Hansard, 2010-03-04

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 (2010) To (2010) Mr Lim Swee Say 12 Mar 14 Mar Mr Khaw Boon Wan 01 Apr 04 Apr

ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Mr Seah Kian Peng asked the Minister for Community Development, Youth and Sports in view of the disagreement between the Singapore Sports Council (SSC) and the Singapore Athletic Association (SAA) (a) whether mediation can provide a possible resolution; (b) what is the impact on

athletes from the delayed disbursement of the annual grant of almost $900,000 to SAA; and (c) whether this will have implications on our hosting of the Youth Olympic Games and other future major athletics events.

Mr Speaker, Sir, the Singapore Sports Council (SSC) administers the disbursement of grants to National Sports Associations (NSAs), to help them promote and develop their respective sports in Singapore. As part of due process, SSC requires NSAs to submit their sports development plans for SSC's consideration before the disbursement of funds. NSAs are also required to demonstrate that they have in place sound governance and administration structures, as monetary grants are involved. In evaluating the request for grants, SSC will also look at whether the NSA has been able to fulfil past targets that the NSA has set.

The Singapore Athletic Association (SAA) has not met the conditions for SSC grants. It has not fulfilled the past targets, and the improvement plans have not been adequate. There are also major weaknesses in governance, including some high-risk audit areas. Therefore, SSC has withheld the disbursement of the grants for Financial Year 2010. This is a regulatory matter involving public money. When SAA is able to meet the conditions for SSC grants, SSC will re-consider the situation and if all conditions are fulfilled, SSC will disburse the grants.

Part of NSA grants goes towards supporting the training of national athletes. SSC is mindful of the possible impact on them, and is working with

This episode should not have any implication for the upcoming Youth Olympic Games (YOG). The competition managers and key staff for athletics for the YOG have already been appointed. They are in full preparation for the successful running of the athletics events for the Games. SSC has also continued to allow the YOG athletes to use Bukit Gombak Stadium for training and qualification competitions for the YOG.

various stakeholders to ensure that the athletes’ training and welfare are not compromised. For example, SSC has been disbursing training assistance grants directly to athletes under training. SSC has also continued to provide sports medicine and sports science support to the athletes. Funding is a privilege. It is not an entitlement for NSAs. We will not hesitate to fund the athletes directly in consideration of their welfare and funding needs.

Mr Seah, I will allow one supplementary question only.

Thank you, Sir. I thank the Senior Parliamentary Secretary for his answer. I have the following supplementary questions. There has been much public interest in this matter and there were some calls for MCYS to get involved in addressing the leadership issue in SAA. My first question is, should Government –

You have only one question, Mr Seah.

Should the Government play a more active role in this, or leave it to the fraternity to sort itself out? Second, can the SSC consider direct funding to the athletes in view of this protracted negotiation, specifically for the 4 x 100-metre relay team? Can this be done given that one of our best athletic talents in recent decades? Third, –

Mr Seah, I said I would allow only one question. You have gotten into your third, now.

Sir, there is one portion where the Senior Parliamentary Secretary did not quite address which is the impact on future athletic events. And just one last question, are there any other NSAs where SSC may have concerns with regard to corporate governance issues?

Okay, Mr Teo. Quick answers.

Sir, SSC is the governor of the sports sector in Singapore and MCYS is the policy-maker. SSC will continue to support all the NSAs who present good development and training plans. We are always in consultation with NSAs to see how we can best support them. Annual funding is one way, and indirect services is another way through which we support them. We cannot be involved in the associations' electoral process because that has to be decided by their respective fraternity.

In SAA's case, the 21 affiliates have to decide what is the best way forward for the association. They have to decide who takes the leadership because they represent the voices of the athletic fraternity. At the same time, they have to, not only to listen to themselves and the fraternity, but also the public voices as well. When it comes to elections and the time to vote, they have to make the right decision.

For the 4 x 100-metre relay team, I am glad that they are back in training. If they have any needs in terms of funding and training, they can always approach SSC, and we are more than willing to give them support. We are always willing to support any future athletic event, and we are always open to consultation and having more athletic events in Singapore. Because in any major game, athletics is a

key event and an integral part of any international multi-sports game. We will also like Singapore to do well in this key sport. As such, the Member can be assured that when NSAs such as SAA are able to sort their issues out, whether audit, governance or training plans, SSC will be fully supportive in terms of disbursing the grants. As for his concerns over other NSAs with governance issues, the Member can also be assured that SSC will step up its regulatory audits and make sure that these are more regular. We will make sure NSAs understand that when they obtain funding from SSC, they are dealing with public money. Public money cannot be taken for granted.

The following Question stood in the name of Mdm Cynthia Phua –

2. To ask the Minister for National Development (a) what is the ratio of carpark lots to the number of residential units in new HDB estates; (b) whether there are plans to increase the carpark lots in the mature estates to reflect changes in the population demographics as more HDB units now have more than one car with the children becoming working adults; and (c) whether the Ministry is planning to build any new multi-storey carparks in the older precincts in Aljunied GRC.

Question No. 2.

In general, HDB’s 1,800 car parks are sufficient to cater to both season parking and short term parking needs of the various housing estates. The average season parking take-up rate in HDB car parks is about 73% currently.

However, due to changes in the demographic profiles and car ownership patterns, about 10% of HDB car parks are currently unable to meet local parking demand. HDB is looking into supply as well as demand management measures to alleviate the shortages at these car parks.

Depending on the availability of space as well as cost considerations, HDB may add parking lots by extending the existing surface car parks into adjacent vacant land, adding parking decks to existing multi-storey car parks (MSCPs), or constructing new MSCPs to replace existing surface car parks.

HDB currently has no plans to construct MSCPs in Aljunied GRC as the shortfalls in parking lots at the affected locations are too small to justify the provision of MSCPs. It will look into providing additional parking lots through other means instead.

There are limits to increasing car parks in land scarce Singapore. Therefore, demand management measures are also essential. Where there are only limited parking lots for season parking ticket holders, HDB accords priority to the first car in each household. HDB also groups its car parks for season parking such that car owners living in several nearby blocks share their car park lots.

HDB will continue to monitor and manage the supply and demand for HDB car parks to address residents’ changing parking needs.

3. Mr Laurence Wee Yoke Thong asked the Minister for National Development whether the Government will consider extending land leases to at least 60 years

or 30 years plus another 30 years for the establishment of retirement homes or villages so as to provide more residential options for the elderly.

Developers can already build retirement housing on any site zoned "Residential". They can also choose to build residential developments and customise the design and concept to target specific niche markets, including the elderly. For instance, some developers have introduced "dual-key" adjoining apartments in private condominiums.

In addition, the Urban Redevelopment Authority (URA) has made available a site at Jalan Jurong Kechil for sale on short tenure of 30 years. The developer has the flexibility to develop the site for retirement housing or conventional housing development. The shorter tenure of 30 years allowed for the site was intended to reduce the land costs, which could facilitate retirement housing development. We will study the suggestion to extend land leases to 60-year or 30+30-year tenures for such sites in future. HDB has also built Studio Apartments, which are custom-built for elderly living and made our public housing estates elderly friendly.

Thank you for the Senior Minister of State's reply. We are now healthier and living longer. A number of older persons face loneliness which cut across all income groups. Retirement villages offer a great opportunity for them to interact. Sir, there is no supplementary question.

4. Mr Laurence Wee Yoke Thong asked the Prime Minister whether the Govern

ment will consider enlisting relatives and neighbours in the mobilisation of community resources to care for the frail elderly.

The family must be the first line of care and support for the elderly. Besides the immediate family, the extended family should lend its support. I fully agree with Mr Laurence Wee that the community, and especially, neighbours can also play an important role. To augment the efforts by community agencies and VWOs, we are indeed trying to encourage and mobilise informal networks to support our seniors to age-in-place. As a Chinese saying goes, "in times of need, a relative who lives far away would not be as helpful as a neighbour". At the minimum, neighbours can help to keep a lookout for our seniors, particularly those who may be frail, home-bound or socially isolated. They can help the seniors with some simple tasks such as running simple errands or accompanying them for medical appointments.

For instance, a 73-year-old senior from Queenstown comes together with three neighbours to help 10 other seniors who are either wheelchair-bound or staying alone. They help to purchase their neighbours' groceries, chit chat with them and bring them out to participate in community programmes together. In preparation for the recent Lunar New Year, these four kind-hearted neighbours also helped to spring-clean their neighbours' homes. In time, more of our seniors would be frail, single or without children. Hence, I cannot emphasise enough the importance of neighbourliness and community support.

How are we trying to foster this? One avenue is through programmes such as the Wellness Programme. This encourages

people to join or even form their own social interest groups. Through regular social interaction, we hope that some will become close friends and they can lend support to one another in times of need. Another avenue is through grassroots outreach and activities. For example, floor parties would be useful to encourage greater interaction among neighbours. We hope to rekindle the kampong spirit which many older Singaporeans reminisce about in our vertical kampongs today. MCYS is also harnessing the strengths of voluntary welfare organisations and their volunteers to support the vulnerable and needy. This include the seniors' activity centres and the befriending programme. However, we cannot rely entirely on volunteers or the staff to support seniors. As much as possible, VWO staff can also tap in the good will of neighbours or work with other local community partners, such as the schools, to optimise our limited resources. If we can mobilise community resources more effectively through complement family support, we are one step closer to our vision of ageing-in-place.

Do you have a supplementary question?

Thank you, Minister, for the comprehensive and heartening response to the ageing scene, where we supplement family support as a first line with community support. Sir, the supplementary question is, will the Government consider, at the opportune time, to give this group of community caregivers some kind of an allowance as incentive and recognition for their efforts?

Sir, I agree that we should recognise these community support groups. In fact, we do, but not in the monetary sense. There is a Good Neighbours' Award scheme which is jointly offered by People's Association and HDB. Most are aware that in different

constituencies, the grassroots organisations also give their own Good Neighbour Awards

and these are usually presented at the National Day dinners. So I think we should do more of this.

5. Ms Denise Phua Lay Peng asked the Minister for National Development when is the appropriate time for lifting of the ban on the sale of chewing gum in Singapore.

Mr Speaker, Sir, the Government decided to impose a complete ban on the sale of chewing gum in 1992 due to problems arising from the indiscriminate disposal of gum litter, such as difficulty and cost incurred in removing gum litter from public places, vandalism and service disruptions caused by gum being stuck between doors of MRT trains. Notwithstanding our general policy to keep Singapore free from chewing gum litter, the Government made an exception in 2004 for sale of chewing gum with therapeutic value as defined under the Medicines Act. These include those that help smokers quit, or products of dental hygiene.

Chewing gum litter has not been a significant problem since the ban took effect. We remain concerned that lifting the ban on the sale of chewing gum could result in chewing gum litter resurfacing as a problem, and undermine our on-going efforts to curb littering. As the rationale for the imposition of the ban is still valid at present, the Government's position is that the ban should remain.

Yes, Ms Phua, short supplementary question.

Thank you, Senior Parliamentary

Secretary, for the answer. I am really not so concerned about the chewing gum but really another underlying issue. If Singaporeans were seeking liberty in so many areas and the Government does concede in some of these areas, then why not liberalise the chewing gum ban? I am quite perplexed by the fact that people, especially our detractors, remember Singapore for chewing gum ban and caning. I think this ban that has been effective for almost 20 years now need a review and a rethink. Let Singaporeans be accountable for the consequences and not be shaped by so many sticks around –

Are you are making a speech, Ms Phua?

Surely, Senior Parliamentary Secretary will not consider banning sweets because there are –

Ask your question and take a seat, Ms Phua.

– sweet litter or ice cream if there is ice cream stick litter?

Sir, I think we know that Singapore has taken a very pragmatic approach to governance, weighing the cost and benefit of any issue very carefully and making decisions with the interest of Singaporeans at heart. I think the Government stands by its decision to ban the sale of chewing gum as the rationale is based on maintaining a clean and comfortable living environment for all Singaporeans to enjoy. Our efforts at creating a clean, green and safe living environment have garnered much more international acclaim than criticism of the ban on chewing gum. But just to also add littering is still a prevailing problem in Singapore. We know that there has been increases in education and enforcement efforts but it still is a problem. So I think going by the experiences and the

possibilities of disamenities created, at this point of time, we still feel that the ban is necessary.

12.18 pm

Order. End of Question time.

Resolved,

That, notwithstanding the Standing Orders, the debate on the Budget Statement and the Estimates of Expenditure for FY 2010/2011 under Paper Cmd.1 of 2010, be taken today. – [Mr Mah Bow Tan].

Resolved,

That, notwithstanding the Standing Orders, the proceedings on the Estimates of Expenditure for FY 2010/2011 be taken till 7.15 pm on the days allotted to the Committee of Supply on the Estimates for FY 2010/2011. – [Mr Mah Bow Tan].

Resolved,

That, notwithstanding the Standing Orders, the Second and Third Readings of the Supply Bill for FY 2010/2011 and the Supplementary Supply (FY 2009) Bill for FY 2009/2010 may be proceeded with immediately after the conclusion of the proceedings on the Main and Development Estimates for FY 2010/2011. – [Mr Tharman Shanmugaratnam].

ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question [22nd February, 2010],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2010 to 31st March, 2011." – [Minister for Finance].

Question again proposed.

Sir, some people say that this year's Budget is an election Budget, but I do not think so. As long as there is increase in GST and the GST is still intact, it is difficult to say that it is going to be an election Budget.

The increase in GST will hit hardest the lower income group as well as our increasingly marginalized middle income group even with the GST offset measures from the Government which is short term. I would suggest that the Government take a radical step by reducing the GST by 2% points to rein in inflation which has gone up too high. I believe that the Government can afford, given that the GST collected accounted for over $6.6 billion or 15% or more of the total revenue, plus additional revenue from the two casinos when they come on stream.

Tax credits only benefit big companies and have limited benefits to borderline companies like SMEs where growth is important and is a constraint to keep momentum going. Upfront cash or grants is more helpful for SMEs with cash flow problem for them to invest in skills and technology. The foreign workers' levy could be varied according to industries, like hospitals, old folks homes, hospices that rely a lot on foreign health caregivers which eventually leads to higher operating costs.

I would like to propose the creation of a skills shortage list for short-listing of foreign worker applications. Create a ranking of skills that have a shortage of labour in Singapore for example, nursing, coaching of certain sport, medical experts

The Ministry of Education – I would like to suggest the Government to peg the increase in tuition fees for tertiary institutions such as polytechnics and universities to the inflation rate or the actual reported increase in operating costs. This aims to limit the ability of the institutions to raise the fees beyond what is acceptable based on reason.

Every increase in tuition fees should also be matched with increase in financial aid for needy students so that nobody is left out. Setting up of a "Work and Study" scheme in tertiary institutions – this scheme allows students to work on cared by the institution and Government. This helps students finance their education, while gaining useful work experience in a safe and convenient environment. The last suggestion I would like to make has already been made by Minister Khaw Boon Wan.

If each individual Singaporean is encouraged to take more personal ownership of their health and lifestyle, perhaps the Government can consider introducing an individual balance score card which the Government could use as a cost saving incentive. This will be given to individuals to offset expenses in the move to adopting a healthy lifestyle for example, gym membership, medical bills, purchase of exercise equipment, health checks and supplements as well as to redeem benefits such as better insurance

etc. With this list and a cap on the number of foreign workers allowed to enter Singapore, work permits will be issued in priority of the shortage in local labour available. Hence, ensuring that despite placing a cap on the number of foreign workers, industries that require foreign labour due to the shortage of certain skills in Singapore, will still be able to get the workers they need. payments such as the 'no-claim' bonus in the car industry.

Mr Speaker, Sir, I thank you for the opportunity to contribute to this debate. I would like to share a few observations on the topic of productivity, on quality of life for all Singaporeans, and to address the introduction of the foreign workers' levy.

I have no doubt that the issue of Singapore's productivity has to be addressed and have no argument with the need to be more creative and innovative in a changed global economic climate. Cheaper labour and business costs in other countries have already forced us to adopt new strategies to continue our economic growth.

However, what has not changed is that our key resource is our people. As such, it is heartening to see that older workers have been singled out for attention and support in this year's Budget as they have worked hard for our nation. We are hardworking people, but we also want to be fairly treated and attain a decent standard of living. To attain this decent standard of living, our productivity levels, competitiveness, and attractiveness as a place for business and investment, have to be addressed. But I believe that increasing productivity levels requires more than tax breaks and incentive grants. It will take more than financial rewards to inspire true innovation and change. More than these measures, what is essential is a mindset change. Employers, industry leaders, and workers themselves have to understand what productivity means – in real, practical terms – for themselves and their companies.

Take training, for example. How exactly does it help a worker's or company's productivity? This is something that a worker and the company have to look at. They need a clearer

Furthermore, Singaporeans are so used to having their training paid for by employers and the Government that perhaps we do not necessarily have the incentive to seek out training opportunities on our own. Hence there is less motivation to improve.

understanding of the need for training and the determination and support to make it happen. Simply attending a training course, or sending your workers for such a course, is not a magic pill for better wages and higher productivity. Many people are sent for training simply because the subsidies and grants are available. I have heard people complaining about being sent for training "yet again". Workers should want to be trained or re-trained and understand how this will help their job performance. At the same time, employers need the skills and smarts to harness the workers' newly acquired knowledge in their line of work. It can be frustrating for a worker to have attended training or re-skilling, and then return to the same old job without the opportunity to apply their learning.

But we know there are exceptions to this as we have heard many stories of people who have gone for training and re-skilling and have better jobs even in the debates in this House in the last few days. Another disincentive to training is the long hours we already put in at the workplace, and in some companies the heavy workload per worker which leaves little time for additional training and even can lead to mental fatigue. If we take training for granted, if employer and worker attitudes do not change, then our productivity levels would not increase.

In this context, I would like to share some remarks that I read in the Business Times by Mr Kenny Yap, who is Executive Chairman of Qian Hu. Mr Yap said, "My experience tells me that the difference between Singaporeans and foreign workers is attitude. Most foreign workers are dead serious about working, whereas

Sir, Mr Yap's point is that, when we look at measures to increase overall productivity, there are other factors in the work environment and business landscape to consider. Mr Yap refers to something other Members of the House have already raised: the reluctance of Singaporeans to take on jobs that involve long hours, shift work or manual labour. The irony is that while we shun these jobs, we also worry about the influx of foreign workers whom employers have resorted to hiring. For instance, the bus companies having to hire foreigners to drive our public buses, as described by Mr Ong Ah Heng. Now, I personally believe that bus driving is an honourable profession as it provides a valuable public service – I am a regular bus commuter myself – and the unions have done much to beef up the training and professionalism of the job. I will elaborate on this point about upgrading the image of certain jobs a little later.

Mr Kenny Yap also makes the point that if Singaporean and foreign workers are needed to work on the same team, it is the entire work process that matters. If Singaporeans are re-trained to better standards, how can this be harnessed with their foreign colleagues' skill levels so that the entire team's work process becomes more efficient and productive? The implication here – and it is an important one – is that management and employers play a very important part in organising or innovating these work

A further important factor in raising productivity is actually the human factor. A happy worker is a productive worker. Thus, it is crucial for companies to provide a happy work environment where workers look forward to going to work, morale is good, bosses are compassionate, interpersonal conflict is minimised, talent is recognised and rewarded, staff welfare is taken seriously, workers' suggestions are taken on board and, of course, providing a healthy work-life balance. Good management practices and leadership are essential.

Since the setting up of the Tripartite Committee on Work-Life Strategy in 2000, Singapore has made progress in encouraging companies to be family-friendly. The Ministry of Manpower's website has a section dedicated to Work-Life Balance, where it notes the business benefits that result from a successful work-life strategy – these have been found in other research. They include increased productivity; improved recruitment and retention which means also lower cost in terms of recruitment of staff as there is lower staff turnover; lower absenteeism rates; improved customer experience and a more motivated, satisfied and equitable workforce.

So what more can we do to encourage these "softer" aspects of enhancing productivity? In addition to work-life strategies, what other measures can we encourage employers to adopt in order to maintain a positive and productive work environment?

Having a good work-life balance certainly improves our quality of life. And when we talk about improving the quality of life for all Singaporeans, we cannot

Employers will have to anticipate that salaries will need to increase with inflation over time and find ways to harness improvements in productivity to covering these business costs. One way to do this is job redesign and, of course, investing in training and innovation. But, perhaps more importantly, it is not only about employers. It is about society as a whole. We need to re-value these jobs. It is time for us to change our attitudes towards these so-called "dirty jobs" – those that involve manual labour.

