means the profitable SMEs are paying zero taxes for this year; and for the unprofitable SMEs, they get their credit anyway. What we are essentially doing is injecting $4.5 billion into the economy, in a way that will not only have a significant multiplier effect but will help preserve the interest of Singapore workers.

We are quite realistic about this. It will not be possible to avoid retrenchments and an increase in retrenchments in this recession. The Jobs Credit and SPUR cannot prevent an increase in retrenchments this year. But this significant injection – 2% of GDP or 50% of total corporate taxes paid – being put into the economy and given in a way that is tied to Singaporean jobs, will make a difference to the pace and scale of job losses.

How will businesses use the Jobs Credit, and how does it help Singaporeans? The Jobs Credit is earned through employing Singaporean workers. This means that if the workers are retrenched, the businesses would not benefit further Jobs Credit for those workers. If the workers are kept, the Jobs Credit will continue to be earned.

But the Jobs Credit, once a business earns them, is a resource that they can deploy flexibly. We should not introduce rules to circumscribe how the businesses use the funds. The flexibility of the Scheme is, in fact, its key advantage because it allows businesses to use the funds where they are most needed to help them survive and grow.

Businesses can use it in many ways. For example, they can use the money to: (i) avoid wage cuts for their workers; (ii) invest in training their people; (iii) hire new workers. As Dr Loo Choon Yong told us, this is how Raffles Medical intends to use the Jobs Credit; (iv) pass on the savings to consumers so that they can improve their sales; (v) pay suppliers on time – which will in turn help these suppliers keep their workers; and (vi) keep it as working capital or as a buffer against a decline in revenue, so that they can avoid having to cut jobs down the road.

We have to let the businesses decide depending on their own circumstances. Whichever way the businesses spend the Jobs Credit – either directly on their workers, or to keep up payments to their suppliers, or through other ways to support the business – the money will have a multiplier effect on the economy and go towards supporting jobs. As Mrs Josephine Teo said, there are two priorities that matter most for the vast majority of workers – saving jobs and minimising the impact of the recession on wages. The Jobs Credit will make a real difference to all Singaporean workers on both fronts – jobs and wages. As Minister Lim Swee Say explained yesterday, it also protects their full CPF contribution. So to say as Mr Siew Kum Hong did, that $4.5 billion is a very expensive way of saving, let us say, 100,000 jobs, he said, or $45,000 for each job saved, is really missing the point. The Jobs Credit is a macro-economic injection to support the Singapore economy, but designed in a way that preserves the interests of all Singaporean workers – by supporting their jobs, their wages and keeping their full CPF contribution intact. The benefit is not just felt by those who would otherwise have been retrenched, but by all Singaporean workers.

Ms Denise Phua and Ms Cham Hui Fong asked for the Jobs Credit to be tilted more in favour of lower income or older workers. We should keep the Jobs Credit Scheme as simple as possible. It has only one slant – it provides more credit to the employer for workers with median wages or below. But it applies to all firms equally. We have other schemes that provide further support for lower income and older workers – the Workfare Income Supplement (WIS) scheme and the restructured CPF contribution rates that were implemented with Workfare. And as I have just explained, the design of the Jobs Credit Scheme in effect gives older workers an advantage because the employer gets the full 12% of their wages despite having a CPF contribution rate that is much lower than for younger workers.

Let me just very quickly address an issue which Mr Inderjit Singh raised about the Obama Administration's earlier proposal. I think some time in January, they mooted a proposal for a Jobs Tax Credit Scheme, which they subsequently dropped. Dr Amy Khor touched on this yesterday as well. This was a different proposal. The proposal that the new US Administration had raised involved a tax credit for businesses for each new job that was created and it was dropped because it would have been extremely difficult to implement. There was no way of telling which was a new job, as distinct from a job created after retrenching someone and getting rid of an old job.

Second, if the US were to do something as broad-based as our Jobs Credit, which applies not just to new jobs but to all existing jobs, it would also have cost them a whole lot more. In fact, it would have taken up a very significant share of the package that they are planning.

Direct help to households

Next, the second objective – direct help to households. Some Members, including Mdm Cynthia Phua, Mr Zainul Abidin Rasheed and Mr Lim Biow Chuan, asked if we could provide more direct support to households. Mdm Ho Geok Choo further suggested that the doubling the amount of the GST Credits is too timid and proposed quadrupling the amount.

The main support that we are really providing to Singaporeans this year is in the broader measures in the Resilience Package that will support the economy, help them secure their jobs and wages, and keep their full CPF contributions. The direct support we are providing to households is also necessary, because this will be a difficult year for most. But this is only a complementary strategy; a strategy that is complementary to the Jobs Credit and other broader measures we are taking to support the economy. Nevertheless, we are providing a sizeable $2.6 billion package of relief for households in the Resilience Package.

We have also weighted the transfers within this $2.6 billion, in favour of the middle and lower-income groups. They have less to fall back on in difficult times. The bottom 60% of households will receive benefits worth 6% of their incomes on average.

We have calibrated our measures. We have calibrated each of the direct measures we are taking to help households so as to provide meaningful support in a difficult year. But we are also mindful of the need to avoid entrenching a system of providing significant benefits to households every year. As Mr Chiam See Tong rightly warned yesterday, we must avoid an inadvertent drift towards a welfare society.

Personal income tax

Personal income tax came up at many points of the debate. Several Members, including Ms Lee Bee Wah and Senior Minister of State Zainul Abidin Rasheed, have asked for a larger Personal Income Tax (PIT) rebate, through an increase in the cap from the current $2,000. Those who argued for this felt that it would help to boost demand.

There are two reasons why we capped the 20% PIT rebate at $2,000.

First, increasing the cap would only benefit a small proportion of the population but at a high cost to revenues. Only the top 5% of our resident labour force is affected by the cap on the PIT rebate of $2,000. The middle class, in fact even the upper-middle class, is not affected by this cap. Removing the cap would be costly to revenues. Even just raising it from $2,000 to $3,000 would have cost us an additional $100 million. And if we had no cap, as Mr Inderjit Singh proposed, it would have more than doubled the cost from about $500 million to $1.1 billion. That means we would have had to either significantly reduce some of the other measures in the Budget package, or we would have to reduce the income tax rebate percentage. If we lifted the cap completely and wanted to stay within the budget of about $0.5 billion, it would have meant reducing the PIT rebate percentage from 20% to 8% for all taxpayers. This would have meant less for the middle and upper-middle income groups in order to give more to the top most brackets.

So that is the first reason – it would have benefited the very small proportion of taxpayers and have had a significant impact on revenues, and something would have had to give.

The second reason is that a larger PIT rebate would not give us as much bang-for-the-buck as a measure to boost demand. Unlike the lower and middle-income groups, the top income groups tend to save most of the benefits they receive. This is one of the least contested economic facts all over the world. The marginal propensity to consume amongst the rich is low, and conversely, it is very high amongst the lower-income groups. The lower-income groups tend to be cash constrained and they spend most of the additional benefits that we hand out.

In fact in the US, last year's PIT rebates were an important fiscal initiative. They were hoping to stimulate the economy in the third quarter and they were hoping that the PIT rebate they gave would lead to a "kick" in consumption in the third quarter. They eventually found that only 15% of the rebates were eventually spent by consumers, and amongst the higher income groups, this percentage was even lower.

Some MPs such as Ms Lee Bee Wah also felt that we should have cut PIT rates this year. With our current PIT rate and schedule, our personal income tax regime is already very competitive and highly progressive. Compared to Hong Kong, the vast majority of Singaporean taxpayers pay lower taxes.

This chart was put together by PWC, published in the Business Times on 23rd January. It shows the individual tax liability for a typical upper-middle income family; married man, non-working wife and two children. And as you can see, the effective tax rate for this family is significantly lower than for most other Asia-Pacific countries, and also lower than Hong Kong.

It is only at the very top end that the effective tax rates in Hong Kong are still lower than in Singapore. The Government will continue to assess the competitive landscape for talent and see whether we need to make changes down the road in our top PIT rates, while ensuring our overall fiscal position remains sustainable.

Immediate impact, lasting benefits

The third theme is about making sure that we are building confidence for the future. We want to achieve immediate impact for this Budget but we also want lasting benefits. I appreciate the comments made by several MPs – Mdm Halimah Yacob, Ms Jessica Tan, Mr Zaqy Mohamad and Mr Michael Palmer and others – that we should not lose our focus on Singapore's long-term future, even as we grapple with the problems of the short term. We have to set our sights on the recovery and the years beyond, and start preparing now for recovery and the next phase of growth.

The Resilience Package cannot merely be about survival. But our focus on preparing for recovery and the long term does not come at the expense of the short term. What we are in fact doing is to spend more and cut taxes now, not just to meet short-term needs, but also to strengthen the chances of recovery and strengthen Singapore for the long term. This is a key point in how we have designed the Budget – make an impact in the short term with measures that prepare Singapore for the long term. It is a key point in the design of this Budget.

Let me explain this with respect to the two main types of measures that we have undertaken for the long term: Government spending on infrastructure and capabilities; and the tax measures that we are implementing to encourage investment in the downturn and to enhance long-term competitiveness.

Government spending

We are spending wisely in the short term, to build up long-term infrastructure and capabilities. I agree with Mr Inderjit Singh's point about the need to diversify Government spending, and can assure him that this will, in fact, be the case. Our spending is across the whole range of sectors – transport, housing, education, healthcare and security. We are also continuing with IT projects, eg, MOH's electronic records project, MOE's IT Masterplan, the National Broadband, and so on. The Test Bedding Fund will also seed projects in a whole range of areas, eg, transport systems, etc.

Tax measures for long-term competitiveness

The corporate tax cut that we have introduced, plus the substantially enhanced reliefs for investments over the next two years, will provide strong encouragement for companies that seek prospects for growth. It is important to do it now, as companies are reconsidering where to base their operations for their next cycle of growth. It will also help in the short term by encouraging companies to keep their operations here and not downsize.

I can assure Mr Inderjit Singh, because he was concerned about whether this is taking up a significant part of this year's Budget at the expense of other measures, that the short-term revenue impact of the corporate tax rate cut is not significant. It will be about $70 million in this fiscal year, before building up over the long term. The real cost comes in a few years' time when the full impact of the 1% corporate tax rate cut is felt. We estimate about $400 to $500 million per year over the medium term. But that is also when we start deriving the long-term benefits for Singapore, arising from this enhanced competitiveness.

Dr Ahmad Magad and Ms Lee Bee Wah asked if we could apply the Corporate Income Tax (CIT) cut for Year of Assessment (YA) 2009, in other words – not for YA 2010 but applied for YA 2009 – which effectively means a retrospective application of the CIT cut for income earned last year. A retrospectively applied CIT cut is in fact equivalent to a tax rebate.

To put things in perspective, we are already providing substantial benefits to companies this year. As I mentioned earlier, the Jobs Credit alone is equivalent to a 50% CIT rebate. But, unlike a CIT rebate, the Jobs Credit has a better chance, is designed to have a better chance, of preserving Singaporean jobs. So, large benefits to companies, both through tax measures and Jobs Credit and other measures all making an impact this year.

A Resilience Package for maximum impact

The Resilience Package, therefore, delivers immediate impact but keeps our focus on measures that build up Singapore for the long term. It enables us to:

Do things decisively to provide the economy with quick support;

Do things that at the same time, build up our infrastructure and competitive capabilities; and

Do things which will see us through the current downturn, but also pay off for Singaporeans over the long term.

Drawing on reserves: A robust process

Let me now turn to the third key theme in the debate which has to do with the draw on past reserves. Many MPs have commented on this. In fact, most MPs – Mr Ong Kian Min, Mr Matthias Yao, Mrs Josephine Teo, Miss Penny Low, who spoke just before me – have provided strong support for the move to draw on past reserves to fund the two extraordinary measures within the Resilience Package. Ms Irene Ng had asked for assurance that the decision to draw from the reserves was made carefully and was not an over-reaction.

Several others, Mr Liang Eng Hwa, Dr Amy Khor, Ms Denise Phua, Dr Lim Wee Kiak and Mr Zainul Abidin Rasheed, have asked what benchmark is being set by this move for future governments

by drawing on past reserves in this fashion now, and whether there are clear criteria as to when Government should be allowed to draw on the past reserves. Mr Low Thia Khiang and Mdm Halimah Yacob asked why we had sought the President's agreement to use the past reserves now, rather than exhaust our savings accumulated in the current term. Several Members – Mr Heng Chee How, Mr Low Thia Khiang and Mr Lim Biow Chuan – also asked for clarifications on the process by which the President's approval was sought to draw on past reserves, and the reasons why the President, in consultation with the CPA, agreed to the Government's proposal. Let me address each of these questions.

Tapping on our strategic asset

Many MPs appreciated that the current global crisis and its impact on Singapore is precisely the type of situation that our past reserves had been accumulated for. This is the sort of thing that we have anticipated many years ago. As then-Finance Minister Dr Richard Hu explained in Parliament in September 2001, "the reserves would be available for use if there should be a major economic dislocation in the world affecting us. The size of that is not something we can predetermine but it is a bulwark which we can fall back on. I can assure the Member that it is not the intention to lock up our reserves permanently but it should be used with discretion and care".

The Prime Minister also addressed this possibility in 2006 in the Debate on the President's Address, saying: "The reserves are something which we have built up for a rainy day because we are highly dependent on imports. We have no natural resources. That is all we have and we have to husband them carefully and use them only when we really need to". So this is our philosophy on reserves – accumulate in good times, manage and safeguard them well, for use only in extraordinary circumstances.

A key question is why the Government sought the President's agreement to use the past reserves now, rather than wait till we have exhausted the savings that we have accumulated in the current term. As I stated in the Budget Speech, the Government does have sufficient accumulated savings within the current term to fund the FY2008 and FY2009 deficits without drawing on past reserves. But there are two reasons why we are doing so now.

First, signalling our intention to draw on past reserves reinforces confidence in Singapore's ability to deal with this crisis resolutely. Investors and citizens alike will know that we will use all resources at our disposal to weather this crisis, and emerge stronger. Markets too, including the currency markets, would know that unlike other countries, Singapore will do what it takes to address the crisis without borrowing.

Second, doing so now frees us to make a bold and forceful response to the crisis now, commensurate with the magnitude of the crisis. We can only implement these bold and forceful measures if we know we have the full resources available now for a decisive response – not just for this Budget, but to carry and sustain our fight beyond this Budget and this year if the crisis deepens and persists. Without the confidence of adequate resources, we would have had to reconsider our schemes, in particular, the Jobs Credit and the Special Risk-Sharing Initiative (SRI). It would have meant curtailing the scope and scale of our initiatives, and undermining their effectiveness. So without the confidence of adequate resources, we would have had to rethink the scope and scale of the measures we are putting in place in our Resilience Package. It would in fact be unwise for the Government to undertake the bold measures that we have set out in this Budget if we did not know we had the certainty of tapping on past reserves. Moving on a Big Bang measure now and leaving nothing to use subsequently, would be irresponsible. This is why it is the right move for the Government to tap on past reserves now, rather than use up all available savings first.

This does not mean that the Government intends to exhaust its current savings. We will still proceed prudently and only spend what the situation justifies. If we are lucky and the situation improves, we will naturally save our resources for another rainy day. But if things get worse, the Government now has at our disposal the resources to tackle the problems with all the vigour that is necessary.

As Prof. Koo Tsai Kee, Mr Arthur Fong, Dr Loo Choon Yong and Dr Fatimah Lateef have said, this crisis also shows why we were right in building up our reserves carefully, not tapping into it as many have urged in past years, and not run deficits in good years when we could afford it. Our reserves now will allow us to deal with this unquestionably severe crisis from a position of strength.

This draw on past reserves does set a precedent. It is therefore important that we are clear about the basis for the draw, which inevitably sets a benchmark for the principles that should apply in future.

The current circumstances and the measures for which we are drawing on past reserves are setting a high threshold for any future situation where such a draw is contemplated. It minimises the opportunity for future governments to call for unjustified use of the past reserves.

