Hansard, 2011-02-28

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 (2011) To (2011) Dr Lim Wee Kiak 24 Feb 27 Feb Dr Teo Ho Pin 24 Feb 27 Feb Mr Teo Siong Seng 28 Feb 02 Mar Mr Alvin Yeo 03 Mar 06 Mar

ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Dr Teo Ho Pin asked the Minister for the Environment and Water Resources if he could update the House on the achievement of the main targets laid out in the Singapore Green Plan 2012.

Mr Speaker, Sir, the Singapore Green Plan 2012 (SGP 2012) was launched in 2002 and sets out targets in six focus areas to ensure Singapore's environmental sustainability. These areas are clean air and climate change; water; waste management; public health; conserving nature; and international environmental relations.

Sir, a number of these targets has been met. In the area of water, our domestic water consumption per person per day in 2010 was 154 litres, which has surpassed the 2012 target of 155 litres. The SGP 2012 also set a target to increase the supply of water from non-conventional sources to at least 25% of the Singapore's water demand. We are now able to meet 30% of our water needs through NEWater production.

Sir, good progress has been made in other areas. For waste management, we attain a 58% recycling rate in 2010. To achieve the 60% recycling target by 2012, my Ministry is now studying new waste-minimisation and recycling measures, taking into consideration the impact on businesses and households. The National Environment Agency (NEA) is also working closely with public waste collectors and grassroots organisations to encourage households to segregate waste for recycling. In the area of public health, we continue to enjoy a low incidence of vector-borne and food-borne diseases. Dengue has been kept on a control with an average annual incidence of about 5,800 cases between 2006 and 2010, compared with some 14,000 cases reported in the 2005 epidemic. During the same period, we kept the average annual number of food poisoning outbreaks to about four per 1,000 food establishments licensed by NEA. On the international front, we are emerging as a leading regional centre in epidemiological surveillance and research on vector-borne diseases. NEA contributed towards a formulation of the World Health Organization's Dengue Strategic Plan for the Asia Pacific region in 2008. Sir, the plan is now being used by member countries to enhance their preparedness and response to dengue outbreaks and to

limit dengue epidemics through prevention and control. Singapore's air quality remains good over the years with the PSI in the "good" range for at least 85% of the days in 2003 which meets the SGP 2012 target. Going forward, we will focus on reducing the PM 2.5 emissions from local sources such as transport as well as continue to engage neighbouring countries to mitigate and minimise transboundary haze pollutions. Despite Singapore's limited land area, we have managed to incorporate existing national areas into new developments so as to preserve our bio-diversity. For example, an existing natural mangrove along Sungei Punggol was integrated into the newly developed Sengkang Riverside Park. Under the ABC Waters programme, work is also underway at Bishan Park to develop a naturalised river that will meander through the park and that will in time enrich the bio-diversity of Bishan Park. As part of the SGP 2012 target to establish more parks and green linkages, NParks completed 150 kilometres of park connectors as of November 2010. Sir, in the area of international environmental relations, we continue to meet the SGP 2012 targets of engaging our ASEAN neighbours and intensifying our international collaborations to tackle our environmental challenges. We are working closely with our ASEAN neighbours to overcome the transboundary haze pollution problem. The sub-regional Ministerial Steering Committee (MSC) on Transboundary Haze Pollution was a platform mooted by Singapore and established in 2006. Under the MSC framework, Indonesia and Singapore successfully embarked on the joint collaboration in Jambi province to implement action programmes to prevent and mitigate land and forest fires. Globally, Singapore is committed to international environmental efforts and our obligations are the multilateral environmental treaties, such as the United Nations Framework

Convention on Climate Change and the Kyoto Protocol and the Montreal Protocol on Substances that Deplete the Ozone Layer. Sir, looking ahead, there is a need to step up our efforts across all sectors – public, private and people – and engage all our partners and stakeholders to do more to ensure sustainable development. Higher economic and population growth will exert pressures on our limited land resources and our environmental quality in years to come. Global environmental challenges, such as climate change, are also key concerns on the international and national agenda. To ensure that Singapore continues to be a dynamic economy with a high quality living environment, the Inter-Ministerial Committee on Sustainable Development (IMCSD) released the Sustainable Singapore Blueprint in April 2009 which establishes fresh targets in areas of resource efficiency and liveability to guide our efforts through 2030. My Ministry and other agencies will continue to monitor progress and embark on the new initiatives laid out in the Sustainable Singapore Blueprint to ensure that Singapore continues to develop sustainably in the decades beyond SGP 2012.

The following Question stood in the name of Dr Ahmad Mohd Magad –

2. To ask the Minister for Health since the implementation of the Human Organ Transplant Act (HOTA) (a) what is the number of successful organ transplants; (b) how many Singaporeans have opted out of HOTA and, of those who have opted out, how many of them are Muslims; (c) how many applications for reimbursement of expenses incurred by live organ donors have the hospital transplant ethics committees received;

and (d) how many applications were approved and how much was each applicant reimbursed on the average.

Question No. 2, Sir.

The Human Organ Transplant Act (HOTA) was enacted in 1987. As at the end of last year, 52 hearts, 144 livers, 1,080 kidneys and 1,181 corneas from deceased donors have been successfully transplanted. Many lives have been saved by HOTA. All Members of this House can claim some credit for this outcome by supporting this Bill.

The vast majority of Singaporeans support organ donation. Less than 3% of the potential HOTA population, or about 77,000 people, have opted out. As we do not ask objectors to indicate their religion, I do not know how many are Muslims.

As for the question on applications by living donors for reimbursements of expenses, I do not have the data in the format as requested. But last year, there were 156 applications for living donor organ transplant. Of these, 142 were approved by the Transplant Ethics Committee (TEC).

The majority of living donations are between family members and close relatives. In such cases, there is no reimbursement per se but the family will pool its resources to pay for all the medical expenses.

For the others, most recipients would pay for their donors’ hospitalisation directly to the hospitals. The size of the medical bills would depend on the type of transplant, the class of ward and the extent of subsidy enjoyed by the patients.

In addition to the direct payment for hospitalisation expenses, there would be regular follow-up expenses for the donors.

These follow-ups usually cost about $100 to $300 per consultation. They would be picked up by the recipients in most cases.

There were a few cases where the recipients had also reimbursed their donors for loss of income. The average quantum of such reimbursement ranged from $500 to $750.

To support needy Singaporean patients, the National Kidney Foundation has set up the Live Donor Support Fund. So far, it has received 11 applications and approved 10 of them. This is about one a month. The eleventh application is still under review.

A couple of questions, Sir. I would like to ask the Minister: those who have opted out of the HOTA, what efforts have been made to persuade them or dissuade them from opting out? Secondly, on the 14 that were not successful in the applications for living donors: what were the reasons? Thirdly, on the NKF Live Donors Support Fund. The numbers that have applied seems to be rather small. Are there any efforts to make it known to those who are needy and who would benefit from this scheme about the availability of this scheme?

For those who have opted out, we leave it as it is because organ donation really ought to be purely voluntary. All over the world, the preferred approach is for an "opt in" scheme. But it is not effective to get the required numbers and that is why nations, like us, go for the "opt-out" scheme. For those who have expressed a decision to opt out, we respect their wishes. We do not make any effort to try to dissuade them or persuade them to re-opt back in. But the general public education on the value of organ donations and how it can save lives continues and that goes across to the whole population.

As for the dozen or so live donor applications which were rejected, there were a number of reasons. These are decisions made by the Ethics Committee. The applicants have to satisfy the Ethics Committee that the donors are fully informed of what they are going into and there is no coercion of any kind. If the Committee is suspicious about the motive behind the applications, it will reject the applicants. So, I suppose, some of the reasons could be that.