Instead of looking down on these jobs, we should appreciate that they are vital aspects of our economy and workers need to feel that they are respected for the work that they do. This kind of re-valuing demands a sea-change in our mindsets and attitudes. Singaporeans have often observed that in western countries, workers in lower-skilled jobs such as hospital cleaners have a different attitude and carry themselves differently – they see themselves as holding down a proper job, with proper pay and benefits, and more importantly able to raise a family. These are quality of life markers that matter to the ordinary citizen. But as we have heard in the past few days, there are still many families in need in Singapore and those stresses they face and we cannot discount them. In Singapore, we have some examples of how job redesign and training have contributed to changing the perceptions of certain jobs, for

Yesterday's Straits Times carried two interesting articles about two workers – a carpenter in Japan and a bricklayer in Australia – which showed how these "manual labour" jobs have attained societal respect. The article on the bricklayer had the headline "This job is an art and a career". The word "art" in this context is interesting but true. It takes training, expertise, attention to detail and care to lay the bricks in an even and straight line, and that is what we would call "quality finish". It all ends up in a beautifully-constructed building. In Singapore, on the other hand, one of the barriers we face in attracting people to such work is that we no longer have this appreciation for the work of the hands, for things like carpentry, woodworking, metal working and bricklaying. Even bus driving, it seems, falls into this category. The work of the hands is what we could call "craft", and is related to artistry. For instance, every handmade piece of furniture is unique and carries the mark of its maker. I would like to suggest that it is time we start to understand such craft again. Perhaps, in fact, we can even draw on the arts sector, on traditional and modern artisans and artists to build up this appreciation and enhance the image of jobs that require hardwork with the hands. Perhaps, they can help to educate the young on the value of handiwork. When our appreciation of manual labour rises, the standing of those who perform these jobs should rise too. So, perhaps, this is something that the Ministry of Education or policy makers could consider. Certainly, in my profession, I have met many people who fabricate things or

Another way that we could re-value jobs is to devise other ways of calculating their value, such as the social and community benefits created through particular jobs. I was just reading an interesting article on BBC news from December last year about a research from the New Economics Foundation in the UK, where various jobs were evaluated according to the total contribution they made to society, such as the impact on communities and the environment, and it was found that hospital cleaners created £10 of value for every £1 they are paid, whereas in this research bankers destroy £7 of value for every £1 they earn! I do not know how the numbers were calculated, but this was carried in a number of news reports. Perhaps, our policy makers could look into such an index for blue collar jobs to broaden our perspectives.

A final point about training is on contract and freelance workers. I think that should be easy avenues for them to pursue retraining and re-skilling as well.

For too long now, we have relied on foreign migrant labour to fill low-skilled and low-wage positions, and it is clear we cannot afford to continue with this assumption.

I would now like to raise concerns about the increased foreign workers' levy. Because I can imagine that the trigger response of some contractors who employ large numbers of foreign workers will be to seek the fastest solution to an increase in business cost. This could result in a few worst-case scenario responses by employers which will end up hurting the workers. For instance, the increased levy is passed on to workers

Simply put, when it comes to money, unfortunately for a lot of human beings, we are willing to risk prosecution. The recent prosecutions of contractors who accepted kickbacks, which have been widely reported in the media, are testament to this. Those who provide welfare services to foreign migrant labour regularly report that there are many cases of illegal, exploitative and unsafe practices that go unreported for many reasons. So with the increase in foreign workers' levy, we might have some unintended consequences. Will the Ministry of Manpower have to work even harder to root out errant employers? I urge the Ministry of Manpower to pay close attention to the impact of the foreign workers' levy on companies that hire large numbers of foreign workers, and ensure that errant employers are brought to justice. I would also like to suggest that part of the increased foreign workers' levy could be channelled towards training, integration and welfare programmes for migrant workers who have also contributed to our development. It will be to Singapore's benefit for us to be more vigilant in ensuring that migrant labour is treated fairly and humanely.

While Singaporeans are understandably concerned about the pressures on space, transport and housing caused by the large population of foreigners, perhaps we also need to be more

Ultimately, what Singaporeans need to do is to shift our work culture attitudes where better productivity is not about working longer hours and where there is work-life balance and where human factors count.

Sir, the Budget and the recommendations of the ESC are a step towards dealing with some entrenched issues within our economy and workforce and I hope that Singaporeans will strive together for a better quality of life and inclusive growth for all. I will end by telling a story about Switzerland as that comparison has come up a few times during the debate. Two Swiss artists came to Singapore for an art project that I organised, they stayed in Singapore for three weeks, and they loved our country. What made a deep impression on them? Our multilingualism, multiculturalism and the fact that diverse races and religions co-exist in peace and harmony. They told me that they would not encounter such a rich diversity of cultures where they live, and said: "This is very important, it gives Singapore strength and uniqueness, don’t take it for granted".

quite a few young Singaporeans force themselves to work. My gut feeling is, if we cannot find a way to change the working attitude, it is going to be a tall order." Mr Yap also commented that, "to raise the productivity of the whole team, we must upgrade all of the team members' skills. By this logic, only subsidising local workers training defeats the purpose of building a team. As far as the company is concerned, if you are good, you are good regardless of whether you are a Singaporean or foreigner."processes. Perhaps, management and employers also need further support in this area.forget those among us who are likely to remain in low-skilled, low-wage jobs for a long time. I think we cannot escape the fact that these jobs will always be around. What quality of life can these workers expect in, say, five years from now? How much can, say, a cleaner expect to earn in five years' time? Can companies offer wages to the lowest-ranked workers in a way that keeps up with the inflation rate? Will they share their gains from productivity increases in an equitable manner with their employees? example, security guards. Training programmes driven by the WDA, unions and industry have led to better trained security guards and recognition as a profession, which leads to pride in their jobs and better salaries. I hope that WDA, the unions and employers will continue in this fashion and help more lower-wage workers attain a better quality of life.do manual labour – carpenters, electricians, movers – and I respect what they do. They have specialised knowledge that I certainly do not possess, and without which the show cannot go on!which may be in the form of illegal kickbacks or salary deductions; labour agencies increase their fees for finding jobs for workers; employers cut corners by dismissing workers before their contracts are up; and cutting corners may also result in safety lapses – with fewer workers, they may have to work longer hours, or there may be less than the optimum number of workers to carry out a dangerous task, and that could result in injury or death.balanced in considering the issue. It is an emotive issue. I think we need to be careful not to go overboard in our complaints. After all, we are a society that is multi-cultural and diverse. Yes, PRs may have contributed to the rise in demand for flats leading to high housing prices, but do not forget that Singaporeans too sold their flats to PRs and therefore a number of Singaporeans have actually benefited from this, just as others have found themselves on the losing end.

Singapore has faced many challenges in the past and by uniting as a people, we have overcome difficulties and made the country what it is today. Perhaps, not quite Switzerland yet, but still, I think we have done pretty well. We cannot take our resilience and unity for granted and we certainly have to address gaps such as the growing income disparity. But what we have, I believe,

stand us in good stead as we head into the future.

12.45 pm

Sir, in the past 40 years, simply put, our growth strategy was one of "more input, more output".

First, we mobilised our own land and labour resources and attracted foreign capital and entrepreneurs. Then, when we expanded land by building upwards and labour by importing more cheap workforce. Over the decades, labour force participation rate reached a high 80%, for ages 20-59 years old, quality of life improved and the cost of living escalated. But meanwhile, this same old method of increasing input to increase output seems to have reached a diminishing marginal return. So this year's Budget focused on increasing productivity, spearing global SMEs from Singapore and an inclusive growth.

But yet, feedback from the GPC Resource Panel, trade associations and businessmen pointed to the fact that change means uncertainties and uncertainties is not good for business. Many businessmen also said that they know how to maximise every factor of production so there is no need for the Government to interfere. Some in the hospitality and construction industries even criticised the Government for not being truly understanding to their operational limitations, and that the new levy rules would severely impact their business.

But, Sir, global tides are changing at real time, and we must avoid the frog-in-boiling water syndrome, waking up one day, only to ask "who moved my cheese?", when it is too little, too late.

European supermarkets offer us some lessons. Many have digital price display

In Singapore, the National Library is way ahead of the curve. With its bold and innovative use of technology, some regional libraries now have only one frontline staff.

One of my grassroots leader, Mr Jeffrey Low, from Meng Soon Paints and Hardware Trading Company, recently invested in a computerised pre-programme paint tinting machine. He said that it has increased efficiency of his business operations significantly because before that, when there were special paint colour orders, he would have to take it down to the paint supplier personally and wait for about three days before he got his order confirmed. And sometimes, because the quantity is too little, the order is turned down and he loses the business. But now, with this machine, he said that he can cut down on the supply chain for customised requests immediately thereby increasing efficiency, sales and of course, giving him a lot more free time to do and focus on growing his business.

Sir, Google recently won the accolade of having the highest value-add per worker at $450,000 at the second quarter of 2009. Not only that, it is said that they receive one million job applicants a year and denies some 99.5% of them. How did they do that? There is no time to elaborate here, but a complete redesign of the workplace and workflow, making Google Town the place to work, play and live in, while offering space and flexibility for workers to work on their dream technology seems to be the trick. In short, they kept morale and aspirations high, and drives employees to be the best they can be. The question is: can we do the same for Singapore and Singaporeans? Can the Government act as a facilitator and create an incentive framework that encourages everyone, every enterprise to be the best that we can be.

Yes, we can, and I think, in fact, we might have done so for the top half of the population, but I cannot say the same for the bottom half. I was heartened to read that an inclusive growth was the third thrust of this Budget. But upon closer examination, I was dismayed to see that it refers very narrowly, to increasing productivity and income of the low-wage workers. What about the no wage workers? What about the marginalised latent resources that could have been further disadvantaged because we had unknowingly built an environment that further isolates them? For example, without MND's recent effort in ensuring barrier-free access for all roads and buildings, the physically handicapped, the

Once, I was at the launch of a universal access website by a disabled people's association. At the welcome speech, the president said, "Imagine a world where the visually impaired can file their tax returns online". Just then, it hit me that I have been e-filing my taxes for years, but they had no access, even though universal web access is inexpensive and has been around for sometime. Then it occurred to me that they did not need it any way, because to start with, they have no income to file. Yet, like savants who have been found to have super-human abilities because their brains block out some other functions, the blind has a profound sense of hearing and touch beyond that of a normal being. The same can be said of many other marginalised groups, be it the autistic, hearing impaired, depressed, elderly or lowly educated. Can policy makers design incentive frameworks that encourage the deepening and employment of such super skill sets? It will up productivity if a square peg is fitted in a square hole. Now, by giving wage subsidy to companies to employ any disabled is not only a handout approach, but one that does not incentivise people nor company to operate at their best.

Another example, Mr Dennis Kweh, an National Library Board (NLB) staff, suffered from a rare genetic disorder called Morquio-Brailsford Disease, Spinal Sclerosis and blinded on one eye due to glaucoma. He started Adventure 200, a 200-kilometre wheelchair marathon over three days, to raise $200,000 for the

For too long, while in a rat race, the world has accepted a widening bell curve approach to development, rising Gini coefficient was acceptable, and economic growth does not have to account for externalities. Perhaps that was necessary to get majority up to speed in the shortest possible time. But history is a mirror, and externalities, be it social or environment, will boomerang in our face, if we refuse to heed the lessons of the global recession.

Sir, we are not all responsible for the past, but we are all responsible for the future, and for the world we leave for our children. I repeat my Budget call last year, when Iceland and the Artic Ice melted together that the right question to ask is not "when the downturn will 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. We need to re-value our goals, which cannot be just a pure GDP race. We need to redesign the policy incentive framework to be truly inclusive, and rebuild the KPIs and institutions to support them. What gets measured, gets done. It is not an issue for the economists to worry about. It concerns all of us. So I have three wishes for this Budget, in building an inclusive growth.

Wish number two – making of what I call, a WikiMe. I understand that the Government promotes mass collaboration between multiple Government agencies and businesses. The impending One Map is one example, where Government agencies and businesses can make their facilities and services available through a map interface. I propose the we create another map, which I call 'WikiMe', meaning Wikipedia and me where the Government creates the infrastructure like how we created Wireless@SG, and templates, while people upload their own content, offering information about themselves, exchange triumphs and tribulations, and even offering a hand for free or for a fee. If done properly, this could be the largest and single most effective way of self-help and neighbourhood bonding mechanism that could inform the neighbours of who are around them, who is available to be a babysitter, run an errand or be a handy man. Productivity will rise, as latent resources like homemakers and elderly who may not want to work long hours and only want to work on jobs to home, can now be meaningfully employed.

My final wish is that for the Youth Olympics Games (YOG). This is an inaugural event in the world, and one that Singapore will possibly host once for a long time to come. August is only five months away, and yet, there does not seem to be very much buzz in the air. In contrast, Glasgow won the bid to host the Commonwealth Games 2014. Yet, when I visited it last November, people were excited about it. Why? The answer is found in the search results page. When you google the YOG page, that is the

Sir, a language reflects the dominant thought of the organiser. While both Glasgow and Singapore rallied the people to support the Games, Glasgow made the game relevant to the people. First, I understand from the Mayor he had to go to the Chambers to ask for taxpayers' money to bid for the Games. When he won the bid, he set up multiple feedback and suggestion portals, to understand how the Scotts would like to spend that money. As it turns out, seemingly unrelated wishes like improving public transport, more low-cost housing and so on topped the list. The GCG website states that, "One of the benefits of hosting the Commonwealth Games is to leave the host city with a lasting legacy of improved infrastructure that is both positive and sustainable. Glasgow will be rolling up its sleeves to ensure that everyone involved with the Games has a fantastic time. But the Commonwealth Games means so much more – it is the once-in-a-generation opportunity to regenerate a derelict part of the city and tackle some of the issues of health and deprivation that have blighted Glasgow." It went on to say that, "Members of Glasgow City Council and the Scottish Government are working on plans to ensure the Games leave a positive legacy on our communities."

Amongst others, Glasgow is working on a comprehensive transport system that covers the city and extends to the expressways that connects the country, while the Commonwealth Game Village will be built and converted to 300 low-cost social housing units and a 120-bed

panels alongside barcode scanners that provides information about the goods on the well-stocked shelves. Since all products do come with barcodes, there is no longer a need to physically tag every item and change tags when there is a price change, greatly reducing the need for manual manpower. In Japan, all 7-Elevens have additional pictorial keys on their Point of Sales (POS) system. Once, a 65-year-old smiled as I self-scanned my purchase, while she pressed some pictorial buttons which indicated my age, gender and build. She was collecting shoppers' data so she can have an accurate picture of her clients' purchase habits, frequency and time of purchase so that she can better plan her cashflow and manpower needs. She also makes more money from selling the data to manufacturers, who will use it for better product launches specific to that locality. So indeed, improved productivity can spur economic growth, but we must remember that they are only a means to an end, and not the end in itself. So what is the end? Workers are not just a statistic on a business or Government chart. Every person deserves to be facilitated to become the best that they can be in whichever field that they choose. old, the weak and the heavily pregnant will find navigating roads difficult, and in another 20 years when the ageing population explodes, we will have a good proportion of the population sitting at home. But with the barrier-free access and low step buses, they can continue to be mobile and continue with gainful employment, contributing to growth with dignity. Spastic Children's Association of Singapore. I wheelchaired alongside Dennis at the start and end of the marathon and saw how he toiled every distance, stopping only for a doctor to check that he is fit to carry on. Yet, the event was not very well supported because Dennis is not an Olympian nor a super star, and there is certainly no big prize money at the end of it for him when he completes the trip. However, his effort is no less than that of an Olympian. How can we support his effort? How can ordinary Singaporeans support his effort to be a net contributor to society, despite his own very difficult conditions? Wish number one – I hope that the National Productivity and Continuing Education Council will involve not only the union, the public and the business sector, but also the people or the non-profit-organisation sector, who also needs a leg up.YOG site, the search results turned up words like "volunteer", "sports", "YOG", "events". But the Glasgow Commonwealth Games, abbreviated GCG, turned up words like "getting involved", "our people", "what Games mean to Glasgow", and so on.care home. This is relevant and real connection with the people and responsible use of taxpayers' money. This is also why while Glasgow is cheering while the Games are four years away, our streets are still quiet while the clock is ticking away. If people welcome the Games, they will embrace the athletes with open arms and genuine smiles. People need to understand what the Games mean to them, we need to involve everyone in this historical event. We still have five months so it is still not too late. I urge the organisers to make this event the Singapore moment where everyone counts. I also urge that everyone, individuals or enterprise rally around the YOG and stand up for Singapore.

In conclusion, Sir, during the downturn, many global MNCs suddenly discovered that they have a nationality. Similarly, many people discovered they have a welfare pass via their passport. Only in our own homeland, are we first class citizens. While, we need to return the economy to the service of its people, people too, need to return to the country the dignity of being the best and the spirit of self reliance, and people need to return to each other, the humanity that binds us all. Sir, in the spirit of taking this opportunity to re-value, redesign and rebuild our society, let us strive towards a more inclusive, sustainable and better future, ming tian hui gen hao (明天会更好).

Yesterday, Deputy Prime Minister Teo talked about the National Productivity and Continuity Education Council and our strategy on raising productivity to achieve sustainable and inclusive economic growth. I will talk more about Ministry of Manpower's strategy during the COS. But let me just focus on one particular area this afternoon. To make the strategic shift, we are making adjustments to the foreign worker levy to encourage employers to use their foreign workers more efficiently and to motivate them to

We have taken a calibrated approach in adjusting the levy, so as to maintain a balance between supporting economic growth and ensuring that we do not become over-reliant on foreign manpower. As Ms Jessica Tan has pointed out, we must ensure that Singapore remains as an attractive place for businesses so that we can continue to create jobs for our workers. That is why we have not reduced the top line Dependency Ratio so that growth companies can have access to foreign workers they critically need to support their operation and expansion. This will also allow us to attract high value new investments that will raise our productivity, spur our growth and create good jobs for Singaporeans.

However, we cannot continue to grow our foreign workforce at the same pace we did in recent years. We need to moderate the overall inflow of foreign workers and motivate companies to invest in productivity improvements. To achieve this, starting from 1st July 2010, we will increase levies across the board and adjust the levy tiers. Let me explain how this works. The levy tiers are structured such that the higher a company's dependency on foreign workers, the higher the levy rate and the bigger the levy bill it will have to bear. For example, a services company with 10 local workers may employ up to 10 Work Permit holders because the Dependency Ratio is 50% – 10 locals for 10 foreign workers. Let us assume that the foreign workers are all skilled workers to simplify the example. The first Work Permit holder it employs will be subject to a levy of $160 from 1st July 2010. It will pay $160 levy for each of the Work Permit holder it employs up

A number of Members, including Mr Liang Eng Hwa, Mr Teo Siong Seng, Mr Sin Boon Ann, Mdm Ho Geok Choo, Dr Amy Khor and Mr Michael Palmer, have expressed concern about the impact of foreign levy changes on businesses, especially the SMEs. Let me stress that the levy changes should not be viewed in isolation. They should be seen in the light of the various initiatives and measures announced by Finance Minister Tharman to help companies, especially SMEs, to improve productivity. As Deputy Prime Minister Teo mentioned yesterday, productivity is not just about cost reduction and efficiency, it is also about how businesses can create value. I will not elaborate further as the Ministry of Trade and Industry will address how it intends to assist SMEs at a later stage.

Ms Jessica Tan and Dr Ahmad Magad have also cautioned that some companies may not be able to implement productivity improvements immediately. Mr Michael Palmer has also asked if we could align the pace of the levy changes to the 10-year productivity target. We understand that companies will need time to adjust. This is why the levy changes will be implemented in steps over three years. The first increase in levy rates on 1st July 2010 will be a modest one, ranging between $10 and $30 for most Work Permit holders. This represents an average of less than half a percent of the overall wage bill. But we need to get companies to start thinking about improving the productivity and take steps to reduce their dependency on foreign manpower now,

Several Members, such as Mr Teo Siong Seng, Ms Irene Ng, Dr Ahmad Magad, Mr Ong Ah Heng, Mr Sin Boon Ann, Mdm Ho Geok Choo, Dr Amy Khor and Mr Zainul Abidin Rasheed are also concerned that some jobs may be shunned by locals and companies may have difficulties in recruiting enough locals to replace the foreign workers. Let me clarify of the aim of the levy changes is to motivate companies to increase their productivity and deliver higher value-added products and services with fewer foreign workers. The increase in levies alone will not necessarily lead to productivity improvements if companies merely replace foreign workers with locals and employ the same number of workers. Let me borrow a phrase from a colleague, Mr Lim Swee Say, "with same-same input and same-same output, productivity will remain same-same, with no real improvements". Companies should consider how they can streamline business processes, improve their products and services, explore new markets with higher value and upgrade the skills of their workforce. This way, they will see real productivity gains.

