Hansard, 2012-03-05

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission by the Speaker to be absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated:

Order read for consideration in Committee of Supply [3rd Allotted Day].

Mr Chairman, Sir, one of the most pressing issues today has to do with that of Singapore's burgeoning population. In the annual Population Trends report released by the Department of Statistics, the total population grew by 2.1%, with our total population hitting 5.18 million at the end of June last year. This has fuelled many practical fears and concerns by Singaporeans as to the adequacy of the nation's infrastructure to absorb such rapidly increasing numbers.

One group feeling the strains of this is young, newly-working adult Singaporeans. I would like to ask the MND whether more can be done to ensure that newly built flats are made affordable for younger start-up families as well as the average working-class family. Would the Ministry also continue to review and revise income ceilings on a more regular basis so that it corresponds to the demands of Singaporeans from a wider segment of society, thereby ensuring that homes remain affordable for a broad section of the population?

Does the Ministry have plans to help target groups such as divorcees with children and low-income families? Especially divorcees with children, who may be neglected by policies traditionally aimed at catering to the majority of the population? Are there more creative solutions in the line-up beyond just building more subsidised rental flats?

Also, as the population increases, we would need more "spill out" spaces such as parks and gardens where people can unwind and come close to nature and feel restored and refreshed. Also, given the many tributaries and rivers in Singapore, how could we help to bring even more Active, Beautiful and Clean (ABCs) projects and near-the-river experiences to Singaporeans? If there are these pockets of solace, close to mother nature, away from busy roads and concrete infrastructure, it could well help Singaporeans cope with the inevitable increase in population which globalisation brings to a small and attractive city-country.

Sir, please forgive my flu-stricken voice. First, Lift Upgrading Programme (LUP). The LUP is a Government programme where the bulk of the cost is to be borne by the Government with the balance co-shared between residents and Town Councils, each paying between 5% and 12.5%. However, based on the accounting used by HDB, the Town Councils are paying much more and are subsidising HDB's share. This is because HDB's definition of LUP costs is different from what a common person understands. HDB defines LUP costs as "the total cost of lift upgrading minus the Town Council's share of the lift overhaul costs".

What then is lift overhaul? During LUP, new lift shafts are erected. Once operational, HDB requires one or two of the existing lifts to be shut down. According to HDB's logic, the shutting down of these lifts is deemed an overhaul. The Town Councils have to pay HDB the overhaul costs, as overhauls are cyclical works to be done by the Town Councils. The overhaul cost is based on a 28-year life span for a lift. If the lift is 24 years old now, the Town Council has to pay the depreciated portion, that is, 24 out of 28 years of value based on HDB's costings, which cannot be challenged. This could easily work out to about $100,000 for each lift. For 10 blocks, the Town Council would be required to pay a substantial amount of $1 million, just for the shutting down of lifts.

There are several issues here. First, use of the word "overhaul" to cover shutting down is convenient to HDB but does not square with the usual meaning of overhaul. Second, from the Town Councils' perspective, it is unjustifiable to pay HDB $100,000 per lift when no physical overhaul work was done but the lift instead became extinct. What HDB is bearing is not based on the total bill of the LUP but a lesser amount after first making the Town Council pay to HDB part of the total LUP bill through such lift overhaul costs. This results in a significant drain on the Town Councils' sinking funds, way above the one-off LUP assistance provided by HDB. How does HDB justify such accounting?

My next cut, Sir. In mature HDB estates where there are few multi-storey car parks, families may be asked to park their cars some distance away from the block, even a few hundred metres away, for the second car, in particular. In other car park clusters, even the first car may need to be parked some blocks away. Residents are concerned not just because of the inconvenience. It poses difficulties to the less mobile, and ladies have expressed to me safety concerns. It was reported in December that MND is studying a mechanised parking solution for implementation in mature HDB estates. Since then, some parking experts and others have thrown up some possible strategies. Could MND share more information about what it is looking into to ease the car park shortages for residents in mature HDB estates?

Mr Chairman, under the vehicle parking certificate scheme implemented in 1994, all heavy vehicles in Singapore are required to have a parking lot in an authorised parking place licensed by LTA. Many of these designated parking spaces are located far away from residential homes of drivers of heavy vehicles. For example, they could be located in the industrial estates. On the roads, I have seen prime movers with bicycles mounted at the back of the vehicles as an innovative way to cycle home after the drivers have parked their vehicles in the industrial parks. For many of these drivers, getting home after duty can be a challenge, especially when they start work early and they end work late. They have to travel long distances back to their homes and there are also no public transport vehicles available at those early hours.

As a result, some resort to illegal parking along public streets near their homes. This can cause them to be fined and bring inconveniences to others. For example, many of my residents in Seletar have given me feedback that there have been many instances of overnight parking of heavy vehicles along public streets and sometimes within the residential estate. These vehicles pose safety concerns and congestion problems especially to vehicles, such as the public waste collection vehicles, that need to move within the estate in the mornings to remove garbage.

Can MND set aside more interim heavy vehicle parking spaces situated near residential areas to meet the needs? Currently, such parking sites are available, located near to residential areas such as those in Bishan and Ang Mo Kio Ave 1. These parking sites are conveniently located under the MRT tracks or near to HDB housing estates. These are heavily sought after by drivers of heavy vehicles and often have a long wait list. It demonstrates that the practicality and needs of such parking sites. Currently, there are also many empty plots of land under MRT tracks which are not utilised, such as the space next to Yio Chu Kang MRT Station. These plots of land can offer temporary parking spaces for heavy vehicles. Will MND be able to identify more of such sites to bring relief to residents and drivers, so that drivers of heavy vehicles need not park illegally or find other means to get home after work? It would therefore be easier for them to go home after their work. Residents need not put up with the potential safety hazards and inconveniences, and there will be a win-win situation for everyone.

Mr Chairman, URA's Master Plan 2008 envisioned more regional commercial hubs being developed outside the city centre to offer alternatives for businesses and provide jobs closer to homes. One of the objectives of the Master Plan is to achieve better job distribution island-wide, and reduce congestion and commuting to the city.

Sir, having a large proportion of commuters travelling to and from the city centre at the same time, puts huge stress in the transportation network. This necessitates the building of more roads and MRT lines to serve the city centre and puts pressure on public transport operators to add more bus and train capacity to cater to the very high peak loads heading in the same direction.

I understand that the Jurong Lake District and Paya Lebar Central are currently underway. May I ask MND for an update on progress of these developments and any other decentralised commercial centres? To what extent will these reduce the crowding in the city centre and manage the stress on the transportation network? Does the Ministry have plans to develop more such commercial hubs and, if so, where will they be located?

Mr Chairman, I wish to speak on the topic of sports stacks and use of second floors at HDB developments. I have spoken on these two topics before, so I apologise for being repetitive. It is just that I notice when I broach the topic with some HDB officials, the idea still seems to be relatively new to them, so I was not sure that the idea had actually permeated through the levels of MND. And since there is a new Minister since the last time I spoke on it and a new Minister of State and a new Permanent Secretary, I thought I would raise the topic again, believing like Robert the Bruce that if at first you do not succeed, you must try and try again.

On the question of second floor of HDB developments, I have noticed that over the years, we are using more and more of the void deck space and taking it away from the use of residents. The problem was best illustrated perhaps by the recent furore over the day care centre at Woodlands. Whilst one should be mindful of the need to have amenities, there is also a need to balance the void deck space available. I thought it would be a good idea to reserve the second floors of new HDB precincts that are being built for amenities, such as elderly day care centres, senior activity centres, facilities for the disabled or childcare centres. There is precedence for this – Block 118 at Bukit Merah View in my constituency has the Moral Neighbourhood Link, a VWO which serves the residents in that area. I would urge HDB to consider this because that way, we can keep the void deck space void but, at the same time, still provide the amenities and facilities that are needed for various precincts.

The second idea was the one of sports stacks. Inevitably, every HDB estate will have complaints about boys playing football and that is natural. Boys will be boys. They will play football. Other people also want the space for games, and I also understand that space is a premium and we have limited space. I thought that the idea of having a sports stack, meaning set aside some land away from the main blocks but still part of the precinct. One level could be used for football; another level could be used for ball games like basketball or netball; another level more for the senior-type games like gateball; and another for racquet games like badminton, table tennis and things like that. In that way, we can still maximise the use of the land, the footprint is kept small because we will stack it up so it benefits the residents. It promotes sports and at the same time, it takes away the noise nuisance for the residents. I would like to ask HDB to consider these ideas.

Mr Chairman, Sir, many of our residents in HDB estates find cycling a good recreational activity, a convenient form of transport around the neighbourhood and a way for them to travel to the nearest MRT stations. HDB estates were often not designed to cope with this increased demand for bicycles and the resultant need for more parking facilities. Also, HDB estates provide only basic bicycle parking facilities that afford inadequate protection against theft. Residents do not feel confident with parking their bicycles in allocated areas. Instead, they park the bicycles on their floors of residence. And when I do my block visits, you can often find bicycles clogging up the corridors which lead to congestion and fire hazards. Would the Ministry be open to (i) re-designing bicycle parking facilities that provide more security against theft, and (ii) increasing the number of secure bicycle parking facilities?

Mr Chairman, I would like to respond to Minister Khaw's call to go beyond building homes to building communities. Indeed, we need to design and build our neighbourhoods into places which are not just great places to live, work and play, but also places where we have strong relationships and community life. Today, people mostly live in gated communities and for many, the main value of the home is its dollar market value. There is often little value ascribed to the value of the community they live in, or the social capital and relationships in their neighbourhood. Social ties among HDB residents seem to have worsened, households more isolated and neighbourly disputes.

In our context, let me give the Minister my suggestions. I shared the long version of this as a Guest Speaker at HDB's Senior Management Retreat last year. I am strongly influenced by Jane Jacob's New Urbanism – Prof Robert Putnam, who taught me all I know about social capital and the asset-based community development approach.

Sir, in my dream, I hope that each neighbourhood is unique and diverse, and has distinctive characteristics, reflecting the identity of the residents who have emotional attachments to it. Each neighbourhood has a discernible centre, which can be a square or a busy street junction, where the bus or train stops. Homes are within a five-minute walk from the centre, or within the 400-metre radius. There are mixed types of homes housing people with different demographics, facilitating the bridging type of social capital. Within the neighbourhood, there are shops and services of sufficient varied types to supply the weekly needs of a household, so they do not need to visit the mall. There are so called Third Places where people can be regular customers and visitors, and can establish connections. There are attractive, usable public spaces for formal and informal community gatherings. The Residents' Committee in the neighbourhood are empowered to take on estate management, and they constantly engage residents to make meaningful decisions and set rules on how their neighbourhood should evolve and be uniquely organised. More "white spaces" are set aside for this. There is depth of interactions, mutual self-help, and more informal volunteerism. There are formal and informal groupings within the community to plan and organise activities and initiatives within the neighbourhood.

I urge MND to experiment with some of these design elements in building new HDB estates. Let me just summarise the core differences with today's approach. First, there is more emphasis on the software, including infrastructure that supports the building up of relationships, like Third Places. Secondly, very importantly, there needs to be co-creation and genuine empowerment of residents with much more active participation from them. Thirdly, everything needs to be on a human scale, walkable. Together, with having a distinctive character, this will make people stay outside their homes, in their neighbourhoods. I hope MND will take into account my suggestions.

The Chairman: Miss Penny Low. Miss Penny Low is not in the House. Dr Teo Ho Pin.

Sir, the fast ageing population of Singapore requires fast implementation of elderly friendly features in our built environment. Many Singaporeans are ageing within their respective communities, and thus require these elderly friendly features to enjoy a good quality of life. Sir, the introduction of barrier-free access amenities in housing estates and lift upgrading of HDB flats have brought much convenience to our residents. But barrier-free access amenities may not be adequate to make our built environment elderly friendly. We need to better understand the needs of our elderly, and facilitate them to live, work and play in our community. Sir, I wish to ask the Minister the following questions: (i) what is the long-term plan to facilitate Singaporeans to "age in place" in the community; and (ii) can the Ministry identify and implement more elderly friendly features which are necessary for the elderly to live, work and play in our built environment?

Sir, the Home Improvement Programme (HIP) is an upgrading programme for flats built in 1986 or earlier. They have not undergone upgrading before. It is highly popular with residents. Currently, there are 300,000 eligible flats for HIP. I am glad to know that the Ministry is rolling out HIP at a faster pace. Last year saw a doubling of beneficiaries of 5,500 to 10,000 flats. However, MND's assurance that they would take 10 years to complete the balance of 250,000 flats – is too long. This is an important consideration as rising cost due to inflation and manpower may further delay its full implementation. As the ageing of these older flats give rise to higher incidents of defects such as spalling concrete and leaking ceiling and pipes, what can the Ministry do to speed up the completion of HIP?

Mr Chairman, eating is often called the natural pastime of Singaporeans. We love our food but many do not know too much or do not think too much about where our food comes from, unless there is a sudden surprise shortage or sharp increase in prices. With limited land and resources, Singapore, in fact, imports more than 90% of the food we consume. This reliance on imported food make us more vulnerable to shortage, especially with the threat of climate change and inflation food cost. Sir, it is good that the AVA has taken effort to ensure that, except for eggs, most other key food items in Singapore has less than 50% of their supplies coming from a single country. What is the Ministry's plans to continue to bolster sufficient supply of key food items and restore their supplies in the event of surprise disruption and mitigate sharp price increases? With increased globalisation and diversifying food sources, how would the Government assure that the food that comes in will remain safe to eat, so that Singaporeans can continue to enjoy their food with confidence? Let me continue in Mandarin.

(In Mandarin): [Please refer to Pg 1981 for Vernacular Speeches.] Mr Chairman, Singapore can be considered a food paradise. Just counting eggs alone, Singaporeans consume 4 million eggs a day. However, whether it is rice, wheat, fish, meat, vegetables, fruits, eggs or tea, we rely on imports for all these. The smooth, steady supply and safety assurance of our food, which we have enjoyed for so many years, does not happen by chance, neither should we take it for granted. The Ministry of National Development must continue to act as a safeguard for us, do more to explore more food sources, and work with all businesses in the food industry, as well as the public, to safeguard our food safety and the stability of our food supplies. We hope that the situation in Taiwan – where people are worried about eating beef, chicken and eggs – will not happen here, so that Singaporeans can continue to enjoy their food with a peace of mind. Even if something unfortunate happens, and we are unable to avoid it, I hope that the Government also has plans to help Singaporeans deal with it calmly, and minimise the negative impact.