What should be the considerations for a draw on past reserves? Senior Minister Goh, speaking last Sunday, said he was in favour of putting up three "No" signs for drawing on past reserves. To summarise: first, no draw to support social assistance programmes. Second, no draw to fund permanent programmes, no matter how meritorious. Third, no draw except under dire circumstances that require one-off extraordinary measures to ward off catastrophe or prevent irreparable damage to the economy.

Senior Minister's three "Nos" have been implicit in the Government's thinking on how we should conscribe the use of past reserves. When we sought the President's in-principle approval for the draw on past reserves for the current purposes, we set out similar considerations.

First, a government should only draw on past reserves in very exceptional situations, for example, when external events or crises pose a threat to Singapore's economy or society. The current severe global economic crisis is a clear example of this.

Second, the measures to be funded out of past reserves should be of a temporary nature and not built into continuing government programmes. The Jobs Credit and the Special Risk-Sharing Initiative for bank lending are distinguished from regular budgetary interventions during a typical downturn, such as tax rebates or increased social spending.

So those were the two considerations that we set out when we sought the President's in-principle approval for the draw on past reserves. We should not, however, prescribe strict quantitative rules or specific indicators of distress on when a draw on past reserves can be justified. It is not possible to define quantitative rules that meet all circumstances. For example, should the criteria be that the Government is incurring a deficit of at least 6% of GDP? That criterion can be met because a Government is profligate and can overspend to achieve the criteria. Similarly, there may be situations where a dire circumstance requires a targeted and justifiable intervention of a magnitude not as large as 6%. It is also not possible to anticipate the nature of the crisis that can hit us in the future, whether due to natural disaster, a health pandemic, major security threats or war. So we should avoid trying to define very specific quantitative rules or very specific indicators of distress to justify a future draw on past reserves.

NTU Prof. Tan Khee Giap advocated the same view in the Straits Times on 3rd February. As he put it, "... specifying particular indicators of economic distress before the reserves can be tapped ... would put the Elected President on auto-pilot". He went on to say, "As future exceptional events are highly unpredictable, we must instead rely on citizens to vote in responsible governments to exercise sound judgement on how best to accumulate, manage and deploy our hard-earned reserves". That is indeed the basis of our two-key system. Its strength rests on the credibility of the Government and of the Elected President and his advisers on the Council of Presidential Advisers (CPA). The most effective safeguard for our reserves is in a system of robust checks and balances, by having the right people in charge, and the President exercising independent judgement on the Government's proposals with the advice of the CPA.

Not depleting our past reserves

I have set out the reasons for drawing on past reserves, and why it is better to do so now, rather than to wait until we exhaust current savings. I have also set out the threshold and conditions that should be set for any future draw on past reserves, and to ensure that it is not detrimental to the long-term objective of preserving and enhancing the real value of our reserves.

Ms Irene Ng and Dr Ong Seh Hong asked how long it would take for us to restore the $4.9 billion in our past reserves. Dr Lim Wee Kiak was also concerned about whether we had ample reserves left. Let me put the $4.9 billion in perspective. For FY2008, the year that is ending soon, the Net Investment Income Contribution to the Budget is estimated to be $3.7 billion. This is based on the actual interest and dividends that were earned on our investments. This $3.7 billion was no more than 50% of the total investment income for FY2008.

The $4.9 billion that we are drawing from past reserves is a significant sum, but it will not be large compared to the amount of annual investment income that we can earn. It is also smaller than the total return, including capital gains/losses, that we can expect to make each year on average over the long term. As Members know, the Net Investment Returns Contribution for FY2009, based on long term, expected total returns, is $7.7 billion.

We are not killing the goose that lays the golden eggs. Our reserves are substantial, with assets far in excess of our liabilities. The reserves are well-diversified. The Government is confident that the prudent management of our reserves – with investments aimed at the long term – will continue to grow our reserves and yield us a steady stream of Net Investment Returns Contribution over time. We will continue to exercise fiscal prudence and accumulate our reserves in good times.

Robust process for obtaining President's approval

Let me now come to the issues of process which Dr Amy Khor, Mr Lim Biow Chuan, Mr Low Thia Khiang and others had asked – the process by which we obtained the President’s approval for the draw on past reserves. Did the President have the full opportunity to properly evaluate the proposal, or was it a fait accompli? We are glad that Mr Low Thia Khiang is concerned about the two-key system working well in protecting our reserves. I presume this means that he now accepts the need for the Elected President as the second key.

The Government followed full due process in obtaining the agreement of the President and the CPA on its proposal. The Government finalised the shape of its Budget, in particular, the proposed Jobs Credit and Special Risk-Sharing Initiative (SRI), within the two weeks before Budget Day. Members would have to recognise that this year's Budget was brought forward by a month, resulting in a significantly compressed timeline for working out our measures.

The fact that the economic environment was also shifting in the weeks before the Budget meant that we had to refine the shape and size of our key proposals up until those final two weeks. The proposal to draw on past reserves to fund the Jobs Credit Scheme and the Special Risk-Sharing Initiative (SRI) had first to be agreed by the Cabinet, before it could be formally put to the President. The Cabinet did so the week before the Budget. But before the Cabinet decided, the Prime Minister met the President informally to share with him the Government's thinking, to sound him out and to give him more time to think over the matter. After the Cabinet's decision, in the week before the Budget, MTI and MOF followed up with briefings to the President and the CPA.

First, MTI and MAS briefed them in detail on the global economic and financial situation, and the implications for Singapore. MOF then briefed the President and CPA comprehensively on the two proposed measures the Government intended to undertake as part of its response to the crisis and the reasons for the proposed draw to fund them. We addressed the President and CPA's questions and clarifications on all relevant matters. We also briefed the President and the CPA on the possible scenarios that might require our accumulated savings or past reserves in the next few years, and the contingency measures that might be necessary. One of the issues addressed was the justification for drawing on past reserves now, before exhausting the savings of the present government.

Following the briefings, once we had finalised the costs for the two schemes, once we had finalised the numbers, we sent a formal request to the President. The President and the CPA were able to form their views in advance of this final submission because they had been thoroughly briefed. The President, in consultation with the CPA, accepted the Government's explanation that the crisis we are facing is of an exceptional nature, and the measures, being extraordinary and temporary in nature, can be justifiably funded from past reserves, and the President gave his in-principle approval to the Government's proposal.

Once Parliament approves the Supply Bill, we will seek the President's formal approval for the draw. Upon the President's approval for the draw, his decision will be gazetted, as required under the Constitution. I can assure Members that the President and the CPA were given full information to enable them to deliberate and make a decision, and in good time given the exigencies of the situation at hand.

We cannot rule out the possibility of another exceptional situation in our lifetimes that might require the Government of the day to draw on reserves to preserve Singapore's interests. In that scenario, the onus will once again be on the Government to justify its case to the President and the CPA, to seek Parliament's approval of the Supply Bill that contains the measures it is undertaking, and to explain to the public its reasons for doing so.

The draw on past reserves today sets an important benchmark. The crisis we face today is extraordinary, and the decisive but temporary measures we are undertaking in the Budget should rightly be funded out of past reserves. By doing this now, we are instilling confidence in Singapore's ability to see through the crisis and emerge stronger.

Let me now address three other important issues which have come up in the debate; first, getting credit to flow to businesses; second, schemes to help the unemployed; and, third, whether we should have cut the GST.

Getting credit to flow

First, on credit. Several Members – Dr Loo Choon Yong, Mr Seah Kian Peng, Mr Teo Ser Luck and Mdm Cynthia Phua – asked whether the Special Risk-Sharing Initiative (SRI) would succeed in getting banks to start lending. Others such as Mr Inderjit Singh, Mr Sin Boon Ann, Mr Ang Mong Seng and Mr Edwin Khew suggested that Government do more to spur bank lending to our companies or implement alternative strategies such as setting up a new lending institution.

First, I have to emphasise that there is no strategy that is going to prevent a decline in the overall volume of credit in the course of the recession. The de-leveraging that is taking place in the major economies is severe and likely to continue for some time despite the efforts of their governments. This will affect the credit markets globally and have continuing impact on banking systems in every country. Companies themselves are, in many cases, trying to control or reduce their debts in the recession. Overall, the demand for credit goes down in every recession.

However, our situation is much less dire in Singapore than in the major economies. The structural reasons why banks are unable to lend in other countries do not apply in Singapore. Our banks have strong balance sheets that have not been weakened by bad assets, and are well-capitalised. Their credit ratings are high.

Risk-sharing approach is likely to work

There is therefore every reason to expect that the Government's initiatives to take over a substantial proportion of the risk of bank lending will help sustain the flow of credit to our companies. It will not reverse the overall trend of a decline in credit, but it can make a real difference for a significant group of companies.

The SRI as well as the other schemes being implemented by the Government to help companies to obtain credit were, in fact, formulated in close consultation with the banks. The move to raise the Government's share of risk from 50% to 80% through the SRI was what the banks felt would allow them to keep lending.

The banks felt the SRI will be especially important for the significant group of companies that are essentially viable and have business models that can allow them to succeed in the years to come but who face great uncertainty in their short-term revenues. A very significant group of companies, so-called grey area, mid-sized companies, some larger ones, some SMEs, who are good companies, viable companies for the long term, but who face short-term financial problems or uncertainty in their short-term financials.

The SRI will help because Government is going to take the bulk of the risk. Because Government is taking 80% of the risk, the interest rate margins that banks will earn under the scheme will, in most cases, fully compensate for the risks faced by the banks themselves.

The top market players who account for more than 60% of the market have provided positive feedback on the scheme structure. Banks are already responding positively to the enhancements which were made last November, and we expect this to continue to pick up. The amount of loans that have been approved under all the financing schemes administered by SPRING went up significantly in January – more than 50% higher than the average of the previous two months. With the SRI, there is a good chance that this lending will be sustained, including to the mid-sized segment of the market. But this does not mean that we will leave the banks and customers entirely on their own to work things out.

The Government is engaged with both the banks and businesses. SPRING is closely monitoring the flow of loan applications, and is active in referring businesses to the Participating Financial Institutions. The Singapore Business Federation (SBF) and the five Enterprise Development Centres run by our other business groupings are also closely engaged with companies to help them with their loan applications. They have hired experienced ex-bankers to help out on this.

We can study alternative approaches for the future, including some of those suggested by Members. But let us focus on getting the SRI, which is just being introduced, to work. It is the fastest way in which we can get things moving on the ground, and has a good chance of succeeding despite the difficult climate. The Government and the Enterprise Development Centres (EDCs) are beefing up their resources and will work closely with the companies. The Government will continue to have regular exchanges with the banks and monitor the progress of their lending under the schemes.

Schemes to help the unemployed

Let me turn now to unemployment benefits. Some Members have suggested putting in place a new system of unemployment benefits. Mr Sin Boon Ann and Mr Siew Kum Hong proposed a permanent system of unemployment insurance. Ms Sylvia Lim proposed a temporary "Job Seeker Allowance". The scheme would be means-tested and provide benefits equal to half the last drawn salary, subject to a cap of $500. The substance of the benefits that Ms Sylvia Lim has in mind in her scheme are, in fact, already being provided for Singaporeans who lose their jobs. In fact, they often obtain far more assistance than what she proposes. However, there is a fundamental difference between her proposal and what the Government is doing, which I will explain later. So the substance of the benefits that she wants to give the unemployed worker is already been given to them, sometimes far more. But there is a fundamental difference in approach. As Minister Lim Swee Say would probably put it, it is same-same but different.

What is the Government's approach to helping the unemployed? Our basic approach has four limbs.

First, we spare no effort to match you with available jobs. Second, if you need new skills, we will help you get it. We will heavily subsidise the cost of your training, and you can also get a training allowance under SPUR. Third, we provide you with short-term means-tested assistance through the Work Support Scheme, administered by the CDCs. Fourth, if you face difficulties meeting your HDB payments, HDB will help you restructure your loan, or to downgrade to a smaller flat.

This four-pronged approach is over and on top of the significant assistance that we are providing to all families this year, and especially to the lower and middle income. These are the things that the Government would do to help you directly. But it is not just the Government that has a role to play, as several MPs have pointed out. The family, community groups and VWOs (Voluntary Welfare Organisations) all play key roles as part of the larger network of support for those in need. This is why the Government has topped up its grants for the community to help it to do so.

Matching people to jobs

Let me go through each of the four-prongs of the Government's approach. First, matching people to jobs. Minister Lim Swee Say, Mdm Halimah Yacob and others have highlighted the fact that many jobs are still available in the economy, including new jobs that are being created. There will be at least 45,000 new jobs available over the next two years. This is only counting the new jobs that we already know of.

Minister Lim Swee Say has explained the efforts that are being taken to help match every individual to the jobs that are available, and to put each individual through the training he or she needs, everything from preparing you for an interview to helping you onto the retraining courses to pick up new skills. e2i is doing this. So are the CDCs, as Mayor Zainudin Nordin spoke about yesterday, and the career centres run by the self-help groups.

Second prong – Support for Training. This is a key component of our approach to helping the unemployed. I would not go through the details of SPUR again, but just to highlight: Apart from the heavy subsidies for the training courses, low-skilled unemployed workers can also get a training allowance to support their skills training. For longer programmes such as the PCP (Professionals Conversion Programme) which helps retrenched PMETs, the allowance can go up to $1,000 a month.

Third prong – Work Support Scheme. The Work Support Scheme provides assistance to job-seekers on a means-tested basis. There are already 2,400 people today on Work Support administered by the CDCs. They will receive a comprehensive range of assistance, from cash grants to medical, educational and household assistance such as the utilities bills. We are, in fact, enhancing the Work Support Scheme in Budget 2009. Minister Vivian Balakrishnan will elaborate on this during MCYS' COS debate.

Fourth prong – HDB Loan Restructuring. Mr Hri Kumar, Ms Eunice Olsen, Mdm Ho Geok Choo and Mr Yeo Guat Kwang have asked for the Government to provide help to those who need help on their HDB loans. HDB will address the problems faced by the unemployed on their housing loans. Where there is a genuine need, HDB will temporarily reduce or defer monthly payments for up to six months. But it is important that we help households move to a sustainable solution. Some may be able to sublet a room. For those who are unemployed for a longer period, many will need to downgrade to a smaller, more affordable flat. HDB will help by providing an additional loan to facilitate their downgrading. Mr Mah Bow Tan and MND will be providing more details on the assistance measures during its COS.

When you add up the assistance we are providing through these various prongs – the four prongs – it is significant. But the approach is to provide assistance on a discretionary basis. At each step, an assessment has to be made as to whether every effort is being put in by the unemployed person to get a job and attend training where needed.

This is the fundamental difference between what the Government is already doing, and what Ms Sylvia Lim has proposed – which will provide automatically $500 of assistance to anyone who say he is looking for a job. As Senior Parliamentary Secretary Mr Hawazi Daipi just mentioned this afternoon, automatic financial assistance in this form will be unwise. Our discretionary approach of helping the unemployed is the best way of ensuring that those who are unfortunate to lose their jobs do not stay out of a job for long. As Mr Zainudin Nordin, speaking as Mayor, said yesterday, "It's about having the right attitude and having the skills that employers want." As he pointed out, unfortunately, every CDC gets a large number of unemployed people who want financial assistance but reject perfectly good job offers.

So, for any individual who is willing to adapt, be flexible, and do what it takes to get a new job, we will help him. As Ms Irene Ng said, if you need help, you will get it. We will provide you with financial assistance and we will help you get new skills so that you can get a job.

I want to give two examples to illustrate the benefits. First example is Ms Winnie Gong, a PMET, a professional, in fact a senior professional, who lost her job in January this year. She was working in the semi-conductor industry for the last 16 years, went up to the position of Senior Engineer. She lives with her elderly mother and her younger brother in a 5-room flat – upper middle-income family. She recently decided to take up a PCP programme to make a career shift to the pharmaceutical industry. Under SPUR, Ms Winnie Gong pays $600 out of the $6,000 course fees, which means the Government subsidises the balance of $5,400. For her course, she receives $2,000 in training allowance. That is cash. This is on top of the household benefits of $2,600 that she and her family – this is a family of three – will receive as part of the Resilience Package this year. The total benefits therefore amount to $4,600 in direct benefits (including the training allowance), and another $5,400 in course fee subsidy from the Government. So that is the first example of a professional who is using the opportunity we are providing to retrain and make a move in her career. It is a very significant amount of assistance.