Mr Low Thia Khiang has suggested that we remove the foreign worker levy completely and use Dependency Ratios instead as the sole lever to control the foreign worker numbers. Let me explain why we need the two levers – Dependency Ratios and foreign worker levy – to work in tandem to moderate demand for foreign workers and allocate them efficiently. If we use Dependency Ratio alone to regulate demand for foreign workers, we will need to reduce it significantly. I have earlier explained why this could impact high value growth

Therefore as Mrs Josephine Teo has pointed out the Dependency Ratio system requires an accompanying pricing mechanism to allocate foreign workers. Mr Low has initially suggested adjusting the Dependency Ratio by industries to achieve this. The question is how can the Government be in a position to decide which industries are more deserving of foreign workers? For example, how do we determine whether the pharmaceutical industry requires more or fewer foreign workers than say, the food industry? Even within the same industry, food and beverage, for example – how do we decide whether a coffee shop requires more or fewer foreign workers than, say, a French restaurant? So instead of the Government making decisions on the number of foreign workers in each industry, each business and each company, we should leave it to market forces to do that through a pricing mechanism. In fact, Mr Low conceded as

Sir, the foreign worker levy is a pricing mechanism that works in tandem with the Dependency Ratio. Together, the system gives flexibility to companies so that they can have access to foreign workers but they have to hire locals to meet the Dependency Ratio requirement. They have to pay higher levy rates if the ratio of foreign to local workers is high. This way, we allow market forces to operate so that we can efficiently allocate foreign manpower resources, give enterprises some flexibility while motivating them to improve productivity and minimise reliance on foreign workers. It is not a perfect system, but it is a practical system.

Mr Michael Palmer has asked why we are increasing that S Pass levy by a higher amount than the Work Permit levy increases. Sir, since the introduction of the S Pass in 2004, the number of S Pass holders has grown more rapidly than any other work pass groups. Although S Pass holders are considered mid-skilled workers, they are still part of the foreign worker landscape. The S Pass levy has remained at $50 since 2004, and is currently significantly lower than the Work Permit levy. We will need to increase it to moderate demand. I should also point out that S Pass holders are expected to receive higher wages to qualify for S Pass. The new levy rate is still in relatively smaller proportion of the S Pass holders' wages compared to that of the Work Permit holders.

Ms Irene Ng, Ms Audrey Wong and Dr Amy Khor have raised the concern that

Sir, let me reiterate that the levy changes should not be seen as a standalone measure to moderate the growth of foreign manpower, as Mr Inderjit Singh has pointed out. Instead, it is part of the overall coordinated efforts by the Government to strive for productivity-driven growth. As Mr Heng Chee How has mentioned, companies will need to change their mindsets on the way they use their foreign workers and drive productivity improvements.

Sir, let me end by sharing a short story. One day, a teacher went into a classroom with a big jar. First, he put some rocks into the jar and asked the students, "Is the jar full?" So, when the rocks were piled up, the students said, "Yes, it is full." The teacher then picked up a box of pebbles and put the pebbles into the jar, and asked the students, "Is the jar full?" The students said, "Well, I think it is now really full." But to the surprise of the students, the teacher now took up a box of sand and poured it all into the jar. Then, the teacher asked the students again, "So what do you say? Is the jar full?" The students now became very hesitant, but after a while, they conceded, "I think it is quite full." Now finally, the teacher took up a cup of tea and poured it into the jar. And now, when the teacher asked the students, "Is the jar really full?" There was dead silence.

invest in productivity improvements. I think it is useful to share with Members the thinking behind the levy changes and respond to some Members' concerns about these changes. First, let me thank Members for their comments and support of the changes.to a total of five. That is the first tier. However, the sixth Work Permit holder it employs will be subject to a levy of $300, and the ninth Work Permit holder will be subject to a levy of $450. That is the second tier and the third tier. We will further tighten the levy tiers over the next three years. This way, companies will have a strong incentive to reduce their dependence on foreign workers.so that they have enough time to realise productivity gains. The longer we delay, the more painful the adjustment will be later.companies and new investments that may require foreign workers. The challenge is how we can support these high growth companies and new investments without increasing the total number of foreign workers here. The issue is therefore one of allocation. We want to encourage companies which can operate with fewer foreign workers to reduce their dependence, while those who need more will have to pay a higher levy rate but still keeping within the overall Dependency Ratio requirement. I have illustrated earlier how the levy works to achieve this. If we only have Dependency Ratio system with no levy, it would not make much of a difference to a company, like the example I gave just now, whether it hires one foreign worker or 10 foreign workers. In the end, most companies may well decide to hire as many foreign workers as they can, right up to the limit of their Dependency Ratios. This will be contrary to our objective to moderate demand and facilitate efficient allocation of foreign manpower resources.much when he subsequently suggested a "COE" system to allocate foreign workers, which, in fact, is another form of pricing mechanism. However a "COE" allocation system for foreign workers is fraught with many difficulties. For one, it creates uncertainty for employers, in terms of price and availability of foreign workers. The "COE" system would be no simpler than the levy system and could end up creating other problems.errant employers may exploit their foreign workers by passing the levy increases on to them. Sir, current Work Permit and S Pass conditions explicitly prohibit employers from recovering levies and other employment-related costs from their workers. The Ministry of Manpower will continue to monitor and take enforcement actions against employers who attempt to do so through salary deductions and kickbacks.

Sir, when I talk to companies on the need to moderate demand for foreign

Sir, of course, productivity improvement is much more challenging than filling a jar. We should not underestimate the challenges of productivity improvement, but neither should we underestimate its potential. Sir, let us stay focused and work together to find more ways to fill the jar further.

workers and raise productivity, some claim that it is not possible to improve their productivity any further. They say, "My jar is full." Those who always think the jar is full will not make efforts to fill it. But they are surprised every time when others manage to fill it up further.

1.17 pm

(In Malay): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, the changing economy and competing market demands need workers possessing the latest skills that are relevant and can add value at work. Hence, workers must take steps to upgrade their skills in order to get better income. If they do not do so, they will be left behind.

In the current situation, workers must not just be contented doing low-skilled jobs or odd jobs, because it only provides low wages that are also irregular at times, while the cost of living keeps rising, times change and technology is getting more advanced.

The time has come for us to also further understand the concept of productivity and innovation, and try to practise it. However, as we learn something new, we must avoid falling into problems like spending beyond our means, being in debt and so on.

I would like to suggest that the Government explain clearly the concept of

This is because there might be misconceptions and a lack of understanding on what productivity means. Some might think that it means working for longer hours; some might think that it brings higher income for the same amount of work, and some might also assume that it is a process where automation will do all the work so that workers do not have to work as hard.

I would also like to call on the Malay bodies and grassroots organisations like the Malay Activity Executive Committee (MAEC) to engage the Malay community to explain the correct concept of productivity.

Finally, Mr Speaker – skills, positive energy, productivity, motivation and lifelong learning – these are the buzzwords that will be on Singaporeans’ lips from now on.

(In English ): Sir, in our early years, with the vision, strategies and mindset of our leaders, Singapore grew rapidly. Growth of 8% to 10% was not uncommon. We have moved on – from third world to first world status. When we have achieved so much, further growth may not be as fast and the growth curve, not as steep. There are new challenges, what with our open economy. Thus, to adapt to these rapidly changing domestic and global situation, it calls for a transformation in the way we think, the way we work, and the way we act. No more stereotyping. Our tagline would have to include words like ideas, innovation, invention, inspiration and information technology.

Things do not change. We have to change. We have to be the agents of

This year’s Budget is yet another creative one. I would personally call it the people’s Budget, and how appropriate,because people are our major resource in this land scarce tiny little red dot. Thus, the focus on manpower, skills, training, talent capital and development. Talent retention is a necessary shift for organisations not already having plans on doing this. Continuous upgrading, learning, unlearning and relearning is crucial.

In medicine, we have compulsory continuing education for doctors. If you do not meet the minimum requirement for the year, the practising certificate will not be renewed and therefore you will not be allowed to practise. There is a reason why this is essential – new developments, new ideas, evidence-based practices and changes are happening daily. With the characteristics of the doctor in me, when I came to Geylang Serai, my constituency, grassroots professionalisation and continuous learning and upgrading became part and parcel of their lives. Now, I am proud to say that they are a very motivated lot and nearly 70% have been for at least two or more self-improvement courses in the last two years. However, this is not good enough. We have to go further. So we have set a target – 100% trained by the end of 2010. Now, my grassroots leaders practise what they have learned and apply the knowledge and skills in events organisation and residents' outreach.

Our workers too need to move up and move forward because in today’s globalised but small world, when you apply for a job, you are not just competing with foreign workers and local applicants. You are competing with the

Mr Low Thia Khiang, Member for Hougang, claimed in his speech that "low-wage workers do not have enough incentives to go for training." I would strongly urge him to review that comment in view of the Jobs Credit scheme, the WIS and now Enhanced WIS (Work Income Supplement), the WTS (Work Training Supplement), which can subsidise 90% to 95% of absentee payroll and course fee for training, the Post Secondary Education Account and many others which may be specific to the company and the profession. Are these not incentives for training and upskilling? I would say then, the only thing lacking would be their internal drive and motivation of the workers and the employers.

To complement investments in productivity, there is also a move to increase foreign worker levies, which we have just heard. I would like to urge that this again be done very very gradually as foreign workers make up over one-third of our workforce and, of course, they represent an essential component in our growth. Certainly, the suggested tiered system in certain industries may work but I have concerns that it may have some backfire effects in certain other industries and may even lead to higher labour cost. Therefore, I am assured by the Minister's speech earlier where he said that MOM will be monitoring this very closely.

Let me now share a very positive example. The Management Development Institute of Singapore (MDIS) has campuses here and also one in Tashkent, in Uzbekistan, which I visited – a wonderful and state-of-the-art campus. The Minister for Higher Education there

What is in this for MDIS and for Singapore? One, revenue for MDIS. Two, enlarging and strengthening our Singapore brand name on the global stage. Three, exposure of students to emersion in culture, understanding and building bonds, in other words, international relations, an example for all companies to try to emulate.

Developing an inquiring mind and inculcating the research culture, which is a basis, is also crucial in our next phase of development and growth. If we always do what we have always done, we will always get what we have always got. "You must do things you think you cannot do", so said Eleanor Roosevelt.

I can say that many innovative instincts may have been killed because of lack of funds, lack of expertise to write up and package the proposals, uncertainty about where to get advice and assistance on the research projects. Perhaps out of every 10 applications, eight may end up being rejected. Can Singapore consider setting up an inventor-friendly and approachable Innovation and Invention Advisory Committee, accessible to anyone who needs advice on their research projects. Sure, we have the BMRC, NMRC, NRF, etc , but these may be beyond many of the applicants with simpler and smaller projects, and these may well be the projects which eventually make it big.

In mental health, for example, we often face the challenge of monitoring whether these patients take their drugs

Perhaps with the bed crunch situation we face ever so often in our restructured hospitals, remote care through teleconferencing provided at an area and facility outside the hospital may become common practice in time to come.

With all the focus on productivity and bottomlines, please do not forget the human factors, and I agree with Ms Audrey Wong on this because, eventually, it boils down to us dealing with people. Let me give Members an example:

HSR, Realtors with a Heart, is a company that towers over its competitors. It has received more than 20 awards and recognition recently and it is also rated No. 1 in a productivity campaign under the HSR property group. It is the fastest growing real estate company in Singapore. My encounter with the company was slightly different, because I was there to receive a donation on behalf of Mercy Relief, raised by the HSR staff in response to the Sumatran earthquake. The moment I stepped into the organisation, there was positive energy – a very strong positive energy. A warm and caring atmosphere exuded as I moved from place to place in their facility. The "Attractor Factor" was very powerful. Their staff, multi-racial with foreign workers as well, were genuinely happy, and they were just looking and feeling great. This was consistent with all the employees I met that evening. Indeed, we can certainly combine hardware and software to come up with the best results in Singapore companies.

Mr Speaker, we have come a long way for a small, young nation. From nowhere, we are now somewhere, I have to say. From the days when letters to Singapore were sent to China, our brand name is now not uncommonly on the lips of people globally. This did not come easy and it will continue to be challenging as well. Our work ethics, our mindset, growth, productivity and everything else need to be strengthened continuously. We cannot look back. We cannot procrastinate. In the end, it is all about attitude. No limits, no excuses, no ifs and no buts. It is just our attitude. If we have been afraid and we have had butterflies in our stomach, then now is the time to make that change – align and make all those butterflies fly in formation. The world is indeed as large as the lens through which we view it.

With that, Mr Speaker, as the 50th MP to speak on the Budget, I support it.

productivity and how it can be implemented under our strategic transformation of our economy in various sectors, especially in industries with many low-wage workers.change. A country’s budget reflects the vision and the performance of the government. Over the years, notice how it is customised and tailored to meet our evolving needs and challenges, whether local or global.same level workers in Russia, India, Malaysia, China, etc. That is why the Government will allocate $5.5 billion over the next five years to help enterprises and workers enhance productivity.has stated that students in all undergraduate and graduate courses in Management must go through MDIS in Uzbekistan. MDIS is also expanding to be the management institute in the Central Asian market and later they are planning to extend to Malaysia and India as well.diligently in order to control their symptoms, especially when they are out in the community. I learnt recently that there is a technology using a chip which can be used to monitor from afar if the patient really swallowed his tablets for that day. Is that not wonderful because we can also cut down on manpower, on volunteers, on ambulatory care nurses and counsellors doing the monitoring!In this Budget, Sir, there is more relief for the handicapped. This is indeed great news. However, the definition of the word "handicapped" is still rather nebulous. Does it comprise seniors in the various stages of Alzheimers' disease, dementia and also the mentally infirm? I would like to suggest a review of the current guide using the ability to perform six sets of activities of daily living certified by a practitioner. Perhaps both MCYS and MOH can collaborate to refine the definition and conduct more publicity and public education related to this to enhance understanding. *Cols. 3015-3016.

1.29 pm

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, Sir, last year's economic crisis was the most severe the world has ever seen. Our Government responded swiftly by providing a $20.5 billion Resilient Package

The Finance Minister announced in this year's Budget a series of measures to restructure Singapore's economy in the next five years. A total of $5.5 billion will be invested in companies and individuals to improve their productivity and to increase productivity growth from the current 1% to 2%-3% and to improve Singaporeans' real income by one-third in 10 years. To achieve this target, we must formulate new strategies and development plans to boost economic growth. A key strategy is to increase productivity, reduce our dependency on foreign workers by gradually increasing foreign worker levy and to create better jobs, better income and better life for Singaporeans.

Such a policy helps to ensure our long-term growth. However, for industries that are not popular with Singapore such as construction and maritime industries, foreign workers are still needed to man their operations. If we reduce foreign

Government encourages automation and mechanisation to increase productivity. I believe most companies will support this. However, this requires a lot of resources and skilled technicians. Time is needed to get everything ready so as to generate more output with less input. This is very much like a marathon runner who must warm up before his run to achieve best result. I believe our marathon runner, Mr Teo Ser Luck, would agree with this.

Another good example is the recent car recall incident involving Toyota, Hyundai and General Motors. This has created huge losses for the industry. As you know, car manufacturing is a high-tech and highly automated industry. By going for quantity, these car markers have overlooked quality. This has not only affected sales but also greatly tarnished the companies' image; they might even have to retrench workers now. We must be aware not to commit the same mistake.

Improving productivity is nation-wide movement. All Government agencies and companies must give their full support. I suggest: First, set up a cross-agency committee to train all civil servants on the productivity mindset. Second, fund training expenses for the companies. Third, provide interest-free loans or cash grants to companies to improve their

Mr Speaker, Sir, the Minister also announced setting up a National Productivity and Continuing Education Council chaired by Deputy Prime Minister Teo. The mission of the Council is to train people to innovate and to increase productivity. This is a good policy for the young and educated. However, some old and less educated Singaporeans may not be able to get training and end up losing out. This kind of structural unemployment will create social problems. I know structural unemployment rate in developed countries is 5%, in France is 6% to 7%. Currently, the European welfare system provides a social safety network for the unemployed. Singapore does not have such a welfare system. I would like to ask if the Council has any solutions for structural unemployment.

This year's Budget did not hand out hongbao like the previous years, but it drew up future plans for Singapore. Topping up the Medisave Account for people over 50 years old will benefit 1.02 million people, which will cost the Government $310 million. The Government is also setting aside $200 million for Medifund to help needy Singapore and another $200 million for the Eldercare Fund. In total, direct transfer to Singaporeans amount to $1.4 billion and it will be $1.8 billion if we include WIS. Many helping measures in previous Budget are extended to this year, so, in a way, we are still getting hongbao. For example, utilities, S&CC, rental and GST rebates. So, we are still getting all these but many HDB dwellers do not understand this. When I went to the community’s Chinese New Year parties, many residents asked me this question. So, to put their minds at ease, I urge the Minister to make it clear again to Singaporeans that Singaporeans can still enjoy the above rebates.

On this note, I support this Budget.

and tapping into our past reserves for the first time. The Jobs Credit Scheme has helped to keep workers' jobs and companies to operate smoothly. With the support from our tripartite partners and our people, we managed to overcome the most severe economic downturn and have started embarking on the recovery journey. In 2004, our per capita GDP was $23,700, ranking No. 2 among the four Asian Tigers. Hong Kong was No. 1, Taiwan No. 3 and Korea No. 4. Five years later, we surpassed Hong Kong with a per capita GDP of $50,300 whereas Hong Kong is only $42,700, so we have become the "head of the dragon". Singapore is now No. 1. We are ahead of everybody else. To maintain our leadership position and advantage, we must formulate new plans and strategies to improve our competitiveness. Everyone is striving for new breakthrough. No progress means regress.workers substantially in a short period without getting sufficient local workers to fill in the gap, then two problems will arise. Firstly, over 90% of construction workers are currently foreigners, that is about 245,000 workers. Reduced manpower will slow down, even delay ongoing projects. Secondly, increased levy will add to construction costs which, in turn, will push up housing prices. The consequences will be dire.productivity. Fourth, reward staff who contribute to the company's productivity and share the company's gains with staff.An article in 23rd February Zaobao impressed me very much with its very simple explanation on the Budget. So, all the details of the Budget are clear and easily understood; you can take in the details of the Budget in a single glance. So, I hope the Ministry of Finance can consider adopting the same method when delivering the message. I am laying this newspaper on my table for my residents to see it. *Cols. 3017-3022.

1.40 pm

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, Sir, I am very honoured to be the concluding speaker in the debate on this year's Budget Statement and I have more people in the audience.

In 2007, when the Government announced its intention to amend the Constitution to empower the Government to make use of the net investment return (NIR) of the national reserves, I expressed my concern. I was worried that we were beginning to eat into our capital, making use of "ah gong's " money and, thereby, depleting our reserves.

In 2008, I again urged the Government, the Ministers, MPs and members of public, not to treat the annual Budget as a time for the Government to distribute angpows. I was worried that people would begin to have unrealistic expectation on the Budget, thinking that the Government will be distributing angpows whether in good time or in bad time. Last year, I told a story of an old man who spent $2.50 on a bowl of fishball noodles while his grandson went and enjoyed a bowl of abalone noodle costing $42. I am concerned because our young people seem to be using their grandfather's money freely, and taking it for granted.

Mr Speaker, Sir, raising productivity may be important, but I hope that the Government will not neglect another even more important strength – that is, creativity in our economy. We need to have creativity to push productivity. In today's new economy, if we depend on the traditional production methods of "doing more, doing better", it is not enough. It is not enough to push the economic development of Singapore because if we were to raise productivity on our existing industries, we could only achieve very minimal and very gradual progress. In order that Singapore would continue to develop and be prosperous, the Government should ensure that the policy we promote would be one that leads to a Creative Economy. Only through a creative economy can we achieve a quantum leap in our development. With a creative economy, we will be able to create value and to create high-value jobs.

Coca-cola is a century-old company established in 1886. Its market value now is US$122 billion. Google has a history of less than 15 years. It is a company emerged from the information technology, and its market value is already US$172 billion. Another company, the Apple Inc., from its origin as a personal computer manufacturer, progressed over the years with innovations and all sorts of new inventions, such as Mac, iPod, iPhone. In

To enable Singapore to develop into a creative economy, creative thinking, creative concept and creative spirit should be extended to all trades and all industries, and not to be confined to the creative industries like media, advertising, design, etc. Every Singaporean must be creative. He should make full use of imagination, have new ideas and better processes, so as to provide better services and products.

Take a look at the handphone. Thirty years ago, when the handphone was first introduced, it was as big and as heavy as a piece of brick, and its function was only limited to voice communication. Today, the handphone is very tiny, but it is so versatile that it can be used for communication, sending SMS, sending images, surfing the Net, and even sending emails, for GPS and for playing games. Although the first round of dot-com bubble had caused thousands of start-up companies to go bankrupt, today's Internet has enabled companies like Yahoo!, Amazon, Google, eBay, Facebook, Twitter, etc, to provide all sorts of services, create new needs, open new markets and thereby creating trillions of market value.