Mr Chairman, Sir, when Singapore started out as a young nation, providing adequate housing was a pressing task. In 1960, it was estimated that a quarter million people were living in slums, and another 200,000 to 250,000 in attap squatter settlements, which means leaking roofs and flooding during rain, not to mention the poor hygiene and being prone to fire. As Minister Khaw highlighted, we built 21,000 flats in just three years back then to relieve the pressure on housing.

Today, we are also building as quickly as we can, at 25,000 flats per year, but for a very different context – 90% of Singaporeans own their homes. There are currently 900,000 HDB flats and 300,000 private homes. Our housing programme is very well regarded internationally. Singapore is frequently cited in the ranking for "Top Global Cities" and "Most Liveable Cities". Our economy has advanced, and so has the standard of living for Singaporeans.

However, we cannot stand still. The external environment requires us to adapt. Our society and demographic changes necessitate Singapore to experiment and adjust. As an open economy and a metropolitan city, we must find ways to stay relevant in the web of global cities, trades and investment. But being economically vibrant or world-class is not the end in itself. Rather, it is the means to create an endearing home and an inclusive society for all Singaporeans.

At 7,200 people per square kilometres, Singapore is perhaps amongst the densest countries in the world. As we face tighter constraints in terms of land and space, we will need to be creative in space planning and judicious in land use. There will be inevitable trade-offs between competing demands. But I believe the next phase of nation-building can also be very exciting as we seek new and bold ideas with Singaporeans to co-create our 21st-century Singapore.

A key enabler for a city of the future is its infrastructure. As Mr Christopher de Souza rightly pointed out, we must ensure that our infrastructure meets the needs of both our economy and population. Minister Khaw earlier shared about our accelerated public housing programme. Our public transport systems will also be expanded, with the doubling of the rail network over the next 15 years. The upcoming discussions on the Population White Paper, as announced by Deputy Prime Minister Teo, will help sharpen the focus on future infrastructure planning and execution. We will extend the Concept Plan review to take in findings from these discussions.

In building our home, it is not just housing, but also the amenities such as parks, park connectors, community clubs and commercial centres. Ms Sylvia Lim highlighted the need for more parking. We are doing two things. For new estates, HDB is designing multi-storey or podium car parks within a precinct. In other words, a few blocks of flats sharing a common cluster of facilities. For existing estates, we wish we could do the same but not all the estates have the space for us to do so. We will try whatever is practical. So, besides multi-storey car parks, if we can find the space, other possible solutions include additional surface lots, electronic parking systems to regulate demand, and also mechanised car parks if user acceptance proves positive.

For heavy vehicle parking raised by Mr Ang Hin Kee, we do face a real trade-off in allocating limited space for different vehicle groups. Not all empty plots near residential areas are suitable for heavy vehicles because of alternative development plans, noise and safety concerns. But I noted his suggestions on making use of space under the MRT tracks, so I think we can explore that with LTA.

As a living city, we must continue to rebalance our centres of growth to create comfortable spaces for "live, work and play". Mr Gerald Giam asked about alternative city centres. We do take a comprehensive approach to shaping our city.

In the city centre, we are building up Marina Bay as our new commercial heart. Along with the new infrastructure for business, it will bring many new and good jobs for Singaporeans. Marina Bay is also becoming a bay for the people as it establishes itself as a venue of national events and celebrations. Community events such as arts festivals, sailing and charity walks are also being held.

Beyond the city centre, we are creating new growth centres in different parts of the island. These will provide jobs and amenities closer to homes and minimise the need for cross-town travel, as Mr Giam has pointed out. Under Master Plan 2008, the Government announced the development of three growth centres in this decade – Jurong Lake District, Paya Lebar Central and Kallang Riverside. To-date, 450,000 square metres of commercial GFA has been made available for development in these centres. How large is 450,000 square metres? This is equivalent to about nine AMK Hubs.

Each growth centre will be developed with a unique personality. For example, Kallang Riverside aspires to be Singapore's sports and lifestyle hub. Anchored by the new Sports Hub, Kallang will provide 4,000 new homes, complemented with shopping, F&B, commercial, entertainment and leisure places – this will amount to over half a million square metres; or about five Vivo cities. New parks and improved riverfront promenades will also bring people closer to the waterfront.

Next, our homes in a global city. Mr Laurence Lien and Ms Indranee Rajah spoke about the need to rethink the way we build our neighbourhoods to meet changing needs and allow community bonding to flourish. Indeed, to meet future aspirations, HDB's aim is to build well-designed, sustainable and community-centric towns as part of its recently launched "Roadmap for Better Living in HDB towns". We will invite Members and Singaporeans to co-create these new towns with ideas and suggestions, some of which have been made in the speeches.

If you visit newer towns such as Punggol, you will find a number of new ideas being adopted. For example, HDB has paid special attention to promoting vibrant community spaces. At the town level, Punggol will have a Town Plaza as the epicentre for community events. At the precinct level, Treelodge@Punggol is an example where HDB has piloted a "stacked development", with a first-storey podium car park, a roof deck above that provides space for greenery, playgrounds, fitness corners and other facilities, and, finally, flats above the roof deck. There is also a conscious effort to locate facilities nearer to residents to help lower transport costs and minimise inconvenience. In fact, if Members look carefully at the picture, sometimes when you are in there, it is quite hard to tell whether you are on the first, second or third floor, because of the design and because it is well-integrated. I appreciate Ms Indranee's idea to integrate these facilities into the precinct but we need a certain minimum size in order to incorporate all these features in one precinct. We will unveil the plans for Punggol's next phase of development in the second half of this year.

For existing towns, HDB plans to roll out pilot projects under the Greenprint concept. For a start, HDB will "green" a neighbourhood in Jurong East with water and energy-saving solutions, as well as a Pneumatic Refuse Collection System. To promote eco-friendly transport, HDB will also enhance the cycling and pedestrian network complemented with secured bicycle parking facilities which Mr Ong Teng Koon spoke about. The Greenprint will also look at supporting greener living by piloting a Green Home Package, where residents can choose the types of energy-saving appliances to green their homes. From the pilot's findings, HDB will then refine the Greenprint model for possible rollout to other HDB estates.

Beyond our housing estates, we are committed to ensuring a greener overall environment for Singaporeans. As Singapore continues to urbanise, it will be even more important to soften our otherwise hard, concrete landscape, as Mr Christopher de Souza mentioned. Our aim is to develop an urban landscape with pervasive greenery, where our parks, gardens and green spaces are linked up to form large tracts of greenery. We want to transform from a garden city to a City in a Garden. What this means is that instead of having a garden just outside our homes, we will have the entire city nestled within a garden.

As part of this vision, NParks will add a world-class garden, the Gardens by the Bay, when it officially opens in June this year. We will also enhance the connectivity of our green spaces, including the proposed Round Island Route which Deputy Prime Minister Teo just announced. As greenery becomes more pervasive, we will also bring biodiversity back to the heart of the city, so that daily encounters with nature become a way of life. We will actively engage Singaporeans to co-create and co-own our garden.

I spoke about the attributes of an exciting Global City. A pre-requisite is safety – whether people feel safe living here. Mr Yeo Guat Kwang urged the Government to safeguard Singapore's food supply and safety. As we import over 90% of our food, we cannot control global food prices and supply. To mitigate supply disruptions and volatile food prices, AVA will continue to actively diversify our overseas supply sources. AVA is also working to boost local production of three strategic food items, namely, leafy vegetables, eggs and fish to further enhance the resilience against supply shocks.

To-date, AVA has allocated $20 million for its Food Fund to support R&D, local farm capability upgrading and food source diversification. To ensure food safety, there is also overseas accreditation and inspection of food sources. AVA also conducts rigorous testing of imports before they are allowed for sale in Singapore. Even as Singapore forges ahead as a global city, we cannot forget that our ultimate goal is to build an inclusive society and a better home for everyone. We must be alert to changing demographics and anticipate future needs.

In the coming decade, the ageing of our population will become much more apparent. Our first batch of baby boomers will start to turn 65 this year, and within the decade, we will see the number of seniors increase by 60%. Dr Teo Ho Pin asked about our plans to help Singaporeans "age-in-place". Let me elaborate on some of our key ongoing and upcoming efforts in response.

First, the Lift Upgrading Programme (LUP) is on track to complete by 2014 to improve accessibility for residents, especially the elderly. Ms Sylvia Lim asked about LUP costing for Town Councils. The understanding is totally correct in terms of how it is computed. The principle, however, is applied consistently to all Town Councils. The Government will fund up to 90% of the lift upgrading costs. As Town Councils are responsible for replacing lifts at the end of their lifespan in the first instance, they will bear their share of the costs if existing lifts are replaced as part of LUP, with the Government shouldering the bulk of the remaining cost. The Town Councils are required to bear the depreciated portion of the replacement costs based on the age of the lifts. This is something the Town Council should have been saving up in the form of the sinking fund over the years. Ms Lim asked why Town Councils are required to pay for old lifts that are overhauled or replaced. In fact, these lifts are all replaced – it may not be at exactly at the same lift shaft but in different parts of the block where a new lift is provided and an old lift is shut down. So, when we do LUP, we make sure that each block gets at least the same number of lifts, if not more. With the current funding structure, LUP, as a programme, will cost a hefty $5.5 billion to complete.

Second, the Home Improvement Programme (HIP), which provides practical improvements such as safer clothes drying racks and elderly-friendly toilets, is being ramped up, as suggested by Mr David Ong. This year, up to 28,000 households will stand to benefit from the programme. Within these five years, we aim to cover 160,000 flats. This is about 60% of the remaining eligible households. If we sustain this pace, we will be able to complete HIP in 10 years, budget permitting. We will accelerate HIP where possible, but seek the public's understanding that HIP is a massive programme covering 300,000 flats.

Thirdly, to meet the needs of both the young and the old, HDB has adopted Universal Design guidelines for its new residential projects since July 2006. Universal Design features include larger and lower light switches, wider corridors, wheelchair-accessible bathrooms, and door levers. To-date, 24,600 flats have been built with Universal Design. Sir, in Mandarin.

(In Mandarin): [Please refer to Pg 1982 for Vernacular Speeches.] I have just given an update on the $5.5 billion Lift Upgrading Programme (LUP) as well as the Home Improvement Programme which will benefit 300,000 households. This is what the Government has been doing to build a more inclusive society.

However, we are not resting on our laurels, and we will continue to implement more upgrading programmes. As announced by Deputy Prime Minister Tharman, we will make our homes more age-friendly, especially for those in need. Today, there is a pilot to retrofit 500 households in Marine Parade with senior-friendly features like grab bars; slip-resistant treatment for bathroom floors; and ramps within the flat. The initial response has been encouraging, with over 50% of households taking up the offer. One of these households is Mdm Loo. At 90 years old, Mdm Loo previously had to grab anything within her reach (for example, chairs, tables, doors and so on) to move around her flat. After the retrofit, she can now move around her flat more confidently with the new grab bars. In fact, when she was trying out the new grab bars, she was all smiles and happily said "not bad, not bad, it's more convenient for me now."

To help more seniors like Mdm Loo, we will extend these retrofits to more households under the "Enhancement for Active Seniors" or EASE programme, starting from July this year. EASE will be rolled out as optional improvements under HDB's enhanced Home Improvement Programme. Implementing both programmes at the same time can reduce the inconvenience to benefiting households.

We also understand that there are some families who may not need all the improvements under the EASE programme. Hence, families can choose their own combination of improvements based on their needs. In addition, elderly and vulnerable residents who wish to get the enhancements earlier can apply directly to HDB.

To ensure affordability, the Government will heavily subsidise the enhancements. Similar to HIP, citizen households can expect to co-pay 5% to 12.5%, or $100 to $250, depending on flat-type. We aim to launch the programme in July 2012 and will provide more details then.

(In English): To increase accessibility for residents to the community, HDB will roll out a lift installation programme for all its existing Multi-Storey Car Parks (MSCPs) that are without lifts. While all HDB MSCPs built from 2007 are fitted with lifts, there are still about 550 older ones that are without lifts. This programme is estimated to cost $120 million, and will be rolled out from this year to 2016.

Besides the hardware, we must ensure that the right services and facilities are built in the estates to help residents to age in place. We will work closely with MOH and MCYS to ensure that social facilities are integrated with other town amenities to better serve our seniors. But it is not just physical integration; we need to be open and mutually accepting as a society about catering to the needs of different groups – seniors, the young, and families – alike. This mutual acceptance will help us grow to be more gracious as a society, and build a truly caring and inclusive home for all. Today, some of our playgrounds in HDB estates have become examples of meeting points amongst the young and old. I hope to see more residents making full use of integrated facilities.

Sir, as we seek to position Singapore as a Global City, it is important to think about what makes Singapore a special place. Our skyscrapers may awe us, our greenery may soothe us, but it is the time that we spend with our family and friends, the helping hand we extend to our neighbours and the common memories we create and share together that will render this place special, a place we call home.

Mr Chairman, as we advance as a society, we must not forget our past. The collective history of Singaporeans is what makes us unique. Stories of our forefathers coming from foreign lands – some distant, some not so distant – landing in Singapore, living here, working here, setting up families and businesses here and, in time to come, passing on here. Finding the bridge to our past is important as it keeps us rooted to the generations of people who have in some way shaped or formed and moulded us into the people we are today.

In my constituency of Joo Chiat, there is a strong link with Peranakan heritage and culture. The residents there are very proud of this link with the past. The benefit of this, we have found, is that they have started to attract people from all across the island who are attracted to this nugget of Singapore's past. It might be because they have some Peranakan heritage themselves, or it could be just because they are interested in something which they are interested in. Nevertheless, the experience of Joo Chiat in heritage-related events does have their own following and there is a growing interest among younger Singaporeans in participating in such events.

Having said that, there is more that can be done, not only by MND but by other agencies as well, such as the Electoral Boundaries Review Committee when it comes to naming constituencies and demarcating boundaries. It should perhaps consider the heritage of the area in addition to the population shifts. For example, it is a bit odd that Joo Chiat SMC is named after a geographical area that it does not cover. I am sure there are other examples. Names are important. They provide identities and a visual and mental cue for our memories and experiences.