A second example is Mr Tay, a rank-and-file worker. He was the sole breadwinner in a family of five until he lost his job last year. He sought help from the CDC, and was assisted under the Work Support Scheme. From September to November last year, he received under the Work Support Scheme $510 a month in cash and utilities vouchers for three months, making a total of $1,530. After three months of assistance, he found work again as a cleaner. And in his new job as a cleaner, he is entitled to a Workfare Income Supplement (WIS) payout of $2,200 for the year. He is a person with a strong will and attitude, he wanted to find a new job. But if he had not found the job, he would have received assistance for training, to ensure that he did find a job. I have therefore not included training allowances in this example. His youngest child is now being given childcare subsidies of $200 a month under the CFAC scheme which comes up to $2,400 a year. This year, his family will also receive household benefits, including our GST Credits, worth $2,100. So the total benefits from the Government amount to $8,230. A case of someone who went to the CDC and is put on the Work Support Scheme, received assistance, found a new job, therefore did not require a training allowance – $8,230.

Our approach of discretionary assistance is working. It is better than the alternative proposed by Mr Siew Kum Hong and Mr Sin Boon Ann of a system of unemployment insurance. We must be careful not to move towards a system of automatic broad-based unemployment benefits. The weight of evidence clearly shows that such schemes ultimately lead to a rise in the number of unemployed and also to the unemployed staying out of a job for longer. That is the weight of evidence from a whole range of countries. The reason why this is the case is that an automatic system of unemployment benefits, which is an entitlement, reduces the incentive to find a job. An OECD study in fact found that a 10% increase in unemployment benefits leads to a 7% reduction in the number of unemployed persons who return to work.

We should therefore continue with our approach, and keep on improving it. We provide real support where it is needed, help individuals and families to get back on their feet, and help us stay as a society with self-reliance at its core.

GST cut: Not a solution

Let me move on now to the issue of GST and why a cut in the GST is not a solution for us in this crisis. Mr Inderjit Singh, Ms Eunice Olsen, Mr Michael Palmer and Ms Sylvia Lim proposed that we cut the GST temporarily to 5%. Mr Inderjit Singh saw this mainly as a way to reduce costs for businesses, but also as a way to boost consumer demand. The other three Members also wanted the cut in GST to stimulate demand.

The Government considered a GST cut amongst all the options that we were looking at to address this crisis. We decided against it, not as a matter of philosophy, but because it would not have had the desired impact on demand and the economy; and also because the GST cut would have left the lower and middle-income groups worse off compared to the alternative strategies that we are taking in this Budget. It would not have had the impact on demand that is hoped for and it would have left the lower and middle-income groups worse off compared to the alternative strategies we have taken in this Budget.

There are three reasons for this: First, a GST cut from 7% to 5% will not help business costs to any significant degree. While the GST cut will mean that businesses pay less GST on their inputs, it will not in fact change their margins: The GST that businesses pay on their inputs is claimed back from the Government. At the end of the day, the impact of the GST has always been an impact that is faced by the consumer. It is finally prices that adjust. But business margins are unchanged. However, what businesses would face is the cost of changing the systems for a new GST rate on all their goods and services now, and again when the GST cut is restored. This is why in the UK, which is an example which Mr Inderjit Singh and Ms Eunice Olsen cited, many businesses have been concerned about the 2.5% cut in VAT that the government has introduced till the end of this year. Retailers have estimated that they will have to spend £300 million to cover the expenses involved in making the price changes. So that is the first reason. It will not help business costs to any significant degree.

Secondly, the GST cut will not lead to any significant increase in spending. In the UK, the hoped-for impact on consumer spending arising from the VAT cut during the Christmas and New Year period did not materialise. In fact, they timed it in advance of Christmas and New Year, made a big announcement in the hope that it will spur consumer spending. It did not happen. All the major retailers have commented that it did not make and will not make a difference to their sales. An IMF study also commented, looking at the UK example, that it was "questionable whether decreases in the VAT of a few percentage points are salient enough to lead consumers to shift the timing of their purchases".

Our own experience in Singapore when we raised the GST is similar. There was no reduction in consumption when we increased the GST from 5% to 7% in 2007 and accompanied it with a package of offsets for all households, with more for those in the lower and middle-income groups. Consumption grew by 5% in 2007, no different from the growth in employment income. Both Mr Inderjit Singh and Ms Sylvia Lim also made reference to Dr Basant Kapur's argument in the Straits Times. His main argument was that by reducing prices by 2%, the real value of people's bank balances or any nominal wealth accounts such as bank balances, would increase because prices have come down by 2%. The real value of the bank balances goes up by 2%. So people feel wealthier and they would want to spend more. It is what the economic theorists call a real balance effect.

There is, unfortunately, little evidence of this effect having been observed internationally. It has not happened in the UK and Singapore, as I have just explained. It also did not happen during another major recent episode which is Japan's period of deflation in the 1990s. Japan faced declining prices. So, in theory, people must have felt that the real value of their bank balances and of all nominal balances would have gone up, but they did not spend more. Many economists question whether consumers would at all be concerned about the real value of their bank balances at a time of recession, when their real concerns are over the possibility of losing their jobs or earning lower incomes.

The third reason why we did not pursue the strategy is that the 7% GST is a valuable source of revenue that allows us to fund additional social supports in this crisis. Today, we already use the revenues from GST to help pay for programmes for the lower income groups, especially the Workfare Income Supplement Scheme. What we are doing instead in the crisis, is to give additional GST Credits to everyone, which they get immediately. Lower and middle income households receive more in GST Credits than what they would have saved from a 2% GST cut. Our approach, therefore, provides money quickly in the hands of households and gives more to those who need it the most.

Overall, households will get back much more in all the benefits we are giving this year than what they would have saved if we were to cut GST by 2%. The chart shows this. It is arranged by percentiles of incomes – the highest income groups are on the right hand side of the chart and the lowest income groups are on the left.

If Members look especially at the lower income group, the chart shows how much benefits they get, compared to what they would have obtained in savings if we had cut the GST by 2%. So if we look at the chart, households in the second decile, from the 11th to the 20th percentile, will receive total benefits amounting to 18% of household income this year. If we were to cut GST by 2%, these households would save about 2% of household income. That is the difference.

This approach in distributing the GST credits is also more likely to lead to increased spending because more GST credits are given to the lower and middle income groups, who have a higher propensity to consume. The 2% of GST contributes $1.8 billion to our revenues. We are putting it back into the system, and back to where it will help most.

The Business Times on 2nd February quoted Mr Terry Connor. He is the CEO of Courts and President of the British Chamber of Commerce, and Courts, as Members know, is a major retailer. They quoted him on the Government's approach of keeping the GST at 7% and instead providing GST Credits and other benefits to households. I quote him, "This is a well thought-out response to the call to lower GST as it has the same or greater impact, while keeping on track the longer term goal of competitive corporate and personal taxation and re-distribution to the most needy."

Resilience Package provides a significant boost to demand

Some Members were concerned about whether enough is being done in this Budget for the demand side of the economy. This is a Budget with a basic deficit amounting to 6% of GDP. It provides a significant boost to all segments of the economy. Our main approach has been to help the economy through the supply side – by helping businesses so that they can help preserve jobs. What this does is to support both business demand – the demand that businesses create from each other, one supplier to another – as well as to support consumer confidence, which is the confidence that workers get because their jobs and incomes are more secured. So that is our main approach.

Secondly, as Ms Indranee Rajah has pointed out, our Government spending programmes and the additional investments that we are making in the range of sectors, especially on infrastructure, also add to demand. Together, these approaches, helping the businesses and Government spending, will get the most bang-for-the-buck for the money we are spending. In other words, the injection of Government money this way will have a larger multiplier for the economy, compared to direct efforts to boost consumer spending. It is the best way to sustain confidence in a crisis, amongst both businesses and consumers.

Budget Book estimates for political appointments

Before I conclude, let me quickly clarify the issue, which Mr Low Thia Khiang had raised, on the difference between the salary adjustments for political appointees, as announced by Minister Teo Chee Hean and the Budget Book estimates for FY 2009. Let me assure Members that the payouts for salaries of political appointees would be determined by the Government policy as announced by Minister Teo. The estimates in the Budget Book for expenditures on political appointments within each Ministry were, unfortunately, not updated in time. The actual expenditures will, of course, be reflected in revised budgetary estimates in the course of the year.

Resilience: Our collective approach

Mr Speaker, Sir, the Resilience Package is not just about $20.5 billion. It is not just about fiscal firepower, as Dr Amy Khor puts it. It is not just about the fact that we are running a highly expansionary Budget this year. This Package, and whether it succeeds, is ultimately about how we respond collectively to this crisis as Singaporeans. Many MPs have made this point during the debate – Mdm Ho Geok Choo, Mr Ong Ah Heng, Ms Ellen Lee, Mr Wee Siew Kim and others. We cannot change the global circumstances that we are faced with. But as several MPs pointed out – Mr Heng Chee How, Dr Lily Neo, Mr Matthias Yao, Mr Arthur Fong and others – we must rely on our character, fortitude and perseverance that we have as a nation to get us through this crisis. We cannot change global circumstances but we do have real assets, in our character, our fortitude and our will to survive and to bounce back up, that will take us through this crisis.

As Mr Sam Tan said yesterday, the Resilience Package is about everyone closing ranks and working together. Everyone has a part to play. The Government has provided substantial support to help businesses and households, and stands ready to do whatever it takes to overcome this crisis. Businesses must play their role:

retain jobs wherever possible, and create new ones;

maximise use of SPUR and other training initiatives;

banks should continue lending to all viable companies to help them see through this storm; and

landlords should pass down property tax rebates, and do more where possible;

For the community sector – our VWOs, community leaders, good-hearted volunteers from all walks of

life, and our philanthropists – the crisis is a time to do more for those in need. The crisis will also be a test of our adaptability as individuals. All over the world, people are going to have to make adjustments to cope with this crisis – people of all ranks. We can do this better in Singapore by being willing to work in different jobs and learn new skills, either with the same employer or in order to secure a new job, and by being prepared to help our family members, and the poor and vulnerable in our community.

This collective approach, with everyone – Government, businesses, the community sector and every individual – pulling together and playing our roles, is what the Resilience Package is really about. It is what will help Team Singapore, as Mr Seng Han Thong urged, press on against the tides in the year of the Ox. It is what will get us out of this crisis a more resilient society and a stronger country.

Sir, I want to clarify that my concern over the way the Government uses the past reserves is not an indication that I am now supporting the Elected President system. On the contrary, the concern arises because of the way the so-called two-key system operates. It seems that the two-key system operates simultaneously at the same time. When the Government's key says "unlock", the other key unlocks automatically. It seems to be like that. I wonder whether the second key has always been there on the safe.

Sir, the fact that the Minister for Finance has to explain in detail in this House on how the reserves are being used shows that whether there is an Elected President or not, the Government still needs to publicly justify the use of the past reserves. I would also like to know how does the President forms his independent opinion on the justification on how the past reserves should be used, when in fact the justification and the presentation of the facts to the President were all done by the Government and the civil servants from the Ministries.

Sir, my next clarification is this. The Minister for Finance has explained the rationale for using past reserves for the two initiatives of Jobs Credit and Special Risk-Sharing Initiative (SRI). Can I take it that as long as the programmes continue, even into the next financial year, if there is a need, the Government will continue to draw on past reserves for these two initiatives?

Sir, the Minister for Finance also quoted the Courts CEO for his support on the GST Credit, instead of reducing GST by 2%. Is he aware that the same CEO has also been quoted as saying that the Jobs Credit Scheme is not of much use in saving jobs? The Minister also, in his reply, said that the political appointment estimates in the Budget have not been updated. Besides these items which have not been updated, I wonder whether all the other estimates in the Budget have been updated.

Sir, I thank Mr Low Thia Khiang for his questions. His questions on the reserves are, I think, perfunctory. They do not actually take into account what I have just presented to the House, which has explained quite systematically the process by which we obtained the President's approval for this draw on reserves. I would, nevertheless, go through each of his questions.

First, was this somehow a simultaneous turning of the keys – when the first key turns, the second key automatically turns. He used the term "automatic". No, it is not. I have explained in detail. I have even explained the chronology of how we went about it, but the chronology is not of the essence. The point is that the President, advised by the CPA, makes an independent and careful judgment on the Government's case. It is independent. At the end of the day, our system has to rely on trust in the individuals who are appointed to their positions – the individual members of the CPA, the Chairman, Mr J Y Pillay and all the other members – Mr Yong Pung How, Mr Lim Chee Onn – , the President and the people in Government themselves. This is not a wayang. This is about a Government that, in the exigencies of the circumstances, had to craft, within a short period of time, major measures that were in Singapore's interest. We had to then approach the President and the CPA, provide full information and arguments for why we felt that it was necessary to do this now, what the alternatives were, and what could be the consequences of not acting as boldly and decisively in this crisis. And the CPA had to make their evaluation.

How does the President come to agree with the Government? It is not a matter of agreeing because it is the Government's case. It is a matter of agreeing because the President and the CPA had assessed the arguments – are they the right arguments, are they based on facts, are they based on what is in the interest of Singapore – and they come to their decision. That is all there is to it.

The rationale for drawing on reserves for Jobs Credit and the SRI have been set out. I think Mr Low Thia Khiang has asked a very good question – what if we have to continue the same measures next year? We do not yet know if we have to continue the same measures next year, and if we do, whether it will be on the same scale or be of the same scope. If we do have to do so, I would envisage that we will have to go back to the President to make a case for a further draw. It is too early to commit to this now, and certainly too early to say whether the President and the CPA will agree. But this is what we envisage at present, and indeed in our briefing to the President and the CPA, we had highlighted this possibility. This is a crisis that may be long drawn out. We are making these moves now and we may have to make more moves in future. The President and the CPA understood and appreciated that. They are not approving a future draw at this point, but they understood that in approving the draw now, there was also a possibility that the Government may have to go back to the President and the CPA in a year's time to seek a further draw. I am raising this not because we know we are going to do it or because we are committed to doing it, but this is realistically what the assessment is, and the President and the CPA understood that.

I have not studied everything that Mr Terry Connor has said. It is a matter of record as to what he actually said of the Jobs Credit. But regardless of what he said on the Jobs Credit, it does not change his position on the GST cut and the merits of the Government's approach to the GST. Neither does it change the fact that the vast majority of businesses, as we have heard in this House related especially by the labour MPs and unionists, feel that the Jobs Credit is going to make a difference to the pace and scale of retrenchment in what is going to be a very difficult year. I am sure we will find individual businesses who have a different opinion, but the weight of opinion in the last two weeks has been very encouraging. This is a scheme that will make a difference.

The difference in cost arising from this mis-estimate of budget for political appointees is not very large. But I would say that all the estimates in our Budget Book are exactly what they are – they are all estimates. We got stamp duties completely wrong two years ago because no one expected the property and the stock markets to boom the way they did so suddenly. And that was an error which was repeated by one or two MPs in this debate. That was a large error, but there are lots of smaller errors we make each year because it is not possible to forecast precisely in advance how each item of revenues would turn out, which depends on what is happening in the economy, what is happening in the markets. It depends on lots of factors. So the Budget Book is our best estimates for the year in advance. In this particular instance, it was a case of not having updated the relevant estimates in each of the Ministry's budgets, as distinct from coming out with a wrong forecast. But there are other instances, I am sure, where we will get it wrong. So the Supply Bill contains our best estimates for the year. From time to time, we will be wrong on specific items, and hence the Supplementary Supply Bill.