Mr Speaker, Sir, in order that our creative economy may succeed, we must continue to encourage and promote the creative culture and the creative spirit among our schools, the Government departments, private sectors and the people. Our people should be given more space for creativity. The Government should minimise interference and maximise encouragement. The Government departments should also make corresponding adjustments so that the private sectors could have more space to make full play of their creativity. For

Last night, Senior Minister Goh Chok Tong and the MPs for Marine Parade GRC had a dialogue session with our grassroots leaders on the 2010 Budget. One grassroots leader, who is in the construction industry, gave an example. He said that Housing Board's Lift Upgrading Project is still using the "Bored Micropile System", although a few years ago he had suggested to HDB to make use of another method known as the "Driven Micropile System". According to him, this new method is four times faster and 30% cheaper. It is only 70% of the cost of the conventional method. But the HDB rejected his suggestion on the ground that this new system was a "Percussion Method". I sincerely hope that the Government departments could be more flexible and allow our enterprises to be more creative.

As for the SMEs, how are we going to help them? We often hear proprietors of SMEs saying that business is getting more and more difficult to operate. A very famous business man, Hu Xueyan, from the Qing dynasty in China said, "Business may be more and more difficult, but the more difficult it is, the more opportunities there will be." The key is on our foresight. Yes, our businessmen should look further ahead. If your vision is confined to only one city, you can only do one city's business. If you look at one country, you will do only one country's business. But if you look at the whole world, you will have global business. Globalisation and

The CEO of Alibaba, Ma Yun, is full of confidence for the SMEs. He said the 21st century is not a century for the big enterprises and the big scale. The big dreams of small enterprises should be typical of the 21st century. Therefore, to succeed we must look at how we are able to establish new relations with our workers, customers and the environment. In the past, businessmen depended on how to exploit others in order to make money from the remaining value, but today's enterprises depend on creating value. He encourages the enterprises not to be complaining all the time. He said, "This world does not lack complaints, what it lacks is the means to settle these complaints." "To succeed you must work hard! The market does not come with research. You must fight all the way to open it." In order to realise the dreams, we must put our ideas into action. So long as our people from all walks of life can work in one heart and one mind, dare to innovate, dare to try out new things, we will be able to realise our dreams.

I support the Budget Statement.

This year, I am very happy because the Finance Minister actually gave me a bigangpow, in the form of not distributing any angpow to the people. This year, the bigangpow is that the Government is focusing on how to prepare for Singapore's economic development in the next 10 years, with emphasis on raising our long-term competitiveness. Only then can we continue to compete in this highly competitive global economy and to have a share of the pie so that our people can enjoy a better standard of living.less than 30 years, its market value has grown to US$189 billion.example, in tender exercises, can we not be less rigid so that the bidding companies can submit different but creative proposals that may be even more effective? At the same time, the Government should also be willing to undertake risks to test out new proposals, and not be too rigid and afraid of making mistakes. They should not be too conservative and stick to the same old models and follow the old rules.Internet have brought us a lot of global competition, but they have also opened up a sea of global opportunities. *Cols. 3023-3028.

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].

1.51 pm

Debate resumed.

Mr Speaker, Sir, I would like to thank all Members who have spoken, given suggestions and supported the Budget. I will address the main issues of the Budget Debate in this round-up speech. Members had also raised specific issues related to the programmes of the various Ministries. These will as usual be addressed at the Committee of Supply sessions.

As many Members, including Ms Irene Ng, Mr Yeo Guat Kwang, Mr Arthur Fong, Dr Mohamad Maliki Osman and Nominated Member Mr Calvin Cheng, have said, Budget 2010 is aimed at the long term. Most Members, including Opposition MPs, recognise this, and have expressed their support for various initiatives to take our people and enterprises on a journey leading to higher productivity and higher incomes over the next decade.

Our overall commitment of resources in the Budget is higher than it was last year when we intervened robustly to counter the crisis. But the nature and purpose of the budget has shifted. This year, we make a major commitment for the future – to put our people on a path of superior skills, quality jobs and higher incomes.

But the pay-offs will not be seen quickly. As Mr Zainudin Nordin put it, changing both skills and mindsets will not be easy, but we have to persevere and avoid thinking that there are shortcuts.

Our ultimate aim, as Mrs Josephine Teo, Assoc. Prof. Muhammad Faishal, Mr Ong Ah Heng and several others recognised, is to raise the incomes and sense of self-worth of our citizens, including those at the lower end of the

My response to the issues in the debate will therefore be set out along the lines of these two major themes. First, investing in productivity and second, investing for inclusive growth.

Productivity – a recurring priority

As Members have noted, our focus on productivity is not new. We had productivity movements in fact going back to the 1970s, then in the 1980s and 1990s, each with a different focus. Some like Mr Viswa Sadasivan thought that our renewed attention to productivity growth reflects the failure of these previous efforts. This is patently not the case.

The Singapore of today is a completely transformed place, in most sectors of the economy, compared to what we were 20 to 30 years ago. Since 1980, our productivity levels have more than doubled. It has brought us to about 60% of the average productivity levels of the US and Japan, despite both countries themselves moving ahead. And it has been achieved not just by investments in hardware, but by nurturing a more educated workforce, bringing in new higher value industries to replace old ones, and spreading the good practices from leading players to the rest throughout the economy. That is also why most economic studies have assessed that Singapore has done relatively well in the last three decades in growing "total-factor productivity" – in other words, not

So the productivity effort goes back a long way. And it is in fact worth going back to read some of the early speeches that were made at that time. I happen to have one of Minister Mentor's (MM) speeches here with me – he was then Prime Minister – made in 1986 at the launch of the annual Productivity Month. He quotes from a letter he had received from Mr Kohei Goshi, who was at that time the recently retired Chairman and President of the Japan Productivity Centre. As Mr Goshi put it to MM, the productivity effort is a "marathon with no finish line". It is therefore a continuous and unending effort.

This is also why many of the advanced countries are themselves revisiting the issue of productivity, as a basis of sustaining their growth. Take Canada for example. Productivity growth was doing well in the 1990s – growing by almost 2% a year, which is a healthy rate for an advanced economy. But it subsequently fell to about 0.5% in the current decade. In 2009, an Expert Panel made recommendations for comprehensive improvements, including investments in ICT, and sharpened incentives for innovation and commercialisation of R&D.

Australia is another example. In the 1990s, the government undertook significant reforms to improve productivity by opening up their businesses to competition. Productivity went up by 2.2% a year. But it has since moderated to 1.5% per year in this last decade. The government made a renewed commitment in its Budget last year, to investments in education and other areas to boost the productivity of its workforce and economy.

Ireland, a small open economy like Singapore, saw productivity grow by over 4% from 1995 to 2005, as it attracted

The journey of productivity, innovation and service quality therefore never ends, as Ms Denise Phua, Mdm Ho Geok Choo, Mr Zainul Abidin Rasheed, Mr Wee Siew Kim and Nominated Member Assoc. Prof. Paulin Tay Straughan emphasised. It will also get more challenging as we catch up with the leaders and strive for higher levels than before.

But we do have significant headroom for improvements in productivity. In almost every area that contributes to productivity, there is scope for major improvement – bringing in new and better equipment or software to help workers create more value; training and upgrading employees themselves; spending on R&D or its commercialisation; re-organising the workplace so as to cut out unnecessary processes and focus on delivering customers the best service and value; and building a culture that motivates people and encourages them to take initiative. In some of these areas, there has been a distinct slowdown in the last decade.

Take companies' investments in equipment and software per worker. It has grown much more slowly in the last decade, than in the 1990s [Chart 1*].

income ladder. In order to achieve this, we have to make a sustained effort to grow skills, to innovate and to raise productivity. We must also ensure that all Singaporeans are included in growth and, as Ms Jessica Tan put it, feel that they have a fair chance of success and that they can achieve more for themselves and their families through their own efforts, helped by the Government.just adding more inputs but using inputs better to create more value.new investments in high-value sectors such as pharmaceuticals and ICT. However, with domestic sectors showing weaker productivity performance and the export economy itself eventually losing competitiveness, productivity growth has fallen sharply to about 1% since 2005. To address this, Ireland too has embarked on a major plan to boost enterprise capabilities and competitiveness. *Cols. 3005-3006.

2.00 pm

Training has also slackened. While our workforce itself has become better educated as younger Singaporeans who have graduated from post-secondary education began working, average training

R&D expenditures however are growing well in the business sector [Chart 3* ]. However, they start from a low base and we still have a significant way to go in making R&D pervasive across our economy, not just in industries like pharmaceuticals. The Global Innovation Index 2009, compiled by INSEAD, ranks Singapore 5th overall, but only 21st in terms of innovation in new technologies and 17th for the presence of innovative products.

We are therefore making a major push to invest in productivity. The Government will provide significant support to our enterprises to invest in upgrading efficiency as well as to develop new products and secure new markets so as to grow their top-line. We are also embarking on a major new phase of investments in our people, particularly through the development of a comprehensive system of continuing education and training.

Deputy Prime Minister Teo Chee Hean had set out the comprehensive approach that the National Productivity and Continuing Education Council will take as we go forward on this journey. I will take the opportunity to address some of the specific issues that have arisen in the Debate on the Budget 2010 initiatives.

Investing in enterprise upgrading

Most Members, including Dr Amy Khor, Mr Baey Yam Keng, Er Lee Bee Wah, Mr Ong Kian Min, Assoc. Prof. Koo Tsai Kee and Nominated Member, Mr Teo Siong Seng have provided strong support for the Budget 2010 initiatives to boost enterprise productivity, including both the Productivity and Innovation Credit (PIC) and the schemes that would be funded by the National Productivity Fund. However, several Members were concerned about whether all our businesses will be able to benefit from the schemes, and especially

Let me first explain that the approach to businesses that we are taking in this year's Budget is fundamentally different from last year‘s Resilience Package, which was applied liberally across the business sector. While we are making a major commitment to helping our businesses, the benefits will not be spread out equally. Dynamic companies, those which are investing in innovation and upgrading – including small enterprises – will benefit more than others.

There are in fact three key principles behind Budget 2010's package of productivity measures:

Focus benefits on growth-seeking businesses;

Provide bang for the buck for SMEs; and

Take a two-pronged approach – involving both broad-based incentives and targeted programmes.

Focus benefits on growth-seeking businesses

First, we will facilitate economic restructuring by focusing benefits on businesses that are looking ahead, innovating and investing. The approach we took with the Jobs Credit and the Special Risk-sharing Initiative (SRI) last year was a liberal one. The package was costly, but as Mr Christopher de Souza noted, it was the best way to avoid large job losses and inject liquidity into the business sector at a time of great difficulty. It was meant to reduce costs for all firms, whether or not they were in trouble. In fact, if we had extended the Jobs Credit only to companies in trouble, we would have provided the wrong

Companies will continue to benefit this year from the extension of Jobs Credit for the first six months, as well as the other initiatives introduced in last year's Budget – such as accelerated Capital Allowance, enhanced loss carry-back scheme for corporate tax, and the permanent 1% cut in corporate income tax with effect from YA2010. Taken together, these measures will provide businesses with substantial cash-flow benefits this year.

However we must now shift our focus towards restructuring our economy. Our economy is well into recovery, with improvements in most industries. While there remains some uncertainty over the pace of growth in the second half of the year, we have to set our sights on sustaining growth not just for 2010 but for the next five years and beyond.

It is therefore not appropriate for the Government to extend the Jobs Credit to the end of the year as Member Alvin Yeo had suggested, or to extend the SRI beyond January 2011 as Nominated Member Mr Calvin Cheng had suggested. Doing so would dilute and hamper the move that we have to make to restructure the economy and provide companies with incentive to upgrade productivity.

The measures this year aim to get businesses to invest in innovation, and to upgrade their operations and develop the skills and potential of their workers. Every company that is willing to do so will benefit from the schemes we have introduced.

The PIC, in particular, will benefit businesses which are already profitable and have taxable incomes. But it would also benefit the profile of companies that Mr Liang Eng Hwa had pointed to – growing companies which do not yet have

A company which does not have taxable income can opt to get a cash grant of $18 on every $100 invested, and store the rest of its tax benefits until it eventually earns taxable profits.

For training in particular, employers would obtain a 250% tax deduction on top of the very substantial training subsidies that they can get from the WDA. With current SPUR subsidies of up to 90%, an employer may fork out as little as $6 for every $100 of training costs.

So that is the first principle, where the incentives and schemes are skewed towards companies that will invest and innovate, because this is what will help to restructure our economy. We have to begin now.

Providing bang for the buck for SMEs

The second principle behind our approach is to provide the most bang for the buck for SMEs. Several Members spoke about the need to nurture local enterprises who are rooted to Singapore. Some of our SMEs also have the potential to grow into larger enterprises over time, and will add further to the resilience of our economy. The Government agrees with this.

Dr Ahmad Magad and Nominated Member, Mrs Mildred Tan have commented that SMEs may need some time to develop their innovation plans, including looking for suitable systems and weighing the costs and benefits. The Ministry of Finance has also received similar feedback from the business associations since the announcement of the PIC scheme in the Budget. We recognise that this is an issue. This is something newly announced, and we do not want SMEs to have to rush into implementing new investments or thinking up new schemes for innovation. This is something that has to be calculated carefully, so we want to see how we can make the schemes flexible enough to benefit them even in the initial years. To help SMEs benefit from the PIC scheme without rushing the implementation of their investments, we will refine the PIC claims process to enable companies to combine the $300,000 ceilings per year for the first two years into a new ceiling of $600,000 over two years. Businesses will therefore be able to claim a 250% deduction for the first $600,000 of expenditure on each activity that they

We have also received feedback that companies will find it easier to benefit from the PIC scheme if it covers a wider range of in-house training programmes, besides the WDA-certified in-house programmes. This is besides external training programmes which will all be covered under the PIC. MOF will therefore work with MOM and agencies such as SPRING and BCA to see how a broader range of in-house training programmes can be recognised for the purpose of PIC benefits.

I would also like to assure Members such as Mdm Cynthia Phua and Mr Heng Chee How and Mrs Mildred Tan that the administration of the PIC scheme will be kept simple. Businesses will be able to ride on the existing tax filing system and will not need to fill out lengthy application forms.

Balance between broad-based and targeted measures

The third principle is to strike a balance between across-the-board tax incentives, which any company can benefit from so long as they take the initiative to invest, and grants that are discretionary and given on a more targeted basis.

The PIC is a broad-based incentive which any market participant can benefit from. But if we rely only on the PIC, we will not be able to catalyse the major industry-wide changes that are required in several sectors – like construction and F&B. Industry and sectoral grants are therefore useful in catalysing these industry-wide measures to lift productivity and will also support coordinated efforts

But if we rely only on grants, without across-the-board tax incentives, we will be relying too heavily on the discretion of Government agencies and industry associations to determine which firms or industries should be given more assistance.

We are therefore offering a two-pronged approach, both broad-based and targeted, to provide maximum support for enterprise upgrading. And as Ms Jessica Tan had noted, these new programmes would also complement the existing schemes that provide companies with assistance on financing and capability-building, such as those run by SPRING. Companies can leverage on such schemes immediately even before they obtain the benefits of the new programmes.

*Cols. 3005-3006; 3007-3008

expenditures by businesses have been falling [Chart 2*].whether our SMEs would benefit adequately.incentives, and would not have succeeded in holding down job losses across the board.significant taxable profits but which expect to become profitable over time. The PIC is a generous scheme – in fact exceeding what any other country provides – and is therefore a major push in support of companies that will help restructure our economy through their investments. A profitable company paying the headline corporate tax rate of 17% can get back $43 in tax savings for every $100 invested. A smaller company would already be paying a lower marginal tax rate, of say 8.5%, because of our partial tax exemption system – they would still get back $21 on every $100 invested.Making sure that SMEs benefit most is the reason why the PIC is capped at $300,000 of expenditure per year for each of the six qualifying activities. By setting the cap at $300,000 for each activity, we have been able to give companies an unprecedented tax deduction of 250% of expenses. That way, the vast majority of SMEs will receive more assistance to upgrade and upscale. If we had instead designed the PIC with a higher cap of say $500,000 but a lower deduction of 150% of expenses, it would have tilted the benefits towards larger companies who are the ones that make the larger investments. The most significant item of expenditure for SMEs is usually automation. However, under our Capital Allowance (CA) regime, only 7% of CA claims exceed $300,000 per year.incur for YA2011 and YA2012 combined. Thereafter we will revert to the yearly cap of $300,000 per activity so as to keep the scheme focused on our SMEs. by enterprises, unions and Government agencies so as to maximise productivity improvements. These coordinated efforts are especially important in helping our SME sector build up strengths for the future.

2.15 pm

Before I move on to the second major theme which I will address in this Speech – which concerns inclusive growth – let me quickly address three other specifics that arose in the Debate.

Ms Jessica Tan felt that the phasing out of the Industrial Building Allowance (IBA) will raise costs for businesses, and that the Land Intensification Allowance (LIA) is too restrictive as it covers just nine sectors. The IBA is no longer suitable for Singapore's needs as it was provided irrespective of land intensity. It is also a tax subsidy enjoyed by a very narrow segment of the corporate sector – this is not very well-known. Only 5% of tax-paying companies made claims under the IBA and less than 200 companies account for more than 90% of the IBA claimed.

Ms Jessica Tan also asked if the cap under the new M&A Tax Allowance can be removed, and if the allowance can be extended to sole proprietorships.

The $5 million cap effectively allows for a company to make an acquisition of up to a $100 million in any particular year. It does not provide a significant incentive to undertake very large acquisitions but it is more than adequate to cater to the SME sector, for which it is aimed.

For sole proprietorships, however, such transactions typically take the form of acquisition of assets. There is no M&A as such as there is no acquisition of shares. For his asset acquisition, the sole proprietor can claim capital allowances and deduct related financing expenses.

Let me turn now to our green initiatives which Dr Lam Pin Min and Dr Lim Wee Kiak, and Nominated Member Mrs Mildred Tan had emphasised the need for.

This year‘s Budget did not feature fresh green initiatives, besides the enhancements to the scheme for test-bedding of green transport technologies (TIDES). The reason why it did not contain fresh green initiatives was because we had already committed in 2009 to a significant $1 billion of funding for sustainable development initiatives over the next five years. Since then, $400 million has already been earmarked for a

Investing for inclusive growth – raising the incomes of the lower-income groups

Let me now move on to the second major theme of this Debate, which is investing for inclusive growth. I would like to start with the issue of how we must help our low-income families. This was rightly the focus of many Members, including Mr Masagos Zulkifi, Dr Fatimah Lateef, and Nominated Member, Mr Laurence Wee.

I want to start with the points raised by Mr Low Thia Khiang, Mr Inderjit Singh and Ms Sylvia Lim. They claim that wrong Government policies in the last decade depressed the incomes of our low income groups. They say the Government went for "growth at all costs" – a strategy which Mr Low Thia Khiang in fact says started in the late 1990s – and that by allowing in more foreign workers we reduced the wages of Singaporeans at the lower end of the income ladder. At first glance, the analysis has intuitive appeal but it is wrong and misleading.

We achieved an average growth rate of 5% over the last decade. It was a healthy rate of growth. Few economists would consider 5% to have been excessive or beyond Singapore‘s potential. But we were only able to achieve this healthy average growth because we grew much faster from 2004 to 2007, when our GDP grew at an average of 8% per year. This offset the

By allowing the economy to grow rapidly in the second half of the decade, we were also able to bring unemployment down and grow the incomes of Singaporeans. The resident unemployment rate, which was above 6.0% in late 2003, and stayed above 4% for a couple of years, gradually fell to 2.4% by the end of 2007. In the Budget Speech, I mentioned how median incomes – in other words, the 50th percentile – per Singaporean household member had consequently grown over 2005 to 2008. The growth over those four years in fact accounted for all of the income growth that took place during the decade. Median incomes grew by about 20% over the decade, adjusted for inflation. [Chart 4*] I should point out that this is median, not average incomes because Mr Inderjit Singh had thought that it might reflect the growth of income at the upper end of the scale. This is, in fact, the 50th percentile household.

Lower income households also saw their incomes rise. Their incomes grew by less over the decade compared to the median household. But for the lower income households as well, all their increase took place over the three years from 2006 to 2008, when their incomes grew by about 16% in real terms. Taking into account the decline in their incomes earlier in the decade as well as during last year's recession, they ended the decade with total growth of incomes of about 7% in real terms. So it was the 16% growth over 2006 to 2008, that allowed them to

The improvement in unemployment, and the growth in Singaporeans' incomes that we saw in the last decade, including the modest lift in real incomes at the lower end, would not have been possible if we had prevented businesses from expanding quickly in the second half of the decade. The external environment was favourable, but their growth would have been choked off if they had not been able to obtain more foreign workers.

Bringing in foreign workers allowed businesses to seize opportunities, accept orders and grow, and to create more jobs for Singaporeans. Wages rose as the labour market tightened. In fact, the three years from 2006 to 2008 in which wages showed healthy growth for our lower income families corresponded to the period when the foreign workforce was growing most rapidly [Chart 5* ]. This was how we were able to offset the decline in wages for our lower-income group that had taken place in the first part of the decade.