As for the NKF scheme, I would not describe it as achieving little. I thought they have achieved a lot for a very new scheme which has yet to reach one year. Having benefited almost a dozen lives – about one a month – I consider the outcome as quite successful. In reaching out to the possible applicants, a natural platform is there as these are patients who are undergoing dialysis. Hence, NKF has a way of reaching out to them and can explain to them that it would be better if they can get family members or whoever to come forward to donate. And where they may have been concerned about financial expenses, the NKF scheme comes in extremely handy.

The following Question stood in the name of Dr Ahmad Mohd Magad –

3. To ask the Minister for National Development since the introduction of the Interim Rental Housing (IRH) scheme in 2009 (a) what is the average duration that a family remains under the IRH; (b) what efforts are being made to help these families transit from interim housing arrangements; and (c) how many families have been successfully moved into more sustainable living arrangements.

Question No. 3, Sir.

Mr Speaker, Sir, we introduced Interim Rental Housing (IRH) in January 2009 to help citizen families in financial hardship with temporary accommodation while they worked out more permanent housing solutions. On average, a family stays in IRH for about six months.

Many of these families face underlying socio-economic challenges, such as unemployment and relationship disputes with their families. As stable employment is key to improving their financial situation, the relevant social agencies are helping them in their effort to seek employment or upgrade their skills. Families facing relationship disputes are referred to Family Service Centres (FSCs) for counselling.

Transiting to permanent housing: families who have improved their financial situation will be assisted to move to home-ownership flats. Those who have resolved their family disputes can live with their families. For needy families that are unable to improve their financial situation despite best efforts and who have no family support, HDB will consider them for public rental flats.

To date, about 1,600 families are benefiting or have benefited from IRH. Of these, about 430 families have moved out of IRH into longer-term living arrangements, such as public rental flats, home-ownership flats or living with their family or relatives. Another 430 families will be moving to home-ownership flats when their new units are ready.

4. Mr Viswa Sadasivan asked the Prime Minister (a) whether the Ministry would consider the recommendation by the

Public Accounts Committee to spell out a whistle-blowing policy for statutory boards to adopt; and (b) whether there are Ministries or agencies that have such a policy or protocol in place.

Mr Speaker, Sir, the Singapore Civil Service emphasises high standards of integrity, discipline and accountability. Indeed, these are hallmarks of the service. To reinforce these, the Public Service Division has, on 25th February 2011, clarified the processes and framework for officers to report wrongful practices or behaviour. In addition to reminding officers of the existing reporting channels, the framework emphasises that an officer has the responsibility to make a report if he has sufficient grounds to believe that a wrongdoing has been committed. Officers may report cases of misconduct to supervisors, his HR department, his Permanent Secretary, the head of Civil Service or, indeed, to the Public Service Commission itself. Statutory boards have their own equivalent processes which conform with these principles.

To encourage responsible reporting, the officer making the report should identify himself. Officers who condone wrongdoing through wilful suppression or concealment of relevant information, in fact, may be disciplined. Members of the public who have information on the illegal or corrupt practices can also lodge reports with the appropriate law enforcement agencies such as the Corrupt Practices Investigation Bureau.

Ultimately, good governance is characterised by clear and transparent systems, people with the right values and an uncompromising stance against corruption and patronage. This is what the Singapore system is about and it has served us well thus far.

12.18 pm

Order. End of Question Time.

"to provide for the issue from the Consolidated Fund and the Development Fund of the sums necessary to meet the estimated expenditure for the financial year 1st April 2011 to 31st March 2012",

recommendation of President signified; presented by the Minister for Finance (Mr Tharman Shanmugaratnam); read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2011/2012, and to be printed.

"to provide for making supplementary provision to meet additional expenditure for the financial year 1st April 2010 to 31st March 2011",

recommendation of President signified; presented by Mr Tharman Shanmugaratnam; read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2011/2012, and to be printed.

"to amend the Children Development Co-Savings Act (Chapter 38A of the 2002 Revised Edition) and to make consequential amendments to the Education Endowment and Savings Schemes Act (Chapter 87A of the 2009 Revised Edition) and the Income Tax Act (Chapter 134 of the 2008 Revised Edition)",

presented by the Minister for Community Development, Youth and Sports (Dr Vivian

Balakrishnan); read the First time; to be read a Second time immediately after the conclusion of proceedings on the Estimates of Expenditure for FY 2011/2012, and to be printed.

Order read for Resumption of Debate on Question [18th February, 2011],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2011 to 31st March, 2012." – [Minister for Finance].

Question again proposed.

12.21 pm

"A People's Budget", "An Inclusive Budget with something for everyone", that is the general reaction for Budget 2011.

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

In the various dialogues that we have had over the last week and from the feedback received, the measures in the Budget that addressed the rising cost of living and the focus on inclusive growth are welcomed. Many share the view that Budget 2011 is good and generous and I would like to thank Minister Tharman Shanmugaratnam for this.

But as with all Budgets, and in typical Singaporean style, I will say that there is always a desire for more and suggestion on areas for refinement, and I will touch on this in my speech.

Measures in the "Grow and Share" Package to address the rising cost of living and inflationary pressures faced by Singaporeans by helping to offset the

increase in household expenditure (especially for the lower and middle income) are indeed welcomed.

I am glad to see the continued focus on building sustainable growth, capability of businesses and a skilled workforce with the emphasis to significantly increase real wage for Singaporeans by 30% in 10 years.

In our discussions with businesses, many asked for the continuation of existing schemes for innovation and productivity, eg, the Productivity and Innovation Credit (PIC) scheme which was introduced last year. This will allow sufficient time for businesses to better understand the scheme and realise the impact of the efforts to raise productivity as this takes time. The feedback was that PIC, while useful, was complex. The request was for the scheme to be more flexible and easier for businesses to utilise, and to increase the scope of the scheme for greater impact for companies. It is heartening to see that the feedback was taken seriously. Generous enhancements have been made to PIC in this year's Budget. The enhancements to PIC allow for flexibilities in the categories of investment/activities which companies can enjoy tax deductions for investments that they make as well as the amount of tax deductions. This has been increased to 400% of expenditure up from the 250% for the first $400,000 spent on each qualifying activity. What this means is that for every dollar that a business spends on innovation/productivity, they are effectively getting 68 cents subsidy for that expenditure.

What is required now is to ensure that there is greater awareness amongst companies especially the smaller ones of schemes like PIC. This will ensure that they use the schemes to build and innovate and ensure that there is capability for their businesses for the long

term. I believe that awareness of this scheme is still not extensive enough. The Budget measures gear towards building inclusive growth and recognise that while sustained growth is key for Singapore, it is not sufficient. I was particularly pleased that the Minister reiterated the need for inclusive growth to enable all Singaporeans to be able to contribute and to share in Singapore's progress. I had mentioned previously in this House that we must ensure that all Singaporeans are able to aspire and can achieve better quality of lives for their families, regardless of individual circumstances/status. We must never reach a stage as a country where dreams and aspirations become out of reach of any sector in our society.

There are several measures in the Budget to benefit all Singaporean households under the "Grow and Share" Package, eg, the Workfare Special Bonus, U-Save and Service and Conservancy Charges (S&CC) rebates, personal income tax rebate of 20% capped at $2,000, to help offset inflation as well as permanent shifts in taxes (eg, the removal of the radio and television licence fees), subsidies and support given to benefit all, with continued emphasis on benefiting the lower-income more. The inclusion of benefits to the "sandwiched" middle-income group was well received.