Mr Speaker, Sir, I wish to seek a clarification from the Finance Minister. In his round-up speech, the Finance Minister has still not given the House any idea of roughly how much we still have in our current reserves that justifies the Government to ask the President for a drawdown on the past reserves. In particular, I am wondering if he could clarify, for example, some of the major items of receipts, such as land sales revenue. In the last two years, I think, collectively, it was about $18 billion. And for next year, it is anticipated to be another $8 billion. How is this not factored in? How does this affect the calculation?

Secondly, Sir, I would like to clarify the Finance Minister's comments on my proposal to assist the unemployed. First of all, the proposal which I made is targeted at the unemployed person himself and it is not meant to replace schemes that would assist the family as a whole. So it is targeted at the unemployed person who has lost his income. Second, admittedly, my concern was more about the lower-income wage earners rather than the PMET group as such.

My next clarification is that even though the Minister went into some detail on how the CDCs and the other agencies are helping with job placement, training, etc, does the Minister agree that in the next six months, the job situation would be quite different from what we have been experiencing previously, and the job search would presumably take much longer, and the anxieties placed on the unemployed person would correspondingly lengthen? In that sense, our experience with the CDCs so far is that in terms of cash assistance and other help, it is actually quite small in terms of the cash amount. And the other assistance which the Minister referred to requires appeal to multiple sources of help. So because of these extraordinary circumstances, what I am asking for is that for the six-month period, which is supposed to be a very bleak period, could the Ministry consider giving some assurance to the unemployed person so that he can maintain his own subsistence, and also assist him in the job search, because many of them may not be able to afford to spend their time in training and not look for jobs.

On Ms Sylvia Lim's first question about how much accumulated savings we have, as I mentioned in the Budget, we have enough accumulated savings to meet the deficits we are incurring, which are the FY2008 and FY2009 deficits. If we add those two together, it comes to a total deficit of $10.8 billion. So that was the size of the bill – $10.8 billion deficit. And I have stated that we have adequate accumulated savings to meet that $10.8 billion deficit.

Why is this the case? In FY2007, we made a surplus, as Members know, and the revised estimate was $7.7 billion. In addition to that, over the last three years, FY2006-2008, we have obtained capital receipts of $3.7 billion from our statutory boards. These are the accumulated savings of our statutory boards. If we add $7.7 billion plus $3.7 billion, the total is $11.4 billion, enough to meet the $10.7 billion combined deficit of FY2008 and FY2009.

The estimates which Ms Sylvia Lim mentioned for land receipts puzzled me. I think she might have looked at some private sector reports. And there were some figures which I saw in one of the newspapers recently which were really quite puzzling. We certainly do not have $18 billion of land sales receipts in current reserves. The only thing that the Government takes into revenues for its current term are land sales less than ten years, which is a very small amount. The bulk of our land revenues goes to past reserves, as we had, in fact, explained in the House last year. So those numbers are not accurate. They are not in the current reserves.

On the Member's second set of questions on unemployment benefits, she was concerned about what the individual himself gets under the scheme, leaving aside what the family gets. I would say, frankly, that we take the perspective of the family as a whole. When an unemployed person goes to the CDC to get benefits, they look at all his problems. That is why in the case of Mr Tay that I highlighted, the youngest child was placed on CFAC – $200 a month. He got utility vouchers as well, things for the family. If a person goes for training, we provide him support. It is not just for his own daily meals and so on, we also help to support the family. So what we provide the individual takes into consideration the needs of the family, and that is a very important part of discretionary assistance. Because if the family is able to support the unemployed family member, then their needs are less and our whole emphasis on relying on the family, including the extended family, to support each other would be undermined if we provide automatic support to an individual in that circumstance. So there is a difference. It is providing the same or more benefits compared to the proposal that the Nominated Member had envisaged – $500 a month. We are providing effectively the same or more benefits but on a discretionary basis, so that we do not undermine the fundamentals of our system of providing assistance, and we do not decalcify as a society.

Any more clarifications? Yes, Ms Ng, last one.

Sir, I appreciate that, because of the compression of time, there may be a rush in seeking in-principle approval from the President of a drawdown of the reserves. Can I ask the Minister whether the process can be refined and improved further, so that, in future, we can make sure that the process is more transparent and the public knows that the institution of the President is one that is strong and he can exercise an independent turn of the key. In any request for a drawdown of the reserves, we can expect it to be an emergency. Therefore, before we ask for an in-principle approval, it must be clear what is the sum that we ask the President to approve. Because in this case, I understand that no finalised figure was given until after the fact when the in-principle approval was given.

Sir, that is not the case. In fact, quite frankly, the Prime Minister met the President informally, before Cabinet had decided, to give him a sense of the Government's thinking and the measures that we were going to take. Even then, there was a fairly clear sense of the scale of the measures.

When we briefed the President in detail on the measures and what the total budget would look like and, in particular, what these two measures would comprise, it came with figures. We wanted to scrub it in detail before we submitted our final proposal. If we are talking about whether it was $4.8 or $5.1 billion, it was $4.9 billion. But these are things that we go through very carefully, and the final formal submission to the President came after detailed checking of each of the schemes and each of the details. And they are still estimates. It may be more or less than $4.9 billion, but that is our best estimate. So, to clarify, specifically, we did provide the President and the CPA with estimated costs of the two initiatives – the Jobs Credit Scheme and the Special Risk-Sharing Initiative – and put it in the context of the total package that the Government was going to have to implement to help Singapore through the crisis.

Sir, what is missing is the process that the President took after he received the briefing from the Government. If we could get a sense of what they discussed and what process they went through to decide, then that may clear many of these questions.

I am not sure why it is relevant. At the end of the day, as I have emphasised, and indeed as we debated at some length in October when we passed the Constitutional amendments, this is a system that is different from Norway and Australia, where as much detail as possible is provided, including details of asset allocation decisions, and it has to be approved by Parliament. This is not the nature of our system. Our system relies on trust in the individuals who are in charge, including those appointed to the CPA and the Elected President. Do we trust them? Have they made decisions wisely? Has the Government been acting responsibly? That is ultimately what has been and will be the strength of our system. And in the countries that have gone instead for systems based on transparency of figures and procedures, as distinct from trust in the individuals at hand, we have seen what has happened – a shift towards wanting to spend more reserves for less and less meritorious purposes over time. The Prime Minister had quoted a few cases in the debate in October. I had mentioned some others. It is almost in the natural workings of society that this happens. This is what we want to resist. We have put in place a system of Constitutional checks and balances and a system where the right people, hopefully, will continue to be in place, so that the reserves are safeguarded and protected.

Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 2009 to 31st March, 2010.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.30 pm.

Sitting accordingly suspended

at 3.02 pm until 3.30 pm

Sitting resumed at 3.30 pm

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 2009 to 31st March 2010, contained in Paper Cmd. 1 of 2009.

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 FY2009 on pages 6 and 7 respectively of the Command Paper.

A total of 374 amendments to the Estimates of Expenditure have been submitted this year. The guillotine times to 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. I trust that hon. Members will be able to keep to the speech times indicated against their amendments. I would like to urge hon. Members – both from the back and front benches – to adhere to their time limits.

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. Dr Teo Ho Pin.

Population and Integration

Sir, I beg to move,

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

Sir, to be a first-world economy and global city, Singapore needs to nurture both local and foreign talents in Singapore. The Government has introduced various Baby Bonus initiatives to encourage married Singaporean couples to have more babies. At the same time, we have relaxed our immigration policy to grant citizenships to more foreigners who wish to settle down in Singapore. As the years go by, we will experience a greater mix of Singaporeans with different backgrounds, traditions and religions. Therefore, the Government must provide a more conductive environment for all Singaporeans to stay united as one people.

Sir, I understand that there is an influx of people applying to be permanent residents (PRs) recently. Some have to queue overnight to get a queue number to apply for PR. I am not sure whether the rush is due to the success of our efforts to encourage more foreign talent to work, live and eventually become Singaporeans or is it the impact of recession. May I ask the Prime Minister as to whether there is a change in the population and immigration policy with regard to PR? How many new citizens and PRs were granted in 2007 and 2008?

Sir, the integration of Singaporeans is a continuing task for both our Government and people. Since the formation of the Integration and Nationalisation Champion (INC) Committee by the People's Association, a total of 747 Integration and Nationalisation Champions were appointed. These committees are responsible for integrating new citizens into our community. Although the INCs have initiated various projects and programmes to welcome and integrate new citizens, we have yet to provide sustainable programmes to bond our community. One barrier is the lack of funding in supporting substainable programmes for the INCs. The organisation of welcome parties and roadshows provide limited opportunities for new and existing citizens to interact and may not be effective in integration. We should instead focus on activities which will increase the understanding and interaction of our citizens.

Sir, I wish to ask the Prime Minister as to whether there are mechanisms to measure the effectiveness of the INCs' efforts. Will the Government provide more funding to the INCs? Sir, the Baby Bonus has been in operation for a number of years. It has produced limited results. Are there plans to review the Baby Bonus Scheme and provide more incentives to encourage married couples to have more children?

Attracting, Developing and Retaining Talent

Sir, we live in a highly globalised economy where financial, commercial and social interests flow together in a confluence of markets, travel and communications, cross-border investments and trade. A vital city is a locus of activity in its region. In cities like New York, London, Paris and Tokyo, that region is the world. In the last few years, Singapore has also embarked on a journey to become a global city. We are already a hub of finance, commerce and communications. Our global schoolhouse initiative is helping to expand our intellectual capital, which is the foundation of a knowledge-based world. We recognise that technology and innovation have helped the world expand at an exceptionally fast rate, creating unprecedented opportunities and challenges. We are investing heavily in both infrastructure and human capital to become a centre for biotechnology where we can successfully and repeatedly transfer knowledge creation to early stage commercialisation.

Sir, our strategy to develop Singapore into a global city of opportunity is a sound one and many of the Government's policy initiatives and actions are already bearing fruit. But there is one key ingredient that is required if we are to succeed and sustain our ambition – that is retaining our local talent and continuing to supplement local talent with foreign talent. Our small population, declining birth rate and the mobility of Singaporeans mean that we have to follow a twin strategy to retain as much of our local talent while attracting additional brainpower with the requisite skills and experience from overseas.

This is recognised by the Government, which has launched many initiatives, programmes and campaigns to do just that. For example, we are now regularly contacting Singaporeans living in different parts of the world and hopefully, wooing some of them back home. We are also now taking proactive steps to reach out to targeted foreigners with a view to attracting them to study, work and live here. We only have to look around the Central Business District, residential estates in the East Coast and around River Valley Road and the entertainment spots of Clarke Quay, Dempsey Road and Holland Village to know that we have been very successful in implementing policy. This has helped to fill the many new jobs created in financial services, media, information technology, manufacturing, logistics, and so on.

But alas, how the world has changed in a few months through no fault of our own in Singapore. We are now in the midst of a global economic crisis of unprecedented proportions. Singapore is feeling its impact with the sceptre of job losses looming large. There are already blunt and insensitive calls from certain quarters, including some hon. Members in this House, that when it comes to downsizing the workforce, we must get rid of foreigners first regardless of who is best suited for the job. This is a dangerous political rhetoric. It only serves to give mixed and contradictory messages to two of our important stakeholders – foreign companies and foreign talent, unsettles a key segment of our workforce and undermines the good work of Government agencies in attracting and developing talent.

Of course, we must try and find every Singaporean a job, retrain and reskill our citizens for the "new economy". But to preserve jobs for Singaporeans at the expense of eroding our competitiveness or the development of our increasingly sophisticated and knowledge-based economy would be very short-sighted and, ultimately, could lead to more job losses for Singaporeans. In fact, many of the new jobs created in the financial services sector, in biotechnology, in the petrochemical hub of Jurong Island cannot be filled by Singaporeans because we just do not have enough Singaporeans with the requisite skills and experience. We also hope that multinational companies (MNCs) will continue to take advantage of our excellent infrastructure and attractive tax incentives to locate their regional headquarters (HQs) and perhaps some of their global business unit HQs in Singapore. While this will create jobs for Singaporeans, it will also mean that more foreigners from head office will have to relocate to Singapore.

So we have to continue with our liberal policies to allow foreigners to fill these critical jobs, which will ultimately benefit Singapore and Singaporeans. However, given the economic downturn, this will require political will and conviction because in a scenario where the unemployment rate for Singaporeans increases in the short term, the man-in-the-street will not understand why there are so many foreigners continuing to be employed here while Singaporeans are losing their jobs. This could become an emotive issue and we need to pre-empt such feelings by engaging our citizens in proactive and sensitive ways.

In conclusion Sir, I hope that we will take a long-term view and continue to make foreign talent welcome and feel at home in Singapore because they will not only help us survive the downturn but, in the light of tough competition ahead, will help us emerge from the downturn stronger and more resilient.

New Citizens

(In Mandarin): [For vernacular speech, please refer to Appendix A *. ] Sir, every year, there are 15,000 immigrants and permanent residents who become Singapore citizens. At present, about one third of our population are from abroad. All along, we treat them as equal, and all citizens enjoy the same benefits and share the same obligations as citizens of Singapore. However, in the last two years, at our citizenship award ceremony, we have began addressing these people who came from other countries to become our citizens as "New Citizens". I feel that by doing so, we are creating a demarcation between the "new citizens" and the old citizens. They are constantly reminded that they are "new citizens" and not locally born and bred citizens. This would give rise to an adverse effect to our efforts to integrate the "new citizens" into our society, and generate two different classes of citizens, thereby undermining the social cohesiveness of our people.

Recently, two of my constituents came to see me. One received a summons from HDB for a parking offence. While requesting me to appeal to HDB to withdraw the summons, he reminded me that he was a "new citizen". In fact, he had been a citizen of Singapore for more than one year. The other received a summons from MOM because his domestic maid suffered some injuries. He and his wife also requested that I appeal to MOM to withdraw the summons against them. They made it a point to remind me that there were "new citizens" and asked me to give them special attention.

Such a trend, if not checked, will later on result in a gap between the old and the "new citizens". I migrated to Singapore with my family when I was seven years old. After completing my education and national service, I received my Singapore citizenship and became a Singapore citizen quite naturally. I did not carry the title of "new citizen". I was able to integrate into the community directly, and actively participated in grassroots and community activities, fulfilling my obligations as a citizen.

If there is such a title of "new citizen", how long has one to hold on to this label before he or she is regarded as an old citizen? Is there any special significance in calling them "new citizens"? Otherwise, may I suggest that we simply call them Singapore citizens the moment they received the Singapore Citizenship certificate at the award ceremony, thus avoiding the title of "new citizens"? Do we have any new strategy to integrate these new citizens into our society so that we can become "one people, one nation and one Singapore"?

*Cols. 2071-2072.

Sir, I thank Dr Teo Ho Pin, Mr Gautam Banerjee and Mr Ang Mong Seng for their comments and suggestions on our population strategy. During this economic downturn, it is even more critical that Singaporeans understand the objectives of our population strategy.

The primary objective of our population strategy is to serve the interests of Singapore and Singaporeans. Mr Gautam Banerjee talked about the need to retain local talent and supplement them with foreign talent so that Singapore can remain globally competitive. I agree with him. Not enough babies are born in Singapore every year. Without immigration, our population will start to decline by about 2020 just like Japan, whose population shrank in 2005. We need to continue to encourage marriage and parenthood, engage our overseas Singaporeans, and bring in suitable immigrants who can contribute to Singapore.

Many Singaporeans are concerned about job security in this period of worldwide economic recession. The Resilience Package, including the Jobs Credit Scheme announced in the Budget speech, aims to help Singaporeans keep their jobs. We can also expect the number of foreigners seeking employment in Singapore to slow down.

Some countries, such as the UK and Australia, are limiting foreign manpower. We should not do likewise. As Mr Banerjee mentioned, this would be short-sighted and could ultimately lead to more job losses for Singaporeans. Even in this economic downturn, there are sectors in our economy which still need foreign workers to supplement the local workforce in order to stay in business. For example, in the biomedical sciences industry and others, cited by Mr Banerjee, where there is a shortage of local expertise, highly-skilled foreigners will help us to keep this industry in business and to expand its output from $6 billion in year 2000 to $24 billion in 2007. There are also jobs that locals shun, such as those in construction.