There is another reason why it was sensible for us to have allowed businesses to invest and grow in Singapore when the opportunities presented themselves in the second half of the decade. The significant opportunities come in cycles, not every year or when we want them to come. You cannot postpone a major opportunity that comes this year, even if you prefer to take it next year. In the case of the petrochemical industry, for example, the cycle is once every seven to eight years. When the companies are ready to invest, and we say no, they go elsewhere. If we miss them, we miss the whole cycle, not one or two years. And we lose not just one investment. We lose the opportunity to grow a whole cluster – the critical mass of companies necessary for the

Our growth strategy in the past decade, therefore, was not wrong-headed. It illustrates the very real trade-offs we face in practice when deciding whether to allow the economy to grow rapidly and above its potential for a period. To do so indefinitely will lead to overheating. But it would have been ill-judged to prevent businesses from expanding in the name of avoiding rapid growth, even after having suffered a period of very weak growth in earlier years. Members would I am sure recall that there were calls from many quarters a few years ago for the Government to relax the foreign worker rules so that industries which were unable to find enough Singapore workers would stay rooted in Singapore and grow. In fact, in the 2007 Budget Debate, Mr Inderjit Singh himself had called for a relaxation of foreign worker rules to alleviate the shortage of labour that businesses faced. It illustrated the real pressures that the business sector faced at the time.

If we had turned away investments and prevented competitive businesses that were already in Singapore from growing, we would have ended up with a decade of very weak income growth. In particular, low growth would have hit our low income families the hardest – as it did in the first part of the decade.

We cannot do away with foreign workers. If we had not brought them in, we would not have been able to ease the supply bottlenecks in the private property markets, build HDB flats, or expand our MRT network. Our essential services will also be affected. Our hospitals and nursing homes would be short of nurses and caregivers, and we would have one-third fewer bus drivers as Mr Ong Ah

However, growing our dependence on foreign workers is not a sustainable strategy for the long term. It will reduce the incentive for employers to upgrade their operations and raise productivity. We will also run up against the social and physical limits that an ever-increasing proportion of foreigners in our workforce would bring.

This is why we are moving forward in a balanced manner. We are phasing in an increase in foreign worker levies so as to encourage employers to innovate, and improve productivity, and to keep our dependence on the foreign workers at about a third of the total workforce over the long term. The Government will, however, provide enterprises and workers with strong support at the same time – to raise skills, develop new capabilities and find new ways of creating value. Contrary to what Mr Low Thia Khiang claimed about the increase in foreign worker levy being aimed at fattening the Government coffers, we are going to put back into the economy more than what we will be taking out by way of the increase in foreign worker levies. What businesses pay extra in foreign worker levies will be more than made up for by subsidies and grants they can receive to upgrade their operations and train their workers.

*Cols. 3007-3008; 3009-3010.

The nine sectors under the new scheme, the LIA, are identified as having large land takes and relatively lower Gross Plot Ratios due to the more complex nature of their production process. However, we will remain open to including other sectors where there is a pressing need for land intensification, and where there are significant barriers which companies need to overcome in making such investments.variety of projects, such as incentives for green buildings, test-bedding of solar panels in public housing. In addition, the Government itself will be spending about $500 million over the next 10 years to retrofit large existing public sector buildings to Green Mark Goldplus standards. The Minister for the Environment and Water Resources will be providing more of both the details and thinking behind Singapore‘s sustainable development initiatives in his COS debate.series of downturns that we experienced earlier in the decade – the global dot-com bust in 2000, 9-11 in 2001, and again when SARS hit the region in 2003. In other words, by achieving above-potential growth of 8% per year from 2004 to 2007, we were able to offset the below-potential growth of about 2% per year that we had over 2001 to 2003.offset the years of weakness or negative growth in incomes, and end the decade with a total of 7% growth in real incomes – adjusted for inflation.industry to be in Singapore. Had we rejected leading investors like Shell or Exxon-Mobil when they wanted to expand here, Singapore would be weaker today.Heng pointed out, even with good pay being offered to attract Singaporeans.

2.30 pm

Inequality

Ms Sylvia Lim raised a valid concern over inequality. If we are able to choose, we would want growth of incomes to take place without at the same time letting incomes become more unequal. That would be ideal. However, the reality that we face is that to create jobs and income growth for lower skilled workers, we have to first grow our economy. And we can only do so by enabling those with

This is also the situation faced by other global cities such as Hong Kong and New York. Their Gini coefficients are in fact more than 0.5, like several other American cities. The Scandinavians have avoided these levels of inequality in their cities. However, they have long histories as close-knit, homogeneous societies, with people accepting extremely high rates of tax on both consumption and income, in order to subsidise the middle- and lower-income groups. Denmark, for instance, has a 25% VAT rate and a headline income tax rate of over 60%.

Each country has to find a balance suitable to its circumstances. The solution for Singapore cannot be to grow slowly in order to reduce inequality. If we do that, it will only hurt the people we are trying to help. Slow growth will make everybody worse off, but it will have the harshest impact on those near the bottom. Jobs will be lost and incomes will fall for those at the lower end of the workforce, while at the top end, those with the talent or entrepreneurial ability to seize opportunities elsewhere will up and go. Slow growth will not assure us of a more equal society, as long as we live in a globalised world.

Even New Zealand, with its wide-open spaces and attractive lifestyle that Ms Sylvia Lim spoke about, has seen large numbers of its own talent move to Australia, the US and other countries in search of jobs and better incomes.

Our basic approach therefore must be to maximise opportunities for all Singaporeans — the opportunities to get a good education, to work or to start a business, to retrain and upgrade, and the opportunity to own a home and raise a family in a community they feel they

Helping the lower-income group

We have substantially enhanced the Government's support for lower income workers and their families so that they have the best chance to progress. The main way we support them is to invest in their education and skills, and help them build up their assets through their HDB homes and their CPF.

We are also supplementing this by providing them with cash and support for their immediate needs – through the WIS cash component, subsidies for medical care and temporary financial support in difficult times.

If we add this up over a lifetime, the support the Government is providing is substantial. Take a family in the bottom 20% of household incomes. The husband and wife are in their mid-20s. He earns $1,000, while she earns $500 from part-time work. They have just purchased a 3-room HDB flat costing about $200,000 near their parents. Let us say they have two children, one of whom eventually goes to a polytechnic, the other to ITE.

Over the next 60 years, this family can expect to receive transfers of about $460,000 in real terms (2010 prices) [Chart 6*]. About 60% of this would comprise Government subsidies for their education and skills and to help them build up their assets. This excludes Government spending on education that goes to all children. The remaining 40% would comprise support to help them meet immediate needs, through WIS and discretionary financial assistance such as

Let me elaborate briefly on each of these forms of support.

Investing in skills and education

We are doing more to help the lower income workers to build up their skills and capabilities so that they can participate fully in a growing economy. Budget 2010 grows this commitment – through the development of the comprehensive CET system over the next five years, and through the new Workfare Training Scheme (WTS) that will help our older, low-wage workers to enhance their skills and stay gainfully employed.

Mdm Halimah Yacob, Mr Zainudin Nordin and Dr Amy Khor have made useful suggestions on how to help casual and contract workers go for skills upgrading. The Minister for Manpower will be addressing these issues in his Committee of Supply debate.

Second, we are increasing our investments in the education system itself, which remains the most basic lever that any society has in giving low income families the best chance of success in the future.

Our investment in education for each student cohort will increase significantly. For the entire cohort which entered post-secondary education last year – either JC, ITE, Polytechnic, or university – we expect to spend about $4.5 billion between the time they entered Primary 1, till they graduate from the education system. This is over a third higher than

What this means is new and better facilities, improved teacher-student ratios, higher quality teaching, more opportunities to gain exposure outside the classroom and abroad, and wider cohort participation rates in our tertiary institutions including the universities.

We are also providing enhanced subsidies and support for a quality pre-school education for children from low income families, which as Ms Indranee Rajah noted is an important part of how we help them to level up with other children when they enter primary school. We have also stepped up our bursaries for low-income pupils throughout the school and education system, and have provided significant top ups to their Post Secondary Education Accounts (PSEA).

How does it add up? A student from a lower income family could receive more than $6000 in bursaries and financial assistance over the span of his education from pre-school up to the completion of his Polytechnic diploma. This works out to more than 60% of his total fees. If we add in the PSEA top-ups over the past three years, he would receive over $8,000 in bursaries and top-ups or more than 80% of his total fees.

Building up assets

Next, building up assets. The second part of this strategy is to help low-income families own a home that can appreciate in value over time and give them a nest egg that they can draw on in retirement. We will also help them build up their CPF assets, through the CPF component of

Taken together, Government's support adds up over time to a large part of their retirement assets. Going back to the example of the lower income family I had referred to earlier, Government investment in their assets would amount to about 50% of the total value of their assets in retirement.

Cash and support for immediate needs

Our basic approach therefore is to focus on helping the low income group to build up their skills, capabilities and assets. However, many families will face difficulties from time to time and need additional support.

Let me go through the main prongs of this support for immediate needs:

Our most important intervention was to introduce WIS. While the major part of this goes towards building up their CPF balances, a portion of the WIS is paid in cash to help them meet immediate needs.

Second, through heavy Government subsidies and the 3Ms (Medisave, MediShield and Medifund) framework, we will ensure that all Singaporeans can afford basic healthcare, including especially the lower income and the elderly. Minister Khaw Boon Wan will be saying more about this during the COS.

Third, we provide a safety net for the most vulnerable and needy in our society. We render targeted help through the Work Support Scheme for the needy unemployed, CCC ComCare Funds for families in temporary financial distress, Public Assistance scheme for those

Whilst our help must be flexible and adequate, we have to ensure that in providing assistance we never undermine the culture of self-reliance which remains a key strength of our society. In particular, we must continue to avoid the temptation of providing a permanent and unconditional social safety net. Our current approach of providing discretionary help for individuals and families in need, is working and we must keep improving it. We must keep providing real support where it is needed, to help individuals and families to get back on their feet. For any individual who is out of work, but is willing to adapt, pick up skills and do what it takes to get a new job, we will do everything we can to help him. But we must also encourage and grow the many useful initiatives by individuals, community organisations and corporates that will build an inclusive society. The Government is committed to helping this flourish. That is why in Budget 2010, I extended the 250% tax deductions for charitable contributions, which means that Government is literally contributing up to 50 cents out of every dollar donated to charitable causes.

A progressive system

Let me sum up. Every society faces the challenge of uplifting those at the lower end of the skills and income ladder in a globalised marketplace. No society can evade this challenge.

We cannot determine the wages of Singaporean workers unilaterally, even if the foreign workers are not physically in

higher skills and entrepreneurial abilities to do well.belong in. We should never reduce the incentive for people to work and to make the most of their skills and talents. That has to be the basis for our society, for how we keep our economy growing, and for how we must strive to raise living standards for all Singaporeans including those in our lower-income groups.Work Support and Medifund subsidies. When we count in Government spending in education and other areas that all Singaporeans benefit from, the total transfers such a family would receive would be even greater. So this does not include the subsidies that the Government puts in place for all Singaporeans in the education system, from primary school upwards.for the cohort which entered post-secondary education five years earlier in 2004, a very substantial increase in spending. For the cohort which will enter post-secondary education five years later, ie, in 2014, we expect to increase spending by about 20% over the 2009 cohort.their WIS payments, the extra 1% interest on their balances, and periodic top-ups to their CPF accounts like the Medisave top-ups this year.unable to work and with limited means of family support, and Medifund. This year, we are also topping up both the Medifund and ElderCare Funds to help the lower income groups with their healthcare and long term care costs. Minister Vivian Balakrishnan will be announcing refinements to the Public Assistance scheme at the MCYS COS.Singapore. However, the average Singapore worker already commands a significant premium compared to those in competing locations in Asia because we have built up their skills over time and because Singapore remains an attractive place for companies to invest and do business in. For example, in manufacturing, the total hourly compensation for workers in Singapore is about 25% more than in Taiwan, more than twice as much as in Malaysia and about five times more than in China. Even with the recent rapid rise in Chinese wages – something in the order of 25% in the past two years – the pay of a production worker remains far lower than in Singapore. *Cols. 3011-3012.

2.45 pm

We should keep our premium in wages, even as other countries such as China, Vietnam, India and others catch up. In fact, it is precisely this catch-up in skills from those who have been behind us that makes it imperative that we raise skills and expertise across the board. It is why we are making this major effort.

We are also lending significantly greater support to those with low incomes so that all Singaporeans can take pride in standing on their own feet and progressing with the rest of society. Our approach is helping lower income workers and their families in real ways. Their incomes have generally risen over the last decade, although by significantly less than the average Singaporean worker. Their incomes would remain under pressure over the next decade because there is no lessening in the competition in Asia and globally. But there is no short cut, no quick fix, and certainly no magic solution to raise and sustain higher wages by command, as Mr Low Thia Khiang seems to believe. The only way we can sustain higher incomes of those at the lower end is by investing in their skills and expertise so that they have the confidence to do well and contribute on the job. Employers

However, the Government is also providing low-income families with substantial direct support that has raised their standards of living by more than their wages have gone up. Our spending on direct transfers to lower income households has increased greatly in the last five years. On our current schemes of support, to help them build up their skills, own a home and grow their savings, and to supplement their wages and provide them relief where necessary to help them meet their immediate needs, a low-income family can stand to receive $460,000 over a lifetime, in 2010 prices, as I indicated earlier.

We are able to do this because we have a progressive fiscal system where those with higher incomes or wealth contribute more than the rest, but where the overall burden of taxes on Singaporeans remains low so that we encourage enterprise, hard work and allow our economy to keep growing at a healthy rate.

The benefits we are providing Singaporeans this year alone also illustrate how we distribute more to the middle- and lower-income groups [Chart 7*]. This is without taking into account HDB housing grants, which if included, would show an even larger redistribution in favour of the low-income groups. I provide this data only because the issue has come up in various ways during the Debate – on whether we provided enough to one group or another, including whether we provided enough to the middle income group. Basically, it shows redistribution in favour of the lower income groups and to some extent, the middle-income groups.

The middle-income group benefits significantly. They too benefit significantly

Mr Speaker, Sir, our approach has produced real results for Singaporeans. We have one of the lowest unemployment rates and the highest home ownership rate in the world. Our education and healthcare systems are among the best in Asia. And we are building a society where families of all backgrounds, including our lowest-income groups have the best opportunities to progress and realise their hopes. We are fortunately in a different position from many other countries, especially following the crisis of the last two years. We are not in the situation where the net worth of our citizens has fallen over a whole decade, or where unemployment is stuck at 10% well after the crisis. We are not being forced to cut back on Government spending on essential services in health and education, or to raise taxes on our citizens to rein in Government debts.

We are instead investing in a new phase of Singapore's growth and transformation. If we all play our part in the productivity effort, then as Minister Mentor put it in the conclusion of his 1986 speech which I mentioned earlier, "Today will be better than yesterday. And tomorrow better than today". [Applause. ]

must give them every opportunity to do so, and the Government will support them strongly. –from the shift to a more progressive property tax system, the enhanced income tax reliefs for families as well as the CPF Medisave and PSEA top-ups announced. And these are on top of the schemes announced in previous years, like the GST Credits, the Senior Citizens' Bonuses and other benefits that middle-income families would also benefit from this year. The example of a middle-income household that I gave in the Budget Speech, a 5-room household between the 60th and 70th percentile of incomes, showed benefits amounting to $1,700 this year. *Cols. 3013-3014.

Sir, the Finance Minister has defended the Government's growth strategy and shown us the graph of income growth. Whilst I noted that the median income growth for households and also the low income households income growth, I also noted that there is a gap growing together with these households' income growth. I would like the Minister to clarify why is there a gap and how the Government proposes to close the gap slowly, or is it possible to close the gap at all? My second clarification is related to Ministry of Manpower's wages survey which showed that despite the growth and the benefits highlighted by the Minister for Finance – the result of the growth where income has grown for lower-income households as well – there is a disparity of wages between different occupations, which remains quite large and not closed. Would Minister explain that? Sir, my third clarification refers to the Minister's statement just now. He has somewhat admitted that the foreign workers' levy has fattened the Government's coffer. But he said that the Government will use that to redistribute the revenue, to benefit the business or the people. I would like to ask him specifically to clarify what the Government intends to do with the additional collection as the result of the increase in the workers' levy scheduled on 1st July? And I would also like to ask him whether and how the Government will mitigate the concerns, especially of the SMEs, that the huge increase in time to come would probably jack up business costs and as a result, may affect their competitiveness as well.

I will take Mr Low Thia Khiang's questions in turn. The first question he asked is a very good and instructive question – why is it that the gap widened between workers at the 20th percentile and the average or the median workers. If Members would look at Chart 4 closely, there are two things that would strike them – the periods of

I am sorry I did not refer to the point that the Member made in the debate about the Ministry of Manpower's occupational wage data, which they publish every year. And indeed if Members look across all occupations, there is one occupational group – cleaners and related workers – which has shown virtually no growth in average incomes over the decade. I believe it is about 7.5% of the workforce. Part of the reason for that was in fact a change in the composition of that group. There is unfortunately a gender gap in play in our economy, particularly for simple jobs,

The third question was on foreign worker levies. I am not sure if the Member was in the House when Mr Gan Kim Yong was speaking earlier. He addressed the issue quite thoroughly, of whether this is the right pace or the right scale of increase in foreign worker levies. I can tell you that within Government, several Ministries were involved and we studied this very carefully, particularly to ensure that this was a meaningful enough step to intensify productivity improvement, starting from this year, and yet gives time for the bulk of our enterprises including our SMEs to prepare and to get started on their measures, without going out of business. We studied it very carefully. It is a measured move, it is not the last move, but it is appropriate at a time when we have to start restructuring our economy. Mr Gan Kim Yong has given more information on this and I am sure that in the COS, he will be willing to follow up with more questions.

On fattening the coffers, it is not like one of the slimming adverts where the left-hand side photo has a larger than normal person and the right-hand side photo, much slimmer. We are slim all the way because I do not take the money in

Question put, and agreed to.

Resolved,

That Parliament approves the financial policy of the Government for the financial year 1st April, 2010 to 31st March, 2011.

weak or negative growth hit those at the lowest end the hardest. So the gap was created during the first part of the decade when we went through a series of shocks. Average GDP growth was 2% per year. Everyone was affected but as you can see, the lower end was affected the worst with an absolute decline in real wages, adjusted for inflation, that they do not recover from. It takes years to recover from that. Same thing happened in the recession in 2009. Everyone was affected and everyone moved down, but the lowest end was hit hardest, harder than the average worker. And this is exactly my point. If we go for a strategy of slower growth, in the hope of reducing inequality, we will end up, very likely, with the opposite. And we will end up hurting the people we are trying to help. The fact that there is pressure on the wages of those with lower skills, is unfortunately the fact of global competition that most societies face – it is not just global cities but also large countries that face this. Even China growing at 8% - 10% per year faces this problem, at the lower end of its workforce. Published statistics or not, everyone knows it is a reality there. Stagnant wages at the lower end while the middle and upper tiers rise very fast. So that is the first question. I am glad the Member asked it because it allows me to clarify the point.women earn less than men. The same occupational wage survey shows this up very clearly. There was an increase in the proportion of women in this group of workers – cleaners and related workers – from 25% a decade ago, to 50%, at the end of the decade – a very significant change. This alone accounted for a fair bit of the apparent decline in average wages. There are other reasons, but the fundamental issue goes back to what Mr Lim Swee Say was talking about yesterday – what is the solution? Best-sourcing initiative, providing better equipment, better training. The hard work that it takes to build up the productivity of the worker and give him or her a sense of self-worth. It is the solution that concerns us, bothers us and takes up our energies.and keep it without giving it out. We have announced our schemes, the schemes are ready for companies to take advantage of, and we are spending on existing schemes as well. The schemes have been announced in the Budget. To be frank, the first year increase in foreign worker levy is not a very large one. It does not yield a very large amount of extra revenue for the Government. In the first three years, when we raise levies, we are putting back more to the business sector than we are taking out. And for the five years as a whole we are doing likewise.

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 2.59 pm until 3.30 pm.

[Mr Speaker in the Chair]

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 2010 to 31st

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 FY2010 on pages 6 and 7 respectively of the Command Paper.

A total of 405 amendments to the Estimates of Expenditure have been submitted this year. The guillotine times for the discussion of the Heads of Expenditure under Standing Order 92(7)(a) have taken into consideration the earlier commencement time of a sitting and Parliament's resolutions to reduce Question Time and to extend the sitting times of the Committee of Supply for each allotted day. I must remind hon. Members that the total time for discussion of each Head of Expenditure includes the replies from the front bench. With the assistance of the digital timer in the Chamber and Members' experience last year, I trust that hon. Members will be able to keep to the speech times indicated against their amendments. I would urge hon. Members – both from the back and front benches – to adhere to their time limits, as I will be kind but firm in my time-keeping.

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

March 2011, contained in Paper Cmd. 1 of 2010.

Head U – Prime Minister's Office

Head U – Prime Minister's Office. Mr Matthias Yao.