I was pleased to see the restructure of the personal income tax schedule to make it more progressive. Some may argue that this increases the complexity of the tax schedule. But this allows tax savings to be enjoyed at all income levels, and especially the middle income that form 60% of households. I must also make mention of the efforts made in this Budget to do away with the need for the application of some

of the rebates and top-ups, hence, making it easier for Singaporeans to benefit from these measures. Generous but fiscally prudent. I cannot reiterate how many times the Minister had reminded me of this prudent position. The $4 billion will be put back into the past reserves, which were drawn earlier to fund the Jobs Credit Scheme and the Special Risk-Sharing Initiative under the Resilience Package.

Past reserves had allowed us to act decisively during the economic crisis and it is fortunate that we are able to put back what was drawn earlier. This will ensure that we can continue to build on past reserves for future generations of Singaporeans to benefit from. The one-off income tax rebate for businesses and SME cash grant were appreciated by businesses. But for businesses, I must say that there were, however, mixed reactions to the Budget. Challenged with rising cost, the rise in foreign worker levy and the restoration of the employers' CPF contribution rate by 0.5% were met with some disappointment. While businesses recognise the need to innovate and increase productivity to reduce the dependency on low-wage foreign workers, and the need to restore CPF contributions to workers in better times, the short-term impact of these will result in the rise of the cost of doing businesses. Especially for current labour-intensive industries, it may not always be possible to realise productivity changes in the short term. So not only will they face a rise in costs, they may be challenged with filling jobs with the tight local labour market, and in some industries, as we all know, the unwillingness of Singaporeans to do these jobs. This may impact their ability to meet their operational requirements to keep their businesses and services running.

The impact of the foreign worker levy increase will be felt most by smaller businesses as they face greater challenge and competition in this tight labour market to attract and retain talent. It is therefore important that the impact of the effectiveness of this policy be monitored over time to check if it is achieving its original stated objectives.

During the several dialogues and feedback sessions that we had with business leaders, there were suggestions made for the refinement to the foreign worker levy scheme to support the longer-term objective of productivity and capability building of businesses. One suggestion is for the Government to roll out a tiered approach to the levy increases as it may not be easy for some companies to cope with the cost increase. Unlike larger companies, SMEs may not be able to absorb the increase in levy as easily. There was a concern that some small companies who are effective may be "pushed out" of the economy as a result of the inability to absorb the impact of the increase in cost in the short term.

Another suggestion was for the Government to assist SMEs by allowing quarterly payments instead of monthly payments of levy charges. This will help the cash flow of SMEs.

There was a suggestion to amend the levy such that it only impacts new recruitments and not the existing pool of foreign workers already hired and assigned to projects. This will help companies maintain stability and manage their current projected cost of operation. What companies require is clarity and certainty to allow them to plan their operations. The foreign worker levy changes will impact longer-term, multi-year projects that companies have already contracted for and are committed to. Another suggestion is to improve the image of some jobs to attract more locals.

Reference was made to the skilled plumbers in Australia and skilled workers in Japan.

There was also suggestion for the Government to apply the "productivity rule" to foreign talent and foreign workers. As the intent is to grow capability of companies and to ensure that when companies do hire foreign workers, they are productive. The suggestion is to consider allowing the levies collected to be pooled together and the funds tapped into for the training for foreign workers. This will help increase the effectiveness of the foreign labour and improve productivity of companies.

Another suggestion is for the Government to take the lead on improving the productivity in the various industries and sectors. HDB's implementation of pre-cast is a very good example. This was shared with industry and drove innovation and productivity. HDB can also set the "benchmark" to drive productivity by requesting and awarding construction tenders to companies who innovate and use more productive methods. There were also other measures introduced to support enterprise growth. The $850 million Enterprise Development Fund (EDF) which will be available over the next five years, to be administered by SPRING and IE Singapore, will help high-growth industries in their overseas expansion. This is a substantial increase of about 45% from the previous five-year programme.

Foreign tax credit pooling will simplify and reduce the taxation of foreign income. This will support companies that are globalising and earning a larger share of their income overseas.

The Budget also touched on several initiatives to catalyse trade finance solutions to better support the needs of SMEs which will be announced later this

year. So aligned to this subject, I would like to discuss the Angel Fund investment deduction scheme that was introduced last year.

This was a welcome initiative for capital investment. The feedback, however, has been that the conditions make it difficult to qualify for the scheme. The application process for a maximum tax savings of $50,000 in two years is also an administrative challenge. The request is to simplify the angel investor tax deduction scheme and to increase the investment ceiling. This would make Singapore more attractive for high net worth investors to help build an ecosystem for SMEs to tap on funding required for growth.

There are sentiments that this year’s Budget is a budget for the SMEs and there were very little measures to assist larger businesses to enhance Singapore’s international competitiveness as a location to do business. While I do agree that the measures of Budget 2011 will benefit smaller companies more, we must not forget that SMEs do form an important backbone of the economy and are key to the ecosystem for MNCs and larger companies to succeed in a market. In fact, many MNCs when making a decision to locate their operations in a country, do consider the capability of the local ecosystem of companies to support their businesses. However, I do agree with the point that was expressed that we need to continue to enhance Singapore's international competitiveness as we are an open market and we do have to compete for business with other markets, especially in Asia.

I will now like to touch on the measures in the Budget that look to strengthen our society. With Singapore’s population ageing, it is imperative that the Budget measures

address long-term elder care to provide our seniors with the best care possible to stay healthy and active in their retirement years. Apart from continuing the investments for new acute care hospitals, building on the long-term care sector to provide comprehensive and quality care for the elderly beyond institutional care is crucial. I am glad to see that the Budget measures will take a more integrated approach to build expertise and resources for care in the community and home-based care for the elderly and disabled. This will allow the elderly and the disabled to stay active and continue to be close to their families and friends.

The topping up of the ElderCare Fund to $2.5 million and the setting up of the new Community Silver Trust of $1 billion with matching grant for donations to the long-term care sector will also be important to help catalyse community support and the capability of the long-term care sector. The announcement of support programmes to provide additional support for low-income elderly people to improve their mobility and independence, for example, the assistive devices like wheelchairs and walking frames, are definitely welcomed.

The Special Employment Credit (SEC) for workers currently covered by the Workfare Scheme will encourage employers to attract and keep older workers, and this will help our older workers who want to work and can work stay employed and active.

During our Budget dialogue with residents, the concern of medical cost was raised with emphasis for the elderly. Although many recognise that Budget 2011 is inclusive, with rising cost of living and the impact of inflation, retirees who do not participate in the economy and depend on their savings and CPF may not fully benefit from the Budget measures.

The question is how CPF and savings of retirees can be protected from inflation to meet the retirement needs of Singapore?

Another area that was highlighted during Budget discussions with residents that I had was housing. The feedback was that there should be more aggressive and out-of- the-box measures to address housing. Some felt that the 2011 Budget had not done enough for the sandwiched class in the area of housing. For example, the HDB income ceiling is still $8,000 for many years, yet salaries and other costs have increased. The suggestion is for the Government to consider raising the income ceiling for first-time buyers to purchase HDB flats. For some young graduates, even after working for a few years, they are unable to purchase a home with the high private property prices and are also unable to qualify to purchase an HDB flat. For many, this affects their decision to settle down and to start a family.

Before I end, I would like to ask a question on our overall fiscal position.