3.45 pm

Dr Teo Ho Pin asked for an update on the number of new citizens and permanent residents, our efforts to integrate new residents and the effectiveness of our population measures. Mr Ang Mong Seng asked if we should be using the term "new citizens".

In 2008, we welcomed 20,513 new Singapore citizens and 79,167 new PRs, up from 17,334 new citizens and 63,627 new PRs in 2007. This could be due to the good economy and the broadening of the eligibility criteria in 2004. I would like to assure Dr Teo that there has been no change in these criteria since then. Unlike Mr Ang, I think it is all right to use the term "new citizens" for a while. There is no specific significance to the term. It is simply a descriptor of foreigners who have decided to make Singapore their home. Over time, this distinction will be blurred as their children grow up and become like our children. The important issue is not whether they are new citizens or old citizens, but whether they can successfully integrate into our society. When they do, they become one of us.

There will be cultural differences between native and new citizens. Integration is a two-way process. Singaporeans need to understand and accept immigrants, while the immigrants need to make the effort to become a part of the Singapore community.

As Dr Teo pointed out, the People's Association has more than 700 Integration and Naturalisation Champions (INCs) who reach out to new immigrants in our communities through regular house visits, and encourage them to take part in grassroots activities and community work. I understand that the People's Association provides adequate funding support for the INCs. Grassroots organisations can also do their part.

Many new Singaporeans are also doing their part to integrate into Singapore. Some take part in activities and share their integration experiences with other new Singaporeans in immigrant associations such as 天府会 (Tianfu Club), 厦门公会 (Amoy Association) and 晋江会馆 (Chin Kang Huay Kuan). Some new citizens also do their part for the local community too. For example, Ms Umayal Lakshmanan, who came to Singapore in 1999 from India and became a new citizen in April last year, reads to children at the Hong Kah North Community Club.

Efforts on integration initiated by community organisations are encouraging. But there is scope for the public sector, the private sector and the people sector to work more closely together in a systematic and coordinated way. To this end, a National Integration Council (NIC) will be set up. The NIC will comprise key representatives from the public, private and people sectors to drive the integration agenda forward through a concerted effort. Dr Vivian Balakrishnan, Minister for Community Development, Youth and Sports will chair the NIC and he will say more about this during his Ministry's Committee of Supply.

The Government will continue to encourage and support Singaporeans to have more babies. We will monitor the trends and assess the effectiveness of the enhanced marriage and parenthood package announced last August. It is therefore too soon to review the programme, as Dr Teo suggested. Although the current economic crisis may cause some to think carefully about having children, I hope they do not put off their decision until the good times return. Our total fertility rate in 2008 is still low, at 1.29, unchanged from that in 2007.

Even as we make Singapore a better place for families and help immigrants integrate into our society, we should not forget the more than 150,000 Singaporeans who are now overseas. In this economic climate, overseas Singaporeans are anxious about how Singapore is coping and even worried about their own job security. We will continue to engage them and keep them informed of what is happening back home through platforms such as the Singapore Day. Our next Singapore Day will be held in London on 25th April this year.

Mr Chairman, Sir, Singapore is facing tough times now. But the problem will blow over one day. Our society is stable and we have the resources to help Singaporeans overcome this crisis. I have no doubt that Singaporeans have the grit and determination to ride this out. The key to our success is our people – a people made up of Singaporeans who are citizens by birth or by choice, of Singaporeans living here and overseas, and of Singaporeans from this generation and the future generations. It is during challenging times that Singapore needs to continue to have a sustainable, cohesive and integrated population. I am confident that we will be able to overcome our current problems and emerge stronger after this economic storm, especially when we face the challenges together as one united people.

Caring for the Elderly

Sir, many visitors remarked that in a modern metropolis like Singapore, they often come across the rather unusual, if not disturbing, sight of old ladies and sometimes men, bent double pushing trolleys piled high with cardboard boxes. If they are not collecting cardboard boxes, they can be found at petrol stations pumping petrol or working as cleaners in office premises or condominiums. They are doing this to earn a relatively meagre allowance to see to their daily needs. By most accounts and from talking to them, they are not rich, retired Singaporeans. On the contrary, these are elderly folks probably in their 70s or 80s often living alone and having to provide for themselves. It is indeed sad to see our fellow Singaporeans in advanced age having to lead such hard lives to eke out a living. This has prompted many of my overseas friends to ask whether we have any welfare support for senior citizens.

Such comments and queries often lead us to wonder whether we can do better to look after our senior citizens. How we take care of our senior citizens is a reflection of who we are as a people and what we stand for. The question is really whether we can do better as a country to provide for the elderly.

The fact remains that the Government is indeed thinking long term in providing for a society that is rapidly ageing. The formation of the Inter-Ministerial Committee on Ageing is one example of the priorities that we as a country are facing on the problem. Until we have effectively put in place a robust comprehensive framework for taking care of the elderly in our society, we will continue to be confronted with questions of how we should manage their long-term needs.

To be sure, many elderly want to continue working to stay active. The question really is whether we can find jobs that are less physically demanding and perhaps meaningful for them to work in. I would, therefore, like to ask the Prime Minister for an update on the work of the Committee in dealing with the problems of ageing in our society.

Caregivers

Sir, I would like to put up a case for financial assistance for unpaid caregivers. Providing care for persons with disability (PWD) has become a way of life for many Singaporeans. With a fast ageing population and longer average lifespan, there will be an increase in Singaporeans trying to balance working and caregiving responsibilities. The need to care may be related to either event such as a stroke or a gradual process such as the onset of dementia. In either event, you may not be sure where to begin.

Currently, many of the caregivers are employed full-time. I believe some are also employed part-time. Employed caregivers struggle to balance their time and energy between work and caregiving. Caregivers are often exhausted, burdened and stressed. Employed caregivers find it necessary to turn down training opportunities or promotions. They may take retirement or simply quit their jobs altogether providing care for their loved ones. Lost work opportunities take a financial and emotional toll. Caregivers not only lose current income and benefits, they also face reduced retirement income because of zero CPF contributions. Caregivers who enjoy their job, are friends with their co-workers may also become depressed and lonely after quitting. With zero income, an extra responsibility of being a family caregiver for a PWD is added to an already costly equation. Many people are feeling the financial burden on top of emotional and physical burdens that come with the situation at home. Currently, there is a foreign domestic worker levy concession available to families with children aged 12 years and below and elderly aged 65 and above. Families of PWD who need help in caregiving. Is the Government helping to reduce the cost of living in caregiving and assist caregivers in caregiving chores? It is not enough if you are basically giving a discount to a levy in which Government has implemented in the very first place, provided the family has means to employ a foreign domestic worker which costs about $300, $400 for a reasonably experienced FDW. This does not –

Mr Chiam, your time is up.

Thank you.

A Caring and Active Community

Sir, can I take both cuts together?

Yes, please.

Sir, as Singaporeans live longer, many are also reportedly suffering from illnesses and undergoing treatments.

Whilst many can take care of themselves by going for regular follow-up checks and treatments, there is still a significant group who rely on caregivers who are inevitably the unmarried children or siblings. As a result, these caregivers cannot be gainfully employed as their caregiving role is often a full-time, unpaid task. This task can last the lifetime of the person who needs care and in the process the caregiver would have also advanced in years besides having been made poorer without any savings or support for himself or herself.

Whilst it is only right that the responsibility of caring for a family member, either a parent or sibling should be borne and shared equally amongst all the other children or siblings, this is often not the case. There is never any equality of burden when it comes to caring for an infirm relative or parent, unless there is a prospect of an inheritance. While some cases can seek relief from the Maintenance of Parents Tribunal through using the parents as the person needing maintenance, there is no equivalent of such a tribunal for siblings.

Should we allow this group of home caregivers to fall through the cracks especially when they had performed their obligations so unselfishly? Can they not be certified as qualified caregivers and be offered some schemes that allow them to be given priority when applying for jobs in community hospitals, nursing homes or homes for the elderly sick in priority to other foreign nationals, so that their experience and skills that they had picked up looking after their own relatives could be turned into an employable skill? These caregivers may not qualify for or participate in SPUR for various reasons. As locals, most of them would know how to speak dialects, Tamil or Malay and would obviously be an asset over the foreign nationals as employers need not provide accommodation, pay foreign workers' levy or security bonds for them. They are also likely to be loyal employees as their lifelong dedication looking after their loved ones have shown.

Socially Responsible Individuals

Next, on socially responsible individuals. According to statistics, about 14% of senior citizens are aged 50 to 59 now. This particular group possesses core values which are very different from the generations after them. The majority are educated in Chinese Language schools with strong emphasis on moral and character development, reflecting the political and economic situation then. They had a very colourful and stormy life history, a fate tied up with governments that were colonial, then self-governing,

then a part of the Federation of Malaysia before going alone to become independent. It is often lamented that our current generation lack many of the innate values which this group possesses as they have greater capacity, certain desirable traits, values and mindset that could perhaps help us to reduce some of the disturbing trends or values that confront us today. I, therefore, ask what and how our Government can engage this group of senior citizens meaningfully, so as to tap or draw on their expertise and experience in and area of our economy, community and societal use.

4.00 pm

(In Mandarin): On 1st January, there was an article in Lianhe Zaobao by Mr Wu Wei Cai. He said that senior citizens who are above 50 should take part in social work, so that they can make use of their rich experience and impart them to our younger generation.

(In English): In TODAY newspaper's VOICES column yesterday, ie, on 4th February 2009, Dr Peter Yan recounted his experience and lamented that, "There's an increasing lack of respect from stressed-out, pampered youths." He said he has "a head full of grey hair", so I guess he must be a senior citizen. I quote him, "While we need skills to excel in life as well, it is important to take notice of the seniors who have made the world what it is today. In 2040, 60% of our population will be senior citizens. Life has became impersonal – on seeing a neighbour, you get just a nod, at most. Youngsters are blaming the 'elderly experienced' for allowing the economic woes to evolve and not learning from history. It is easy to point fingers. But, rather than to shift blame, will the youth be open to intellectual discourse on issues? Can they discuss this, while keeping in mind that a failing economy is no reason not to maintain their respect for the elderly?

I would add to that by saying that being elderly or frail is not a reason to be discriminated by the young and able-bodied. Singapore is what it is today because our elderly have shared the vision of our Government and worked to make Singapore survive. Their respect is already earned and we should not be any least respectful. Nevertheless, I wish to know if the Prime Minister's Office has any concrete plans to address these issues.

Concessions for the Elderly

Sir, a newborn baby is wrinkled, hairless, toothless and looks quite like an old man. There are actually many similarities between a growing baby and an ageing person, except that the changes and developments go in opposite directions.

I am glad now that my four-year-old daughter does not need to wear diapers to bed anymore. However, now, my 90-year-old grandmother is bedridden and wears diapers. I just bought knee guards for my eldest daughter who has been selected to train for her school volleyball team. On the other hand, my mother has a knee problem and is thankful for the Lift Upgrading Project. There are childcare centres and daycare centres for the elderly. In Singapore, many domestic helpers are engaged to look after babies and the elderly.

It is always a joy to watch a baby learning to walk and to talk, becoming more and more independent. However, it is a different matter seeing a person decline into old age, losing motor skills and becoming weaker. It can be particularly heart-wrenching if the person is our parent, someone who used to care for us, who used to be the stronger one, and able to provide all answers to our questions and our needs. It is a reversal of roles and not everyone takes to it easily. "The Curious Case of Benjamin Button" only happens in the movies. Society and the business world seem to favour the youth over the aged. It is always sexier to have the young as your target customers because your business can grow with them, whereas the old cannot bring your business beyond this life.

I was pleasantly surprised to chance upon a Japanese sushi restaurant recently, which offers discounted buffet prices for both children and senior citizens. Most restaurants only offer discounts for children. Come to think of it, it does not make sense as old people do not eat a lot. That is why the elderly do not like to go to buffets as they do not think it is value-for-money. For air tickets, a child between two and 11 years old enjoy a special price. I assume it is because they do not earn an income, but neither do the elderly who are mostly retirees. The child takes up the same one seat as an elderly person and is served the same food. In fact, it is cheaper to fly an elderly passenger as he does not need to be given toys and a funpack!

Let me now move to an issue that was discussed many times in this House – concessions for public transport. Why is the child ez-link card, which is applicable for all pre-schoolers above 0.9 metre in height and below seven years old, valid throughout the whole day but the senior citizen ez-link card is not valid before 9.00 am on weekdays?

I believe the explanation given was so that this does not add to the already heavy passenger load during the morning rush hour. But if you think about it, no senior citizen would want to squeeze with the working crowd to get onto the trains and buses, if they have a choice. For those who need to do that regularly, they are likely to be still working. Are we not asking people to continue working past retirement age, be re-employed, but be prepared to take a lower salary? Would this concession not help to ease expenses and encourage working among the aged?

In Mexico, all residents above 60 years old can apply for a free discount card. They enjoy 50% off on bus travel, free or reduced admission to museums, savings on water bills, 15% off at many stores all over Mexico, a 5% to 10% discount on pharmaceuticals, 25% to 50% discount off tickets to arts festivals, and many others. In the Philippines, the Expanded Senior Citizens Act of 2003 grants senior citizens 20% discount from all private establishments. In turn, the discounts may be claimed by these establishments through tax deductions based on the net cost of the goods sold or services rendered to the senior citizens. In Hong Kong, the ferry service between Hong Kong Island and Kowloon is free for senior citizens.

It is commendable that a number of private businesses in Singapore are already providing such concessions for senior citizens, without Government intervention. But I would like the Prime Minister to consider legislating or encouraging concessions for senior citizens perhaps through tax benefits to the private enterprises. The concessions should be given with no restrictions on valid hours, as this creates bipolar ends of the consumer market. Our elderly should be encouraged to go to restaurants and cinemas with their children, grandchildren and young people, and spend time together.

I am happy to learn that the Singapore Sports Council gives senior citizens and their family members a group concession when using sports facilities together, but then it is only during off-peak hours. Some may argue that such practices should be left to the businesses, as they will do it if it makes commercial sense. However, should care and respect for the elderly be dependent on commercial sense or should it be a value of the society? Doubling the length of maternity leave does not make commercial sense, but the Government feels that having kids is an important national issue, therefore, now we have four months of maternity leave and the Government pays for two months of it. So where do we stand on the value of the society to care for and respect the aged? In fact, the market share of the elderly consumers will be an expanding one, but let us not wait for commercial sense to happen.

Just as we provide care for our children, we have to care for our elderly. Caring for elderly parents is a child's obligation. Caring for the elderly population is a community's obligation.

Mr Chairman, Sir, I thank the Members for their strong support of the elderly. And the voices that have been put forward, on behalf of the seniors, are commendable and I hope that the whole generation of younger Singaporeans will listen to them.

We know we are all growing old and Singapore is ageing fast. Although, during this time, there is a tendency to put this aside because of other pressing issues, I think we should still take the opportunity to prepare ourselves for the much larger number of seniors that we are going to have. Mr Sin Boon Ann requested for an update on the efforts that we have to prepare for ageing. I will first cover financial security.

In recent years, the Government has focused on helping Singaporeans to work longer and save more. This is necessary because we are living longer. CPF LIFE will be implemented from 2013. The Workfare Income Supplement (WIS) scheme has also been refined to better support older lower-income workers, and for WIS, seniors get more. Retraining and upskilling opportunities have been expanded. Our tripartite partners have also been actively promoting re-employment, before it is legislated in 2012. As Ms Cham said yesterday, 706 unionised companies have committed to re-employment, with about 5,400 workers above 62 years old already being re-employed in October 2008. Some have not had their contracts renewed, so the number fell to 4,650 in December. But, our employment rate for workers aged 55-64 years is 57% today, and we will still work towards the target of 65% by 2012. Ultimately, we should build a culture where seniors are engaged in purposeful and fulfilling work, for as long as they are able. More Singaporeans are sharing this view. According to a global survey by insurer, Aviva, six in 10 Singaporeans would like to work beyond the retirement age. This is the second highest rate in the world after Hong Kong. We must, however, accept that working longer does not equate to working in the same job, in the same organisation, at the same pay. The seniority-based wage system, which has been with us for decades, is a barrier against continued employment. Under this system, it might cost employers less to recruit and train a fresh employee, than to retain an older worker. Ultimately, pay has to be based on the value of the work produced. Thus, the terms of re-employment have to be negotiated and unions and employers are doing so. And WIS, as I said, favours senior workers and should be taken into account.

