market to achieve this restructuring. 3% to 5% GDP growth per year does not mean every industry or business growing by 3% to 5%. More competitive and innovative players must be allowed to grow much faster, by bidding for the talent, manpower, land and other resources that they need. part – businesses and industry associations, workers and unions and the Government–and work closely together. The Government will commit $1.1 billion a year over the next five years in the form of tax benefits, grants and training subsidies to support this combined, national effort to raise productivity.By going for growth when the conditions allowed, we offset the downturns we experienced earlier in the decade – first, when the global dot-com bubble burst in 2000, then with 9/11, and again when SARS hit us in 2003. The upshot is that by allowing in foreign workers so that we could go for growth in the good years, we reduced unemployment, and raised wages for Singaporeans after the standstill in the first part of the decade. As Chart 1* shows, it enabled the median income per household member(1) to rise significantly from 2005 to 2008 – in fact contributing virtually all income growth that occurred in the past decade. (Median income over the decade grew by 20%, adjusted for inflation, and virtually all of it happened during that four-year period.) This was therefore not a strategy of "growth at all costs", but of growing our economy to raise Singaporean incomes.The increase in levies will be complemented by the strong financial support from the Government, through tax benefits and grants to help businesses that invest to raise their employees' skills, to improve efficiency or to create more value. In fact, over the next five years, the government financial support that the business sector will receive for productivity upgrading will be significantly larger than the additional payment they have to make in foreign worker levies.continuing education and training. The Council will oversee the work of the different Government agencies and promote close collaboration amongst the business sector, workers and unions, and the public sector. This need for a comprehensive CET system becomes more important as our workforce gets older. The Government will help employers to invest in their workers, so they can keep building on their knowhow and maximise their value in the workplace. grants will be of greatest benefit to the SME sector. In fact, both the tax incentives and grants would be of greatest benefit to the SME sector.usual 100% of the expenditure under normal tax rules, but an additional 150% under the scheme. This works out to an additional $450,000 of deductions, which will give the company tax savings of about $76,500. If the company also spends $150,000 to design a new product, it will save a further $38,300. As Members can see, the company will then enjoy total tax savings from investing in the two activities, of $114,800 on an investment of $450,000 (3). In other words, the company gets back a quarter of its investment through additional tax benefits from the Government. The company can undertake any number of activities under the scheme in a year.manufacturing enterprises that are investing in machinery. For example, a Japanese food outlet at Iluma Mall called Ebisboshi Shotengai invested $160,000 to implement a wireless self-ordering system – apparently the latest technology from Japan, which allows customers to simply tap on the menu using a wireless stylus pen, to send their orders to both the kitchen and the cashier's desk. It is a "talking" pen which repeats customers' orders aloud. In the future, it could give some advice as well on what to order. [Laughter from hon. Members ]. Not only has it reduced customers' waiting time, it has translated into faster turnover. The restaurant has also been able to employ only two-thirds the number of staff it would normally have required, and expects to fully recover its investment in the self-ordering system in two years. If we apply our scheme to a case like this, not only is it in the enterprise's interest to invest as it will recover its investments within a period of years – in this case, two years – but it would also get from the Government a tax credit that provides them tax savings upfront.productivity improvements, irrespective of the state of the economy.ing concepts, detailed production planning and, most importantly, by sharing the responsibility for innovation and continual improvements with employees, with everyone taking responsibility.We will phase in further adjustments in levy rates and dependency tiers in 2011 and 2012. Taking the three years together, there will be a total increase of about $100 in average levies per worker in manufacturing and services. So, a $100 increase on average, reflecting the effect of both levy rate increases as well as the tightening of dependency tiers. The construction sector, where there is much scope for productivity improvements, will see a larger increase, ie, larger than $100.restructuring of our overall economy, towards higher-value and more innovative players. This is as important as the upgrading within each industry or enterprise which is also what we will promote.acquiring companies which are not large players. I will therefore introduce, for five years, a one-off tax allowance scheme to help defray a portion of acquisition costs.land use, towards more land-efficient and higher value-added activities.efforts will comprise three major thrusts, which I will elaborate on in turn.