Another topic which generated much public debate was Bukit Brown. Apart from the fact that exhumations are emotional issues for many, concerns were also raised that Bukit Brown contained much which were worth preserving. Interestingly, Chew Joo Chiat, after whom my constituency is named, is buried in Bukit Brown, alongside with several other prominent Singaporeans in days gone by. I would like to ask the Minister whether he can institute a system whereby decisions are made in relation to sites or matters of significant historical value and the relevant stakeholders would be consulted at an early stage of the process so that views of interested parties can be taken into account, and informed decisions eventually made.

Sir, in this fast-paced and globalised world, we should not underestimate the necessity and desire to identify and protect heritage sites that can give Singaporeans a sense of identity and belonging. We should be very careful to ensure that locations treasured by people do not get demolished too easily in the name of progress, as we may lose a part of our soul with it. We have felt the pain of losing iconic buildings before – the National Theatre, the old red-brick National Library, the Van Kleef Aquarium. Good reasons were trotted out by the MND leaders of the day – too expensive to renovate and maintain; need the land for other uses and redevelopment. Today, some still wonder: were the right decisions taken? This question often enters my mind when I drive through the short Orchard Road tunnel, for which the old library building had to be crushed.

Sir, it is a healthy sign that there is a surge of interest today on heritage issues. It signals their search for emotional anchors and for a narrative that connects the present to the past. The latest evidence of this is the civic effort to save the Bukit Brown cemetery. I visited it recently and found it informative. It gave deeper insights into how our early pioneers lived and died. Some of the tombs are decorated with sculptures and works of art.

We know that not everything old has heritage value. But what are the criteria applied? What are the processes in place to make a proper evaluation? Are the views of experts, civic groups, independent heritage organisations and stakeholders adequately taken into account? It is necessary to lay down clear guiding principles and to put in place a wide consultative process. We should not rush to demolish what some may treasure as heritage sites - as once demolished, what is lost cannot be recovered.

Sir, we know that space is always a constraint in Singapore. This is a given. But it does not answer the question of why a road to cater to a group of some motorists, say, is given higher priority over what some others may value as a heritage site. In fact, the space argument can also be used to support higher priority for heritage conservation. Singapore, being a small and relatively young nation, has fewer heritage sites for the people to focus its attachments on. Precisely because of this, even if a few of those areas go, the effect would be even more devastating than in big countries which could boast a host of landmarks spanning centuries.

We know that MND has done much to conserve our natural and cultural heritage over the years. I would urge MND, however, to do another review on the merits of preserving Bukit Brown, or some parts of it, with a more open mind.

Mr Chairman, sometime late last year, LTA announced that a dual four-lane highway in Bukit Brown will be built from early 2013 to alleviate congestion along Lornie Road and the Pan-Island Expressway during peak hours. In a statement, the Land Transport Authority (LTA) added that the new road, to be completed by 2016, will also cater to expected growth in future traffic demand. It said that the new road will cut through parts of the Bukit Brown Cemetery, and it estimated that it will affect about 5% of the more than 100,000 graves there.

Upon the announcement, several groups of stakeholders voiced their concerns and their unhappiness, with one grouse being that stakeholders were not consulted prior to the decision, and the other being the impact the project will have on Bukit Brown. Mr Chairman, here let me declare my interest as a member of Nature Society Singapore, one of the groups of stakeholders which have voiced our concerns.

Then, on 22 November 2011, to a question raised by Ms Irene Ng in this House, Mr Khaw Boon Wan explained that these options had been considered, three of them: (a) the widening of Lornie Road, (b) viaduct above Lornie Road, and (c) a tunnel below. All these options were thought to be unworkable; thus, the need to stick to the decision for the proposed highway.

On 4 February this year, The Straits Times reported that the Minister of State for MND BG Tan Chuan-Jin said that plans for the proposed highway will proceed. Here are my questions. I have broken them up into four parts.

Apart from the three options mentioned, that is, the widening of Lornie Rd, the viaduct and the tunnel, what were the other options, if any, that had been considered before they were narrowed down to these three options? My second and third questions are related. We all understand that forests provide free eco-services, one of which is that they act like a water storage tank as they absorb water through the soil and the roots when it rains. We also know that when these natural areas are removed and are paved, ground infiltration is interrupted, surface storage is removed and, as a result, there will be an increase in the speed and the quantity of the surface run-off. This is serious in view of the close proximity of the proposed project to Bukit Brown. In fact, in a report, in January 2012, by the Expert Panel on Draining Design and Floor Protection Measures appointed by the Ministry of Environment and Water Resources, it is stated that rapid urbanisation had been a contributing factor to the floods. Here are my two related questions.

Firstly, has a complete Environment Impact Assessment (EIA) that includes biophysical, especially hydrological, social and other relevant effects of the highway been conducted and, if so, what are the results? Secondly, in view of the recent floods and the resulting public concerns and outrage and the report by the Expert Panel aforementioned, would the authorities consider deferring the project until an EIA, if it had not been done, conducted or concluded, or other sorts of studies, are then conducted and concluded?

Lastly, in keeping with Budget 2012's tagline of an "Inclusive Society, a Stronger Singapore" and in view of the outcry that ensued after the proposed highway was announced, would MND ensure that there will be more effective and inclusive channels for public engagement and consultation in the future and, if so, what would these plans look like?

Mr Chairman, I have been visiting the Bukit Brown cemetery since I was little. My great-grandfather was one of the many tens of thousands of early migrants buried there and, as far back as I can remember, every Qingming festival, my parents would dutifully visit his grave to clear the weeds, bring offerings and pay their respects. As a child, I never thought much about its significance. As an adult and a parent, however, I have come to treasure this link that I have to my ancestral past.

This connection was particularly poignant for me when I took my two children to visit the grave a few weeks back. Nothing quite replicates the emotional experience of standing on the very ground where your forefathers were buried five generations ago. A cemetery is not just for the dead and about the dead. It is about keeping our history, our memories and all the meanings of our past alive for the living and for future generations of Singaporeans.

But one cannot always be sentimental about land use in Singapore. In a short span of 40 years, we have seen the destruction of over 200 cemeteries in Singapore. Many of our housing estates, our schools and amenities would not be here today if previous cemeteries had not made way for them.

Yet, the most compelling point for me in this debate about Bukit Brown is that Bukit Brown is not one of the many cemeteries in Singapore. It is, in fact, now one of the important few left behind in our midst. And as such, it is fitting that we deliberate on this question of its demolition with a lot more care and consideration.

In the early years, we cleared many shophouses and old buildings to make way for urban development. But at some point, we realised that if we did not start preserving and conserving whatever shophouses we had left, even the remaining few would be gone. My question is: has MND conducted any systematic survey or impact study to look at the tangible and intangible benefits of preserving Bukit Brown? If so, can these findings be shared with the public? And if not, would MND consider holding back road-building works until a more in-depth impact study is conducted?

Sir, Deputy Prime Minister Teo also recently announced that the Government is preparing a White Paper on Population that will be released at the end of the year. Should we not wait until there is a stronger national consensus on our population growth strategy before we commit irreversibly to this course of building more roads and more housing on this historical piece of land? Sir, I suppose, in short, my question is: can we ask for a "stay of execution" on Bukit Brown? There will be other sites with similar issues in the future. How will MND incorporate citizen consultation and engagement with civic groups into their decision-making process when it comes to long-term urban planning?

Mr Chairman, pet ownership has been a hot topic of late. It comes as no surprise as animal welfare groups, such as the Cat Welfare Society and SPCA, have ramped up their efforts to raise awareness of proper pet care, highlighted cases of abuse and work towards the ethical treatment of animals. But instead of fire fighting, I think the authorities must do more to improve the pet ownership framework and the regulations here as well, including minimising abandonment of pets.

Currently, AVA oversees the licensing or regulation of animals while HDB regulates the size of dogs allowed for the flats. These rules have not been reviewed to keep up with changing times. For one, cats are still not allowed in HDB flats despite repeated appeals from cat lovers to review the law. We are still seeing disputes between neighbours arising from nuisance and noise caused by pets. Often, pet owners and neighbours requesting for information or enforcement find themselves in a no-right-door situation.

I would propose that AVA and HDB streamline regulations regarding pet ownership and make the channels of complaints, action and appeal more integrated. We also have to improve pet ownership education to hold the pet traders – the ones who sell the pets – and also pet owners to be more accountable. Can we look into requiring new pet owners to attend training or orientation programmes?

Proactive education is needed to ensure that when people purchase a new pet, they understand the commitment that is involved, their responsibility and how to manage their pets. We should request pet traders to play a more active role in this area as well. Lastly, would AVA consider the AWG's proposal to set up an adoption centre which will provide a dedicated community facility that supports and encourages adoption. Sir, I will continue in Mandarin.

(In Mandarin): [Please refer to Pg 1983 for Vernacular Speeches.] Sir, Singapore is considered the most liveable city. However, in our living environment, we often find that there are a lot of conflicts caused by men. It shows that there is much to be done in our journey towards becoming a civil society. Currently, we often witness many conflicts related to pets and neighbours. We hope that, if we want our environments to be more harmonious, and allow the ecosystems to co-exist, we must resolve the issue of homeowners with dogs and cats. Although the problem appears simple, we must nip the problems in the bud. Ultimately, we must link pet business owners, pet lovers, animal rights activists, residents and grassroots together on a platform, to work together to create an inclusive and sustainable green environment for all.

Sir, there are four areas which hinder productivity increase in the construction industry. First, too many rules to comply with. Sir, many practitioners complained that we have too many rules to comply with in the construction industry. Each time an accident occurs, many new rules will be introduced. As a result, many practitioners are spending time doing paperwork, instead of construction work. Sir, we need to review our Building Control Act and rules to ensure that our rules enhance productivity. We must also set productivity performance standards for various Government approving agencies to reduce bureaucracies and delays in approvals.

Secondly, design and supervision. Almost every building in Singapore has a unique design, and thus a learning curve in construction. There is a lack of standardisation in the design of building components to facilitate increase in productivity. Except for HDB, the private sector lags behind in the introduction of prefabrication technology to expedite construction. We should encourage the use of more prefabrication of building components, and set higher buildable score by BCA to increase productivity.

Due to the low fees paid to building professionals, there is a lack of supervision on site. Very often, the Resident Technical Officer is the only person who controls the speed of construction. The lack of supervision by professionals also resulted in many abortive works, thus causing wastages and delays.

Thirdly, procurement methods. In Singapore, many developers still adopt the traditional method of engaging contractors through lump sum contracts. Under such arrangements, the consultants and contractors do not share the same objectives of ensuring that the project completes on time and within budget. As such, many unproductive hours are wasted in resolving conflicts and problems. Sir, design and build contracts are usually considered better procurement method as it provides a one stop service in the delivery of projects. In Japan, design and build contracts are commonly used to build good construction teams which deliver high productivity and quality projects.

Fourthly, high turnover of workers. The high turnover of skilled workers in the industry is another barrier to achieving higher productivity. Many foreign workers are trained in Singapore but do not stay long enough to contribute productive work. Sir, may I ask the Minister what are the plans to increase the productivity of the construction industry?

Mr Chairman, Sir, as all of us sit here today and as we talk about our heritage and history, I wonder, what are our memories of our past, of our growing up days, when we went to school; stories our parents or grandparents told us. Ms Janice Koh shared about her growing up years; her memory of going to Bukit Brown.

I have been taking pictures of Queenstown as there have been a lot of developments there. I remember my parents bringing me to Queenstown when I was young. I remember the pasar malams along the streets; I remember the cinemas, which are now churches. I remember when we went to cinemas in the old days, we bought kacang putih in newspaper cones; I do not know if they are still around. Or the hawker centre there that has recently been torn down. I will always remember the yew zhar kway stall. I always marvelled at the way the stallholder kneaded the dough, and the way he made the yew zhar kway. I would go home and practise doing it with plasticine.

We remember many things from our younger days and they are all precious. Many of these places that we reminisce about, and talk about have made way for housing and other developments.

All of us have our memories and these memories are precious and unique. We can bring our children to some of these places that mean a lot to us, and they will take on board our perspectives, our stories. But they will also create their own and the cycle continues.

In many ways, today's moments become past memories for our children when they look back in the future. I understand where Mr Charles Chong, Ms Janice Koh and many of you are coming from. As I do the many passionate Singaporeans who champion the Bukit Brown cause or that of their alma mater, or of the various locations around Singapore that hold meaning to them. I do also understand that many of us sometimes wonder if we are changing too fast. What price, development?

We must not forget our past. The issue at hand, as many of you have shared, is about our identity and our sense of what it means to be Singaporean; our sense of what it means to be Singapore. It is about our spirit; it is about our soul. Often, we do not talk about these things enough.

Where does it all start? We know the emotive stories leading up to our Independence and thereafter but our history goes way beyond 1965, beyond the heroic accounts of Lt Adnan during the Second World War and even before Raffles. We all grew up with tales about Sang Nila Utama and his exploits. Real or otherwise, it all makes up part of our history. Our history provides us with a sense of who we are. With the passage of time, stories are interwoven with documents, images captured, virtual constructs, and physical markers that are left behind whether by design or by chance.

Last week, we talked about culture, we talked about art. Those things, together with our stories, define who we are as a people. We are a young nation but that should not discount us from valuing a very rich heritage that all of us share. These memories are anchors to our past even as we look forward to our future. This is why we can proudly call ourselves Singaporeans and not just any global citizen.

When I came to MND, one of the first things I wanted to know was what is being done on this front. Like many, I also wondered, are we developing too fast and are we tearing things down where we should not? It has been an eye-opening and a humbling experience. I would say this quite definitively: my colleagues in URA care a great deal about these things. In our earlier years, our urgent priorities were to develop, to get the economy right so that we could provide jobs for our people and house our people. But we also realised, as pointed out earlier, that if we were not careful, we were beginning to lose some of our precious past.

URA's conservation arm was set up to ensure that we tread carefully. Many areas and buildings were deliberately saved from urban renewal. Today, we have conserved over 7,000 buildings and earmarked our oldest urban areas like Kampong Glam, Little India, Chinatown and Boat Quay for conservation. In fact, we drive past many of these developments every day; we have taken them for granted; and we forget. As Mr Low Thia Khiang pointed out last week, although we talk about heritage and history, sometimes not enough people visit them, and we should encourage more people to visit all these places that have been kept. It is, and I want to emphasise this, not about economics and it is not about development value because if it were, many of these sites would have been long gone in order to maximise plot ratio.