I agree with Mr Sin that we should help the elderly find jobs that are less physically demanding and more meaningful. But there are practicalities and, sometimes, it is unfortunate that the only type of work that an elderly person can do is the type that he described. Nevertheless, we should try to find meaningful work for seniors. In the US, the concept of an "encore career" has been embraced by baby boomers there. These new careers in the second half of life are usually in the social arena, and provide meaning, self-fulfillment and also income. This is an area where Ms Ellen Lee has been speaking up for, on behalf of seniors, and, I think, an area where our seniors can be gainfully engaged.

Today's economic environment also allows for experimentation with flexible work arrangements that meet the aspirations of our seniors. However, we should not deny seniors of work which may be more physically demanding. If seniors want to and are able to work in these jobs, we should encourage them to. It keeps them active and self-reliant. I have often been cheered by the impeccable service provided by older staff at fast food counters. Let me turn next to the community.

Hardware-wise, we have made good progress in building an age-friendly community. We are on track for all HDB precincts to be barrier-free by 2011, and for lifts to be at every floor by 2014. Within five years, community clubs and RC centres will have basic barrier-free features. To expand the range of housing options for seniors, HDB is building more studio apartments, two-room and three-room flats. Seniors wanting to encash their housing assets have more options. For seniors living in smaller flats, we are implementing the lease buyback scheme this year.

Hardware must be backed up by software, so that our community is not just a pretty, but empty shell. Far too often, we read about seniors and their families struggling to cope with mental illnesses. Last month, Mdm Voon, who has mild dementia and depression, went missing in Genting. We are happy for the family that she was found in Singapore a week later. But there have been other cases where seniors with mental illnesses die alone and unnoticed, abandoned by their families and shunned by their neighbours.

As a society, we need to be more aware of mental illnesses among the elderly. At times, the stigma and misperceptions are worse than the illness itself. We must address this early, if we are to manage them well in an ageing population. The incidence of dementia, one form of mental illness, is expected to rise sharply.

Within a decade, 45,000 seniors are projected to have dementia, double the number today. They will make up 8% of the elderly population.

4.15 pm

Resources have been allocated to improve public education, prevention, detection and early treatment of mental illnesses. Late last year, the Community Psycho-Geriatric Programme commenced training of grassroots volunteers in early detection and follow-up of suspected cases. More than 400 grassroots leaders and frontline staff from CPF Board and Town Councils will be trained this year.

We should not just rely on grassroots leaders and community touch points. At the end of the day, families, friends and neighbours are best placed to care and support our seniors.

In line with this, the People's Association has made "neighbourliness" a central theme in its workplan. It has launched a "Neighbours Connect" programme to build social networks within each RC. We target for at least 200 RCs to implement the programme over the next five years.

Small acts of kindness go a long way. About two years ago, one of my former colleagues, Ms Debbie Ng, was discharged from hospital after a knee operation. As her daughter had to work in the day, Debbie had considered admitting herself to a community hospital for rehabilitation. But when a neighbour heard of her situation, she immediately offered to help Debbie in the day by cooking some simple meals. There is nothing better than being able to recuperate in the comfort of your own home. And there are no hospital bills to pay!

Neighbourliness is another reason why we are piloting the Wellness Programme in 12 constituencies. The programme helps residents aged above 50 to better manage their health and to be engaged with others through social interest groups. Residents, assessed through health screenings to be at-risk, will be referred for follow-ups. Through the pilot phase, we will develop a model which we hope to introduce to other constituencies next year.

So while the focus is on the seniors themselves, we are also hoping that this programme will promote inter-generational bonding. In the pilot programme, there are examples of younger people from the schools working with seniors. So, therefore, the respect that we want the younger generation to have of seniors can be transmitted through such joint activities. Sixty-year-old Mr Ho Toon Fang has benefited from joining "Wellness@Punggol South" last year. Mr Ho used to stay at home and barely exercised. Today, he is a regular user of the gymnasium at the Wellness centre, and has found friends with common interests. Last December, he was part of a group that called themselves "OCBC - Old Can Be Contributing". This group of seniors collected newspapers together with students to raise money for needy residents. I hope that more such stories of healthier and active seniors will arise through the "Wellness Programme" and as this example shows, young students are involved and so those values which the older generation holds on to will be transmitted through these activities.

Neighbourliness is also key to healthy lifestyles. Last year, I announced that Mr Heng Chee How will study ways to promote physical activity among older Singaporeans. It is well known that regular physical activity is essential to our health and well-being. It even reduces the risk of mental illnesses and some types of cancer. The problem is that not enough people do it.

One lesson that Mr Heng and his team have learnt is that physical activity is best promoted and sustained through social groups. Finland has only five million people. But it has 9,000 sports clubs, run mostly by volunteers! Can we do the same at our grassroots, among neighbours? We are now working out how brisk walking and taichi, already popular activities in the community, can be better promoted. I know that Dr Teo Ho Pin will like more money to be provided for brisk walking but I put it to him that it is an activity which should come from the ground and we should not need to spend so much money to motivate people to do this activity.

Even with all our efforts to promote healthy lives, some of us will fall sick, become frail and require care. We project that the number of seniors needing help with activities of daily living will double to 65,000 over the next decade. For these seniors, most of them will look to the family. Mr Chiam See Tong and Ms Ellen Lee both spoke on the need to provide greater support for caregivers.

Caregiving is an important and, at times, stressful task. As family size becomes smaller, the burden on caregivers will also rise. The Government will look to ensure that caregivers are given the support they need to carry out their responsibilities.

Caregivers should be given better information and guidance on care options. For seniors discharged from hospitals, the Agency for Integrated Care helps families to coordinate the appropriate services required to support the senior within the home and the community. We have to be more senior-centric and provide services across the medical and social care continuum in an integrated fashion.

We will also look at expanding caregiver training and support programmes. Today, families can tap on subsidies under the Caregiver Training Grant to attend caregiver training courses. We will raise awareness and availability of these courses. Some of these courses can be accredited to the Workforce Skills Qualifications framework, so that these caregivers can also find employment in the eldercare sector, something that Ms Ellen Lee hopes to see.

More services will also be introduced to provide more options for caregivers. I am pleased to announce that MCYS will fund the building of six new day care centres for seniors over the next five years. Day care centres provide care and keep frail seniors socially engaged. They also provide respite for family caregivers. We are improving maintenance exercise programmes at these centres, so as to keep our seniors physically and mentally active.

Going forward, the Ministry of Health will enhance the provision of services in the Intermediate and Long-Term Care sector, which it will elaborate on later. Even for those without family caregivers, seniors should be supported to live as long as possible in their own homes.

Among the more vulnerable seniors are those living in HDB rental flats. Today, there are 19 Seniors Activity Centres serving seniors in one-room rental flats. Operated mainly by Voluntary Welfare Organisations, they provide basic information and referral, organise social activities and engage homebound seniors. Over the next five years, MCYS will also fund the set up of about 22 Seniors Activity Centres (SACs) and expand some of the existing SACs. Working hand in hand with the local grassroots, the SACs are part of the social safety net for vulnerable seniors.

Overall, MCYS will spend an additional $18 million on these day care and Seniors Activity Centres.

Mr Chiam and Ms Ellen Lee also mentioned financial assistance for caregivers. I am mindful that other members of this House have previously called for an allowance for family caregivers. I have said that we should not inadvertently monetise family care and responsibility. Nonetheless, we will take a look at this issue in the context of financing long-term care.

All around the world, countries are grappling with how to finance long-term care. One issue is to manage the rising demand for long-term care services. Another is that long-term care services tend to be more fragmented than medical care, and therefore not as cost effective or as "person-centric". Long-term care is also expensive, requiring us to examine who pays for the care. There is growing consensus that national policies should not prescribe the form of care, but should allow personal choice. Last month, there were visitors from overseas who shared their experiences and said the greatest mistake that the United States made was to build so many nursing homes that became the automatic option of choice, which is very costly and something which they now find difficult to unwind. They suggested to us that we have the opportunity to keep people at home because of the nature of our housing and we have the Public Housing Programme that no other country has, which provide us with the elements to build support services for the elderly around that framework and we will study accordingly.

In most OECD countries, total long-term care expenditure average 1%, but can be as high as 3% of GDP. Welfare states, in particular, find that they have to ration services to contain public expenditure. The UK is now considering a mandatory private insurance scheme for long-term care, a radical departure from its state-funded health service. We have to understand these models better as the devil is in the details.

We are not starting from scratch. Eldershield provides a good basis from which to refine our long-term care financing mechanisms. Eldershield was reformed in 2007 to provide higher payouts of $400 per month for up to 6 years. Supplements are also available to provide higher payouts or longer periods of payout, or both.

In the same way as how our 3Ms, "Medisave, Medishield and Medifund", cover medical care, we will need to look at whether to set up a parallel of having 3Es to cover long-term care expenses. The 3Es being Eldersave, Eldershield and Elderfund or maybe it is possible to enhance the 3Ms. Together with means-tested Government subsidies, which are available for most care services today, we want care in old age to be affordable for all Singaporeans. The Government will study how such a financing framework can be more holistic and robust.

While we set about to deal with the challenges arising from an ageing population, we must not forget that the extra years we have is also a blessing. How can we help seniors add life to years?

We want to enable older Singaporeans to lead happy, healthy and active lives. Our efforts on employment, financial security, ageing-in-place, health and long-term care will go a long way to achieve this vision. Changing our attitudes about ageing is also important.

An international survey conducted by AXA tells us that retirees in Singapore tend to think 70 is old. On the other hand, retirees in the US associate being old with the age of 78. The irony is that the US life expectancy is lower than Singapore's! The boxer Muhammad Ali probably exemplifies this optimistic American spirit. He once said, "Age is whatever you think it is. You are as old as you think you are".

Efforts to promote positive mindsets about ageing have intensified over the last two years. In 2007, the Council for Third Age (C3A) was set up by MCYS to champion active ageing. Last year, the CDCs partnered with the Council to hold active ageing carnivals all over Singapore, greatly enhancing outreach efforts. As more seniors become active agers, we will certainly see them come out to contribute their time and expertise, at work and in the community.

Mr Baey

Yam Keng asked if the Government should do more to encourage concessions and discounts for seniors. Certainly I encourage commercial companies to do so. But I think ultimately this must still be based on commercial considerations. Otherwise, the costs of concessions would fall back on the rest of society, and everybody else has to pay more. What we can do, however, is to encourage companies to see that being pro-seniors is also pro-business.

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Let me offer an example. It is well-known that NTUC Fairprice offers senior citizens a 2% discount on Tuesdays. It does this not just because of Corporate Social Responsibility, but also to attract customers, since Tuesdays tend to be the slowest day of the week. Tuesdays are now one of the busiest days, alleviating the heavy weekend traffic at the supermarkets, and raising the yield per square metre of floor space used.

Part of the mission of the Council for Third Age is also to build a vibrant market for seniors in Singapore. Last month, it organised a 50 Plus Singapore Expo, which received an enthusiastic response from about 70,000 seniors. Special deals for seniors were on offer from the 150 participating companies, ranging from health screening to customised travel packages and I believe concessions or special offers were provided to these seniors. Over time, I am confident that more companies will want to reach out to our increasingly affluent seniors. I think Mr Baey's point is that we should also encourage family packages so that the seniors can enjoy certain activities together with their grandchildren. Today, if you go to a cinema there are concessions on weekdays, Mondays to Fridays, before 5 pm but for seniors. So his point is that we should encourage the cinema operators to give concessions so that they can go together with their grandchildren. We should certainly encourage them to do so.

Ageing is a sunrise industry not just in Singapore, but all around the world. Our Asian hinterland dominates population ageing; the number of people aged 60 and above will quadruple to 1.2 billion by 2050.

For this reason, we want to develop Singapore as a knowledge and business hub for ageing. Let me give you some examples: EDB is leading efforts to develop the health and wellness industry in an ageing population. In January, two conferences, "Reinventing Retirement Asia, and Asia Forum on Ageing", were held in Singapore, involving many international experts and partners. The Silver Community Test-Bed Programme under MCYS is into its second call for proposals to test-bed age-friendly products in HDB homes. Last year, Singapore Management University, with the support of the MAS, has set up a Centre for Silver Security to conduct research on retirement security in ageing populations. As we can see, Singapore is becoming a vibrant place for research and business on ageing.

Let me conclude by saying that the work of the Ministerial Committee on Ageing builds on previous efforts to prepare our population for ageing since the 1980s. There are still some major items on the agenda, such as long-term care financing and developing more care and community services for an ageing population. At the end of the day, however, each individual is responsible for preparing and living out one's golden years, with the family playing an important supporting role.

Within the next two months, MCYS will be releasing a public report to update on what the Government has done to prepare for an ageing population. It will contain useful information and practical advice on how Singaporeans can prepare well, and how we can work, live and play in our later years. As we add years to our life, we should also add life to our years. I hope that the report, titled "Adding Life to Years" would inspire all Singaporeans to be happy, healthy and active today and in the future.

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Developing Singapore as a Pre-eminent Financial Centre

Mr Chairman, the negative effects of the global financial crisis are still unfolding, making victims of more traditional financial giants after Lehman Brothers. Singapore is now ranked third behind New York and London as a financial centre in a survey commissioned by the City of London. The crisis is not only forcing financial giants to their knees, it has also resulted in a heavy retrenchment of staff in the industry. How does the retrenchment of banking staff on whom we have spent much public and private resources to develop, affect our status as a pre-eminent centre?

We have been promoting the wealth management and fund management as specific sectors with strong growth potential. How does the MAS consider this growth sector going forward? Will our ambitions be thwarted, or have we already, in the last five years, developed the natural advantage in this area?

Finally, Sir, I call on the Government to take stock of the progress thus far and re-assess the immediate and longer-term directions to develop further Singapore as an international financial centre.

Developing Financial Literacy

Sir, what are the root causes that led to the recent structured products fiasco? It is greed and lack of financial literacy. Many people lost their nest egg. In 2008, the total debts to individuals in Singapore stand at $112 billion, 10% more than 2007. Credit card debt alone stands at $3.3 billion and worldwide, credit card debt has been growing fast and even threatens to be the next sub-prime. Sir, since my first speech in Parliament, I have made repeated calls for national financial literacy programmes. I am happy with the MoneySense programme but judging from the recent financial fiascos, the MoneySense programme is not sufficient. Hence, I am making urgent calls for two additional suggestions.

One, perhaps we can equip every household with a basic financial literacy handbook – much like the case of an emergency handbook; and life skills that can help them do basic financial planning whether in good or bad times.

Two, I propose setting up a high-level National Financial Literacy Advisory Council, perhaps under the PMO, to co-ordinate efforts to work with the public, private and people sector to accelerate financial education efforts for youths in school, adults in the workplace, homebuyers and retirees in the CPF queues, homemakers and self-employed who are found everywhere. In addition, the council can help improve understanding of financial services, create national financial literacy barometer, conduct research and strengthen financial education programmes.

Sir, let me reiterate that financial literacy can help to smoothen consumption, provide for better education and health needs, save individuals from their financial headaches and family heartaches and also provide capital for entrepreneurship. Most of all, it would also help to lighten the Government's load on the financial security that needs to be set aside for an ageing population.