There have been several large pipeline projects announced by the Government to make Singapore a top quality home. For example, in the area of our transport infrastructure, there are projects like the Downtime Line (DTL) Project, Eastern Region Line (ERL), Thomson Line (TSL) North South Expressway (NSE) and the Marina Coastal Expressway.

Ten billion dollars, as announced by the Minister, will be spent over the next 10 years for the Neighbourhood Renewal Programme (NRP) and the Home Improvement Programme (HIP), and the Remaking of our Heartlands (ROH) Programme in Hougang, East Coast and Jurong Lake.

In the area of lifestyle, there are also several large projects like Gardens by the Bay, the Active Beautiful Clean (ABC) projects, National Arts Gallery, and the

new commercial and lifestyle hubs in Jurong Lake District as well as Kallang River and Paya Lebar.

There are also several large projects for tertiary education, for example, the Singapore University of Technology and Design (SUTD), the Singapore Institute of Technology, the Polytechnic expansions, the Imperial College London-Nanyang Technological University Medical School, and the third ITE Regional Campus. There are also the Upgrading Programmes for Schools with the Primary Education Review and Implementation (PERI) and for the provision of the Indoor Sports Hall for Schools.

There is higher expenditure on the ageing society including projects like the Jurong General Hospital, the enhancement of the quality of health services by increasing the number of doctors, nurses and allied health professionals and the upgrading of long-term care sector as announced in the Budget.

With all these projects in the pipeline, what is the overall fiscal position versus the expenditure required? Will revenue be sufficient for the long term? Will there be a need to raise taxes? Will we expect to see the GST increased?

Sir, Budget 2011 is an inclusive Budget with measures that address the concerns of Singaporeans on the rising cost of living while making investments to strengthen our society and build capability to grow real income of Singaporeans. To be successful in achieving these objectives, there is a need for partnership with industries and Singaporeans. The Government cannot do this alone but will play a crucial enabling role. The Government must continue to provide the vision and the environment for Singaporeans to contribute and to share in the success of Singapore’s progress.

Sir, with that, I support the Budget.

12.38 pm

Mr Speaker, Sir, I rise in support of the motion as proposed by the Finance Minister.

Sir, when I first conveyed news of the Budget goodies to 1,000 residents in Bukit Panjang, there was jubilation among my residents. Many were grateful that the Government has responded and addressed their key concerns of rising cost of living, affordable housing and children’s education expenses. This year’s $6.6 billion benefits for Singaporeans are indeed "Pro Growth and Pro Singaporeans". In Singapore, in particular, the "Grow and Share" package provides a comprehensive set of handouts and rebates to reward all Singaporeans for contributing to the 14.5% GDP growth in 2010.

Sir, Singaporeans have shown resilience and are willing to take tough measures as proposed by the Government when faced with crisis. The success of our economic rebound last year is the outcome of the trust which Singaporeans place in our Government and the efforts of all Singaporeans working together. This strong partnership between Singaporeans and our Government is unique and not seen in many countries. It has proven to be effective in bringing peace, harmony and growth to our country, thus improving the lives of Singaporeans.

Growing incomes for Singaporeans. Sir, I fully support the strategy to grow the incomes of Singaporeans. But, how can we grow the incomes of Singaporeans when faced with an ageing workforce and intense global competition? First, Singapore must continue to provide a conducive business environment for all investments. Political stability, pro-business and sound Government policies must be in place in order to attract companies to invest and provide good

jobs for Singaporeans. Second, we need to grow our service industry to provide more jobs for an ageing workforce. Third, we need to increase our competitiveness to attract investments and secure business.

Sir, political stability is the key success factor in ensuring foreign investments in Singapore. One good example is the construction of our two Integrated Resorts, namely, Marina Bay Sands and Resort World Sentosa. Since the operation of the Integrated Resorts, tourist arrivals and spending have increased drastically. Supporting industries for the Integrated Resorts have also seen an increase in demand for their products and services. Many local SMEs have benefited and have also offered more job opportunities for Singaporeans.

Sir, I support the measures to increase the productivity of our firms including raising the foreign worker levy but I am concerned about the impact of the levy increase on consumers and businesses. It is difficult to check and prevent profiteering. Some businesses may use the increase in levy as an excuse to increase prices, thus further increasing the cost of living.

Theoretically, the increase in levy may force firms to innovate and increase productivity, but some business operations may have limited scope for productivity improvements. For example, how much productivity can you improve for hairdressing salons? Customers usually choose their hairdressers based on price, quality and service. As such, the increase in levy may not improve productivity drastically but will increase cost for consumers. There are many similar situations in the F&B industries where the scope of productivity improvement may be limited. Yet, these businesses will have to pay higher foreign worker levy. I am

concerned that some firms may fail resulting in job losses.

Sir, I would propose to the Finance Minister to refine the proposed increase of foreign worker levy. The increase could be industry specific depending on the urgency to improve productivity and competitiveness. For example, export-oriented manufacturing industries are facing intense global competition from low-cost production countries. Thus, they need to redesign their work processes and increase productivity to stay competitive.

But in certain low-productivity industries such as the construction sector, we may need to identify the causes of low productivity before increasing the levy. Sir, low productivity in construction can be attributed to many factors such as designs which hinder construction productivity; or Government rules or bureaucracy which delays development and construction time; or poor planning of developers, consultants and contractors resulting in unnecessary delays or abortive works; or the lack of skills and low productivity of workers. Sir, unless we identify the root causes of low productivity in the various industries, the increase of foreign worker levy may not achieve its desired outcomes.

Another example is the F&B industry where quality of service is more important than productivity per se. The F&B industry also faces difficulty to attract Singaporean workers due to its shift work and long working hours. Therefore, it is more crucial for the industry to redesign its business operations to provide more job opportunities for skilled Singaporeans, especially older workers. To further upgrade the services of the F&B industry, I would urge the Finance Minister to consider providing incentives for Singaporeans working in the industry to upgrade their quality of service. More training subsidies and grants should be given to Singaporeans who pursue skills

upgrading courses in service quality. This will provide more impetus to upgrade the service standards in the F&B sector. In this regard, I would like to propose that the Government consider providing a "Skills Upgrading Credit" Scheme for all adult Singaporeans to continually enhance their employability, productivity and quality. The credit can be topped up from time to time depending on the budget surplus. It can be used by Singaporeans to attend WDA-accredited training courses. The credit scheme will also encourage greater ownership among Singaporeans to constantly update and upgrade themselves thus growing their incomes.

Green tax incentives. Sir, one area which does not receive much attention in this year’s Budget is tax incentives or measures to encourage green living. Besides the extension of the Green Vehicle Rebate Scheme for one year, there are no new initiatives to make Singapore an eco city. Sir, by 2030, about 80% of the global population will live in cities. Many mega cities are experiencing strains or failures in providing sustainable urban infrastructure. The impact of urban living and industrialisation has resulted in climate change and adverse impacts on the environment. As a city state with limited land area, it is crucial for Singapore to re-think our urban landscape development and the sustainability of our living environment.

We need to develop a holistic Eco Plan to rejuvenate our urban habitat and introduce eco-friendly measures to reduce pollution, increase energy efficiency and water conservation, reduce carbon emission, and encourage greater use of eco-friendly products and services among our people.

Eco infrastructure. With an increasing population, Singapore must relook into the capacity of our infrastructure to support future population. The increase in human activities will intensify the density of our built environment and exert demands on

transportation, energy, water and waste disposal. Sir, many mega cities in Asia which experienced a sudden influx of people to the cities over the last 20 years are now facing enormous strains on housing, transport, waste disposal, pollution and many urban living problems. The existing infrastructure of these cities is not eco-friendly and is on the verge of failure. People living in these cities are prone to serious health problems and disease outbreaks.