In this vicinity, around Parliament House, you will see the work of URA and other agencies like NHB and Preservation of Monuments Board. This area was first set aside by Raffles in the 1820s as the Administrative District. Today, many of its buildings and civic uses have been retained. The Old Parliament House, just behind us, at its core, is Singapore's oldest building. It is now a venue for arts programming.

The Old City Hall, where the Japanese surrendered and where self-rule was proclaimed, where our parents paid their PUB bills and where couples still go to take their wedding portraits, this will soon be one -half of The National Art Gallery.

I will add that our natural environment is also very much part of our heritage. We declared Bukit Timah and Central Catchment as Nature Reserves; they harbour one of the richest sources of biodiversity in the region. Thanks to the efforts of National Parks Board and stakeholders like the Nature Society of Singapore, we can continue to appreciate our natural heritage and bring people there, such as to some of the treetop walks. The majestic hornbills, for example, which used to be extinct in Singapore, can once again be seen and heard on our island, as we try to bring back some of this wildlife into the city.

There is so much that we should celebrate and be proud of. No one is like us. We are an entire nation squeezed into just over 700 sq km. We need to decide how best to allocate land to live, work and play and, as Mr Laurence Lien commented earlier, to build communities. We have to decide how best to, at the same time preserve our environment, our heritage and our history. Few cities, if any in the world, need to make these choices, because most, if not all, of these cities are part of a much larger country.

Clearly, conservation is but one part of a larger story to celebrate our history and heritage. We should also focus our energies on ways to document our stories and to share them. To be proud of the history and heritage that we already possess. Stories and memories make all the difference.

MICA plays a very important role in this. I fully agree with what Minister Yaacob shared on Friday. MICA's Singapore Memory Project builds on much work already done over the past years and takes it further. It is an exciting and, I think, a very meaningful project where Singaporeans should come on board and act upon it. With advancements in technology, we can now collect and share memories in ways which we could not before. We can weave our heritage together, individual by individual, memory by memory. We need to move fast because with the passing of time, as the older generation passes on, we need to capture those memories.

NHB will continue to create heritage markers, and that remains important, to bring trails to life to educate and to inform Singaporeans. The National Library Board and National Archives will also continue to document and promote our collective stories and memories. There is very much more that we still need to try and capture and to document.

And what about Bukit Brown Cemetery? You will realise that Bukit Brown is part of a much larger fabric that is our history and heritage. I will say this: I believe that Bukit Brown is very rich in heritage value. Many of our forefathers who built this nation, such as Lim Chong Pang, Lim Nee Soon, Chew Boon Lay and Chew Joo Chiat are buried there. Indeed, these names remain familiar to us because parts of Singapore are named after these pioneers. But the legacy of these pioneers does not lie with the tombstones in Bukit Brown. It lies in their works among us. Those things can be celebrated as well.

In fact, this is why the Government had taken such a long time and deferred our development plans for Bukit Brown. Ms Irene Ng asked us not to rush. We have not. The 2-km long road across the cemetery will replace Lornie Road – we are looking at replacing Lornie Road with a stretch that will cut across Bukit Brown. This is part of the Outer Ring Road System. It is not a new thing. This Outer Ring Road System has been around since the British days. What it does is it enables motorists to bypass the city. There is already a traffic jam at Lornie Road during peak hours, and the new road is urgently needed, not simply for future developments but it is needed because housing is also being developed in the northeast and northern part of Singapore. It represents part of that network to allow people to move back and forth; not just people driving but public transport as well.

Ms Faizah Jamal asked if we considered other options. We did. Our efforts to enhance public transport, and manage and optimise traffic flows will continue. However, the road is required for the Outer Ring Road System, so we are left with few options. We considered widening Lornie Road but that would have encroached into the Central Catchment Nature Reserve, and it would also have entailed land acquisition which where we can, we try to minimise and avoid. A viaduct: that was something that we had considered but it would also have had similar impact. For example, road diversion would have been required during the process of building some of these viaducts. Tunnelling – a tunnel would have caused more damage to the cemetery as major tunnels are typically constructed by the cut-and-cover approach, meaning you cut a hole for the tunnel and then you cover over it. Boring – if you were to bore the tunnel, you do not have a bore that is large enough to create this eight-lane road. You would have to create three separate tunnels in order to create that. You would have to go deep but at the ends, again, you would have the cut-and-cover method to provide for the exit points. And that would, again, cause quite substantive damage, more so than a road would. So, the proposed road was decided upon because it had the least impact.

Our planning process also required agencies to evaluate the impact of the proposed road on the environment. PUB and National Parks Board studied the drainage requirements and its impact on the environment before the plan was approved. LTA is also carrying out a biodiversity study to address specific concerns arising from the roadworks. We are exploring ways, and I think it is quite possible, and we will ensure that wildlife can continue to traverse within the Bukit Brown area.

Ms Jamal's concern about drainage is valid. But for Bukit Brown Cemetery itself, development will not be taking place there until about 20 years.

How about the rest of the cemetery, having decided on proceeding with the road? Most of our projected plans for housing will be effected much later. In the near term, the southern part of the area, which largely centres around the old Police Academy, will be developed for public housing. It is an extension of Toa Payoh, which is why the whole area there is significant from the housing perspective. Toa Payoh, in fact, used to be called An Xiang Shan. It used to be a cemetery, as with Tiong Bahru, as with Bishan. These are now homes for many, many Singaporeans. In these places, our children are growing up and forming their new memories of these places themselves.

Plans for Bukit Brown were surfaced many years ago as part of the Concept Plan. And as with all Concept Plans, there was public consultation, getting stakeholders and various groups to share their views. With the surge in interest, I asked for these plans to be re-surfaced, to go through in detail again to see if we had missed anything. Could we have shared better with the public at the earlier stages? I think we could have. Some of these briefings that we have provided to various groups, we could have done them, perhaps, on a much broader basis. But not all plans can be shared beforehand largely due to market sensitivity, especially where land acquisition could take place. And, inevitably, it is our responsibility to make the final call on the trade-offs between competing land needs. I have been corresponding with many who actively champion the Bukit Brown cause. One shared with me that he felt moved when he was brought round the cemetery. I know how he felt. I feel it too, every time I go there to run and to explore the place, to bash through the bushes and stumble upon new tombs that have been overgrown by plants and trees. The earlier exhumations at Tiong Bahru, many years ago, also raised similar community concerns. Recalling the opposition then, the late Mr Lim Kim San had asked a group who came to see him, "Do you want me to look after our dead grandparents or do you want to look after your grandchildren?"

Mr Lim's thoughts still ring true today. How do we preserve the past while we build the future? I will say this: it is a very difficult decision, but it is a decision that we need to make.

Given our development plans, does this mean that the heritage of Bukit Brown and our other historical areas are lost to future generations? I think not. Last week, Mr Laurence Lien and many of you here also shared about the need for empowerment, the need to be able to participate, and I agree. There are areas that we should co-create. And Singaporeans have stepped forward.

Since October last year, the URA and LTA have been funding the documentation of about 5,000 graves which may potentially be affected by the road. Dr Hui Yew Foong championed this initiative and is now leading the effort. He has brought on board Dr Loh Kah Seng, who is helping to capture the stories which are important, and Dr Gan Su-lin, who is exploring how best to record the religious and cultural rites involved with exhumation. I think many of these rites and practices would fade with time if we do not document them. I also want to recognise the work of the many volunteers who stepped forward and put in many hours. I visited them recently and met volunteers, such as Ms Wendy Tan and Mr Chua Seng Huat, who coincidentally are from my constituency; architecture post-grad students like Zhen Ru and Qiao Ling, and champion documenter Mr Seow Kit Chua, who apparently is able to document up to 41 graves in half a day!

There is still actually very much more that we can do together. I am discussing this with some of you out there who care for this part of our history and with our various agencies on the next steps to take and to explore actively what else we can do to retain, capture and promote this story that is Bukit Brown. And this is again, I would say, part of a much, much larger story which is about where we come from and who we are. This is not the end of the road.

In similar fashion, we also formed a consultation group, comprising nature lovers, heritage buffs, cyclists and the like to discuss how best to shape the future of our Rail Corridor. That is also another important part of our history and heritage and our bio-diversity. We have envisioned together that, indeed, a continuous green strip can co-exist and can complement developments along that corridor. Work goes on to define that space together.

Co-creation also extends to other areas like our common space, where we work on how best to take a more compassionate approach towards our cats and dogs and animals. Mr Yeo Guat Kwang spoke about a more responsible pet ownership ecosystem and how we can streamline and update regulations for pets. This is something that we are working on, again, with many of the stakeholders.

Promoting responsible pet ownership is an area where we need to work with the community. I would particularly like to acknowledge many of the animal welfare groups and individuals who have come forward, in particular, the Society for the Prevention of Cruelty to Animals (SPCA), which has shared with us a proposal to enhance animal welfare legislation. And we are working on this, this year.

Mr Chairman, Sir, Singapore's development should not and need not come at the expense of our heritage, our identity and our sense of belonging. We have been able to conserve and preserve much. But we do also need to make hard choices on how our land is used. That is a reality that we face. When we are unable to preserve certain aspects of our heritage, it does not mean that we do not care; it does not mean that we have no regard for who we are. We can and must conserve and celebrate it in the many different ways that are available to us.

This journey in building our nation has to be taken together as we remember our past and we build our futures. There is much that we should take pride in. And there is much common space that we can work together on.

Our Singapore story is a special one. What makes us who we are can be found here, in our heads, and here, in our hearts. And nothing, no development, can take that away from us.

Members, we have some time for clarification.

Mr Chairman, there is a second part to my response which is on construction productivity which does not quite fit into the earlier portion on heritage and history.

Sir, let me now address Dr Teo Ho Pin's questions on construction productivity. Our previous efforts to raise construction productivity have had some positive results. But, as Dr Teo highlighted, productivity improvements have been very slow. It is not good enough. It is a structural problem because of our industry's heavy reliance on workers and especially foreign workers. While we have seen some technology adoption among our construction companies, we can do more. Our annual construction productivity growth still lags behind those in the manufacturing and services sectors. And it is behind those in developed countries.

Building and Construction Authority (BCA) deepened the already close working partnership with industry stakeholders – including developers, architects, engineers, quantity surveyors and contractors – to formulate and launch our Construction Productivity Roadmap in 2011. This Roadmap aims to turn the industry around and to make it into a more productive one.

There are essentially three key thrusts.

First, we put in place a schedule to reduce Man Year Entitlement (MYE) and to raise foreign worker levy, to regulate the supply and demand for foreign workers. While regulating the overall foreigner numbers, we also recognised the need to retain the more experienced ones in the workforce, given their higher productivity.

Second, we set minimum buildability and constructability standards to require adoption of easier-to-construct designs and labour efficient technologies to reduce the industry reliance on labour.

Third, we rolled out incentives to narrow the substitution cost between labour and technology.

In this year's Budget, we have announced further reductions in MYE by an additional 5% with effect from 1 July 2012, and the introduction of a foreign worker levy of $650 for Basic Skilled work permit holders in the new tiered MYE-waiver category from 1 January 2013.

To complement these changes, BCA will step up its outreach to companies to help them restructure processes and increase technology adoption. We will also step up efforts to enhance the quality of our construction workforce.

Our industry partners have given us feedback that experienced foreign construction workers are a plus for productivity. Unlike new workers, the experienced workers are more productive and more familiar with the safety requirements in the construction industry, simply because they have spent time here.

Our companies have also indicated that they have to hire and re-train new workers to replace those Basic Skilled workers who are sent home after working the maximum of six years here, if they are on R2 qualifications. This is not very efficient. Employers are calling for the retention of experience in the construction workforce, especially as the industry presses ahead with the productivity drive. We agree with our industry partners. MND and BCA will work with the Ministry of Manpower on how we can retain experienced workers to support our productivity drive, and to moderate the demand for foreign construction workers over time. And we should be able to make some announcement in a very short time.

Besides experience, we also must continuously upgrade the skills of our construction workforce. Since 2008, BCA has certified more than 10,000 workers to possess specialised skills in 17 key construction trades, through its Construction Registration of Tradesmen Scheme, or CoreTrade in short.

To complement the CoreTrade scheme, BCA will launch a new multi-skilling scheme in July this year, to recognise workers with a breadth of construction expertise under the "Higher Skilled" category. For example, workers with structural steel and welding skills; or, those with drywall and ceiling board installation skills will be classified as such.

The outcome of this new upgrading pathway is clear. With more of such multi-skilled workers who can take on more and varied assignments, companies will have greater flexibility in optimising their manpower deployment on site and, hence, are able to hire fewer workers. Under this scheme, the workers must pass BCA's skill assessments to qualify for lower levy as "Higher Skilled" workers. Employers will, hence, be encouraged to send their workers for training outside of their first skill to boost their productivity.

While upskilling is important, it is also important to encourage the greater use of technology, standardisation and prefabrication. We have already seen some results. Our public housing projects are generally more productive than the industry overall, given the greater use of prefabrication.

By manufacturing building components like walls, floors, toilets off-site, we can eliminate most of the labour-intensive, dirty and cumbersome onsite work, thus also reducing some of the disamenities to the people around the area. Consequently, our construction sites will not only need less manual labour but will become cleaner, tidier and, less noisy.

The Government has committed a sizeable $250 million Construction Productivity and Capability Fund (CPCF) to help companies make the transition to greater productivity. Through the CPCF, we encourage firms to mechanise their operations, re-engineer the processes, to adopt the Building Information Modelling (BIM) approach to better integrate the entire construction value chain, and also upgrade their workforce.

The take-up rate is growing steadily, with more than $40 million committed to more than 1,100 individual firms within the past two years. Sixty-five per cent of the CPCF beneficiaries are smaller firms. We need to pay particular attention to these companies as they represent a large pool that must be plugged into the construction productivity drive, if we are to see productivity gains for the sector as a whole. This year's Budget is committed to extending special help to small and medium-sized enterprises (SMEs), because they will be the group most affected by the need to restructure and operate in a new environment with fewer foreign workers. BCA's Construction Productivity Centre provides customised approaches to help companies get a head-start on their productivity journeys.

In conclusion, Sir, these changes in our construction industry have begun, but will take time for the effects to be felt. We are also fully aware of the pressures faced in these few years of transition as our construction demand remains high. We will work closely with industry to navigate this journey together.