MAS - Guidelines for Fair Dealing

Sir, in February 2008, MAS released a consultation paper on proposed Guidelines for Fair Dealing. The proposed Guidelines focused on the role of board and senior management of financial institutions (FIs) in leading their companies to deliver fair dealing outcomes to retail consumers. The proposed Guidelines, amongst others, seek to build consumer confidence that the FIs will put their interests first in the conduct of their business and to offer product and services suitable for the targeted consumer segment as well as handle consumers' complaints promptly and in a consistent manner. As these proposed Guidelines are in line with one of the supervisory objectives of the MAS, I would like to ask the Minister four questions.

One, we all know that the board and senior management of FIs will always put the interests of their company first. They have a duty to ensure that their company is well managed and profitable. Thus in any dispute with consumers, no FI will readily admit to any wrongdoing. The collapse of Lehman Brothers in September 2008 and the resulting meltdown of the financial markets have made investors of structured products even more sceptical of FIs on the issue of fair dealing. In a press release on 2nd October 2008, MAS stated that it understood the anxiety of many investors and identified three well respected independent persons (IPs) to oversee the complaints handling and resolution process of FIs for the failed structured product linked to Lehman Brothers. IPs are also tasked to determine whether these internal processes of FIs are independent, fair and transparent. My question is, does the Minister still believe that the proposed Guidelines for Fair Dealing can be effectively administered by the board and senior management of FIs given that MAS has embraced the importance of IPs to assure consumers that they will be given a fair hearing by FIs on the issue of mis-selling.

Second question, Sir, would the Guidelines for Fair Dealing for FIs be considered complete without the input of consumers? Would MAS consider releasing the consultation paper by groups like CASE or the Security Investors Association of Singapore for consumers to feedback on their experience with FIs over the issue of fair dealing since we have about 10,000 affected investors of failed structured products to-date?

Third Question, when does MAS intend to implement the Guidelines for Fair Dealing for FIs?

The last question is, how is MAS going to monitor the compliance of the Guidelines for Fair Dealing by financial institutions or is MAS going to consider its job done once the Guideline is accepted for implementation by the FIs?

Mr Chairman, Mr Arthur Fong asked about the impact of the financial crisis on the development of Singapore as a financial centre.

Financial services is a key sector in our economy, contributing about 12% of our GDP and employing 8% of our workforce. We think it is very important for us to continue to grow Singapore as a financial centre. This crisis would test us to the fullest. Arising from the crisis are also opportunities for us to develop Singapore as a financial centre. Our immediate objective really is to make sure our financial institutions here remain sound and prudently managed. We need to ensure that our financial markets operate smoothly, credit flows to corporate sectors continued and there is sufficient liquidity in the banking system. How we deal with the crisis will add to our reputation as a financial centre. Over the longer term, once the global economy recovers, we expect financial services to continue to grow significantly. Why?

First, because of our competitiveness as an international financial centre which rests on our key attributes, including the rule of law, trust, reliability and our strong governance, our high standards of prudential regulation and supervision and our high quality skilled workforce. These are critical enablers for Singapore to emerge stronger from this crisis and remain competitive.

Second, while we expect the global financial industry to undergo important changes during this crisis, we expect the growth prospects and the economic competitiveness in Asia to remain strong and financial services to remain a key pillar in supporting this growth. To make sure we can come out of this crisis stronger than before, we will continue to invest in capabilities development, particularly in sectors that Singapore is competitive in, which Mr Arthur Fong has identified, for example, in the wealth management and in the fund management sector.

MAS announced last November that training incentives under the financial sector development fund would be enhanced in order to encourage financial institutions to continue to invest in financial training and talent development. MAS will also be working with other international regulators to shape the new regulatory environment. So if we respond to this financial crisis capably, then I am confident that Singapore will continue to grow as a financial services centre.

Miss Penny Low asked about what we can do to enhance the financial education of Singaporeans. We agree that financial education is very important and as Miss Penny Low pointed out, we have a programme called MoneySense that has been in place since October 2003 and we have set up a Financial Education Steering Committee (FESC) to drive this effort. This Steering Committee comprises CPF Board, the Ministry of Education, MAS, the Ministry of Manpower, MCYS, the People's Association and the National Library Board. The Committee has been fairly effective, setting strategic directions to financial education initiatives and coordinating the efforts of the various agencies. For example, the different agencies will spearhead specific programmes to target

different groups under their purview. For instance, the Ministry of Education promotes initiatives for the students, CPF Board for the pre-retirees, PA for community groups and low-income families, MAS for working adults, MCYS for senior citizens and the National Library Board for the general public.

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The Steering Committee also works closely with the financial industry associations, partners such as the Security Investors Association Singapore (SIAS), Council for the Third Age, NTUC, Singapore Exchange and CASE to develop, implement and fund the various programmes, and the programmes cover a wide range which include seminars, games, publications of guides as well as national financial literacy surveys. So we have the structure in place and we will continue to evaluate this and see whether there is a need for setting up a high-level council as Miss Penny Low suggested to drive this and to give it a higher impetus. Not all solutions need to be solved by kicking it up. So, we will evaluate the effectiveness of this Steering Committee before we embark on this suggestion of a national council.

Mr Low Thia Khiang asked about the guidelines on fair dealing. The MAS put up the guidelines for fair dealing for public consultation and the consultation closed in mid-May 2008. The four specific questions which Mr Low asked, whether we can expect the board and the senior management to change the culture of the financial institutions to one that hoist in fair dealing. What we want to try to do in setting up these guidelines is to inculcate this corporate culture of fair dealing in our financial institutions. For this corporate culture to come about, it needs the support and the driving force of the top management, the board and the senior management. And we believe that this culture is in fact in line with the commercial objectives of the financial institutions. The two are not at odds. So even in the resolution of the recent structured products issue, and the appointment of independent persons, we believe the fair dealing guidelines set out the five fair dealing outcomes that we want to bring about, and these five fair dealing outcomes are still germane and relevant.

If I may just take a bit of time of the House, essentially, these five outcomes are one, that the consumers have confidence that we deal with financial institutions where fair dealing is central to their corporate culture. So this is something that we want to bring about and to make it part and parcel of the financial institution's corporate culture. Second, that financial institutions offer products and services that are suitable for the consumer segments they target. So, again, it must be appropriate products. They must evaluate the needs of the customer and make sure there is a proper matching of needs and products. Third, that financial institutions appoint competent representatives who provide consumers with advice that meet their financial objectives and suit their personal circumstances. This is very important. We have just recently amended the Financial Advisers Act (FAA) and key changes in the amendments go toward raising the overall standards of financial advisers. This is part and parcel of this whole change that we are bringing about in the financial institutions. The fourth outcome that we want to achieve is that consumers receive clear, relevant and timely information to make informed financial decisions. Again, this is something that we want the financial institutions to bring about. And, finally, that the financial institutions handle consumer complaints promptly and in a consistent manner. I would think that in this recent saga that we had on the structured products, the financial institutions, with the help of the independent persons, have discharged their responsibilities well and have shown that they take the consumer complaints promptly, seriously and they have dealt with it in the best way possible. So I believe that the fair dealing outcomes that we want to promote is in keeping with our philosophy, and the way we have resolved the structured products issue brought about by Lehman Brothers' collapse, shows that this can be done.

Mr Low asked whether the input of consumers, such as CASE and SIAS, were incorporated in the guidelines. Indeed, they have been. This document was put up for public consultation which involved industry and all these people. His third question is, when MAS intend to implement this? MAS intends to issue these guidelines towards end-March 2009. And how MAS will monitor compliance? Even though these are guidelines, MAS as the supervisory authority would monitor how the FIs go about discharging the spirit of these guidelines. In some of these outcomes, there are also tangible deliverables say, for example, the third guideline of competent representatives. There are clear standards of what the representatives' qualifications, track records and their competencies require. Also, the fifth outcome of dealing with consumer complaints – there will be proper processes. So MAS would be in a fairly good position to be able to monitor the compliance of the financial institutions even though these are just guidelines.

Public Sector Jobs

Sir, I was at the NTU Career Fair yesterday. More than 107 employers participated in the fair. But the number of private sector companies has reduced and the public agencies have increased by two-fold – 28% for public sector agencies, 72% for private sector companies. The undergraduates heard that there were 18,000 jobs available from the public sector, they were keenly interested. I perceive that there was a sense that all the jobs were available only for graduates. I believe that there should also be positions available for non-graduates and even older workers. So, could the Prime Minister's Office share what jobs are available from the public sector for graduates and non-graduates, "O" levels, "A" levels and above "A" levels?

Older Workers in the Government Service

Sir, fortunately, even in the depth of a recession, we have the resources to provide additional employment with positions in Government agencies. Over 18,000 jobs needed to be filled. I hope that these opportunities will be well shared with two categories of job seekers, namely, the mid-career workers and the older workers.

Certainly, for the new entrants to the workforce, armed with their newly-minted certificates, and a zest for life, the Government service would be a good place to start their new job search. They will be a breath of fresh air. I am sure a good percentage of the 18,000 jobs will go to this new group.

However, with job losses mounting across a broad spectrum of industries, many workers of varied ages and experiences would become available as well. I believe there are opportunities for Government agencies to inject new old, and not so old blood at every level. Mid-career workers with private sector work experience could provide the agencies with new perspectives. They can bring their private sector experience to bear in Government agencies, providing input to enhance policies and/or processes and even public perception and needs. Another breath of fresh air.

However, for mid-career workers to be welcomed and for them to survive, thrive and contribute, the workplace needs to have an organisation culture that welcomes feedback and is relentless in raising performance by adapting and innovating. Stones need to be allowed to be turned over and over again. This will require the support and endorsement of the most senior leaders in the agencies.

The next group is the older workers. Just as the Government encourages commercial businesses to employ older workers who do not wish to retire, it should also provide opportunities for its older workers to continue working as long as they can, wish and are able to contribute. The public often judges Government agencies for the service they receive and many a time, this is a function of their interaction with Government officers. While excellent customer service comes from the right service attitude, it is also a function of experience. In this area, older workers can be a big plus.

Re-employment of Older Workers

Sir, at last year's Budget debate, the Minister assured this House that although the re-employment legislation would be enforced only in 2012, the public service will do better and will be ready by 2010. Although we are now in the midst of a severe recession, nonetheless, we must not lose sight of this important long-term policy and we know that the actions of the public service is watched closely by the private sector. I would like to ask the Minister to give an update on the measures adopted by the public service to re-employ older workers. How many older workers have been re-employed in the civil service as well as the statutory boards? What is the period of re-employment and on what terms? Could the Minister also clarify what are the jobs that have been identified for the employment of older workers and how has the public service redesigned jobs in order to make them more suitable for older workers? Could the Minister also give an update on the three pilot agencies – the Ministry of Education, the Singapore Police Force and the Ministry of Manpower – that have agreed to establish the processes needed to ensure a smooth implementation of the civil service re-employment policy by 2010?

Internal Feedback

Sir, the Advisory Council on the Impact of New Media on Society has recommended that the Government Instruction Manual be amended to allow civil servants to voice their personal opinions on Government policy. However, the Government has decided that it will not do so.

Whether it is on new media or other channels, it is important for any employer to actively engage and solicit feedback from employees internally. Not only is it useful to hear from people who know the systems and have ideas to improve it, it is also a powerful tool to build a sense of belonging.

The civil service is the largest employer with many Ministries and departments performing various public roles. It also has many talented and motivated people who are dedicated to serve in the interest of the nation.

During my 10 years in the public service, I have the fortune of working under good leaders who promoted an open culture for staff to speak their minds. However, being such a big organisation, there must be systems in place which are not dependent on the big boss to provide the environment. Many people are aware of the Staff Suggestion Scheme which encourages and even incentivises civil servants to give suggestions. However, the ideas tend to focus on matters pertaining to the respective organisation. I also have the experience of the leaders treating that system as a numbers game.

Of course, nowadays everyone is just an email away, theoretically. A civil servant can always email to Head, Civil Service or even the Prime Minister directly. However, I do not think many people would want to do that.

In the corporate sector, there is the whistle-blowing mechanism where staff can direct any feedback to an independent body which will investigate and maintain the informant's anonymity. While the intent of whistle-blowing is more about ensuring corporate governance, an adaptation of that could be considered for the civil service's internal feedback system.

I would like the Prime Minister's Office to look into ways to enhance the internal feedback system and harness the wisdom of civil servants.

Caring Government Agencies

Sir, in the Budget debate, I had spoken on the need to administer with a heart. The question is perhaps how can the Government show that it cares? The tone is already strongly set as relief packages and budget provisions kick in so quickly to help businesses and individuals cope with the recession. In my mind, the Government cares.

However, how the Government, through its agencies, interact and help people day to day will be just as important in showing that the Government cares. This is the "software" that will colour the people's perception of the Government – whether it really cares for the people or not.

So let me reiterate my call – please go about your work with a human touch and a big heart. Hence, my earlier comments on older workers being mentors to younger frontline officers in interactions with the public. Please empathise with people who seek assistance and be more sympathetic to those who find themselves in difficult situations. For example, an unfortunate accident involving a motorcyclist and his pillion-riding wife was brought to my attention. The car in front of them braked suddenly. The motorcyclist swerved his bike and fell. The car sped off and the motorcyclist and his wife were too hurt to take the registration number down. Not only were both husband and wife hurt and off work, he received a fine and demerit points too. Is this fair or is it just the unthinking application of a rule that if you are hurt in an accident, you are penalised first? Would this resident see this as justice? Are the officers so busy and stretched that everything is an automated response?

I had appealed in the Budget debate that many agencies can take a leaf from how ComCare support is delivered. If a judgment call needs to be made, why not be generous in compassion or set up a system where people closer to the situation can be relied upon for an additional point of view or judgment?

Just like the roles the grassroots leaders play in the delivery of ComCare support. In these difficult economic times, we can, perhaps, be more forgiving and try to go out of our way to be more understanding and sympathetic.

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I have also mentioned earlier, the issues faced by SILRA Home. If the officers and the volunteers are aligned in their goals to provide the best value to the Home's residents, I am sure they would have been able to come to some general consensus in terms of the operating budget. They need not feel that they are on opposing sides, with one playing the domineering role of a custodian and a steward. But do not get me wrong. There are agencies that go out of their way to understand the ground, in order for them to perform their roles better. These agencies send representatives to community meetings, which are always invariably in the evenings. They take feedback seriously and they follow up. They communicate. If only this is common across the family of Government agencies. If we all go about our work and responsibilities in partnership, much more can be accomplished. Many helping hands make the load lighter. Many more hands would emerge, not for handouts but to hand-hold. The human touch can lift many out of depression.

Mr Chairman, I would like to thank the Members for their interests in issues related to the public service.

Mr Teo Ser Luck has asked for the breakdown by educational qualifications of the 18,000 jobs that the public service said will be made available in the next two years. About 30% of the jobs will be for those with 'A' Levels and below. The rest will require at least a diploma qualification. The jobs requiring degree qualifications are in more specialised professions, such as teachers, doctors, pharmacists and engineers. Those requiring diploma qualifications include positions, such as nurses and technical officers. The Singapore Armed Forces and the Home Team agencies have a range of jobs for applicants with qualifications ranging from 'A' Levels or below to diploma and degree holders. There are also jobs available for those with 'A' Levels or below, such as environmental health officer positions and healthcare related positions, such as assistant nurses.

Mr Chairman, when the economy is doing well and jobs are plentiful, the public service, like the private sector, often faces challenges recruiting sufficient staff and retaining them. However, when jobs are not so plentiful, job seekers are more prepared to consider the merits of jobs that are available, including those in the civil service. The public service will, therefore, make use of this opportunity to recruit suitable applicants, many of whom are needed to fill our existing vacancies in education, healthcare, and other essential services. Some of these jobs will meet new demands, eg, to improve teaching in our schools and healthcare delivery. However, I should add that, notwithstanding our intention to hire more people, the public sector currently employs 110,000 people who constitutes just about 4% of the total labour force. Hence, the public sector cannot be the solution to all those who are looking for a job. While we expand recruitment, I would also like to stress that the public service will maintain its standards in terms of hiring people with the right skills and more importantly, the right values and attitudes for public service.