Sir, I would urge the Finance Minister to consider putting resources to enhance our infrastructure to be more eco-friendly. For example, we need to invest more on our public transport system to increase the connectivity of our MRT, LRT and bus services. More incentives should be provided to boost the competitiveness, productivity and innovation of our transport service providers to make public transport fees more affordable. Sir, many cities have started providing free public transport services so as to reduce traffic congestion and reduce vehicle emissions. I would suggest to the Finance Minister to consider providing free eco-friendly shuttle bus services linking neighbourhood centres, schools or shopping malls to housing estates. In addition, we can have a free shuttle bus linking up large shopping malls and nearby MRT stations in the city centre. This will encourage more people to use public transport especially during the weekends, thus reducing our carbon footprints.

Sir, I support the $4.7 million top-up fund for the School Advisory Committee (SAC) to help needy Singaporeans. But I would urge the Finance Minister to consider providing a yearly grant to SAC to provide school bus services in the morning for all students. School buses can pick students from the Residents' Committee (RC) centres, MRT stations or bus interchanges. Students can walk to their respective RC centres or go to the designated MRT or bus interchange to

take the school bus. In this way, students need not compete for public bus spaces with working adults during the morning peak hours. This will also reduce traffic congestion and carbon monoxide emission during the morning peak hours.

Eco buildings. Sir, Singapore has made good progress in keeping our environment clean and green. We are ranked among the top green cities in Asia. However, there is still room for improvement to further improve the eco-friendliness of our built environment especially in older built-up areas like Chinatown, Little India, Queenstown and Shenton Way. There are many areas which require Government's support to go green. For example, many buildings in Singapore are not eco-friendly; many business processes are not eco-friendly; many homes are not eco-friendly, and there are not many people adopting eco-friendly lifestyles.

Sir, I understand that the Building and Construction Authority (BCA) has a Green Mark Scheme for new buildings. More needs to be done to incentivise or encourage building owners of existing buildings to upgrade their buildings to be eco-friendly. Many existing buildings are still operating using inefficient energy installations and appliances, thus consuming lots of energy. Some buildings are poorly designed and thus increase their air-conditioning load while others use housekeeping processes which are not eco-friendly. Sir, I would urge the Finance Minister to consider providing tax incentives for building owners to upgrade their buildings to meet BCA's Green Mark Standard.

Eco homes. Sir, as Singaporeans' standard of living increases, more homes will be installed with air-conditioning, water heating systems, refrigerators and many electrical appliances. This will increase energy consumption drastically

if nothing is done to encourage Singaporeans to adopt green measures at home. Instead of simply upgrading the electrical capacity of our buildings, we should encourage building users to reduce energy consumption. The Singapore Environment Council has developed energy and water efficiency labelling schemes. Unfortunately, the level of awareness and take-up rate is low. Many home users or decision makers are still purchasing inefficient electrical home appliances. Very often, more eco-friendly appliances (four ticks energy labelling) are more costly as compared to less eco-friendly ones. Thus, many home owners continue to purchase and use inefficient electrical appliances at home.

Sir, consumer education on eco-friendly appliances is challenging as reflected in the low take-up rate of eco-friendly appliances at home. I would urge the Finance Minister to consider providing tax incentives or cash rebates to encourage home owners to replace or purchase eco-friendly home appliances (those with four ticks). The Government can provide a "Green Credit" Scheme to make every home eco-friendly in Singapore.

Eco community. Sir, to build an eco community, we need to set up proper infrastructure in the community. More green spaces or parks should be developed within the community. In this aspect, I would urge the Finance Minister to provide tax incentives for buildings which convert their rooftops into green spaces. As the majority of rooftop in Singapore is flat, there are lots of potential to make our roofs green. This will reduce the temperature in our built environment and reduce air-conditioning loads of our buildings, thus saving energy. In addition, we should build more green corridors within our built environment such as park connectors or community gardens. This will reduce the ambient temperature of our living environment and prevent adverse "heat island" effects.

Besides greening the built environment, we must also encourage Singaporeans to adopt Green living lifestyles. Simple eco-friendly living values like 3Rs (Reduce, Reuse and Recycle) should be inculcated among Singaporeans especially young children. I would urge the Finance Minister to consider setting up a "Green Education Fund" to spearhead environmental education for all Singaporeans on a sustained basis. We must adopt a more integrated approach towards building a green culture among Singaporeans. At present, the piecemeal and sporadic approach in environmental education lacks resources, consistency and sustainability. Government agencies, educational institutions and community-based organisations have limited funding to promote environmental education on a continuing basis. As such, we have yet to develop strong green values among Singaporeans.

Sir, I hope the Finance Minister will provide strong support to make Singapore "An Eco City".

12.53 pm

Mr Speaker, Sir, Budget 2011 is seen by many Singaporeans as a pre-election sweetener designed to win back the hearts and minds of people disempowered by 46 years of PAP rule. The Growth Policy adopted by the Government in recent years has left a hardworking nation disillusioned with its own identity, values and quality of life.

The global recovery has helped Singapore greatly. The Finance Minister has called 2010 an exceptional year. We ended the year with an exceptionally high GDP growth.

The exceptional year also saw the number of locally born residents dipping to just 57.3% of the population. This has caused some of our young men to lament

that they no longer know what they are defending any more.

The year also ended with aspiring home seekers grappling with a 14.1% rise in HDB prices and older Singaporeans worrying about retirement and rising medical costs.

Looking ahead, the new decade did not start off well either. Singaporean students attending our universities in 2011 will have to contend with a 4%-6% rise in tuition fees, all in the name of making the distinction between Singaporeans and permanent residents (PRs) sharper.

While the economic outlook for Singapore is positive this year, almost every basic necessity is expected to cost more moving forward. From food to utilities, rental to childcare, lower- and middle-income Singaporeans will bear the brunt of the rising cost of living.

Most Singaporeans are already resigned to paying more for public transport despite the unexpected move by the Public Transport Council to defer the 2011 Fare Review Exercise to the end of the year, after the election is over.

The immediate threat that can derail the momentum of our economic growth is inflation. Singapore's inflation has just hit a two-year high in January. Food prices, healthcare and education costs have gone up by 2.8% to 3.8%. With oil prices hovering around the US$100 mark, Singaporeans can expect to pay more for many essential items and services this year.

Therefore, I am of the view that the 2011 Budget should do more to tackle inflation from every possible angle as it is going to be a concern for everyone. There is a need for a concerted effort to address the rising cost of living at the fundamental level, which is to control the

price increase of essential items like food, transportation, education and healthcare.

Using rebates and subsidies to fight inflation can only ease the hardship in the interim. Permanent programmes like the Public Assistance (PA) scheme take a long time to catch up with inflation. The PA amount took two years to finally reach $400 a month in this Budget.

At this point, I must state that it is a blessing to Singapore that many charitable organisations like the Lions Club and Food from the Heart are willing to help needy residents beyond what the Government is doing. However, inflation bites all sectors of the society. Middle-income families are hard-hit too. Many of them suffer in silence under a mountain of levies and price hikes. Thus, without tackling the rising cost of living at the fundamental level, the election year's Growth Dividends would evaporate fast.

The GST is at the centre of everything we consume. I urge the Government to seriously consider reducing the GST to help all sectors of the society cope with a projected slower growth and high inflation expected.