It is clear that we need to transform the industry. In part, we have no choice because going forward the industry can no longer rely on an abundance of cheap foreign labour. We need to move up the productivity chain. Already the construction industry employs 38% of all Work Permit holders. As the Minister of State in the Ministry of Manpower, I have keen interest in this particular concern and am also keen to achieve significant labour savings in the construction industry, in order to bring down the number of foreign workers in Singapore as a whole.

Brigadier-General, I just want to make sure that there is no third part. Yes, Members, you have some time for clarification. Er Dr Lee Bee Wah.

Sir, I would like to ask the Minister whether the Ministry of National Development will review some of the very old rules and regulations or practices that may be obsolete, for example, the one that I cited last week about asking the divorcee to get a letter of confirmation from the ex-husband. I believe this is something that could be obsolete and is causing a lot of pain to the residents.

Sir, we certainly have and we do review policies all the time. Since I stepped into MND, quite a number of rules and policies have been changed and I do not think that is the end of it, and we will continue to press on. Some rules are put in for good reasons. I do not think they are frivolous, for example, the rule on divorcees and the need to get ex-spouses' consent, which I have a lot of sympathy with. Therefore, I also asked why it was so.

Let me try to explain this in simple terms. You have a couple – let us call them A and B. They can own one subsidised flat, if they keep the marriage intact. But if there is a divorce, A or B may then retain or apply for a subsidised flat within five years. So, that was the rule. There was a five-year debarment period. If they want, only one of them may retain or apply for a subsidised flat. The other party can only buy a resale flat; in other words, an unsubsidised flat, which is not an issue. The issue is subsidy.

So, you have a couple, if the marriage remains intact, they have one flat. If they divorce, and if without this rule, they may split the children between them and have two subsidised flats. Then, which couple is better off? To stay married or go for divorce? So, that was the basis behind this policy. It is not a new policy, it is quite old. There were cases in the past where people were gaming. It was very unfortunate; it was an abuse. They were never divorced but just wanted to take advantage of having these two subsidised flats, and they feigned divorce, while remaining married in practice. Their marriage is intact but, in form, seemingly they divorced, and then they opt to buy two flats. This was an old case, and that prompted this policy, but the story did not end there. I recalled reading in either Wanbao or Shin Min a few months back, about a reporter interviewing some sales agents. The sales agents told them that that there were some couples thinking of doing this, that is, they are actually not divorcing but they intend to file a divorce, so that they can have two flats. Their plan is to rent out one flat, while continuing to stay together in another.

So, let us not be naive and think that everybody is honest. The vast majority are, but there are cases of abuse like these. And that is why the policy was put in. Without the time bar, each party who has custody of the child could then apply for a subsidised flat immediately after divorce, thus resulting in two subsidised flats. The time bar ensures that a divorced couple is not treated better off than a married couple. However, the time bar is waived if a divorcee buys a subsidised flat with his or her parents or a new spouse. In other words, the family unit is different from the original one.

As I said, it was introduced in response to some abuses. I must say it is not a common occurrence but it is not uncommon either. It is not a common occurrence, perhaps, because of the rule. Because without this rule, it may then become common, which is what we are trying to avoid. As only A or B is allowed to have one subsidised flat, we need the other party's consent to give up the right during this five-year debarment period. Because we are in no position to decide whether A or B is more deserving of a subsidised flat, in the case where the kids are split between them.

But as I heard from you and my own experience at MPS, the rules have, , created problems for many genuine divorcees. Therefore, what I have told HDB is to be sympathetic to genuine divorcees. They turn back to me to say, how do I know whether it is genuine? I said, well, we have to try to ascertain. Therefore, we need to probe. That is why it has to be on a case-by-case basis. However, over the weekend , as I thought through what had been raised by Er Dr Lee Bee Wah, and after many e-mails with my staff, I told them, let us do this: if A and B divorced, and A has custody of all the children who are young – let us say the settlement between the two is that one of them has full custody of all the young children − then in cases like this, we shall, henceforth, immediately waive the time bar for A without the need to seek consent from B. But the time bar must continue to apply to B who has no kids in custody. In this way, we put the interest of the young kids uppermost. In addition, given the MPs' feedback, I will also review whether the time bar of five years is a little bit too long. I think to waive it, or to make it zero, is unwise. But I want to mull over this one – whether five years is too long − and we will try to balance between deterrence against abuse and minimising hardship on divorcees.

May I seek some clarification from Minister of State Lee Yi Shyan concerning my cut on Lift Upgrading Programme? The nub of my cut is actually to ask why Town Councils are paying HDB for older lifts that are being shut down under the name of overhaul cost. I have four clarifications in relation to this.

First, does Minister of State Lee agree that to use the term "overhaul" to describe a lift that is shut down is actually not in keeping with the meaning of the word "overhaul"? The second clarification is on HDB's definition of lift upgrading cost, which is a net of the actual lift upgrading cost minus away Town Council's contribution towards the overhaul cost. Does this actually mean that the Town Council is subsidising the cost of the LUP, in particular the Government's portion of the LUP? The third clarification: I agree with Minister of State Lee that cyclical works such as lift overhaul are part and parcel of Town Council's work and, of course, Town Councils do accumulate sinking funds for that. But does he also not agree that if Town Councils were to do these cyclical works on our own, we could determine the timing and also the costing of the works? And we note that HDB's costing is rather higher compared to our own estimates. The fourth clarification: two years ago, during the COS of MND 2010, it was announced that HDB would provide one-off LUP assistance to Town Councils. If we looked at the debate there, there was a recognition by MND that LUP does cause a strain on Town Councils when it comes to sinking fund usage; in other words, more than above the cyclical funds that Town Council accumulates. As usual, LUP does cause a burden, so that is why the LUP Assistance (LUPA) was provided.

We have looked at some of the LUPA provided by some of our clusters for LUP and we find that in a particular cluster − if I can just give an example of, say, about 11 flats which are largely 3- to 4-room flats − the Town Council's share of the LUP cost is supposed to be about 7%. But including the overhaul cost which we have to pay, it becomes about 16%. Despite the LUPA being provided of half a million dollars, we are still paying about 12%, which is much higher than the roughly 7% we are supposed to pay. In light of this, would the Government at least consider looking at the LUP Assistance amounts?

Sir, I want to thank Ms Sylvia Lim for her clarifications. I also want to commend her for knowing the mathematics very well. Sir, if you want to take a step back on the LUP programme, this is a programme that was added on in year 2001, to give access to all the residents in different floors. We know back in the older days when HDB flats were first built, there were lift landings, and residents actually shied away from those units because it meant noise and loss of privacy, and so on. So actually, people wanted to stay away from lift landings. Anyway, fast forward, decades later, we find that people are requiring that facility, especially when they are getting older, and there is no question about the need. So, the LUP programme comes in and, as I have mentioned, this is a $5.5 billion programme over a period of 15 years or so. As you can imagine, when this programme was introduced, the estates are at different ages. Some were maybe 15 years old; some may be 20 years old; and some may be very near the lift replacement cycle which is 28 years. As part of the discipline of the Town Councils, and I mean all Town Councils, they always set aside a portion of their S&CC charges into a sinking fund. And one of the biggest items of the sinking fund usage is actually for lift replacement. So, at the 28th year, if you have been saving regularly, conscientiously, you would be able to have, say, $100,000 to replace each of the lifts that is "retiring".

Since LUP was introduced halfway, some of the lifts may be 20 years old, some may be 22, 25 years. What the Government is saying is that for this portion of the money that they have saved up, "Don't worry, you know, we know you haven't saved for the 28 but you saved for the 22, that is fine. We give you a new lift, and you pay for the 22 years and the new lift will start from there." I think this is fair because this is something that the Town Councils have been anticipating to spend on. So, it is fair to draw down this amount from the Town Council's sinking fund.

Likewise, the formula will apply to other lifts of different ages. However, the costs associated with replacing the lift is not just the lift carriage or the lift car. In most cases where we need to build new lift shafts, across the slab block, let us say, there will be costs incurred in the building of lift shafts, diverting the service lines below the lift shafts, putting in power and so on. These are additional costs that the programme will bear. Also, using analogy A and B, so A, Town Councils will pay for a portion of the lift costs, X over 28 and then for the other component of the costs, let us say, call it B, HDB will pay up to 90%. When it was introduced in 2001, many Town Councils said, "If we charge 10% to the residents, maybe it is too high. Town Councils will be happy to chip in the 5%." That is why we have the formula – 90% by HDB; 5% from Town Councils; 5% from residents on the component B. A and B together, we are able to roll out this programme quite successfully and we expect to complete by 2014.

There is no doubt that the drawdown for lift replacements will be the highest item in the cyclical work of the Town Councils because the other cyclical works, such as painting, water tanks and so on, will occur in shorter intervals but the cost is much lower. Therefore, I think, going forward, it will be prudent for Town Councils to review what will be needed in another 28 years' time and then to adjust S&CC charges accordingly.

Sir, I am happy that the Minister mentioned that MND is helping Singaporeans who are in distress with regards to their housing matters. I am also hopeful that he mentioned that he is mulling over the issue of how to help singles to own flats. He mentioned that singles attaining the age of 21 can form a family nucleus with their parents. However, if you look at the environment today, I feel that even at the age of 21 or even late 20s or early 20s, one is not sure whether one is going to be single. Sir, I am very concerned, especially, for older singles who would like to form a family nucleus with their parents. However, their parents are constrained with the fact that they already got the maximum number of times of grants or subsidy. So, I hope Minister will exercise his discretion and be sympathetic and compassionate to this group of Singaporeans, especially singles with parents who are in distress.

Mr Chairman, as Members know, sympathy and compassion, we have plenty. The difficulty is how to apply them sensibly so that they do not get abused. And that is why we have no choice but to review case by case. And as I said on Friday, I also need Members' help. As Members of Parliament, you are closer to your ground and you would know your residents better than bureaucrats would. In our evaluation, we do take into account what is your own assessment. If you are discerning, you will find that we can be more responsive. But if you simply pass on what you heard and push it all to us without any due process, then we just have to evaluate it as how a bureaucrat normally would.

Sir, I would like to ask the Minister for his view on the negative reaction by some segments of the population towards the studio apartments for the elderly, for example, in Toh Yi Drive. Just today, we heard that the Toh Yi Drive residents have selected another location for the apartments but the residents of that other location also feel that it is not appropriate and also are rejecting that option. Can I ask the Minister whether MND should take a firmer stand on this issue because the elderly is a group to be treasured and valued, and not to be treated like a leper colony to be shunned?

Can I also ask the Minister to spell out clearly what is the process in place to select locations so that residents, when they object, cannot use the argument that it is not an ideal location to reject the idea?

My other question is a related one but it is to the Minister of State. It is about honouring the past and the older generations before us. Sir, I understand that hard decisions have to be made and that the Minister of State has done a lot to engage the civic groups and to document the significance of the graves. But there must be a distinction made between documenting graves and putting it in the CD or online, and a physical marker where people can go and appreciate the engravings, the stories that tombs tell. For example, the Ong Sam Leong grave has engravings to do with filial piety and this kind of value can be passed down to future generations not only through stories or CDs, but through a physical focal point for the story, and how we ourselves are honouring the graves of those who have contributed to Singapore. Can I ask the Minister of State whether it is possible for him to consider preserving some of tombs that have significance to the country and which can help us to remember the past and honour it?

Before the Minister answers, can I just remind Members that this is a time for clarifications and not a time for speeches. Some of the clarifications are as long as the answers from Ministers.

Yes. Mr Chairman, I will try to prove your point by giving a short reply. Indeed, we must be firm with the policy of helping the seniors and that is why I stress the ancient Confucian saying in my earlier speech. That ethos of helping seniors to age with peace of mind underpins my policy and I hope Singaporeans, in general, would embrace that, too. We will all grow old one day, so let us try to put ourselves in the seniors' shoes. And where facilities are needed, let us try to think about whether that option should not be exercised so as to help our seniors age with peace of mind. But the process is important and, therefore, the engagement is important. We will continue that process of talking but, at the end of the day, a decision will have to be made and if, indeed, that is the best option for the seniors, then we will press on.

Mr Chairman, physical markers are utterly important. In fact, in my discussions with the advisory group and the various stakeholders involved over Bukit Brown, there are different ways that we can try to preserve, whether tombstones, carvings, tiles, apart from just documentation alone. There are really three parts. I mean, one, documentation of the physical graves by marking it through GPS and so on. That is important. The other one is in terms of capturing the stories, which as the Member mentioned, are the carvings, the inscriptions placed there. And another part, which is also very important, is capturing the rituals that will take place with exhumation.

I would like to emphasise that a large part of Bukit Brown Cemetery would actually be remaining as it is for the next two decades or so, because the bulk of the development in the immediate future will take place in the south, the old Police Academy area. Apart from the road, the rest of the Bukit Brown Cemetery will remain. We will work closely with the interest groups in terms of how we think we could possibly preserve some of these things and that is quite possible.

Mr Chairman, I thank the Minister for adjusting the policy to allow those who exceed the $1,500 salary threshold to still rent flats from HDB but at higher rental rate. I believe this will help many families in difficult housing circumstances. I have three questions. Will requests under this new policy be more easily approved than previously, or will they still have to go through the trouble of appealing through their Members of Parliament? Secondly, can this be extended to families who are ineligible for rental flats due to other factors like the 30-month debarment period or having working children whom they are estranged from? Thirdly, what are the rental rates under this new policy?

Mr Chairman, because the cases are usually unique, it is very hard to generalise. Of course, they will have to appeal. They can appeal directly to the HDB, as most do, or sometimes they do double barrel. They go straight to the Member in parallel. Either way, whether it comes from the Member or from the HDB branch office, we will look at each case. Last year, just as an example, we approved more than 100 families whose income exceeded the $1,500 ceiling. I expect the numbers to grow for this year and in the future.

If the 30-month debarment should affect some families, then you have to look at the individual case. If we deviate from the rule, we have to find a reason for doing so. I have expressed the principle last Friday that for victims of misfortune, like a sudden death of a breadwinner, our default position is to try to say yes. Try to find a reason to say yes, so long as the spirit of the policy is not flouted.

What is rental rate? Rental rate will depend on their salary. If he is earning, let us say, $2,500 versus another one with $2,000, there must be a difference in their rentals. For those earning below $1,500, for example, rental for a 1-room flat is $30 and $110 for 2-room flat, or thereabout. For those, earning about $2,000, we are charging something like $200 plus. It is still heavily subsidised. But I think there must be a difference for those who are earning below $1,500.