New and old citizens

Sir, I beg to move,

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

Sir, Singaporeans take pride in Singapore being a multi-racial, multi-cultural and multi-religious society where people of different ethnic origins and beliefs live and work side by side in harmony and mutual support.

We are a multi-racial society because our forefathers came from different parts of the region and the world to make Singapore their home. They came from the Malay Archipelago, India, China, the Middle East and beyond. They worked hard together and raised their families here. Today, their descendents, that is, we, have a nation and a home called Singapore.

Through the years of nation-building, this society of different communities has forged a way of life where it is uniquely ours. It has an identity which is perhaps still very hard to define but, certainly, Singaporeans know what being Singaporean is. When we go overseas, we can spot a Singaporean from a mile away.

In recent years, it has been more difficult to keep growing our economy at a strong pace. An opportunity came by when the economic cycle turned up as explained by the Finance Minister earlier this afternoon. But our workforce did not have the capacity to take on all the opportunities that came our way. We had to employ more foreign workers and approve more applications for citizenship to enlarge the workforce. However, when their numbers became larger, when the presence of foreign workers and new immigrants became more visible, Singaporeans began to feel that the Singaporean way of life was being encroached on or even slowly changed. Some do not like it. While they have no problem living in a multi-racial, multi-cultural society, and indeed that is what Singapore is, they nevertheless feel that it

This is a delicate development that we need to pay close attention to. On one hand, even as we slow down on immigration, we cannot turn it off completely. We still need to continue to attract well-qualified foreigners to become our citizens to make up for the lack of a larger population base. To do that, we need to offer these foreigners an attractive proposition. And we should appreciate that these new citizens bring with them variety and diversity that will enrich our society. In fact, we should even say that the new immigrants ought to be proud of the deep heritage they come with and invite them to share it with us.

On the other hand, Singaporeans also want them to be quickly assimilated and become Singaporeans not just in legal status but also in preferences, attitude and behaviour. In other words, be more like us, the old citizens. They do not want their neighbourhoods and their workplaces to feel more and more like foreign localities.

Sir, we must not let tension arise between the old and the new citizens. We build Singapore into what it is today by gelling immigrants from different origins into one cohesive society. We must press on with this great effort. In this respect, I would like to ask the Prime Minister whether his Office will introduce any policy initiatives that will help to achieve a balance between the needs of new citizens and the concerns of the old ones.

has to be a Singaporean society and not a new imported society that is alien to those born and bred here.

Citizens and permanent residents

Sir, we have always had the debate on foreign talent and foreign workers in Singapore. In the past year, however, Singaporeans' concerns about foreigners and permanent

Why is this the case and why is it that this general reaction seems to be more heightened now than in the past? I think it is not a coincidence that this heightened expression of concern by Singaporeans has arisen following the global meltdown. October 2008 marked the beginnings of the global financial crisis that affected the world economy and Singapore's economy as well. We began 2009 with much uncertainty over the economic environment and whether businesses would stay afloat. Over the past year, Singaporeans have been understandably concerned about whether they will be able to keep their jobs and for those who lost their jobs, whether they can find new ones. There are feelings of insecurity about livelihoods because although economic recovery can be seen on the horizon, the effects of the recovery have yet to reach the ground.

Foreigners and PRs are therefore seen as a competition for a limited supply of jobs, housing and facilities. This reaction towards foreigners and PRs in Singapore is ultimately attributed to a perception that the foreigners and PRs are getting or taking what rightfully belongs to

Recently, the Government has indicated that it will raise the foreign worker levy which will make it more difficult to employ foreign workers. The Government has also sent out signals that they will slow down the intake of foreigners. Whilst this does give some reassurance to Singaporeans, it has, on the other hand, led to the foreigners and the PRs feeling more insecure. They are now wondering whether this is the beginning of an anti-foreigner sentiment here in Singapore. One Managing Director of an international group mentioned to me that he had been thinking of remaining in Singapore in the long term but in the light of the recent ground sentiments, he was now thinking of purchasing a home in Europe as a fallback just in case things did not work out here.

As a country with a strong sense of nationhood that is founded and committed to the ideals of peace, prosperity and progress for the nation, it is clear that Singaporeans must come first. However, we have always also been an open society and we have benefited from the presence of non-Singaporeans in our midst. So it seems to me that the question is really one of calibration – what is the right ratio of Singaporeans to foreigners and what is the right allocation of jobs such that we can ensure that Singaporeans are fully employed but, at the same time, allow foreigners to work in Singapore so that we can grow the pie as a whole so that Singapore as a whole country can benefit.

I think that what Singaporeans need most right now is reassurance, not just in

I would therefore like to ask the Deputy Prime Minister for his comments on this, whether there is a differentiation in terms of benefits for Singaporeans and PRs and how the Government intends to balance the need for priority for Singaporeans on the one hand with the need for foreigners to live and work in Singapore on the other hand.

residents (PRs) living and working in Singapore have reached a new level of intensity. The concerns expressed by Singaporeans range from complaints that foreigners are taking away their jobs, that PRs are snapping HDB flats and driving up prices beyond the reach of ordinary Singaporeans, thus depriving Singaporeans of flats, to overcrowding on the MRT. And explanations by the Government as to why we need foreigners and PRs only seem to elicit a general feeling that Singaporeans are less appreciated than foreigners. If you think of Singapore as a family, the Singapore citizen is like a biological child asking: why do you care for my foster brother or sister more than me? That seems to be the feeling.Singaporeans and that seems to be the heart of the problem. Whether or not this is, in fact, really the case and whether the statistics actually bear this out is something that I would like to ask the Deputy Prime Minister to comment upon. However, it is a perception, and so long as it is a perception, it is an issue that needs to be addressed.words but also in deed and policy, that they will always come first, which is right, because Singapore is our country and our home. At the same time though, the foreigners and the PRs amongst us also need to hear where they stand and a clear indication that they are not going to bear the brunt of an anti-foreigner backlash.

New immigrants and permanent residents

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Chairman, the birth rate in this country has been decreasing in recent years. In the year 2009, the birth rate has fallen to a historical low of 1.23%. Although the Government does provide baby bonus and other incentives, the birth rate has yet to increase to the Government’s targeted level. In order to have enough manpower to build our nation and sustain our economic development, the Government has no choice but to open its doors to allow more foreign immigrants into Singapore to boost our population.

Currently, the population of Singapore is five million. Out of this five million, 3.28 million are Singaporeans, 600,000 are PRs and 1.2 million are work permit holders. As such, we now see many negative reports about the PRs and foreigners such as them causing the rise in housing prices and depriving locals of their jobs. The total number of PRs and worker permit holders stands at 1.8 million, that is 40% of our population.

I need to ask, how long, on average, do these PRs live in Singapore and what is

According to my knowledge, some who have been PR for more than five or even 10 years are still not willing to convert. We need to encourage them to become a citizen and provide services to this country. Can we perhaps invite those PRs who have been PR for more than three years to become citizens so that they can start contributing to this country sooner?

In attracting these immigrants and foreign talent to Singapore, have we also done enough to encourage our own local students who are studying abroad to come back to Singapore? I wish to ask the Deputy Prime Minister: how many local students do we have now studying in higher institutes of learning abroad and how many will come back to Singapore? Are there any plans to bring them back?

their average age? What kind of contribution have they made to our social and economic development? How have they impacted on our social behaviour and values? What kind of policies are we going to have to implement in the next few years with regard to foreign immigrants and PRs? *Cols. 3029-3030.

Foreign talent and Singaporeans

Sir, Singaporeans understand that we need foreign talent to complement our local workforce to compete in the global economy. But in recent years, the sudden influx of foreign workers has raised concerns amongst Singaporeans. Some foreign workers have also taken jobs previously held by Singaporeans, thus causing unhappiness. The presence of foreign workers in our community has resulted in some social issues such as dormitory problems, overcrowding and fear amongst Singaporeans.

Sir, as the Government builds capabilities of our workforce in the future,

it is crucial to review the foreign talent and worker policy. Foreign talent must help companies to be competitive so that companies can continue to employ Singaporeans. This must be the basis in attracting foreign talent. The Government must continually monitor the policy to ensure that it is not a zero-sum game for Singaporeans.

3.45 pm

Sir, as Singapore attracts more foreign talent to be our citizens and permanent residents, the integration of our people will be more challenging. We need to identify more platforms where new citizens, PRs and Singaporeans can interact and bond. One simple way is to encourage our new citizens and permanent residents to join the PA Passion Card membership and, thereafter, participate in our community activities. Besides our grassroots associations reaching to them, we should provide opportunities for our new citizens and PRs to take initiatives to join our community activities. Therefore, I would like to suggest to the Prime Minister to consider making PA Passion Card membership as part of the new citizen and PR application process.

Sir, I would like to ask the Prime Minister the following questions:

What is the Government's long-term strategy in attracting foreign talent to be Singaporeans, PR and foreign workers?

Will the Government provide more measures to differentiate between Singaporeans and PRs? Will such measures bring tangible benefits to Singaporeans?

Can the Government provide an update on the efforts and outcomes of the

integration and naturalisation champions (INC) in bonding new citizens in our community?

Mr Chiam See Tong is not here. Mr Seah Kian Peng.

Total fertility rate review

Sir, we are worried that the Singaporean born in Singapore may one day become a rare and exotic creation. Total fertility rate is at an all time low. We need to review the effectiveness of the various parenthood measures. After all, our expenditure on parenthood measures has increased almost 100% since 2007.

Sir, I suggest that the Government target its subsidies in three ways:

Give more to parents who want to have assisted conception. Sir, I suggest that the first course of IVF for all Singaporean citizens be paid for completely by the Government. This will give those who really want to have children the financial means to do so. Last year, there was a 50% increase in patient numbers for IVF, after the Government announced its subsidy.

Continue to provide financial and other support for children up to the time they are 18 years old, at a budget of about $300 per child per year, and this amount can be used for anything that the parents want – whether it is buying books, going for hair cuts, new clothes, and so on – in other words, minimal restrictions.

Increase the number of university places for Singaporeans. Sir, many of us worry about our children and our bank accounts as our children near 18 years old. The MOE has told us that the increase has been about 5% each year – is this rate enough to keep up with

Adopt a Whole-of-Government approach to tackle this issue – can the current Government paid maternity leave scheme be enhanced? Would paternity leave help? Could those starting a family be given much higher priority in their HDB flat applications? The list goes on.

Sir, it is a difficult problem and we are fighting against a global trend. But try we must. I hope the Ministry will consider all proposals and see how they can complement the current incentive schemes.

demographics and the changing aspirations of Singaporeans? The long-term goal has been to provide places for 25% of each cohort. Why not aim for at least 30% of Singaporean children having a place in a Singapore university?

National Population Secretariat

Mr Chairman, Sir, in recent years there has been a visible increase in the number of foreign immigrants in our midst. At last count there are close to one million foreign immigrants, including foreign workers here on Work Permits, S-Passes, Employment Passes as well as Permanent Residents. Some have become citizens, others are keen to apply to be Permanent Residents and some will not.

All said, their increased numbers have added much diversity to Singapore as most Singaporeans will agree. However, there are segments of Singaporeans who lament that the uniquely Singapore way of life has taken a new phase, especially in the heartlands. Heartlanders have complained that the environment is dirtier than before and blamed this on newly arrived foreigners. Although there is anecdotal evidence that some incidents have been attributed to foreigners, largely our fellow countrymen do still have habits that are anti-social. It boils down to each resident

The Town Councils and HDB Branch Offices have been working hard to educate all residents and we have seen some improvement but we have a long way to go.

Sir, we cannot afford to be xenophobic. We cannot let a "them and us" attitude to permeate. With the challenges that we have identified and debated on earlier and the slew of strategies to execute, we need all Singaporeans to be in concert. We cannot have a polarised society.

Sir, the Government needs to explain its position and its stance towards the foreigners, either here as foreign workers or PRs. It is a difficult balance that we need to achieve, that is, to explain our position and the reasons for recalibrating policies on foreign workers and PRs, and that of acknowledging the concerns of our people. The fact is these very foreigner workers often bear the brunt of job cuts when economic times are hard and are easy punching bags when the economy experiences a downturn. The PRs are blamed when property prices increase, when service standards drop and when our children fail to get to the school of their choice. In some schools, parents have commented that foreign scholars edge our children out in the academic race.

This recalibration of policies requires a delicate response as both groups can be emotionally charged by the changes or the lack of it. There are many knock-on effects on the social fabric while we recalibrate. Sometimes, both groups, that is a PR and a Singaporean, are in the same household. The Singaporean wife of a PR expressed to me that we are an ungrateful lot and ignore the contributions that the close to one million foreigners make. I can only imagine the kind of

Ironically, in an advance society like ours, inter-racial and inter-religious marriages have fewer issues than the one faced by a couple of whom one is a citizen and the other is a PR. I know it is difficult for a government as decisions must be made by the couple themselves. But with the changes, it will mean tougher choices for them. I only hope that their decision will not be less beneficial for Singapore. We have to assure both Singaporeans and foreigners alike that our Government is not wavering on our policy. We should be single-minded, committed to spend our energies to ensure that Singapore becomes an attractive city for the talent, be it Singaporeans or foreigners. The outcome must be that we need to acknowledge the fact that as we push towards increasing our productivity –

taking ownership of our living environment but that is another debate altogether. angst, conflict and the doubt that the couple faced.

Mr Arthur Fong, time is up. Mr Sam Tan.

Mr Chairman, Sir, some say this Budget is clinical, rational but boring. I could not help but agree. However, is this necessarily a bad thing? To me, this Budget is like how Roger Federer plays tennis – not very exciting but extremely effective. He plays to win and not to entertain. And so, too, for this Budget, which has few fireworks but lots of gunpowder to fire up Singapore's long-term future. But the long-term future of Singapore cannot be secured by dollars and cents alone. It is not just a matter of strong intellectual solutions or hard-headed decisions, it is also a matter of the heart and unity.

The second part speaks to new Singaporeans. We also need to look more closely and carefully at existing social cohesiveness attempts and see how this can be called into service in integrating new Singaporeans.

Sir, there are quite a few rental blocks in my constituency at Radin Mas. Residents who live in these rental blocks generally take as good care of their homes as the rest of us, though, of course, there is always the occasional black sheep who litters the estate. However, this is a common problem in all the other HDB estates. Sir, I was, therefore, disconcerted to read about the protest of residents in Tampines who are upset that the building of the rental blocks in their vicinity will bring down the value of their properties. They do not want the old and the needy in their neighbourhood. Sir, is there a sense that some people are "untouchables"? Are we seeing a caste mentality developing in Singapore?

Sir, I am concerned with this incident which, I believe, if it is left unchecked, will tear our social fabric, weaken our societal foundation and threaten our national survival. If our fellow Singaporeans start to develop and embrace this new caste mentality, then I fear this will be the beginning of the end for Singapore. I, therefore, argue that we ought to take a big-hearted approach to embrace Singaporeans of all walks of life into the common spaces of our society.

Let me just quote a few lines from his article. He said, and I quote:

"Lee Kuan Yew is not my dad. Yet he is clearly the Father of modern Singapore. Singaporeans are, in that sense, all his children. As children, we were "prisoners of his education policies. As young men, we were 'hostages' to National Service duties … ."

"Then there is the matter of my father. You see, my father is Fong Swee Suan … to put things simply, MM Lee and my dad used to go head to head, fist to fist, in their youth."

The writer is Mr Otto Fong – not our Mr Arthur Fong – son of the former Secretary-General of the Singapore Bus Workers' Union, who was involved in the Hock Lee bus riots in 1955. Mr Fong Swee Suan was a leftist member of the PAP and, later on, he became a political detainee. After his release from detention, Mr Fong Swee Suan and his family settled in Johor Baru. Mr Otto Fong and his siblings travelled daily from across the Causeway to study in Singapore. He would get up 5.00 am and returned home only after 3.00 pm. Life was not easy for him.

He goes on to say, and I quote:

"In my own youth, I blamed both men for my imperfect Life. Fortunately, age gave me new perspectives. If I do not make a better life for myself, I am the only one to blame. Just as MM Lee’s generation had worked hard for me, I must now work hard for my own future. Whether Singapore ups its game to another level is not up to my father’s generation. It is up to mine."

Sir, this is a fine example of a boy turning into a man and, in the process,

Sir, I had spoken earlier about how Singaporeans ourselves need to find that special something to cherish and the need to love our fellow Singaporeans. Now, I would like to talk about the new arrivals who come to Singapore to start their lives anew. While there have been a lot of discussions on the issues of locals versus foreigners and so on, I would, however, just want to share three stories which highlight the impact of foreign talent and workers, both in Singapore and other countries.

First, in the past, I remember we could only eat Malay and Indian food during Chinese New Year period as most Chinese would close their stalls to celebrate Chinese New Year. Since opening up to foreign labour, many Chinese restaurants and hawker stalls are opened during the Chinese New Year period because of the foreigner workers from China and their presence has also spurred some of the Singaporeans stall owners to open their stall as well. So, having foreign workers among us has helped us to improve our living comfort.

Second, I met a China Minister last year and asked him why China needs to attract foreign talent when it has already had 1.3 billion of population. His reply was that for China to compete with the world, it needs the best from the world. When China does not have such talents, it will seek them out from the world. I am not surprised that if this talent search also includes Singaporeans.

Third, I was in Tokyo last month for work when having a bowl of noodles in an eating house, I noticed that some of the waitresses did not quite look like Japanese. So, when I asked one of them,

This Budget focuses mainly on turning Singapore into an advanced economy. However, we do not only need to be an advanced economy, we also need to be an advanced society. So, today, I want to take my speech into two parts. In the first part, I will speak about old Singaporeans, those of us who were born and bred here. For this group, I urge us to see how we can become a closely knit nation, a gracious society. How can we do this? Here is one perspective from a young who was an engineer and later a teacher and now a writer. He writes about the process of blaming, criticising and growing up. developing a forgiving attitude and a very balanced perspective. I quote Otto Fong because he has shown the spirit of "live and let live", despite his own imperfect life in his youth.in Mandarin, she responded and told me that she and her many of her colleagues were actually from China. Later, when I asked the senior executive of the big Japanese corporation about this, he said many Japanese are no longer willing to work as waiters and waitresses. Even if they do, their salaries will be much higher than foreign workers. He then whispered into my ear and said that if not for these foreign workers, he would have paid much more for his noodles. So, while Japan is quite a closed society, many Japanese quietly welcome foreign workers as they help to bring costs down and make life easier.

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Singapore only has about five million people. We need talents and we need them from the world. The alternative is a lower standard of our own game, a less comfortable living and a loss of international competitiveness. All these points have been well argued during the debate in the last two days. Hence, I shall not belabour them further.

Sir, although these arguments are well won, the fact remains that one-third of our current workforce is made up of foreign workers, and we know that we need them while we embark on a challenging path to raise our productivity by one-third in the next 10 years. Since we cannot wish the foreign workers or foreign talents away because we need them, I think the next best thing to do is to think afresh about what we can do to help foreign talents better integrate into our Singapore community.

First, I want to suggest that the whole notion of national integration is to go beyond race and religion, beyond locals and foreigners. National integration should also include intra-social bonding between the haves and the have-nots to bridge the

Sir, we know that since January 2002, Inter-Racial Confidence Circles (IRCCs) were set up for constituencies, and Harmony Circles for schools, workplaces and other local organisations. There are altogether 84 constituencies in Singapore and there is one IRCC in each constituency. There are also many Harmony Circles out there in the community. What I would like to propose is this – that the IRCCs consider expanding its scope to include intra-social bonding in our society for the purpose mentioned earlier in my speech.

On the other hand, the Harmony Circles in companies, schools and elsewhere take into their job scope the integration of new Singaporeans. I would also like to propose additional funding mechanisms and strong support for this expanded role and job scope for the IRCCs and Harmony Circles. There are justifications to do so.

Sir, no one knows how well this will work, and I think we will need to refine the idea further. But I do believe that we need to work on old Singaporeans via the IRCCs while at the same time bring a fresh approach to the national integration efforts for the new Singaporeans through the Harmony Circles.

Sir, all of us in this House carry a flame for Singapore and we all want to do it proud and graciously, regardless of our race, language, our achievements and our social standing. Like what Mr Otto Fong said, it is up to our generation – Singaporeans old and new – to make Singapore the land of our dreams.

gap, to stop the breeding-of-the-caste mentality.

Mr Chiam, do you want to take your cuts now before the Minister replies? You have two cuts. Please take them together.