The Minister for Finance told this House in 2007 that the Government was shifting towards indirect taxation as a source of revenue when it raised GST from 5% to 7% then. When GST was increased in 2003 and 2004, its percentage share of the total tax revenue went up to 14.9% in 2005. In this year's Budget, GST is projected to contribute 19.5% of the total tax revenue. As you can see, the GST’s share of the tax revenue has gone up 30% since 2005.

If the Government is shifting from direct to indirect taxation, we should see the share of direct tax, specifically personal income tax, come down over

the years. In 2007, personal income tax constituted 15.5% of the total tax revenue. In the 2011 Budget estimates, this share is expected to go up to 16.1%. How can the Government justify the increase in GST when there is hardly any shift from direct to indirect taxation as a source of revenue?

Therefore, the Workers' Party calls upon the Government to reduce the GST rate by two percentage points from the current 7%. Although this will shave $2.4 billion from the estimated receipt for FY 2011, if we discount the one-off election year's Growth Dividend of $1.55 billion, the shortfall in receipt is $0.85 billion. The shortfall in revenue can be balanced by trimming the budgets of some bloated Ministries. The shortfall may also be compensated by an increase in consumption stimulated by a lower GST rate and the expected increase in tourist receipts from the two fully operational IRs. The Workers' Party has also called for a waiver of GST on basic necessities for a long time. I hope the Government will consider the proposal seriously.

Next, the foreign domestic worker (FDW) levy, like the radio and television licence fee, is fast losing its relevance too. Hiring a domestic helper is no longer a luxury like in the past because of our changing lifestyle. Families with two working parents will need a helper to take care of their young children. Although subsidised infant care is an option, most parents would prefer a domestic helper to look after their babies under the supervision of their aged parents at home.

Furthermore, in our ageing society, domestic helpers can be trained to provide some basic care for our elderly and disabled. These helpers will complement our long-term care objectives and ease the demand for nursing homes.

I am not aware of Singaporeans who want to work as stay-in domestic helpers.

Yet, such help is important to many working-class families. The FDW levy should be removed permanently. A saving of $170 to $265 a month will ease the financial burden of families with children and aged parents significantly. It will also somewhat mitigate the rising cost of employing a domestic helper since foreign governments supplying such labour are now demanding a higher salary for their citizens.

The removal of this levy may even nudge couples to think about having more babies since getting a domestic helper has become more affordable. The key thrust of this year’s Budget is to strengthen our economy and society for the future. It promises to grow incomes of all Singaporeans by 30% in real terms over this decade.

Out of curiosity, I looked up the salaries in the Budget to estimate how much a 30% increase would work out for all Singaporeans. One group of employees did enjoy a 30% rise in salary last year. The estimated salary for Political Appointments for FY2010 was $58.3 million. This salary was revised to $75.7 million or about 30% more. This increase took only a year to materialise. Unfortunately, the incomes of Singaporeans do not grow 30% just like that.

It is a lot harder for the salaries of Singaporeans to grow because foreign workers are always willing to work for less. I really hope to see us succeeding in growing the income of low-wage workers through the road of productivity growth.

The Workers’ Party recognises the contributions of foreigners to the economic vibrancy of our nation and the need for foreign expertise in certain fields. However, the reason for admitting foreigners into our country should be to enhance the quality of life of Singaporeans. There must be sufficient

opportunities for Singaporeans to earn a decent living and to advance careers in our own country. Employers must give priority to hiring Singaporeans. Foreign workers should primarily be employed in positions Singaporeans are unable to fill. Until such thing happens, increasing the incomes of all Singaporeans by 30% is going to be a tough thing to do.

I have questioned the effectiveness of the foreign worker levy in controlling the number of foreign workers in Singapore. The latest increase in levy might dampen the demand for such workers in the short term but once the increase is priced into the foreign workers’ salaries, the situation is likely to return to status quo.

The strong recovery has brought the unemployment rate down to the levels seen in early 2008, before the crisis, but no one can tell if Singaporeans have benefited much from the 14.5% GDP growth last year. Are there more Singaporeans employed now than in the pre-crisis days? Will Singaporeans get the lion’s share of the 21,300 new skilled jobs mentioned by the Finance Minister when the investment projects are fully realised? What about the 35,000 Integrated Resort (IRs) jobs that the Prime Minister mentioned in this House in 2005? How many of these jobs went to Singaporeans now that the two IRs are fully operational?

The Prime Minister has announced in 2009 and 2010 that the Government will make the distinction between Singaporeans and Permanent Residents sharper. Unfortunately, the Ministry of Manpower (MOM) does not believe that this distinction is necessary when it comes to reporting employment data. MOM has never made a distinction between Singapore citizens and Permanent Residents in its labour force report. Is the distinction important? The answer is "yes". It tells Singaporeans that

more jobs did go to them. It tells Singaporeans that distinction between PRs and them goes beyond a mere difference in fees charged for education and healthcare. It tells Singaporeans that jobs are indeed created and reserved for them.

I am sure this House did not forget that Singaporeans did not even enjoy any significant fee advantage in education and healthcare when compared to PRs as recently as five years ago. So, let us make the distinction clearer. Let Singaporeans know more jobs did go to them in 2010 and more are reserved for them in the next decade. This is the true spirit of Singaporeans first.

In conclusion, Sir, the Budget this year has done one thing right. It has prudently put back into Past Reserves the $4 billion that the Government took in 2009. The Finance Minister has said no less than five times in the Budget Statement that the Government can do and will do more to help our society. Therefore, I urge the Government to do more to reduce the rising cost of living and the burden of supporting a family in Singapore.

We also need to start working on reversing our low fertility rate urgently. This Budget has fallen short in encouraging couples to procreate. Increasing our fertility rate has to remain a top priority despite the fact that most of the efforts initiated by the Government have failed so far. Taking the easy way out to boost our population by importing foreigners is counter-productive.

Sir, as this may be one of the last sittings of Parliament before it is dissolved, I wish all Singaporeans well. I also wish to see a first-world parliament in the making when we reconvene in this House after the coming General Election.

1.06 pm

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

I would like to thank the Minister for Finance for once again encouraging productivity and innovation in companies. Having studied and worked with companies in developed countries, I know these two activities will make a great difference to the Singapore economy. The enhancements to the Productivity and Innovation Credit scheme is also very generous and recognises the huge capital and training outlays that companies face in automating and improving their business processes and operations. These tax credits would help level the difference between the increase in labour costs and capital expenditure and will encourage businesses to offset increasing labour costs by investing in capital and training. Quantitatively, every dollar spent on qualifying expenditure, businesses could get up to 68 cents in tax savings through the PIC.

However, I do feel there is still much to be done to increase innovation and productivity activities. We need to create a buzz to get people excited. There seems to be some difficulty pinning down exactly what constitutes innovation and productivity activities. I would like to point out three paradoxes in our current thinking and how they can be resolved.

How do we plan for a "flash in the pan"? First, what counts as productivity and innovation? There is a general notion that it is anything that allows us to do more with less. This is not a bad rule of thumb. For operational purposes, Sir, I note that there is an implicit definition in the qualifying activities that are funded by the Productivity and Innovation Credit. Buying computers, sending people for training, hiring designers, generally buying or registering intellectual property are

considered activities that add to productivity and innovation.

At the same time, there are some caveats which we ought to be mindful of. I would like to point out that merely buying computers and investing in IT is not an assurance of increased productivity. Much depends on its application and on people using and exploiting technology to generate efficiencies or create new knowledge. Therefore, investing in technology and buying a new IT system must include the impetus to want to change, to become better, to see the difference and impact on the business. To that end, we ought to have some accountability on why the investment is important and when it becomes a business imperative. If not, the investment in IT system becomes a "flash in the pan", no different from buying the latest mobile phone or the latest technology equipment in town. We must inculcate the sense of ownership and pride to always want to do better such that productivity becomes a way of life and not just a project.