Dr Teo Ho Pin, last clarification, please.

Sir, I wish to ask the Minister of State whether the Ministry would consider setting up a construction productivity committee comprising various Government agencies and stakeholders of the industry to better coordinate and spur the improvement of productivity in the industry.

Mr Chairman, we are already working very closely with the industries. There are already committees looking at not just the construction industry, but we are also very much interested in productivity across the various sectors. Whether there is a need for a committee looking specifically at construction, we believe that the on-going committees that we have with the stakeholders would suffice for the moment.

Er Dr Lee Bee Wah, can I invite you to withdraw your cut?

Chairman, Sir, I am very glad that we are working with a very compassionate Minister and a poetic one as well. I am sure he heard all of us and I am sure he will try his best to help every deserving Singaporean. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $1,008,915,900 for Head T ordered to stand part of the Main Estimates.

The sum of $5,327,192,500 for Head T ordered to stand part of the Development Estimates.

Sir, I beg to move,

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

Sir, over the last week of COS, many Members have spoken about the plight of our older and lower income workers. It is easy to think that some workers are stuck in low-paying jobs because they are not productive.

It is even easier to hold this view of our older, less educated workers, given that we live in a world of ever-changing IT innovations, and new means of communications that have increased the pace of work. These are convenient but ultimately dishonest stereotypes that I disagree with. My experience on the ground, Sir, tells me that a large segment of our workforce is, in fact, under-employed, and is stuck in low-skilled jobs because of a lack of higher prospects and real opportunities for upgrading.

This situation is particularly ironic, given that we have scarce human resources in Singapore, and have to turn to foreign labour to supplement our workforce at various levels. Sir, we must ask ourselves two hard questions – firstly, whether we have done enough to truly maximise the potential of all our workers, and secondly, whether there are higher value jobs they could be doing, which are being done by others.

I wish to ask the Ministry of Manpower (MOM) if it has sufficiently studied the systemic barriers facing older and lower skilled workers, in their efforts to upgrade themselves. Could the Ministry share its plans to help the older and less skilled workers to climb up the productivity ladder and whether there are better jobs awaiting our workers at the end of the long tunnel of upgrading? What steps are being taken to encourage our companies to achieve a minimum standard of competency among its workforce, so that they can be more productive? Similarly, what steps are being taken to help our school leavers who are going to be our future workers to become knowledge workers, so they can take up jobs that are today being filled by foreign talents?

Sir, it is understandable that new MNCs or companies that come to invest in Singapore may require to be kicked off by foreign talent who are more familiar with the operations and organisational requirements. However, Sir, once they have been operating here for some time, we should have a system to ensure that over time, the core of every company must have a good representation of Singaporeans, especially in the key posts in management and operations.

With this suggestion, I am certainly not advocating job protectionism, and saying that Singaporeans must be given these roles even if they are not suitably qualified. I am not saying that. I believe, instead, that it is possible to have proper measures and policies that can identify areas where Singaporeans can lead, where they can be consciously developed to match or even surpass the talent that foreigners bring with them. At the same time, we must ensure that companies are incentivised to transfer knowledge and skills to our local workers, so that our dependence on foreign talent is lowered even in the future. In this way, also, our local workers will get the good promotion and the career advancement prospects they deserve, and be more motivated to pursue upgrading to move up the employment value chain.

To support this initiative, I hope that MOM will consider and study how to develop a steady stream of highly productive, innovative and creative workers in Singapore, and at the same time also the jobs to absorb them.

Sir, finally, I would like MOM to also look at the retirement savings for our workers. Is the Ministry taking steps to improve the rate of return on CPF savings so that workers can grow their retirement savings, and are there also other measures to increase the living standards of workers once they stop working and earning an income? What are the ways are we going to look at to tap the potential of our older workers because Singaporeans are now living longer? This is an increasingly urgent issue given our increasing life-expectancy and, at the same time, the cost of living in Singapore.

Sir, this is a tale I hear often and it is always a disheartening one. Elderly folks who have very little cash savings and low CPF balances – it is a situation that makes every day a struggle; too old or sickly to work and without family support for one reason or another. Some of them live hand-to-mouth. For the lucky ones, they have a home at least and can be assured of a shelter over their heads; however, there are others who are not so well off.

One elderly lady in her 70s shared that she and her husband have no children and only have some savings but not enough to afford a rental flat in Singapore. Sometimes, they rent a room in Johor Baru or when living in Singapore, stay a few nights with friends for a while before moving on to the next house. Without sufficient retirement savings, they have to rely on the kindness of relatives and friends. Although some relatives have offered to take them in, this is not something they feel that they can burden their relatives with.

Can MOM give us a clearer and fuller picture of the state of retirement adequacy of our older Singaporeans? Has the CPF system provided good enough returns thus far to preserve the value of its savings? The Silver Housing Bonus that we have announced is a good scheme that can help some of these older Singaporeans unload the wealth stored in their homes for their retirement. Will this scheme make a sufficient impact on the retirement adequacy of our Singaporeans? Would our elderly have enough Medisave to cope with their medical expenses? Lastly, what is MOM's evaluation on the CPF LIFE scheme and how effective it has been? Will MOM further enhance it? Sir, allow me to continue in Mandarin.

(In Mandarin): [Please refer to Pg 1984 for Vernacular Speeches.] Sir, "to take care of the aged folks of other people as we take care of our own" is a traditional Confucius ethical ideal. However, the reality that we face today, is that many elderly Singaporeans no longer pin their hopes on their children to take care of them when they are old. Hence, to a large extent, both the Government and the people must work together to try their best to help our old folks stay healthy, stay employed, and work for as long as they wish to. Furthermore, we must ensure that they have enough savings and CPF funds to retire comfortably. We must continually adjust and enhance our plans that cater to the elderly, so that our old folks will have enough support as they age.

Sir, older women in Singapore is a vulnerable group that needs more of our attention. Income security is a key concern for them. The economic development of Singapore was achieved in an incredibly short time – it means that older women today are less likely than their counterparts in the developed world to have gone to university. This has implications for their late-life employment.

Women are often the caregivers, not just of infants, but also of the elderly and the sick. Sometimes they are forced by circumstances to stop work in formal employment to devote themselves entirely to care-giving. Our retirement policies for this group of women seem to imply they are to depend on their husbands and children to support them in old age. But if they are unmarried, widowed, or have no children, there will be no one to care for them. Furthermore, women have longer life expectancies than men. That is why in my speech at the Budget debate, I proposed the idea of pension credits in Singapore as an example of an instrument that may be more effective in protecting older women financially compared to labour market policies.

In countries like Sweden and Germany, pension credits or care-giver credits may be earned during time taken off from work for maternity leave or for the care of the elderly and the sick. These would be used to help women qualify for full pension and retirement benefits. There are various formulae to work out the exact benefits, but they usually take the woman's last drawn salary and compute a supplement based on it for their pension accounts. In Singapore, we may not want to adopt the idea of pension credits for women care-givers on a full scale. But currently no semblance of such scheme exists at all, and this is not sustainable. Otherwise, it is a contradiction that the Government encourages women to have more babies, but also expect them to remain in the workforce.

Other issues affecting older women also affect retirees in general, including men. Again, when compared to our counterparts in the developed world, the raising of our official retirement age has taken place at a faster pace.

The CPF should offer higher contribution rates and interest rates at an earlier age, so that the effect of interest rates compounding will have a much larger impact on the individual retirement fund. If the concern is to better prepare Singaporeans for retirement, increasing CPF contribution when one reaches 50 may be too late. If the aim is to increase contribution at all, the earlier the better. Increasing CPF contribution only at the age of 50 makes little policy or financial sense, especially at a time of their life when their salaries may actually start to dip. This leaves the older workers with less disposable income, at a vulnerable point of their lives in terms of health and for other potential costs.

Also, I am worried that low-income elderly workers will become less attractive to employers, who may then prefer to hire foreign workers for the same job, since that would not require them to make a single cent of CPF contribution.

The move by the Government to curb the country's reliance on foreign labour represents a continuation of a long-term policy. With an eye towards ensuring sustainable growth and productivity improvements in the decades to come, this move is certainly a step in the right direction. At the same time, the decision to raise CPF rates for older workers, with the ultimate aim of bringing it in line with that of younger employees, was also announced. This will hopefully make older workers more employable and lure more of them back to the workforce.

Both these initiatives are clearly aimed at strengthening our economic infrastructure with an eye to long-term growth, while maintaining a balance within the social compact and ensuring that concerns of citizens are met, and our society remains an inclusive one.

As many Members have already shared, the initial response to the measures has largely been positive, but concerns have been raised, especially from small and medium-sized enterprises (SMEs). There is worry that the two measures, coming at the same time, could leave such companies already grappling with their dangerously tight labour market unable to meet their resource needs.

The move to cut the ratio of foreigners that firms can hire comes as part of a series of efforts that kicked off in 2010, when a schedule of foreign worker levy hikes was introduced. And stricter criteria for employment pass and S-pass issuance also took effect earlier this year. It is worth noting that despite the higher levies, the foreign workforce has grown 7.5% annually over the last two years. It is no surprise then that companies have expressed dismay and fears that they simply may not be able to find enough people to do the work with the new measures implemented. This is especially the case in labour-intensive sectors such as retail, food and beverage, and logistics. And the hard truth may be that such short-term pain is a necessary tough decision that must be made as Singapore restructures for the long haul.

The Finance Minister has provided assurance that help will be provided to SMEs to enable them to adjust, especially those that are willing to improve productivity, design better jobs to attract local workers and innovate in order to grow. The issue for industries such as the services sector has always been that it is hard to attract and recruit local workers for such jobs, resulting in lower productivity compared to other sectors.

Now, on top of broader measures to help smaller firms, the Budget also includes a Special Employment Credit (SEC) of up to 8% of a worker's wage when they hire Singaporeans over 50 years of age. Some observers have said that this may provide a boost to firms looking to tap on the latent pool of local manpower that includes homemakers and early retirees. However, employers may be forced to offer higher wages to entice these homemakers and retirees back into the workforce, thereby outweighing the benefits of the SEC.

With our greying population, it only makes sense to put in place measures to optimise our elder workforce and to help companies take advantage of it. It also shows the priorities of the nation to take care of our elders in the wide range of measures introduced in the Budget, on top of the higher CPF and SEC incentives being offered to firms.

That being said, it will be necessary for caution to be exercised when we cut the traditional reliance on foreign labour, and to allow productivity enhancing measures to kick in to avoid undue tightness of skilled labour. We may have to expect a gap in the number of jobs phased out due to the reduction in foreign labour ratios, and the number of Singaporeans willing to take up such jobs in the next few years.

For industries such as the labour intensive manufacturing sector, where shift work, extended working hours and rigorous physical activity are the norm, it might not even be possible to tap into the target homemakers and early retirees pool of workers.

The calibration of future measures to achieve the goal of reducing dependency on foreigners while ensuring that our elder population are able to be financially secure and can find fulfilment in employment will depend on the equilibrium our labour force achieves following the measures introduced in Budget 2012.

The Chairman: Mr Seng Han Thong, please take both your cuts together.

Yes, Mr Chairman. According to the statistics dated 2010, only 40% of active CPF members turning 55 years old in 2010 met the Minimum Sum of $123,000; 60% of members could not meet the target.

This scheme has been in place since 2003. It was set at $80,000, with increase of $4,000 per year to $120,000 (in 2003 dollars) by next year. The Minimum Sum has been increased to $131,000 since July 2011 to account for inflation. The questions asked are: who are the 60% who cannot meet the target? Why set the target where more than half cannot make it after nine years of implementation?

It is observed that with the allocation of higher percentage to Medisave and many members have higher outstanding housing loan payment, the number of CPF members who cannot meet the Minimum Sum will increase. Many mature workers who are in the middle and lower income groups also feedback that while they have contributed to their CPF, they have to cough out quite a big proportion of cash from their monthly salary to service their housing loan as they do not have enough savings in their Ordinary Account. The long-term plan for these groups of workers to save more for their retirement needs has resulted in the short term "money not enough" issue for them.

Sir, with the introduction of CPF LIFE, which is mandatory for all with at least $40,000 in CPF savings, may I propose that the Government review the principle and basis for setting the Minimum Sum especially for the lower income workers.

Sir, CPF LIFE came into life after the Government accepted the five recommendations by the National Committee on Longevity Insurance in 2008. CPF LIFE was offered to older Singaporeans in 2009 to provide lifelong income for our elderly in their retirement. As it is a new scheme and is an improvement over the Minimum Sum scheme, many members are not clear of the difference between the two schemes.

May I ask Minister about the lessons learnt from CPF LIFE and the achievements and impact of the scheme? With more than 70,000 members signing up for CPF LIFE, may I know which kind of LIFE is most preferred – LIFE Plus, LIFE Balanced, LIFE Basic or LIFE Income? In fact, many commented that the four LIFEs are "same, same" but different. But the differences are not much different. Thus, may I ask the Minister whether MOM will finetune members' LIFE? As CPF LIFE will be implemented for all members turning 55 next year, it is good that MOM review the scheme at this juncture and make it a Better LIFE!

Mr Chairman, Sir, it is heartening that the Deputy Prime Minister and Manpower Minister Tharman Shanmugaratnam is committed to "treading a balanced path in our manpower policies". I believe that for Singapore's economy to continue to thrive, we must indeed remain welcoming to businesses and talent from abroad, in order to create and sustain good jobs for our local populace. At the same time, this must be balanced out by policies which guard against an over-reliance on foreigners. To this end, the Ministry has assured Singaporeans that it will seek to keep the overall share of foreigners in the workforce at no higher than one-third over the long term.

I would like to ask the Ministry what measures are being put in place to increase the productivity of Singaporeans, even as we seek to reduce reliance on foreigners in the workforce. First, how is Singapore's national productivity data obtained and is it possible to distinguish foreign workforce productivity from that of the local workforce productivity, so as to enable us to craft more targeted policies to tackle the productivity issue head-on? What are the concrete plans the Ministry has in place to enhance the skills, capabilities and productivity of each worker, so that we can provide more complex and customised services which would ultimately translate into higher profits for the industries and higher wages for our Singaporeans? Therefore, the question is, how do we differentiate between our local workforce productivity and the foreign workforce productivity? If, indeed, our local workforce productivity is already very good, then we should do less for those industries or any other intervention measures for that matter. Besides higher foreign worker levies and tighter quotas on employment of foreign workers, can more be done to help companies shoulder higher-wage costs so that more locals can be hired? And can incentives be offered, for example, to encourage more housewives and retirees to do part-time work?