Permanent residents

Sir, my first cut is on permanent residents. Is there any cap on the number of permanent residents? With all the productivity incentives, training and other incentives to encourage businesses and also incentives for Singaporeans to be gainfully employed and the Government expecting Singaporeans to be self-reliant, these measures shall reduce the dependency on foreign skills and talents. More foreign workers are being used in the construction, marine and the health care sectors. The Government and the organisations say that Singaporeans are not willing or prepared to take up these jobs. Singaporeans are blamed and have been accused of not taking up some low-end jobs with low pay. But the fact is that with the current cost of living, it is practically not possible to survive with low-end jobs offering lower pay, and hence Singaporeans hesitate to take up these jobs. It is the Government that is directly responsible for creating this environment by making Singapore an expensive place to live. Singaporeans should not be blamed for that. The Government should focus on and revamp the whole education system and training for workers, and also introduce policies to encourage and motivate Singaporeans to take up the jobs in the sectors where foreign workers' talents are mostly used now. This will reduce the dependency on foreign workers. Does the Government have plans in this area?

Birth rate

Sir, my second cut is on raising the birth rate. Singapore's birth rate continues to decline despite the Government's special tax incentives, such as the Baby Bonus scheme. As usual, the PAP's practice is simply throwing money at the problem and encouraging more foreigners to fill the gap. Little attention is paid to the accompanying social consequences, in order to overcome the declining birth rate.

My observations and by talking to the ordinary people, I would say that the declining birth rate is due to the following fundamental reasons – high cost of living, including for public housing where couples have to work long hours to service their mortgages; insecurity of jobs; high cost and burden of educating and bringing up a child. As long as economic hardship continues to worsen for families, whether in the form of high cost of living or taxes, there will be an imbalance in the natural forces. Also, it is important for the Government to find out why in certain countries, like Sweden and France, can increase their fertility rates instead of following the liberal immigration policy.

A more integrated and holistic approach is required. What we need is a more conducive environment for people to reproduce by keeping the cost of living from ballooning and providing comprehensive social nets for families struggling to balance career and child-raising. More incentives are necessary for couples undergoing fertility treatment and also needed the Government's change of mindset on unwed pregnant girls.

Lastly, any new policy to improve the birth rate should be made simple and always target the largest segment of the population to achieve any lasting results.

While the birth rate is falling in other developed countries as well, the whole situation in Singapore is among the worst in the world. We are seeing the outcome of our social and economic policies.

Mr Chairman, many Members have spoken passionately about the issues of immigration and population. They no doubt reflect concerns raised by segments of our public over the increased inflow of immigrants and its impact on our society. This is a very important subject, and it is also a highly complex subject. I want to thank

Dr Teo Ho Pin asked about the Government’s strategy in attracting foreigners to come here for work, and to become PRs and citizens. Broadly speaking, there are two types of foreigners living in Singapore – the transient group which mainly comprises those who come here to work, and the resident group which sinks roots and becomes our PRs and citizens eventually. Although this distinction is not obvious on the ground, it is an important one to bear in mind.

In June 2009, the transient group accounted for about 1.25 million out of our total population of about five million. Foreigners who come here to work essentially fall into this transient group. They leave when their work permits or employment passes expire. They are an important part of our workforce, and their economic contributions to Singapore’s growth are real and significant.

Ms Indranee Rajah and Mr Chiam See Tong have also raised concerns about the competition that foreign professionals pose to Singaporeans in the job market, housing and also in the use of our public spaces and public transport. While we will not condone discrimination against Singaporeans, we cannot ring-fence jobs

Indeed, it is because of our meritocratic open door policy that Singapore continues to attract investments, and ranks high up in international surveys on the ease of doing business. Companies must be allowed to recruit and deploy the best talent possible for the job to ensure the success of their businesses. This, in turn, generates economic growth and job opportunities, which ultimately benefit our citizens more than any transient foreign worker group.

For example, Mercer is a company that has benefited from our flexible manpower policy. The ability to attract the best talent from around the world is vital to ensuring skills transfer to its Singapore office, which is today Mercer’s Asia regional hub. From just over 100 staff in Singapore five years ago, in 2005, Mercer will grow to 400 this year. Two-thirds of the jobs created in the last five years are filled by Singaporeans who are

Our flexible manpower policy has also allowed Barclays to establish a hub in Singapore by bringing in foreigners with highly specialised skills not readily available in our local labour force. Barclays has been actively investing in the development of Singapore’s financial services workforce by hiring and developing local talent, which is critical to further expansion and job creation. In the last five years, over 1,000 jobs were created by Barclays for Singaporeans.

Sir, I believe Singaporeans recognise the value and contributions of these foreign workers. This is the point made by Mr Sam Tan too. Mr Matthias Yao and some other MPs who spoke in the Budget debate during the last two days are also right in observing that Singaporeans may have begun to feel that the Singaporean way of life was being encroached upon.

the Members for giving me this opportunity to address it. Let me first assure Members that the Government recognises and acknowledges Singaporeans’ concerns and sentiments. Indeed, in the last few years, we have seen a dramatic increase in the number of foreigners in Singapore. It is understandable that Singaporeans may feel uncomfortable over the sheer number of foreigners in our midst. The Government has taken note of this, and we have reviewed our current processes of granting permanent residence (PR) and citizenship (SC) to foreigners in Singapore.and reserve them only for Singaporeans. The majority of foreigners, who are here on work permits, are working in jobs that Singaporeans do not want to do. I acknowledge that there are also those on employment passes holding jobs that Singaporeans are willing to do, and who compete directly with Singaporeans. However, as Mr Arthur Fong has mentioned, if we want to compete globally, we have to create an environment which can attract the best people, including those in mid-level – be they Singaporeans or foreigners – to work here and contribute to our economy. The measures in Budget 2010 will provide Singaporean workers with the best possible head-start to compete in this global economy. If foreigners are not here to help us compete against other countries, they will be working in other countries to compete against us. The future will see global competition becoming more and not less intense. We must therefore attract skilled and professional foreigners here to increase our manpower pool. given the opportunity to learn from global expertise.

The negative reaction of Singaporeans is one of frustration and annoyance of having to share limited common spaces with people who may have different social habits and reflexes. The Government has hence undertaken action to educate our foreign workers on our social norms so as to integrate them better while they are here.

Singaporeans, however, need to be realistic and fair-minded. While we want foreign workers to do the less pleasant jobs and contribute to our economy, we cannot also expect them to stay away during their off days from public places and shopping malls where we frequent or not to take the public transport to go to work and squeeze the space with us. On our part, Singaporeans need to be more tolerant and understanding the different habits and practices of workers from different backgrounds and cultures. I think some of us who are old enough here would remember that not too long ago, 40-50 years ago, we shared the same

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With regard to Singaporeans' perception that the foreigners are driving up the HDB prices, I am sure the Minister for National Development will address this more fully during the COS, but we know that we have no shortage of housing. New flats are being built, and this year we are going to offer 12,000 BTO flats. I understand that almost the same number of flats were being built last year. When we have PRs who have come to settle here, we also expect them to find a home, so it is only fair that we allow them to purchase flats. They do not receive any direct subsidy from the Government for HDB flats. They have to buy from the resale market.

Some Singaporeans have asked why we allowed such a large inflow of foreign workers in recent years. We had taken in large numbers during the economic boom years from 2004 to 2007 to catch the wind of growth so as to propel our economy forward. The Finance Minister has explained this in great detail this afternoon. From 2004 to 2009, the non-resident population grew from about 750,000 to 1.25 million. The foreign workers enabled us to take full advantage of the favourable external conditions from 2004 to 2007 in order to maximise our growth. And these were good years for Singaporeans too because median income also went up. Had we kept out foreign workers, our growth would have been choked off, and Singaporeans would have been worse off.

Going forward, Sir, in line with the Economic Strategies Committee's recommendation for our economy to keep the foreign workforce to about one-third of our total workforce, the Government will take steps to moderate the inflow of our

To sum up, Sir, transient foreign workers are here to work and they will eventually go home. Most of them do not sink roots. We should appreciate their contributions to Singapore as they have helped us grow our economy. In turn, with economic growth, we have the resources to develop infrastructure and support programmes which have raised the quality of life for all Singaporeans. Economic growth has also enabled us to accumulate reserves in good times, which we have been able to rely on to sustain and support Singaporeans during lean and tough times.

Sir, the second category of foreigners in our midst is not transient but stays on to become PRs and citizens. I know that this is a matter which Singaporeans care very deeply about, and rightly so, as it concerns the value of our citizenship.

The number of PRs and citizenships granted to foreigners has gone up in the last few years. Singaporeans have expressed concern about this increase. Some even wonder if we are giving away permanent residency and citizenship too easily. While the number of Singapore citizenships granted is fairly stable, the number of PRs given is indeed higher over the last few years compared to the years before 2005. Why did we do this? We wanted to take advantage of the strong economy in the mid-2000s to attract and retain suitable foreigners to sink roots here and to make up for our low TFR.

We have recently reviewed the PR/SC assessment framework. We will refine it

Sir, going forward, we will further tighten the framework to raise the quality of the immigrants. This will reduce the number of PRs granted. We will monitor carefully the number of PRs who qualify and, if necessary, fine-tune our criteria in the light of the actual outcome. However, I am not in favour of any absolute cap on the number of PRs. How many we take depends on the quality of the applicants, and there may be events which trigger an unexpected surge in numbers, which we should take advantage of.

As for the number of new citizens, this again will depend on the quality of the applicants, but provided we have good applicants, we should take up to 20,000 a year. I will explain later why we need this number.

Sir, we will put in more effort to integrate PRs and new citizens into our society. This will continue to be spearheaded by the National Integration Council, under MCYS, which was set up last year to promote and foster social cohesion and integration. The success of this endeavour will, however, depend on the support and response of both newcomers and Singaporeans.

Sir, recently, I held a few dialogue sessions with Singaporeans and new immigrants. I met a research fellow from A*STAR, Dr Xue Bo who was very glad

Sir, having newcomers in our midst means dealing with differences in outlook and social habits. While we work to make them a part of us, we should also appreciate the little differences that make our social landscape more varied and vibrant. Let me share the story of Dr Anuj Gupta, a former Indian national, who came here as a Junior College student in 1992. He later studied at the NUS medical school. Dr Gupta now works in Clementi Polyclinic. Like any seasoned GP in Singapore, he is able to interact with patients in a variety of languages, including dialects, English, and a bit of Mandarin. He prides himself on being able to provide medical consultation in Hokkien! It is hard to get much more Singaporean than that. Yet, he recalls wryly that whenever he speaks English, some patients would identify his non-native accent and ask him, "Doctor, where are you from?" Dr Gupta married a former PRC citizen who came here in 1995 and studied in our polytechnic to become a nurse. They now have two lovely children. Apart from Dr Gupta, we have also managed to attract his two brothers, who are also doctors in Singapore. When asked why he chose Singapore, since he married a PRC

As Mr Sam Tan pointed out, new immigrants can play positive roles in building the future of Singapore alongside existing Singaporeans. Many immigrants are taking the first step to be part of Singapore society, through taking part in our grassroots activities and volunteering in community organisations. But it takes two hands to clap. Indeed, we have many Singaporeans, including 800 Integration and Naturalisation Champions from our grassroots organisations, who go about helping newcomers settle in and integrate into their communities as part of their daily lives. The INCs organised about 600 events last year for 30,000 new immigrants. Many Singaporeans took part in these events too. This should be encouraged. The newcomer’s transition into the community would be much smoother and faster if Singaporean neighbours and their co-workers take the initiative to welcome them and help them settle in. On the other hand, new immigrants could also initiate efforts to reach out to Singaporeans, and take part in activities organised for them by Singaporeans.

Sir, although we will continue to welcome good quality PRs and new citizens who can contribute to Singapore, we stand by the principle that Singaporeans come first in their own country. No need to worry about this. Recently, the Government took measures to draw a greater distinction in privileges and benefits between Singaporeans and PRs in the areas of education and healthcare. This is necessary to recognise the privileges of citizenship, and to give PRs adequate incentive to convert to become Singapore citizens.

However, we need to be sensible and balanced about how we go about this. For instance, we should never undermine

Besides broadening our talent pool, PRs and new citizens have another critical value for Singapore. Immigration is a key source of population augmentation which we cannot afford to do without. Let me explain.

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We face a serious population challenge today. Last year, the number of resident births fell to 36,926 compared to 37,277 in 2008. But citizen births constituted only 31,843. Resident total fertility rate (TFR) fell to 1.23, our lowest yet. This is well below the 2.1 needed to replace ourselves. Our TFR is among the lowest in the world. Mr Seah Kian Peng suggested that we review the effectiveness of the marriage and parenthood package. The package was only recently enhanced, less than one-and-a-half years ago, in August

practices. For example, in the coffee shops, you would see spittoons just underneath the tables.foreign workforce over time. However, the change will not be easy. It will require heavy capital investment in automation, training to re-tool our own workforce and raising productivity. Our businesses and workers must also gear up to make the necessary adjustments.to better manage the pace and overall numbers. We will ensure that those who become one of us are of better quality, and not only contribute to Singapore economically but also integrate well into our society. We have already started to tighten the framework in the last quarter of 2009. Mr Ang Mong Seng asked about the number of new PRs and citizenships granted. We granted 59,500 PRs and 19,900 citizenships for the whole of 2009, as compared with 79,200 PRs and 20,500 citizenships in 2008.that he made the decision to move from a private condominium to an HDB flat in Jurong. There, he encountered a friendly neighbour, Mr Alan Lim, who took the first step in welcoming him and his family. Not only did he help Dr Xue’s family orientate themselves in the new neighbourhood, he also included them in his social circles and introduced them to his friends. Kind, helpful and practical gestures like these are deeply appreciated by those at the receiving end, and will go a long way towards making us more cohesive and harmonious even as we become more diverse. Integration is an ongoing journey and takes a long time. It cannot be rushed. It needs the direct and active involvement of both Singaporeans and new immigrants.national, he said, "Well, my wife couldn't adjust to India, and I can't adapt in PRC, so Singapore is the best place for us."the principle of meritocracy which makes us competitive and which ensures communal harmony and social cohesion. We must also avoid making ourselves so unattractive that suitable foreigners are deterred from sinking roots and becoming a part of Singapore. There is a global competition for good people with talent and if we make Singapore an inhospitable place, we will lose out. We will do ourselves great harm if others outside Singapore have the wrong impression that we are xenophobic. This will be against our national interest. We heard the story recounted by Mr Sam Tan that a PRC leader had said that even they are looking for talent. And New Zealand too. New Zealand is targeting Singaporeans, in particular, because they think that we are hardworking, we are honest and they want Singaporeans to be there. And the Australians, too, are also specifically targeting Singaporeans. So, we are in this world where competition for talent is very keen.2008, and then the economic downturn occurred soon after.

So my guess is that the economic downturn is likely to have played a part in the decline, and not like what Mr Chiam thinks, that it is because it is too hard to raise a family. Of course whether people have more children or not, whether they get married or not, is very much a personal decision. We would recall that in the last two recessions in 1998 and 2001, resident births fell by an average of 4,500. In 2009, the decline was smaller, only at 351. We believe that the 2008 marriage and parenthood package has helped to cushion this decline. Without the package, the decline could have been worse. It is too early now to review the marriage and parenthood package. We will let the 2008 marriage and parenthood package run for a while before doing a more comprehensive review. Sir, the Government is trying to address the problem of our low fertility rate and create a pro-family environment. Through the Marriage and Procreation (M&P) package, we aim to provide holistic and comprehensive support to couples in getting married and having children but we also need to be realistic that even with our M&P package, we will not be able to turn our TFR around. Moreover, getting married and having children are intrinsically personal decisions. Singaporeans may still choose not to get married or have more children for various reasons. That leaves us with a sobering truth – Singaporeans are not producing enough babies to replace themselves. What are the implications of this? If our TFR remains the same, and we do not allow immigrants to settle here, our resident population will start to shrink as early as 2025 because deaths will outstrip births, just like what is happening in Japan today. In 1970, when our TFR was above 2.1, each elderly person was supported

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Immigration policies have been widely reported in the Chinese media. Here, I will use Mandarin to say a few words. First of all, there are two types of foreigners living in Singapore. The transient group comprises workers who come to Singapore to work and when they finish their contracts, they will return to their own countries. In the past 10 years, the increased number of foreign workers has been associated with our economic growth. Many Singaporeans do understand that these foreign workers have made substantial contributions to our economy. However, differences in lifestyle and habits are now making some people uncomfortable. The Government has stepped up the effort to educate the foreign workers so that they can better understand Singapore's social norms.

We must transform our economy in tandem with the change of the outside world. We have taken the suggestions put forward by the Economic Strategies Committee to help companies increase productivity and slow down the pace of importing foreign workers into the workforce.

The second category of foreigners are those who want to sink roots and become PRs and citizens eventually. Overall, the number of new citizens has remained stable. Due to the economic situation, we have seen more PRs since 2005. The Government will calibrate the number and pace of immigration to ensure that those who become one of us are of better quality, and not only contribute to Singapore economically but also integrate

Given our low fertility, if we do not bring in immigrants, Singapore's resident population will start to shrink by 2025. With an aging population, we will bear tremendous social burdens. We need 60,000 babies a year to replace our resident population, but we only have about 37,000 babies a year. I do not see a significant rebound in fertility happening. We must bring in 20,000 new citizens every year to keep our citizen core.

We must continue to allow in good-calibre foreigners as citizens, and not just maintain a large number of permanent residents who are contented with the status quo and have no intention to convert. We have already widened the differences in benefits received by citizens and PRs to incentivise more PRs to take up citizenship.

On the other hand, the Government will continue to put in efforts to promote social integration so that new immigrants will be able to integrate into the society earlier. With this new force of new citizens, we will be able to maintain a sustainable population and safeguard our future. We are all descendants of immigrants to whom we owe for Singapore's prosperity. The new immigrants today will sink their roots in Singapore and their children and grandchildren will be future citizens who will continue to fight for Singapore.

by 17 working adults. By 2020, one elderly person will be supported by five working adults. And by 2030, it will be one elderly person supported by just over three working adults. A larger elderly population in the future would also mean increased public expenditure due to increasing demands on our public healthcare, community and social support infrastructure. Taxes may have to be raised to increase support for the aged. With fewer younger people, our workforce and society will lose our vitality and vibrancy. This will mean that Singapore will become less attractive to foreign investors. Our own young talented Singaporeans may leave our shores for better opportunities in more dynamic economies. With fewer young Singaporeans, we will face grave challenges to maintain the strength and efficacy of our citizen armed forces, security and law enforcement agencies. Sir, in a nutshell, we need 60,000 babies just to replace our resident population. But we only have about 37,000 babies per year. That is provided the number does not go down again in future. This is why I mentioned that we need about 20,000 new citizens in order to keep our citizen core. Unless there is a dramatic reversal of our local TFR, and I do not see this happening, it is critical that we must tap on immigration as a measured means to augment our population. We must continue to allow in good-calibre foreigners as PRs and SCs to supplement our low birth rates. However, our society needs a strong citizen core. Singaporeans must always form the bulk of our resident population. Hence, we must focus on getting good-quality citizens rather than carry a large PR population who are content to remain PRs indefinitely instead of taking up Singapore citizenship. Without this infusion of new citizens, based on the current demographic trends, we will soon have a shrinking population and a declining Singapore. Mr Chairman, Sir, I would like to assure this House that the Government is cognisant of the ground sentiments and feedback on the issues which had been brought about by immigration in recent years. We have made careful refinements and changes to our policies to address these concerns. But we have also to be practical and realistic. We must look at the issue of foreign workers and immigration objectively and rationally. We must recognise that good-quality foreign workers and immigration still remain important to our sustained economic growth and are vital to address our serious longer-term population challenges. Ultimately, the key is always in finding the right dynamic balance and trade-offs, as some MPs have suggested. This is not easy to do but it is necessary to do, if Singaporeans are to be assured of a future and a quality of life, no less than what we enjoy today. Sir, we are all descendants of immigrants. Singapore grew and prospered since its founding because our great-grandfathers, grandfathers, fathers or parents – I must say actually grandparents, great-grandparents, otherwise the women will take offence – were allowed to come and settle to make a better life and in the process, to contribute to Singapore's growth. Had they been denied the opportunity to do so at the right time, we would not be born here and Singapore would not be what it is today. In future, the children and the grandchildren of today's immigrants who sink roots here, will grow up with our children and grandchildren. Together, they will be the next generation of Singaporeans and Singapore will be their home, just as much as it is our home today. Mr Chairman, Sir, Singaporeans' concerns over the immigration policy are widely reported in the Chinese media. So please permit me to say a few words in Mandarin. well into our society. From the fourth quarter of last year, we have already tightened the framework. Going forward, we will further tighten the framework to raise the quality of the immigrants. This will reduce the number of PRs granted. As for new citizens, provided that they meet the quality criteria, we should take up to 20,000 a year. *Cols. 3031-3032.

Electoral Boundaries Review Committee Report

Sir, in countries like the UK, electoral boundary revisions are carried by an independent Boundary Commission under the charge of a High Court Judge. Proposed boundary changes are also open to public scrutiny and objection. In Singapore, however, the boundary revisions are done by a Committee chaired by the Cabinet Secretary, reporting to the Prime Minister.

Sir, despite my belief that the PMO should not be in charge of boundary review, the focus of my cut is how the current process may be improved for transparency and accountability. I would like to touch on two points. First, the timing of the release of the report. Second, the contents of the report.