Next, I would like to say a little about innovation. What counts as innovation? When we speak of innovation, is it just a great idea, doing things differently that brings an enhanced value or it is re-thinking a revolution or scientific breakthrough? It has been very interesting and insightful for me being in Parliament. Speaking from someone who is on the outside in the private sector looking in, I am of the view that there are many innovations in the public sector in Singapore. In recent years, many of these have made a great difference to the lives of Singaporeans but few talk about.

My work as Head of ASEAN Advisory Services for my firm takes me to many countries, both regionally and globally. Often, as soon as they know I am from Singapore, they will say two things: "Ah, Mr Lee Kuan Yew, you have a very clever government, we could use them here, they have many ideas." I am often asked

about the different Government initiatives such as Cut Waste campaign to the introduction of the Productivity and Innovation Credits last year. Most companies and governments want to emulate what we take for granted. We are being watched for our innovativeness but, yet, we do not get excited about what happens right here.

Take, for example, one of my favourite examples of ABC Water. There is a movement to make water a part of Singaporeans' lives, to open up the catchment areas, to make one piece of land serve different uses. In the Alexandra area, the canals still flow, the water still drains and now people see it as "waterside" living rather "drainside" living. We did not use more land or more money – okay, perhaps a little more money to landscape the place – but the economic value derived from the same canal has increased. The Park Connector is described by many as awesome. We have increased the economic value of land and properties in the surrounding area. We have increased the community pride and enhanced the social value in these places. This is, however, not a "flash in the pan". It is a result of collaboration of different parties. It is a result of "River Clean Up" in the 1970s that led to cleaner water bodies. It is a result of National Parks collaborating and coming up with landscaping. It is a result of the Ministry of National Development (MND) and URA for their master-planning and, of course, with the Ministry of Environment and Water Resources and PUB, which take care of water.

Now, this is truly an example of innovative collaboration. Taken singly, these different things undertaken by the Government departments and agencies are just annual workplan projects. But taken collectively today, they represent a great urban innovation. But how do we plan for a "flash in the pan"? We need to regard our day-to-day work as part of a

larger whole, to be conscious that innovation is not something that we get by thinking and reflecting but having a vision for tomorrow. Like the bricklayer laying a brick one day at a time to the bricklayer who is laying one brick at a time to build a world-famous cathedral.

I urge us all to change the way we regard innovation as something that comes from reflecting, dreaming and thinking to the path of collaboration, to be excited that how innovation have effected so many transformations right before our very eyes.

But how do we invest in people who may or may not stay? When we speak of training and innovation, we usually think in terms of Singaporeans or PRs. I urge more companies not to invest just in foreign talent at executive and managerial levels but also in foreign workers in our construction workers, in our shipyard workers and our service staff. I think it is useful to note that tax deductions for training expenditure under PIC applies to training for all workers, not just local workers. This is because they, too, contribute to our economy and it is often in these areas that there are many low-hanging fruits. We should see foreign workers as not a liability but an asset. Take pains to identify those among them who will be able to contribute effectively to our economy. Companies should take the lead in identifying these workers and find ways to extend their work contracts. So should we invest in people who may or may not stay? I say invest anyway and find ways to make them stay.

Here, I have a suggestion for the PIC scheme. The deductions have a positive cashflow only in the Year of Assessment and not in the year in which expenses are incurred. This delay in receiving the benefits may dilute the effectiveness of the scheme. Businesses, especially SMEs,

will need cash upfront to invest in technology and training. My suggestion would be for the Government to allow SMEs with qualifying expenditure this year to defer a portion of their liability in the Year of Assessment 2011. This deferred portion would be equivalent to the amount of tax they would save or cash payout receivable in Year of Assessment 2012. The deferral could be spread over instalments payable each year until Year of Assessment 2015. This would encourage companies to start planning and investing immediately to enjoy an early cashflow benefit. It would also provide the Government with earlier indicators as to the take-up rate of the scheme.

Everybody gains when productivity rises but how do we split the gains? Sir, I would like to take this opportunity to share two success stories about companies who have take up the Government's call on productivity and innovation and have tapped on Government grants. The first is Sheng Siong Supermarket. The work processes in the seafood division rely almost entirely on manual labour and most of their transactions done on paper with more than a hundred operational sales staff. With rising labour costs, Sheng Siong decided to automate the processes. Last year, the company embarked on a project to implement scaleable technology where wireless transmission of stock data captured on its weighing scales from procurement to distribution and sales directly to their Enterprise Resource Planning system.

With this, their staff was able to access real-time information, obtain reports to make informed and accurate decisions for stock replenishment. This shows us how productivity is not simply replacing manpower with machines. It is not a matter of cost cutting. Productivity is about how output can be optimised and maximised, and how well-designed processes can help the company grow.

The second example is Red Lips Food. This is a local manufacturing, specialising in production of the traditional Peranakan snack kueh pie tee. In the past, kueh pie tee cups have a shelf life of only one month. Red Lips approached Food Innovation Resource Centre based in Singapore Polytechnic and supported by SPRINGS to conduct a shelf life extension study on kueh pie tee cups using packaging technology. A solution comprising the use of improved packaging and optimal glazes combination was recommended. The shelf life of these kueh pie tee cups is today more than six months. The success of this project enables Red Lips to explore uses of the product and to target export markets for their kueh pie tee cups. Both these cases show that there is a lot which productivity and innovation can be done to improve things on the ground. But yet more can be done. This brings me to a serious point about sharing the gains of productivity. How does higher productivity translate to higher real incomes? Would the benefits of productivity be passed on to consumers with lower prices? Or retained by companies to recover their capital expenditure instead of being passed to staff? This is something for the tripartite team of unions, Government and businesses who will work together. But I encourage the tripartite committee to consider gain-sharing where there is something for everyone. Sir, I have shown that the three paradoxes can all be fairly and easily resolved through a paradigm shift on how we think of productivity through a new approach for foreign workers through open, committed sharing of productivity gains. We need to get people excited and we need to instil the pride that productivity and innovation can be a way of life here. Sir, I end with some observations about business costs in general.

Rising costs of rents. Rents form a large part of business expenses and soaring rents is creating a heavier burden. One way which the Government could help businesses is to allow companies to have an extra tax deduction on the cost of relocating operations to cheaper leases. These costs would include logistics costs, professional fees in drafting lease agreements and stamp duties. This would reduce transaction costs and may encourage businesses to search for cheaper locations. Rising costs of living. If inflation is expected to remain above 3% annually for the next few years, I think we need to address the potential erosion of savings, especially CPF savings, now. I know that we have current plans to ensure that real income rises. At the same time, many Singaporeans count on this for their retirement. These sums need to be protected against inflation and our ability to meet the rising costs of living expenses in the long term. Sir, finally, I would like to touch on one special area and that is of healthcare – about caring for our elderly and caring for those who are unable to look after themselves, for example, the mentally ill. Sir, I think it is vitally important for us to strengthen our home nursing or caregivers’ support, especially to home-care for the elderly or mental health patients or even terminally ill patients. Often we think of healthcare in hospitals and step-down care but I think more can be done for home-care support and to recognise the help needed by those at home.

I would like to thank the Government, in particular, for the $1 billion for the new Matching Community Silver Trust. This matching Government grant set up for donations to the long-term care sector will help the sector be more attractive to private funding and donations. I would

like to urge more companies and private individuals to step forward so that our elderly – especially our needy elderly – will be assured of a better tomorrow. Like the time-tested adage "a little drop of water makes a mighty ocean", I am hoping that no matter how small a donation may be, it will make a difference to someone's life.