I will now turn to the issue on the employment and re-employment of older workers, which Mr Wee Siew Kim and Mdm Halimah have raised. Mr Wee Siew Kim suggested that in filling the 18,000 jobs, we consider mid-career recruits and re-employ some of the older workers in the Government. Our recruitment policy in the public service is based on merit. We look for candidates who have the relevant skills, competency and traits that best fit the requirements of the jobs regardless of age. We believe this approach will better meet the needs of the public service.

For the civil service, the number of officers who are recruited at age 40 years and above has increased from 13% of annual recruitment or 728 officers in 2007 to 16% of annual recruitment or 1,000 officers in 2008. Mdm Halimah has asked for an update on the efforts to re-employ older workers in the public service. The percentage of civil servants who were re-employed at the age 62 years has been steadily increasing. In 2006, the number of officers who were re-employed at age 62 years was 96 or about 53% of the number of officers who retired at age 52. This rose to 57% or 103 officers in 2007, and 64% or 189 officers in 2008. For the statutory boards, 65% or 234 officers who retired at age 62 years were re-employed in the same year in 2008.

The public sector will continue to press on in with its efforts in the re-employment of our older workers. In January this year, the public service division issued an advisory to public sector agencies on the best practices for re-employing retiring officers. For example, public agencies are encouraged to offer re-employment contract of at least one year, where possible. Re-employment job arrangements may also include part-time or short-term project work. In terms of wages and benefits, agencies may consider appropriate adjustments to wages, but will offer re-employed officers the same leave and medical benefits as a fresh recruit.

The three agencies, which are piloting the implementation of the re-employment policy, the Ministry of Education, the Singapore Police Force, and the Ministry of Manpower have started operationalising the best practices in the advisory. As pilot agencies, they will help us finetune the practices. I am also pleased to note that several public sector agencies have shown their commitment to the re-employment efforts by signing a memorandum of understanding with the respective Unions, and these include the AVA, BCA, DSTA, EMA, HPB, HSA, IDA, IPOS, MPA, LTA, NLB, SLA and HDB. (ie, Agri-Food & Veterinary Authority of Singapore, Building and Construction Authority, Defence Science & Technology Agency, Energy Market Authority, Health Promotion Board, Health Sciences Authority, Infocomm Development Authority of Singapore, Intellectual Property Office of Singapore, Maritime and Port Authority of Singapore, Land Transport Authority, National Library Board, Singapore Land Authority, and Housing and Development Board). I can provide what all these agencies are, if you want to know.

I would like to assure Mdm Halimah that the public sector takes a long-term view and remains committed to the employment of its older officers, taking guidance from the tripartite committee on the employment of older workers. Mdm Halimah has also requested for an update on our efforts to redesign jobs for officers in the corporate support and operation support services. The civil service has been working on this in close partnership with the Unions for the past year. For a start, jobs have been redesigned for some 500 officers in three Ministries – the Ministry of Manpower, the Ministry of Education and the Ministry of Home Affairs. The redesigned jobs have given officers the opportunity to take on more meaningful and challenging work, and the response from the officers have been positive. I met some of them myself, personally.

Other Ministries are now starting on the same journey. In total, the job redesign effort will involved some 4,000 corporate support officers and 2,000 operations support officers across all our Ministries. The civil service will also design training courses and programmes that will prepare our officers for their redesigned jobs. In addition, we will also continue training officers to improve their literacy, numeracy, IT and service skills. Some of our Ministries have also taken the lead in sponsoring officers for higher level qualifications, such as polytechnic diplomas. We will be encouraging other Ministries to do the same.

Let me now move on to the point raised by Mr Baey on feedback channels. Civil servants have various internal channels to make their views known, whether it is through their own agency's staff channels or to service-wide platforms, like Staff Suggestion Scheme. In fact, with the availability of email, as Mr Baey has pointed out, civil servants are able to share their suggestions and views with several parties within the civil service, almost instantaneously. To further enhance existing feedback channels, we are also looking at new communications channels, such as new media platforms in the Government intranet. We will take into account the suggestions raised by Mr Baey. Apart from proving the channels for feedback, the civil service encourages supervisors to be receptive and opened to new ideas and staff suggestions, so that staff will not be deterred from giving their honest opinions. I am also aware that it is quite common these days for the senior management in agencies, including CEOs and Permanent Secretaries to have regular small group sessions with their staff. Depending on the openness of both the management as well as of the staff themselves, views on various issues can be raised at such sessions. The experience has been mixed. Some management teams are more open than others. Likewise, some officers are more prepared to speak their minds than others, but we will continue to encourage more open exchanges.

I will now address the issue by Mr Wee Siew Kim. I agree with Mr Wee that public officers need to show understanding, empathy and sensitivity, especially towards Singaporeans who are going through a challenging period. All quality service managers throughout the public service have been briefed to pay attention to these aspects of service delivery. Small efforts can make a big difference. Sometimes, by explaining schemes and initiatives more clearly, more patiently and by offering alternatives, we can help people better understand the situation and determine the best course of action. While we strive to deliver public services with sensitivity and compassion, Members of the public must also appreciate that we will not be able to accede to every appeal, but rest assured that our public officers will be fair and objective and will do their best to understand and to work alongside Singaporeans through this difficult period.

I would like to offer a broader perspective of what public service is. Public servants serve the public in two respects: they serve individual members of the public and we must always remember that; but they also service the public as a whole, and hence there is the wider public interest as well. So policies and laws are there because they serve this wider public interest too. Traffic rules are there because they make the roads safer for all members of the public. They may be inconvenient for certain individuals, but they are there to make lives safer and more convenient for all. Hence, while flexibility can and should be exercised in considering the request of individual members of the public, the interest of the wider public must also be taken into account. We will not, for example, want our roads less safe, or neighbourhoods to become more tarnished by litter, just because of the downturn. That would just add to the doom and gloom. In fact, if our city remains safe and clean and secure, that will help to lift the spirits of our people.

Sir, the economic downturn presents challenging and uncertain times ahead for us. However, while the downturn may pose challenges, it will also provide opportunities. During this period, the public service will make use of the opportunity to recruit suitable staff that it needs to build up and strengthen capacity and capabilities in the public sector. We will continue to improve the quality of our public services in order to better serve our customers and citizens. Thank you for your indulgence, Sir.

We have some time for clarification.

Two clarifications to ask the Minister. First, I would like to ask the Minister if, with the announcement that the Government is now going to create 18,000 new jobs, it means that the earlier policy that exists before the recession on a freeze in hiring no longer applies?

Second question I would like to ask the Minister is whether, considering that there are now many concerns expressed, our civil servants are in touch with the ground. Whether there are any programmes in the civil service and public service to acclimatise and get our public service to understand ground feelings and issues, particularly members of our administration service?

Mr Chairman, in fact, in a number of the agencies, the recruitment is beyond the numbers that they currently have. For example, in the Ministry of Education, a lot of the new recruitment is for allied educators and what we might otherwise call teacher aides to improve the teacher-student ratios in our schools and to improve teaching. In healthcare services, for example, these will be new positions to improve healthcare delivery. So, indeed, some of these numbers will be beyond our current establishments and beyond what the Ministry of Finance have previously allowed.

Sir, on encouraging our civil servants to be more sensitive to the ground, we have a number of programmes already in place to encourage more senior civil servants to go to the ground to understand what is happening. I have had, even in my own MPS, senior civil servants and members of the administrative service, who have come for an attachment to understand what it is that takes place on the ground. And this takes place at the various milestone courses, as well, that the senior civil servants, administrative service officers and even the younger ones attend. There are some agencies which, I think, have made tremendous strides in being in touch with the ground. LTA, for example, has put officers to work closely with the constituencies and a number of places, and this has worked very well and has quite transformed the grassroots leaders' and the ground's image on what the LTA is and what the LTA can do.

5.15 pm

Thank you, Sir, I have two clarifications. I would like to know how

MAS monitors the outcome of the guidelines on the financial institutions offering products and services suitable for the targeted consumer segments.

The second clarification is on the structured products resolution which the Minister mentioned in his reply. There was feedback that FIDReC compensation, which was capped at $100,000, is unfair for those who have invested more than $100,000 because they were deprived of a cheaper way of resolution on the issue of mis-selling and compensation; so whether the Minister will consider increasing the scope of FIDReC.

Mr Chairman, as I mentioned just now, the MAS will issue the guidelines in end March. And as part of its supervisory role, MAS will evaluate the FIs' compliance with these guidelines. Some of these guidelines are in hard form, eg, the qualifications of the representatives, so we can make a very objective and quantitative evaluation. Some are softer, trying to build a culture, so we or MAS will have to make the assessment on a broader basis. And MAS uses several mechanisms, eg, the so-called mystery shopper mechanism whereby members of the public, or MAS officers, will pose as clients and customers, and test the systems of the FIs. So there are several mechanisms to do so.

The second question on FIDReC, the limit is actually $50,000. This limit is set, so that cases that go to FIDReC are cases where the claims are smaller. Because if it is a big claim, these ought to go through the court processes. But where both sides agree to raise the limits, FIDReC is more than happy to hear the cases. So if the FI agrees to let FIDReC hear a case beyond $50,000 or if the consumer is prepared to limit the claim only up to $50,000, even though his case may be $100,000 or $150,000, FIDReC will be happy to hear the case.

Dr Teo, are you withdrawing the amendment?

Sir, I would like to thank Deputy Prime Minister Wong and our Ministers for their comprehensive replies although I still hope that PMO can champion and support ground initiatives to promote brisk-walking.

Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $242,821,800 for Head U ordered to stand part of the Main Estimates.

The sum of $38,437,400 for Head U ordered to stand part of the Development Estimates.

Head P – Ministry of Home Affairs

Head P - Ministry of Home Affairs. Dr Teo.

Terrorism

Sir, I beg to move,

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

Sir, 27th February 2009 marks the first anniversary of the escape of Mas Selamat from our Whitley Road Detention Centre. Despite a nationwide manhunt and the offer of a $1 million reward, we still do not know where is Mas Selamat. The recent terrorist attack at Mumbai clearly shows that terrorism is still a serious threat to Singapore and Singaporeans both locally and overseas. Sir, I noticed that many Singaporeans have simply forgotten about Mas Selamat, and our community engagement programme of the public with regard to terrorism seems to have slackened.

For instance, many posters of Mas Selamat were taken down from notice boards and public places. No one seems to be paying attention to the search for Mas Selamat. It is indeed a worrying sign as we may be facing an increased terrorism threat after his escape. May I ask the Minister for Home Affairs to update the house on efforts to arrest Mas Selamat? Sir, in view of the fact that the new Obama administration is looking into closing down the detainee facility at Guantanamo Bay, are there mechanisms through which the Government would be kept informed of the status and movement of any Southeast Asian detainees who may pose security threats to our country?

Although the Home Team has implemented many measures to harden potential terrorist targets, there is much work to be done to intensify our search efforts for Mas Selamat, strengthen our home team, and enhance the emergency preparedness of Singaporeans.

Sir, I understand from the reply to my Parliamentary written question that the Ministry has fully implemented the recommendations of the Committee of Inquiry with regard to the security protocols and features of Whitley Road Detention Centre (WRDC). May I ask the Minister, how many detainees are presently housed at the WRDC, and when will the new detention centre be built in Changi Prison?

Sir, one of the key reasons cited by the Ministry for the series of security lapses last year was organisational fatigue among officers of the Home Team. Can the Minister update the House on measures undertaken to address the fatigue problems of the Home Team, and what mechanisms are in place to constantly monitor the fatigue of the Home Team in view of the fast changing security landscape?

Sir, may I also ask the Minister what is the level of emergency preparedness among Singaporeans?

Sir, the terrorism attacks in Mumbai were a grim reminder of the terrorist threat, and, more importantly, that terrorists will continue to attempt new audacious ways to destroy, strike fear and advance the agenda. The terrorists came from the sea and were able to infiltrate largely unmolested.

We are as vulnerable as Mumbai, if not, more so. By the time a fast boat enters our territorial waters, it will take just minutes to reach our shores, and we have people living and working almost at the waters' edge. There will be little time to react. There are also parts of our coastline which are not developed where terrorists can slip in undetected and cause mischief further in land. I, therefore, ask the Minister what will be done to protect our coastlines from such possible infiltrations.

Second, I would like to ask whether we can use technology to assist in our security efforts. Aircraft have transponders and are required to submit flight plans in advance. This gives us fair warning when an unauthorised aircraft approaches us. Cannot something similar be posted for ships? There will, no doubt, be a cost but is our safety not worth paying for?

Thirdly, if terrorists do strike, do we have a proper disaster or rescue plan? The recent incident involving the Singapore Flyer was more than just an embarrassment. It shows that there are no adequate rescue plans for private buildings or installations, or at least no proper coordination of such plans between public services and building owners. If we have difficulties rescuing those trapped in the Flyer, does it mean that we will have similar difficulties for those in the many buildings in the Central Business District or other strategic areas?

Finally, we have, thankfully, not experienced any major incidents for many years but this raises the concern that Singaporeans may not know how to react or what to do in the event an attack happens.

Sir, we have often seen images of American kids ducking under their desks during air raid drills in the 1960s, during the Cold War era. That may be a bit extreme for us but such exercises do increase a sense of awareness of the problem. Should there not be more public education to impart some basic protection of survival tips to Singaporeans, so that they will know how to react or what to do in the event such a disaster happens?

Terrorist Attacks and Responsible Media Reporting

Mr Chairman, I would like to raise the issue of responsible media reporting in the event of a terrorist attack. My concern is prompted by what happened in India during the terrorist attacks on the two hotels in Mumbai. As this Parliament will recall, the terrorists took over two hotels. Whilst some people were taken hostage, there were others who were in hiding, awaiting the opportunity to escape. Those in hiding presumably managed to get word out that they were safe. And during the attacks, there was extensive media coverage of what was happening. The Indian media apparently managed to obtain information of the fact that some people were in hiding and of their whereabouts and published this as part of the news. This obviously endangered those people and alerted the terrorists to the fact that there were other potential hostages to be taken. There was also extensive media coverage when the security forces and commandos began the counter-attack and rescue operations. This gave the public a blow-by-blow account of the operations while the operations were ongoing. But, unfortunately, since terrorists and their handlers also watched TV and read the newspapers, it meant that they got the same information too, which endangered the lives, not only of the hostages but of the security personnel as well. Therefore, I would like to ask the Minister for Home Affairs what measures MHA is taking to ensure responsible media reporting in the event of a terrorist attack in Singapore, because whilst the media has the responsibility to inform the public of what is happening, this has to be balanced against putting innocent lives at risk.

Emergency Preparedness

To counter terrorists threats, SARS and the flu pandemic, much work have been done to prepare Singaporeans for the outbreak of these eventualities in the past eight years or so. Yet, how prepared are Singaporeans today? The efforts seem largely confined to major inter-agency exercises, simulations and drills conducted by the Home Team and some grassroots organisations, and the distribution of handbooks to households. Do Singaporeans truly know how to respond to such emergencies if they happen? How long must MHA persevere in its efforts to make Singaporeans realise that they must take ownership and play a critical role in their own safety and not rely totally on the Government? I will use six examples to illustrate.

Fire drills in commercial buildings – office workers often do not take these seriously and take the exercises like “going through the motion”. The participation rate is often not very high.

MRT train disruptions or accidents along expressways or in the tunnels – how do commuters and motorists respond before the authorities arrive at the scenes? Is the Traffic Police making it mandatory for head-lights to be turned on and for drivers to tune in to the local radios for the whole duration of the tunnel ride in the CTE or the KPE?

The tremors felt by earthquakes in Sumatra or Indonesia – most people did not even realise why they experienced sudden dizziness. For people who did evacuate, instead of running away to open spaces as soon as they hit the ground, they stood at the ground floor of the same building, expecting to see something happening.

A Singaporean killed in the Mumbai terrorist attack – how many people would use this incident to remind ourselves to check on travel advisories issued by the MFA before traveling?

The recurring Bangkok political crisis – why are Singaporeans undeterred or not worried for their safety and still going to Bangkok?