Sir, as far as release of the report is concerned, it is noted that in GE 2001, the revised boundaries were released about one week before Nomination Day. In the last GE, they were announced about seven-and-a-half weeks before. I would call for the Boundaries Review Report to be released at least six months to one year before Nomination Day. This is especially important because of the unique situation in Singapore where there are GRCs and SMCs. GRCs can be chopped and changed and SMCs can be created and dissolved with the stroke of a pen.

For the coming election, we are expecting some significant revisions due to expected increase in the number of SMCs from nine to 12 as some GRCs are being reduced in size. Having good notice would give voters confidence in the boundary redrawing process. It will also give a reasonable time for political parties to do more focused groundwork and consider their candidate line up.

My second point relates to the contents of the report. In the last Electoral

Sir, reading the report raises more questions than it answers, for example, how was it derived that the 30% variation was permissible? Why were Ayer Rajah SMC and Bukit Timah SMC dissolved when they still had the number of voters in the acceptable range for SMCs? How was it decided that the new replacement SMCs would be Yio Chu Kang and Bukit Panjang, and so on?

Sir, such changes could not have been at the whims and fancies of the EBRC. There must have been a certain methodology employed or other factors considered. As this is a matter of public interest, could the next EBRC Report go further into the reasons for dissolving or creating SMCs or changing the boundaries of GRCs.

Sir, the Government must know that Singaporeans are skeptical about the redrawing of boundaries. It would be an improvement to have advanced notice and some transparency in this process.

Boundaries Review Committee (EBRC) Report, the terms of reference were very generally stated as reviewing and recommending the new constituencies and boundaries taking into account significant changes in the distribution of voters due to population shifts and housing development. As a basis, the 2006 report calculates the MP to voter ratio using the total number of voters nationally divided by the number of parliamentary seats. This led to a conclusion of one Member of Parliament (MP) for every 26,000 voters. The report then states that a 30% variation is allowed, leading to a possible voter range of between 18,000 and 34,000 per MP.

Sir, the law allows the Prime Minister to call a General Election (GE) any time and there is no legal requirement that the electoral boundaries be revised ahead of a GE. The Prime Minister also has full discretion in

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The appointment of the EBRC is not mandated by law. But the Committee's work is guided by the terms of reference given by the Prime Minister. I have not seen any yet because no Committee has been appointed so far and I do not know what will go into the terms of reference, whether it includes some of the issues that the Member talked about. But, generally, the Committee will look at population shifts, population changes, and then decide on where each of the constituencies will be, including the parts that need to be redrawn. Why some are

The 30% variation used by the Committee in deciding the size of a constituency is a practice that has been carried out for the last 30 years. Before that, the number was smaller but the Committee needs to have a certain way and a certain principle of guiding themselves on determining the size of the constituency. So in the last 30 years or so, each of the Committees has adopted the 30% variation.

determining the number and boundaries of Electoral Divisions. But it has been the practice of the Prime Minister to appoint the Electoral Boundaries Review Committee to look at the boundaries whenever he thinks it is necessary. And based on past experience, he has always appointed the Electoral Boundaries Review Committee (EBRC) before every General Election. The Committee usually takes between two and four months to complete the review. Once that report is completed and the Prime Minister has accepted it, he will present it to Parliament without delay. As to whether the report will be released way ahead of the next GE or six to 12 months ahead of the GE, much depends on when the Prime Minister calls for the Election. I believe he will give all interested candidates and parties as much time as possible. But the timing of the release of the report, and the timing of the calling of Election may not be very certain because the Committee needs to complete the report and if the Prime Minister, at his own discretion, thinks that that is the right time to call an Election, he may call for an Election. But I can assure the Member that he would give sufficient time to Members and interested parties to look at the constituency changes.changed and why some are notchanged, I think much depends on the configuration at the time. And that is very much left to the discretion of the Committee.

Mdm Halimah, take your two cuts together.

Productivity in the public sector

To achieve a target of 2% to 3% growth in productivity, we need a strong and effective public service that is innovative, quick to respond and is not mired in red tapes, to partner the private sector to carry out the various initiatives. At the same time, we need to guard against the pitfalls of the old WITs and other similar schemes which over time became so mechanical and KPI-driven that they began to lose their meaning and impact amongst staff.

A common joke amongst staff is that WITs which stands for Work Improvement Teams actually meant Wasting Important Time. Such cynicism does not augur well for our productivity efforts in the public service but we cannot blame the staff who, after a while, begin to see it as just as a numbers game. To ensure that the past does not repeat itself, the public service needs strong leaders to champion this productivity push in a meaningful and effective manner.

I would like to ask the Deputy Prime Minister how the public service is

preparing itself to support our productivity push.

Re-employment of older workers

Re-employment legislation will be introduced in 2012 and the public sector has set its guidelines on re-employment, both kicking in in 2010. As one of the largest employers in Singapore, the public sector's HR policies have a significant impact on the private sector. With the greater focus now on productivity and innovation, there are concerns amongst older workers if there will be a place for them. Therefore, the re-employment initiative has assumed greater urgency. It is also important that the public sector continues to invest in the training and upgrading of its older workers so that they can perform the new, more complex and challenging tasks and can continue to add value to their work.

I would like to ask the Deputy Prime Minister for an update on the re-employment of older workers in the public sector. How many were re-employed? What is the average length of re-employment? What are the terms of their employment and what kind of training is provided to them?

Mr Chairman, Sir, first of all, I would like to thank Mdm Halimah for her interest in the public service. The public sector has been transforming at the individual, organisational and whole-of-government levels to support the growth of a knowledge-intensive, innovative and entrepreneurial economy.

The Public Service for the 21st century (PS21) movement which was launched in 1995 operates at all three levels. At the individual level, the Public Service emphasises training to upgrade our officers' skills as well as impart positive attitudes towards change. Senior

At organisational level, many of our public agencies strive for and have attained best-in-class organisational practices and benchmarks, including the Singapore Quality Class certification and the People Developer standard.

At the whole-of-government level, the public sector has cross-agency platforms like the SMART Regulation Committee that focuses on improving the operating environment for businesses. The ease with which a company can be registered or individuals can file their tax returns is now well-known. The simplification of factory registration requirements by the Ministry of Manpower is another good example. To maintain and strengthen the Public Sector's productivity drive, I have asked the Head of Civil Service to personally oversee this task.

Let me now address the re-employment of older workers in the public sector. In 2009, 85% of the 820 public officers who retired at the age of 62 years old were offered re-employment. Of those offered re-employment, 540 officers or 77% accepted the offers. About nine in 10 of the officers re-employed at 62 years old and above were re-employed on a full-time basis. Eight in 10 were re-employed at the same job level. Re-employment contracts are generally one-year contracts, renewable up to the age of 65 years. Last year, more than 2,500 public officers attended pre-retirement preparatory courses conducted by the Civil Service College. Public sector agencies

officers are trained and encouraged to create a conducive environment to generate new ideas and to encourage public officers to examine their work processes and make changes. WITs is one of those systems which, when well-implemented with good leadership, is effective. The ideas which emerge may not be big ideas but collectively, they foster innovation, continuous improvement and learning.have also put in place various upgrading and re-skilling initiatives to prepare employees to take up jobs other than their current work.

Elderly care

Mr Chairman, the impact of a double whammy arising from a chronic low birth rate and a rapidly greying population is on us. It is going to hit us like a malignant condition that refuses to go away unless treatment is given early and effectively. Yes, given that the problems that can arise will be troublesome and complex, we need to deal with this double whammy as a matter of urgency.

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Madam, although many have spoken at length, we have debated in this House and we have even appointed a Cabinet Minister to oversee the issue of caring for an elderly population, our people on the ground continue to feel uncomfortable and anxious about growing old. May I ask the Minister to prioritise on three positive attitudes towards ageing and to promote dignified and graceful ageing in our society?

One, preventive healthcare is the way forward. It aims to help those who are healthy to remain well for as long as possible without ill from especially our lifestyle-induced diseases. In other words, we need to encourage "active ageing" as a key element in ensuring our elderly population keep fit and healthy and limit or delay the onset of disabilities. May I ask the Minister whether an "active ageing" drive can be extended islandwide? And will he emphasise the three

Two, many Singaporeans, especially our elderly folk who have no income but have increasingly medical needs, are concerned about rising medical costs. This concern will affect many more people because our population is greying fast. Besides the importance of promoting "active ageing" and encouraging those who have any common illnesses like diabetes and hypertension to pay attention to their treatment so as to mitigate increased healthcare expenditure, there is also a need to promote better financial planning and saving by our people. It is essential to persuade everyone to take up health insurance, such as MediShield and Eldershield to cushion the burden of any hefty unforeseen healthcare expenses. A concerted effort in promoting this area will certainly benefit everyone in the long run.

Three, the necessity for a majority of people here to continue employment beyond the current retirement age of 62 is becoming increasingly evident as the life expectancy of Singaporeans is getting increasingly higher than the 77 for men and 81 for women. It is necessary to keep people agile, physically and mentally, in their "later years of life" and to do so, fresh stimulation and re-training for them to continue working is recommended. Financial planners estimate that at least 70% of Singaporeans do not have enough savings to maintain their lifestyles after retirement at 62. With declining birth rates and declining dependent-working ratio, the elderly cannot be sure of depending on their children. This will be an issue for the economy of the country.

It is becoming more apparent that many mature workers are very much in their prime in terms of knowledge and creativity. These mature workers thus become an available resource our nation can beneficially tap. We have to debunk the perception and mindset that people

May I therefore urge the Minister to step up our effort to dispel the view of ageing with despondent, useless and sickly lives and entrench the view of ageing with purposeful and healthy lives? Let us give the ageing folk new hope.

components in "active ageing" – physically, mentally and socially?become "useless" once they hit a certain age and that their bodies and minds go into such decline that the workplace will benefit from their departure. This will augur well for the idea of lifelong employability of workers.

Physical activities for seniors

Madam, research has shown that in Japan, older people who reported a lack of social support was 1.5 times more likely to die in the next three years than those with higher social support. This is of concern to us today as one in 12 Singaporeans is above 65 years old. Officially launched in 2002, Northwest Briskwalking Club, with a network of 128 clubs and more than 50,000 members, provides opportunities for residents to meet regularly through brisk walking activities. Our brisk walking champions, coordinators and volunteers have spearheaded many initiatives to make our members active and healthy. At the same time, the brisk walking club has provided a platform for social interaction. Last year, we were glad to receive support from the Prime Minister's Office to promote brisk walking to all Singaporeans. To-date, a total of 430 brisk walking clubs were formed and many Singaporeans have taken up brisk walking as a form of exercise to keep fit.

Madam, besides brisk walking, Northwest CDC has also identified qigong as a form of exercise to build strength, flexibility and balance amongst our residents, especially the elderly. With the support from the Singapore Qigong Shi Ba Si Association, Northwest CDC has formed 29 healthy qigong clubs comprising 2,500 members. These members practise qigong regularly and form

Madam, I would like to ask the Prime Minister the following questions:

what is the long-term strategy of the Government in promoting active ageing and healthy lifestyle amongst our seniors?

can the Government consider setting up an active ageing endowment fund to provide sustainable funding support for active ageing activities and programmes?

besides supporting brisk walking, can the Government provide funding to support and promote qigong for our seniors?

social groups to stay active. Based on the experience of Northwest CDC, I would like to urge the Prime Minister to provide support to promote qigong as a form of healthy lifestyle activity for our seniors.

(In Mandarin ): [For vernacular speech, please refer to Appendix A*.] Madam, at the moment, 10% of our population is above 65 years old. Twenty years later, by 2030, about 25% of our population will be above 65 years old. If at that time, our population is five million, this will mean that we will have one million people who are over the age of 65. The various Government departments have been providing better services to our senior citizens like lift upgrading so that the lift stops at every floor. Now, I am more concerned about how to promote a healthy lifestyle among our senior citizens and whether we have any facilities to help them to live a happy life.

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*Cols. 3033-3034

Active ageing and wellness for seniors

(In Mandarin ): [For vernacular speech, please

I agree with Minister Lim Boon Heng that senior citizens should not feel that they cannot participate in some activities when they have reached a certain age. On the contrary, if a person has started running the marathon before 65, he should have no mental barriers preventing him from continuing with the sports. So long as he is physically fit and fully prepared, he can still run the marathon at a comfortable pace. Similarly, if they like to play badminton, squash or tennis, they should continue to do it to lead an active lifestyle.

I know a restaurant owner in Joo Chiat who is now past 70 years old, yet he has been taking part in marathon every year. He even ran at the Great Wall and went to Mongolia to take part in the cross-country marathon. His spirit is truly admirable.

There are definitely encouraging signs of more senior citizens leading very active lifestyle. There is an increasing number of people taking part in brisk-walking and practising qigong in their colourful red and white outfits in the parks. However the percentage is still small. In our constituency, we have 11,500 people aged 50 years and above but only 800 have

Social isolation and support for elderly

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Like Japan, Singapore is facing a serious fertility rate problem. At the moment, 8% of our population is 65 years old and above. This works out to be about 270,000. This is a big number. Many of them have problems walking or have health problems. According to MCYS' statistics, the number of people aged 65 and above will reach 19% of our total population by 2030. If our population remains at 340,000, 19% would mean close to 650,000 seniors.

Our young people these days do not want to live with their parents. In the West, it is nothing unusual as they usually leave home and live on their own by the age of 21. In Singapore, however, we emphasise Confucian and family values and encourage our young to live with their parents and take care of them. I have the following suggestions: first, we must stress family values and encourage our young to look after the seniors; and second, we should provide more social support for the seniors who are abandoned by their children.

refer to Appendix A*.] Madam, sometimes we hear some of our wheelchair-bound senior citizens say that it is more painful living than dying. This is a complaint that I have heard not just from those who are wheelchair-bound but also many senior citizens who live alone and feel very lonely. Especially during festive seasons, these seniors do not have friends or relatives to celebrate with, making them more miserable. We know that when people are old and lonely, they become very pessimistic. With our ageing population, it is more urgent for us to resolve this issue. participated in our Wellness Programmme. I think we should encourage more of them to participate in our activities and know more friends. I urge the Government to provide more facilities to help these senior citizens so that they can live a very active lifestyle. *Cols. 3035-3036; 3037-3038.

Social isolation

Mdm Chair, in the early 20th century, Sago Lane in Chinatown used to be such a sad place. It was where the lonely immigrants from China, who were here for work but because of many reasons were not able to return back to home, went to rent a place at one of the many death houses. They

Fast forward to Singapore today, we have a growing number of elderly living alone. I am afraid this number will continue to grow further in future. However, living alone has its downfall for the elderly as it increases their risk of ill health, affecting their physical and mental wellbeing. It is sad that, until today, we still hear of elderly people dying in their flats and were discovered only when the smell of their decomposed bodies aroused the attention of the neighbours.

Madam, these elderly folks who die alone tend to be also from the less-advantaged group, lower-income group, with no family support. And they tend also to live in poverty and probably living out the last days of their life in a miserable state. The luckier ones might be known to and received some help from many of our VWOs.

Madam, therefore, it is important to look after this vulnerable group of elderly. For a start, we could draw them out and encourage them to interact socially and find ways to remain active. Studies have shown that social interactions and regular exercise can improve the wellbeing and cognitive functions of elderly persons. Although many VWOs have been performing an excellent job providing social support and care to seniors, more can be done and I feel that this is a job that requires the wider community involvement. I suggest that we set up more centres for elderly to drop in, socialise, exercise, and get advice on health matters and other social issues.

would pay the operator a small fee in return for a small foldable bed for them to sleep until they died. The house would then look after their last rites. It was a sad business to be in but these houses offered a service to lonely migrant workers during their last journey in life. Because of this service, Sago Lane was also known as "sei yan kai", or the Street of Dead People. These centres should ideally be located near the elderly's home. Therefore, they should be built on a precinct level and not on a constituency level. They should be run, involving the local communities. These centres should also keep a register of elderly living alone on whom the volunteers and staff can keep a watchful eye.

I think it may be simpler for Members if they just refer to me as "Madam". "Mdm Chair" tends to connote an inanimate object and I do not wish to have any confusion there and so as to avoid further gender confusion, a straightforward "Madam" will do. Mr Laurence Wee.

Assistance for abandoned parents

Mdm Chair [Laughter.] –

That would be "Madam".

We see a trend of abandonment of parents by children through referrals to family service centres (FSCs)by organisations such as CDCs, HDB, Town Councils and grassroots, among others.

At Care Corner, two FSCs, namely Admiralty and Queenstown, we see a total of 14 cases for a 10-month period – 1st April 2009 to 31st January 2010. Of the 14, they are most males, in their early 50s to early 60s. These cases, I believe, are only the tip of the iceberg as most parents do not want to blow matters up regarding parental neglect for fear of losing face. And they walk to a FSC as a last resort, and not to a police station. In one case, the daughter-in-law abused the mother and chased her out of the home. In another three cases, the children chased their own parents out.

Madam, I would like to ask the Prime Minister whether there are any provisions

in the Budget to provide support for this group and may I suggest that more outreach be done to these elderly.

Long-term care for the elderly

Madam, long-term care is a variety of services which help meet both the medical and non-medical needs of people with a chronic illness or disability who cannot care for themselves for long periods of time. It is common for long-term care to provide custodial and non-skilled care, such as assisting with normal daily tasks like dressing, bathing and using the bathroom. Increasingly, long-term care involves providing a level of medical care that requires the expertise of skilled practitioners to address the often multiple chronic conditions associated with older populations. Long-term care can be provided at home, in the community, in assisted living or in nursing homes. Long-term care may be needed by people of any age, even though it is a common need for senior citizens.

While some of these services are presently available, inadequacy, unequal geographical distribution and affordability remain the major issues. There is also the need for more supportive programmes at the neighbourhood level to assist families in caring for their elderly members. These community-based support services include meal delivery; laundry; home modification – for example, the installation of grab bars, non-slip tiles and levelled floors; a telephone hotline for crisis and counselling; a befriender service, where volunteers are matched with lonely elderly people for home visits; mutual help groups, for instance, neighbourhood-based small groups of about 10-30 older persons to foster mutual care and concern; volunteers to accompany elderly to clinics or hospital; bereavement and funeral services, where volunteers offer

While many of these services have already started across Singapore in the past decade and there is a wide array of community-based services available, demand is growing. Moreover, some of these services are unevenly distributed across the island, so family members may have to travel long distances to reach a particular service; older persons will similarly need to travel for long periods and suffer fatigue. If the Government policy of "ageing in place" is to be successful, more will have to be done and relevant support services should be established in all housing estates so that the needs of families with ageing members are met in a comprehensive way. In short, the prevalence, awareness and access can be further augmented nationally.

Another problem is that services for the aged are multi-disciplinary and older people's issues are multi-dimensional. The availability of appropriately trained personnel is also a major issue facing the voluntary welfare organizations, as they generally operate on lean budgets and volunteers may not easily be recruited, a situation that is common in many countries.

There is a need to improve the current financing options for long-tern care services so that they provide the most efficient, most affordable and highest quality care. To combat long-term care challenges, it is imperative to have supporting doctors, nurses, nursing homes and others working together in teams and with the patients and families to ensure the right care is given at the right time, in the right setting. The Government could provide incentives to organisations

In view of increasing medical costs and hospitalisation expenses, I hope the Government will also consider revising the aged dependency relief for co-residential children and children-in-law. It might encourage children to continue care-giving and it could also reduce the incidence of abuse due to the financial stress of caring for elderly parents.

help to bereaved families or arrange funerals for the destitute elderly; and an alarm response service, where staff at a voluntary organisation in the vicinity respond to an elderly resident's call for help when the alarm is used. providing LTC (long-term care) by rewarding them for positive care outcomes.

Capability building for seniors' needs

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] A few weeks ago, I watched a programme on Channel 8 called "Life Transformer 2". The host interviewed a po-po in her 80s who has two mentally-challenged sons. Although her sons are in their 50s, they still need to be cared for by their mother. The family receives Public Assistance so there is no problem with daily expenses. Po-po is no longer young and the two children cannot be much of a help; their house is messy. The programme arranged volunteers to help with the cleaning and even got a sponsor to have their cabinets and floor changed.

There are three things that impressed me. First, the programme looked after po-po's needs. We all have our little habits, especially old people who can be stubborn sometimes. The volunteers were very careful when they did the cleaning. After they cleaned the room, they put everything back in their original place so po-po could find it easily. Po-po has two very old refrigerators in the house. Although she does not need two as they waste electricity, she has a special attachment to the refrigerators as they were paid for with her CPF. Even though the hosts knew this was not economical, they still obliged. Second, po-po has a

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Singapore's population is quickly ageing. How are we going to make adjustments to the changing social landscape? "Life Transformer 2" suggests:

Firstly, we must put the seniors’ views first when it comes to their needs. These people can be old fashioned. In po-po's case, it would be impractical to ask po-po to throw away one refrigerator.