Sir, like many advanced economies, Singapore faces the twin challenges of an ageing and shrinking workforce. Our businesses need to reduce their reliance on foreign labour amidst a tight labour market. It is even more urgent now to maximise our manpower and resources more efficiently and effectively. Job redesign, capital productivity, automation and process improvements are some of the ways that the Government is already helping companies to improve their operational efficiency. Job redesign can certainly keep our workforce flexible, nimble and responsive, especially in a time of rapid changes in the global economy and Singapore's demography. Our demographic profile suggests that more of our workforce will want to work flexibly moving forward. This is especially so for older workers, retirees or those who will be retiring. Flexibility and job redesign are also important factors to women who are thinking of re-entering the workforce as well as mothers with young children.

To this end, I hope MOM can nurture a healthy, skills ecosystem with job redesign for better skill deployment − an ecosystem of healthy networks and support between policymakers, businesses, tertiary tuitions, trade and industry associations as well as community groups, such as Active Agers and women's interest groups. The Government can also take a proactive approach as an aggregator as well as an educator in harnessing the latent pool of manpower and talents, as well as levelling up their skills. The environment and spirit of cooperation will provide more accurate information on skills demand and supply between the stakeholders and facilitate a better matching for redesign and deployment of manpower and resources.

There are certainly strong reasons for the Government to play an even more active role. The potential benefits are: (1) better alignment with economic restructuring; ( 2) support for workers and employers; (3) more efficient distribution of manpower resources; (4) ability to support job redesign through policies and interventions where needed; and finally, closer alignment with the institutes of higher learning. Today's jobs are being challenged by tomorrow's demand – all too quickly. If we can collectively maximise our manpower though job redesign across industries and sectors, we have a chance to recreate value, increase productivity, provide long-term employability and future-proof our workers for the better.

Sir, currently the dependency ratio ceiling for foreign manpower is based on broad industry sectors. It will be helpful to further finetune the sectors based on specific industries to better ascertain and calibrate the need for foreign manpower vis-a-vis Singaporeans in specific industries. In industries where Singaporeans can be trained to take up the jobs, there is room for the dependency ratios to be further tightened. In industries where attracting Singaporeans poses a challenge due to the nature of the work and working conditions, the dependency ratio can be relaxed. MOM may also want to consider a step further by looking at the work scope of jobs within the specific industry to determine whether more can be done to allow Singaporean workers to reclaim specific jobs.

I believe that a targeted approach is needed to achieve the objective of increasing the wages of lower income workers through productivity while minimising the possible fallout of the SME because: (a) the range of SME businesses and industries is complex and a macro policy instrument will not be effective in helping the industries restructure; (b) an abrupt forced transformation of certain industries, such as the cleaning and construction industries, could result in a rapid rise in costs and eventually end up with the consumers paying higher prices; and (c) some industries may also result in a monopoly by a few companies that will dominate the market, as others may not be able to cope with the required change.

Yes, a targeted approach will be a more cumbersome process and will require more resources. However, this will show that the Government cares to look into the problem and concerns of the SMEs and is prepared to help solve the problem and minimise the pain and suffering of a restructuring process. I believe that the outcome will be more satisfying.

Mr Chairman, our manpower policies must help Singaporeans raise their skills and expertise, secure the best jobs and support increases in their incomes. Over the past week, Members of this House have discussed measures to curb the growth of lower wage foreign workforce under the work permit scheme. However, there remain significant concerns on the ground about whether or not the same is being done for higher level jobs, mainly those professionals, managers and executives. This is a significant group that makes up more than half of our workforce. Singaporeans want and aspire to do these jobs. However, it is worrying to observe the rapid increase in foreign professionals who hold Employment Passes − a growth of 24% over the last two years – the fastest growing category of foreigners.

Government has tightened the qualifying salary levels as well as education qualifications for Employment Pass holders. Whilst we wait to see the impact of these changes, can we do more? Sir, there is absolutely no doubt that Singapore needs to remain open to international talent in order to be globally competitive. We recognise that Singapore is home to corporations that operate at world class standards and, therefore, we need to ensure their ranks are staffed with the best talent from around the world.

The question is, how can we ensure Singaporeans with the right skills are being considered first for the best jobs and where there are gaps, employers take determined steps to develop Singaporeans for these jobs? Our current system relies too much on the conscience of companies to adopt fair and responsible employment and staff development practices. The reality is that business is all about pragmatism. Given a choice, companies will turn towards the most convenient and cheapest option to fulfil their objectives. As long as there is an easily accessible pool of foreigners to tap into, there is less impetus to seek out Singaporeans to fill the best jobs.

The concern is amplified by global trends that have shifted growth drivers from the West to the East. Whereas in the past, competition for jobs had primarily come from the lower cost Asian countries, Singaporean executives now encounter competition from even the developed but job-scarce nations of the West. Given our country's strong proposition as one of the world's most liveable cities, and also our attractive position as the hub of the vibrant Asia, we have become a magnet for the talent from all over the world competing for a limited number of quality jobs.

Sir, I would like to ask the Minister to consider strengthening our Employment Pass system so that we ensure that Singaporeans have the first consideration for the best job: first, EP approvals be subject to employers showing clear evidence of efforts to employ Singaporeans first before having to resort to hiring foreigners; and second, even when employers demonstrate they are not able to find Singaporeans with the relevant skills, they are obliged to put in place a plan to invest in the training and development of Singaporeans to fill these jobs.

Many other countries that welcome foreigners as a supplement to their local workforce already have such measures in place. This allows corporations to employ the best international talent without adversely impacting the job prospects of local professionals. At the same time, there is impetus to continuously develop local talent to world-class standards. From the standpoint of security, such a systematic manpower plan will also protect strategic industries and guard against vulnerability from over-reliance on foreigners in selected sectors.

Sir, we cannot leave to the employers' sense of corporate citizenship to ensure they undertake fair and responsible employment and staff development practices. Companies need to be given a clear directive. Their human resources planning must be obliged to adopt a "Singaporeans First" policy to place locals at the core of their workforce.

Mr Chairman, Sir, the Government understands the need to manage the inflow of foreign manpower more stringently, both to achieve a better social balance as well as to spur productivity and stem the trend of an ever-increasing reliance on foreign manpower as we strengthen and build up the Singapore core. Sir, in the case of work permits and S Passes, this is done through a system of dependency ceilings. But in the case of the Employment Pass category, there is no dependency ceiling. There are qualifying salaries and there are educational requirements but no dependency ceiling.

With the growing sophistication of the Singapore economy, and with tighter controls at the S Pass level, would there be pressure for more Employment Passes to be issued? Have the numbers, over the past year or so, been indicative of this? And as there is no dependency ceiling, would it lead to a scenario of surging numbers of EPs being issued in boom times and a less than proportionate reduction in bad times, as would automatically be the case with work permits and S Passes because of the presence of dependency ceilings? How would the MOM then balance between the legitimate needs of business for talent, both local and foreign, and the need to also ensure a Singapore core at the levels comparable to Employment Pass qualifications?

Sir, the further tightening to reduce our economy's dependence on foreign workers is a necessary step in the right direction. However, I would like to ask the Minister for Manpower to do more, by refining the Ministry's current segmentation of industries in coming up with foreign manpower policies including Dependency Ratio Ceilings (DRCs). This does not divert us from our specified goals of reducing our overall foreign manpower dependence and raising productivity. Because given an overall target and roadmap, the idea is to make it possible for foreign manpower policies to be less stringent for some industries than for others, not for them to be less stringent than the status quo. Such refinement will allow the Government to gradually implement additional measures for industries where there is room for tightening. It will allow more targeted measures to help us more effectively meet our set goals by taking into account the different realities faced by our businesses in the different industries such as their prospects for further productivity gains and the different ways foreign workers complement Singapore workers.

The Minister mentioned that it will be quite inequitable if a large firm that undertakes both the high and low end segments in the aerospace industry is entitled to a higher foreign worker quota, while a small firm that is competing with it at the high end is forced to operate within the more stringent quota. But regrettably, inequity also results when you apply the same requirements to two firms that may be differently situated. As the Minister pointed out, there are differences between industries and even among companies in the same broad industry. The question is, practically, can something be done to take them into account? Practically, how are the differences between these two firms addressed, when, for example, the Government works with Singaporean companies to set different productivity targets and roadmaps for different industry sectors? It seems to me that we would have a more effective and targeted and equitable approach if companies and industries with different characteristics with different productivity targets and roadmaps, for example, need not all face the same DRC when it comes to their foreign manpower requirements.

Sir, recently I was travelling in a taxi and the taxi driver shared with me that he used to work as a container truck driver, earning some $4,000 a month for some 13 years. He was happy with his job but, sadly, his pay was gradually reduced to $2,000-plus. And due to competition from foreign truck drivers, he eventually lost his job and became a taxi driver. This Budget announcement to reduce our dependence on foreign labour is welcomed by many Singaporeans. Mr Chairman, Sir, I wish you were there to witness the glow and the smile on his face when this taxi driver shared with me that he was looking forward to returning to his previous job as a container truck driver, which he enjoyed doing very much.

I would like to join this taxi driver to applaud the Government for restoring the hope and confidence of many Singaporeans by putting in place a calibrated approach of reduction in the DRCs and S Passes. While I understand the pain and the difficult transition that the companies have to go through, we also understand that it is absolutely necessary. Rather than to prolong the pain, I think it is wise to act on it now and not only to do it now, but to do it well. I am glad that the Ministry has now put in place a more stringent set of criteria to keep pace with improving salaries of our Singaporean workers and PMEs and this helps to ensure our local workers will not be unfairly undermined. I noted that the real wage increase has been low over the past years. I would like to ask the Ministry what are our plans to encourage companies to tap on the incentive schemes to upgrade their businesses and processes, so that our workers can have a fair share in this productivity gain.

I would also like to urge the Government to close all loopholes to ensure that employment and development opportunities will be given to our Singaporeans and this should not be compromised. My concern is whether this change of policy can be effectively implemented, bearing in mind that there will be employers who will always try to circumvent the restrictions. I would also like to ask the Minister how enforcement measures will be stepped up to ensure compliance with this new requirement. Further, could the Minister elaborate on how the MOM intends to monitor employers to ensure that they provide more employment opportunities and to develop Singaporeans to fill up these job vacancies?

Mr Chairman, the Finance Minister has explained that the timing of the new measures to curb foreign labour is deliberate, given that we are now facing a slow growth year, which presents an opportunity to lower the dependency ratio ceilings while companies are ostensibly not facing a demand crunch.

It is heartening to hear from the Minister as well in his wrap-up of the Budget Debate that no effort will be spared to help SMEs to upgrade and increase productivity, and that the foreign labour curbs will be implemented in a calibrated and measured way. Greater flexibility has also been promised to enable companies to maximise their use of foreign staff.

Now, it is clear that there is a definite need to restructure our economy to remain competitive even as we take into consideration the social concerns expressed by Singaporeans. But I believe that in doing so, we run the risk of contributing to rising costs in Singapore in the short term. Inflation in 2011 was 5.2% and the Monetary Authority of Singapore has said earlier that inflation in 2012 will average between 2.5% and 3.5%. And while consumer price inflation in January eased slightly to 4.8%, down from 5.5% in December, core inflation which discounts accommodation and private transport costs soared to a three-year high of 3.5%.

Now, some observers are already attributing this to earlier cost increases, including labour cost hikes. And the domestic labour market is very tight. We are seeing an almost fully employed resident labour force, with our jobless rate at a 14-year low of 2% in 2011. Companies, especially SMEs, might not be able to reduce their dependence on foreign labour and offset cost increases despite the assistance schemes provided.

The focus on boosting wages for lower income Singaporeans and using more local workers is possibly likely to drive prices for goods and services up as businesses pass on cost increases to consumers. Economists have said that they see significant upward cost adjustment in the economy already underway, as the tight labour market gives rise to higher business costs to add to already higher transport costs and rents. Just last December, Singapore rose two notches to become the sixth most expensive city in Asia, surpassing Hong Kong for the first time in at least a decade, according to a survey conducted by ECA International. And globally, we have also moved up to 31st spot from 42nd a year ago.

The Finance Minister has indicated that there may be further adjustments to policies, especially pertaining to levies if the curbs do not seem to be working. I would like to ask the Manpower Ministry (MOM) if there is the possibility for adjustments to be also made if it becomes apparent that the curbs on foreign labour are contributing to rising inflation in Singapore.

Sir, this year, MOM is reviewing the Employment of Foreign Manpower Act to strengthen enforcement and hold employers and other stakeholders more accountable for the basic employment standards and well-being of foreign workers. The Ministry also helps to educate foreign workers on their employment rights and sources of help, and is piloting a series of pre-departure briefings on topics such as employment laws and terms for construction workers.

While I applaud these moves that the Government is implementing on an infrastructural level to advance the welfare of foreign workers and enhance the protection of their rights, I am uncertain just how many of these well-intended measures actually translate into practical and effective solutions for workers embroiled in on-the-ground difficulties and disputes. It is an unequal playing field, which works against the vulnerable. How far can education of their rights really go, when foreign workers risk losing their jobs, which is the only means of financial support for their families back home?

Let me give three examples. First, ensuring foreign workers, including construction workers, are paid on time. Just two weeks ago, it was reported that some 200 foreign workers had protested in a field in Tampines over the non-payment of their salaries. According to these workers, they had not been paid since last November and were owed amounts ranging from $2,500 to more than $3,000. The workers also alleged that they had been given inedible food to eat, and were made to pay illegal charges of $1,500 to renew their work permits. One of the workers who was interviewed was close to tears as he recounted how his wife had been begging him for money to pay his child's school fees in Bangladesh. I am not commenting on the merits of the case. But, what can the Ministry do to enhance the policing of employment practices if indeed their plight is true?