Finally, Sir, I congratulate the Finance Minister on a fine Budget and I wish him and his team every success in its implementation.

1.20 pm

(In Mandarin ): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, Sir, this year's Budget will help Singaporeans cope with the higher cost of living and to have higher incomes, especially for the middle- and lower-income families. This is what the Singapore Government ought to do and a step in the right direction for Singapore to become a more inclusive society.

There are people who speculate that this is an election Budget to reward and please the voters, so that they will support and vote for the PAP in the General Election. Such thinking is not desirable. In my view, every Budget should be an election Budget because the Government should be continually assessed on doing the right thing for the people. Singaporeans want to know how the Government helps them deal with crises, overcomes challenges, plans for the future and to take care of the interests of as many Singaporeans as possible.

Members will remember the 2009 Budget when the Government introduced generous schemes such as Jobs Credit and SPUR. The purpose was definitely not

to please voters and prepare for a General Election but to preserve the jobs of Singaporeans! If the objective of this year's Budget is to reward or please voters, the Government would not return $4 billion to our reserves but simply use this money to dish out more goodies to buy votes. Our Government is a prudent and frugal government. It concerns itself with the long-term viability of the country.

Just now, Hougang MP Low Thia Khiang said that his responsibility is to criticise the Government because he is the Secretary General of the Workers' Party. If he praises the PAP Government, he does not deserve to be the Leader of the Opposition. Despite criticism from the Opposition, this Budget has received strong support, according to media reports. Mr Low spoke just now as if he were at a mass election rally telling people how to improve their livelihood in the next few years. In reality, however, people know in their hearts if their livelihood has improved or not. We should let Singaporeans decide what kind of party they want. Can such a party form a good government to provide a better future for us and our children?

Our reserves is an important cornerstone of this concept and replenishing it means that the Government is safeguarding the future of our country.

Mr Speaker, Sir, this year's Budget is a good Budget. It is comprehensive and it covers most of the critical issues that are of concern to the majority of Singaporeans. I would like to suggest three key areas which I think the Government should put in more resources.

One, help young couples own a house as soon as possible. On top of housing grants, I urge the Government to consider giving newly married couples priority to select HDB flats that they would like to buy as their matrimonial home. We must help young Singaporeans to get married

as soon as possible and getting them a flat would help fulfil this objective.

Second, help young couples to have children as soon as possible. Raising a child in Singapore is an expensive affair because every parent wants the best for their children. When I speak to young couples, they have three key concerns in raising a child: (i) cost of infant care and mother's recuperation after delivery. The medical expenses can be quite high, often over $20,000; (ii) cost of a good childcare centre; (iii) transport between childcare centre and caregiver's home.

I would therefore like to urge the Government to be more decisive in helping young couples have babies. Give direct cash incentives to the parents for the first two to three children. Give each child $20,000 to be matched by $5,000 from the parents. Allow the parents to spend it freely on the child's education. A few days ago, I heard Deputy Prime Minister Wong Kan Seng say he did not agree with cash incentives. I respect his analysis and views. The problem young couples are facing is that they have to wait two to five years to get their flat after the marriage registration. My views is that cash incentive is the most effective way.

Giving more resources to the Ministry of Home Affairs, I note an increase of 4.7% from 2010 in the budget for Security and External Relations, while the budget for Home Affairs increased 2.9%. Homes Affairs constitute 20.8% of the budget for this sector with the majority going to Defence. I am not saying Defence is not important.

There are two reasons why I support higher spending by Home Affairs. Firstly, the threat of terrorism is a real and present danger. Any lapse in vigilance could result in economic and social damage that could take away years of

growth. A bombing in CBD could mean Singapore ceases to function as an economic centre. So, while we pay attention to Defence, it is also important to support Home Affairs.

Secondly, youth problems and gang fights can be better addressed. I remember when I was a young man, I was terrified of policemen. Not because I had done something wrong, but because of their sense of authority. I feel young people nowadays have less respect for policemen from my casual observations in coffeeshops. If we can attract higher quality policemen, I think we can do better to instil awe and control gang activities. Gang activities in the 1950s were far worse than today but after 20 years, they have not died out.

Mr Speaker, Sir, this year's Budget is a generous Budget but also a prudent Budget. It will boost household incomes and reduce income inequality while also laying the foundation for longer-term innovation and reducing our reliance on foreign workers.

In any country, if the Opposition says good things about the ruling party, then do we still need an Opposition? We must believe in the wisdom of the Singapore people. We experienced the most difficult time after our separation from Malaysia, we have overcome many hurdles. Older Singaporeans all know that PAP has never deceived them. For the new generation, we must use new wisdom and the Internet to lead them. In the end, all we want is, first, a better quality of life; and, second, a better future for the next generation. Singaporeans will see if you can deliver what you have promised. They will not believe words alone. When I go to the coffeeshop, people ask me for the Toto or 4-D numbers. Can I give you the numbers? I give you 1, 2, 3, 4 for 4-D. I can just say that but the numbers will not be the winning numbers. I urge Singaporeans to think carefully after

listening to a party's speech: can they really deliver? The party you elect should be the one who can truly fulfil your aspirations.

I support this Budget and I will do my best to bring the Government's message to the people.

*Cols. 2997-3002.

Mr Low, do you wish to speak?

Can I seek a clarification?

Okay.

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] I would like to ask the Member for Nee Soon Central, my senior, two points of clarification. He said my speech is like an election speech, but his speech is more like a rally speech in an election. In his speech, he said that as I am an Opposition MP, therefore, I will naturally oppose the Government's Budget. I do not know what he means. I would like to clarify with him. He supports the Budget. Is it because he is a PAP MP, hence, he must support the Budget? If it is not, then what he says is "additional talk".

*Cols. 3003-3004.

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, it is not because I am a PAP MP that I support the Budget of the Government. Just now, I gave my views on anti-terrorism, for example. I think we are too complacent and not thinking enough of potential dangers. Therefore, I suggest that in the Budget, we allocate more resources to the Ministry of Home Affairs. I had criticised the Government's Budget before but Mr Low has not supported the Budget of the Government. He almost always criticises the Budget. The Budget cannot always be

wrong, there must be something good in it. I believe that as a responsible Member of Parliament, whether he belongs to the Opposition or the ruling party, he should praise the Budget if it is good and criticise it if it is bad. He says I am making an election speech. No. I am telling Singaporeans that they must elect a party that can do work for them. He knows that I have good intentions.

*Cols. 3005-3006.

Mr Low, we are talking about the principles of the Budget.

He is saying that because I am an Opposition Member, I am opposing for the sake of opposing. I have to clarify that point.

Clarify your point.

Just one point of clarification, in Mandarin, Sir.

Okay.

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Perhaps Mr Ong did not hear my speech clearly. In my speech, I did say what the Government has done right, for example, returning the $4 billion taken out in 2009 to the reserves. Is it that he did not hear me clearly or is he deliberately trying to find fault with me, picking bones from an egg?

*Cols. 3003-3004

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] I am not trying to find fault with him. I am sorry, Mr Low. He has indeed praised the PAP Government's Budget. I must thank him. As I said, he has also experienced the same thing. If the PAP Government wants to please the people and get votes, they would distribute the $4 billion to the people. We did not do that. I thank him for praising the PAP. I say sorry to him for overlooking what he has said about returning the reserves drawn out.

*Cols. 3005-3006