The second issue is: adequate rest for our foreign domestic workers. Everyone deserves rest. Maids are no different, for everyone deserves rest. Some have said that we should leave it to agencies and the maids to work out contractually whether they will have a rest day. However, the maid is inevitably in an unequal bargaining position with many if not most unable to comprehend contractual terms written in English. Therefore, any analysis on the topic of rest days must be viewed through that reality. In this House, I had previously raised the issue of rest days for Foreign Domestic Workers, with the MOM saying it is analysing this. Is the Ministry of Manpower in a position to provide an update on this? After all, everyone deserves rest. We are all human.

The third issue has to do with the controversial Maid Review section of a blog that allows employers to post and view alleged misdeeds of maids. VWOs have complained that the site violated the rights and privacy of maids by revealing details such as their names, photographs, Work Permit and passport numbers. Although the Maid Review section has now been made private, the problem is not totally resolved from the domestic workers' point of view as employers may still have access to their particulars and any uncomplimentary remarks made about them. If something untrue is said of them, this could ruin any prospect of re-employment with a subsequent employer. This is extremely unfair. Would we want that to happen to ourselves? Surely not. So, whoever it is running that blog, have more compassion. What more can MOM do to ensure that maids have at least some recourse to action or a channel for complaints to be made? Would the Ministry consider exploring legislation which prevents users from uploading personal profile data such as those in identity cards and Work Permits?

Mr Chairman, many are heartened by the Government's efforts, through the improved PIC and other measures, to try and mitigate operating cost hikes for companies here as a result of our foreign worker quota reduction. However, many companies, especially smaller SMEs, do not seem to be able to benefit from these as much as their larger counterparts.

What are MOM's plans to enhance our channels to reach out to these companies, and what resources can MOM provide which are best practices within each sector or sub-sector on how they can achieve the expected productivity gains? Unlike larger companies, smaller SMEs do not have the luxury of R&D, HR or finance functions. Deputy Prime Minister Tharman had said that the increase in foreign worker levies may continue beyond our current plan. I hope that MOM will continue to monitor the cost impact of our foreign manpower policy that is transferred on to consumers in the long term before we look at extending the plan.

I would also like to reinforce the point I made during the Budget debate that our public services organisations should also lead by example on productivity improvements and hiring of local workers. In addition to the past efforts to transform the security services and cleaning sectors, we should look at transforming the transport sector to focus on job redesign to improve wages and productivity for our transport workers. With the recent funding of the bus transport services, there is an opportunity to transform this sector to look at how we can make these public transport jobs more attractive to Singaporean workers.

The concern of many employers is that if we reduced the foreign labour, can we attract or persuade more locals or Singaporeans to take up jobs that are currently done by foreign workers, for example, in healthcare, cleaning, transport and construction? What is the Government doing in this regard? How confident is the Government of keeping to its targeted reduction in quotas without causing serious stress to these sectors and, ultimately, the living standards of us in Singapore?

Mr Dhinakaran is not here. Mr Tharman Shanmugaratnam.

Mr Chairman, Sir, I would like to thank Members for their very useful observations and questions so far. I would like first to address the questions related to retirement adequacy and the CPF, whilst Minister of State Tan Chuan-Jin and Senior Parliamentary Secretary Hawazi Daipi will respond to the other important matters raised.

Mr Zainudin Nordin, Mr Yeo Guat Kwang, Mr Seng Han Thong and Mrs Lina Chiam had raised relevant issues concerning retirement adequacy, particularly as Singaporeans live longer. Some questions were also raised during the Budget debate, including by Ms Mary Liew.

How well does the CPF system provide Singaporeans for their retirement? The short answer is that for the current generation of older Singaporeans, as I mentioned in my Budget Statement, cash savings are low for many. At the same time, the majority of them have significant wealth in their homes. On the other hand, for the younger generation, and especially for those in the middle and lower income groups, which is the group that the CPF principally aims to serve, their CPF savings provide significantly higher income for their retirement; in fact, at a level that is comparable to the median for the OECD countries. And this is even without taking into account the fact of higher home ownership in Singapore. For the younger generation that will be saving throughout their working lives and eventually retiring, the CPF system will be able to provide a level of income in retirement that is comparable to the median of the developed countries, and this is without taking into account the fact that they will also own a home, which is not as common in the developed countries when we talk about the middle and lower income groups. So, that is the sum of the matter.

Let me say that the CPF system aims to help Singaporeans save enough to meet a basic level of needs in retirement. What do we mean by a basic level? The Minimum Sum (MS) that is to be set aside at age 55 is set at a level necessary to meet the typical expenditure needs of retiree households in the lower middle income group. It should cover the needs of those in the second quintile of incomes, that is, between the 20th percentile and 40th percentile of incomes. That is how we go about planning the system and setting the parameters, making adjustments from time to time, making sure the Minimum Sum is sized right. Not too low but not too high either. It should meet the retirement needs of the lower middle income group. It should, therefore, of course, also cover the needs of those further down, those in the first quintile.

For middle income households, too, although their spending in retirement is usually higher than for those in the lower middle or lower income group, the CPF still forms an important part of their retirement savings. However, the Minimum Sum is not adequate to support the expected needs of those in the higher income households, and it was not designed for that purpose. They would usually have private savings outside of the CPF to tap on. It is not the aim of the CPF to cater fully to their needs, or those, in fact, higher up than the upper middle income group. If we had to cater to those needs, we would need much higher contribution rates or a much higher CPF contribution ceiling, and a much higher Minimum Sum. That would be excessive for those in the bottom half of incomes. It would not be appropriate to design the system to cater to the needs of those in the upper middle and higher income groups because it will cause problems lower down.

Mr Seng Han Thong, therefore, rightly asked whether the Minimum Sum is too high or unattainable to those with lower incomes, which is the key target group. A member who is 55 today – current generation of those retiring - and who has full Minimum Sum in his CPF can expect to receive a monthly payout that is just enough for an average two-member retiree household in the lower middle income group, that is, in the second quintile of incomes.

It is not uncommon for one spouse amongst such families to not have worked consistently. Sometimes not at all but, typically, they would have worked a little bit but not consistently over their lifetime. Indeed, this is one of the reasons why a significant proportion of today's retired persons have not met the Minimum Sum. Many are spouses who work infrequently or not at all. This is why it is prudent for the Minimum Sum of an active individual to be adequate to support the basic needs of a two-member retiree household because it is quite common within that income group that one spouse has not accumulated much CPF savings. MOM reviews the Minimum Sum regularly. We have to bear in mind that CPF members may also make a property pledge and withdraw sums above half of the Minimum Sum. Bearing all these in mind, the Minimum Sum is not excessive. We review it regularly and there is, in fact, little room to have a reduced Minimum Sum for the purpose of ensuring an adequate stream of retirement income.

Let me now turn to the question of whether our CPF system will provide adequate retirement income for today's younger workers – not for the retirees but those who are young today but will eventually be retiring in the future. Will the Minimum Sum also be unattainable for many, like it is for many in today's older generation?

The percentage of active CPF members who meet their Minimum Sum at age 55 has, in fact, been improving year by year, for instance, from only 36% in 2007 to 45% in 2011. It will keep improving because with each successive cohort – it is a very unusual experience Singapore has had over the last 40 years – we see improved educational profiles and improved lifetime incomes. So, it will keep improving.

Amongst those starting work today, about 70%-80% should be able to attain the current level that is set for the Minimum Sum in cash, not with property pledge, by the time they retire, adjusted for inflation, even after they have withdrawn money for a home. So the current level of Minimum Sum can be backed fully in cash, adjusted for inflation, by the time today's starting generation reaches retirement, 70-80% of them should be able to achieve this. So, our CPF system, with current contribution rates, is broadly appropriate for the younger generation of Singaporeans.

During the Budget debate, Ms Mary Liew had also cited an academic study which showed that income replacement rates in retirement, in other words, retirement payouts compared to pre-retirement income – we call that the income replacement rate – the study had found that income replacement rates were low in Singapore. Those low rates were, however, for a worker in the upper middle income level, the 70th to 80th percentiles. As I mentioned earlier, it is not the purpose of the CPF to cater fully to the needs of better-off Singaporeans. Our own projections showed that for the median and the bottom half of Singaporeans, income replacement rates for younger workers, once they retire, will be comparable to the OECD average. We will publish an Occasional Paper on this topic setting out all the assumptions and data before too long.

I should add that for those at the higher income level, we have the Supplementary Retirement Scheme (SRS). This is mainly helpful for those in the upper third of incomes because they get the income tax deductions. In last year's Budget, we had raised the yearly cap on the amount of savings that one may save under the SRS to $12,750. I am not sure how we got such an exact number, but it is $12,750, yearly cap. For a member who consistently saves the maximum amount over 30 years, he will be able to set aside almost $400,000, without counting the interest or investment incomes he gets from the savings – quite a substantial sum.

I should add that for the younger, lower wage workers, a further source of retirement assets comes from our housing grants, which will allow them to own a home that grows in value. The vast majority of Singaporean households in the bottom 20% of incomes own their homes. This is a key and distinctive feature of our social security system. Unlike most countries, even the developed countries, our low-income group owns an asset that can grow in value as our economy grows, and which they can monetise in their retirement years, if necessary. As I have shown, however, for our younger cohorts, as I just mentioned earlier, monetisation may often not be necessary as their CPF savings in cash will itself yield a stream of income in retirement.

Plus, our low-income workers, they get Workfare Income Supplement (WIS). For a low-income worker who starts off at, say, $1,200 a month, WIS will raise his CPF savings by about $35,000 by the time he reaches 65. Not a small sum. So the Housing Grants plus the WIS are actually major boosts to the retirement savings of the lower income group.

One of our tasks in MOM, as we go forward, therefore, is to ensure that most low-wage workers are in the CPF system. If they are in casual jobs and not receiving CPF from their employers as they should, they lose out on many things. They lose out on Workfare and they lose on the various other Government top-ups that come from time to time. And when we add it all up, it is a fair bit. So, Senior Parliamentary Secretary Hawazi Daipi will talk about this later. We are stepping up both our enforcement and promotion efforts to ensure compliance with the CPF Act.

Next, the current generation of elderly, which is all among us – Mr Yeo Guat Kwang, Mr Zainudin Nordin, Mr Seng Han Thong and Mrs Lina Chiam had raised this issue. The CPF balances of our older Singaporeans are much lower than what we will see in future generations. There are several reasons.

First, wages were much lower 20 to 30 years ago. Amongst the women, it was not just wages being low, but labour force participation was far lower. Many of us will remember what it was like in those days.

Second – and this is a very important factor – our older Singaporeans invested a larger proportion of their CPF savings in their homes. The withdrawal rules were different in those days. For much of their working lives, 80% or so of their CPF contributions could be used for housing, and many used them. We have moderated this since so that now less than two-thirds can be used for housing so that we can provide more for retirement and healthcare needs.

Third, our older Singaporeans were in the past not required to set aside as much savings in their CPF accounts when they turned 55. A person turning 65 this year would have had to set aside only $70,000 as his Minimum Sum, a big difference from the prevailing Minimum Sum of $131,000. And for those who did not meet their Minimum Sum, which would have been the majority of members of that generation, they were still allowed to withdraw at least half of their CPF balances in cash at age 55 under the 50% withdrawal rule. In other words, even if they did not meet the Minimum Sum, they were allowed to withdraw half of it under the old rules. Some of our older members, those aged 72 and beyond this year, were able to withdraw all of their CPF balances by pledging their property. So the rules were quite different in those days. For all these reasons, the amount of savings retained in the CPF accounts of older Singaporeans is low.

The CPF has, however, helped this generation of older Singaporeans to own their homes, and most have fully paid up their housing loans. They therefore have substantial CPF savings locked up in their homes. This is why we want to give them more support to unlock the savings in their homes and supplement their retirement income, not just to get the one-off large lump sum but to supplement their income throughout life, through to the end of their lives.

Some retirees rent out a spare room, especially after the children have moved out. It is a very useful form of income. That is one way in which you monetise the value of the home. To add to their options, we have introduced, as I mentioned in the Budget Statement and as we have debated, the Silver Housing Bonus (SHB) and we have enhanced the Lease Buyback Scheme. MND is also building more studio apartments, many of them in mature housing estates and, at the same time, introducing the new Ageing-in-Place Priority Scheme so that the elderly can live near their family and friends.

Many older Singaporeans do not need to take advantage of these schemes. Two-thirds of those aged 65 and above, in fact, receive a monthly allowance from their family. The family is quite happy that they keep the home; they want the asset to be there, continue to appreciate in value and the family provides them a monthly allowance. That is quite common. And many also receive other forms of support in the community or sometimes through Government transfers, especially for the lower income group. But as our society ages, we must be prepared. The need for different ways to convert savings in the home into retirement income will grow. That is why the Silver Housing Bonus and enhanced Lease Buyback Scheme are important.

On the question of older women in their retirement, in fact, Senior Minister of State Grace Fu has raised this in the Budget debate and Mrs Lina Chiam has just raised it as well. The Silver Housing Bonus, in fact, will help older women significantly. For retiree couples where the husband had worked and the wife was either a homemaker or worked for short periods, moving from a 3- or 4-room flat to a studio apartment will provide a significant boost to their CPF LIFE payouts. If the husband was a median income earner, let us say, if you look at the wage profile of median income earners in the past, it was not very high. If the husband was a median income earner, his RA balances would typically have been slightly above half of the Minimum Sum. Therefore, when they take advantage of the Silver Housing Bonus Scheme, because his RA balances already above half of the Minimum Sum, he would be able to take substantial cash proceeds out, besides getting higher CPF LIFE payouts. So they move to a smaller flat, put some money into the CPF to reach the Minimum Sum, but still a substantial amount of cash comes out, and they get significantly higher CPF LIFE payouts for the rest of their lives. So, the husband and wife benefit.

The CPF also encourages – this is an important point – family support, particularly within the immediate family. For instance, the Minimum Sum Topping-Up scheme provides tax incentives for members who top up the CPF of their wives and mothers. The number of top-ups today is not large, but we are thinking of ways to improve and simplify the current schemes to encourage more top-ups.

However, this does not solve the problem for widowed homemakers with little savings, or poor elderly couples who do not own a home, for example, the case that Mr Yeo Guat Kwang mentioned. For these groups, we must help them in other ways, through ComCare which we have expanded by providing rental flats, which MND is building more of, and by partnership with the community, which we are also doing more of and also finding more ways of supporting the community as it gets involved. So, that is a very important area of work for those whom the CPF scheme cannot serve their needs – widowed homemakers or those who are very poor and cannot afford a home, not a large group, but an important group – we have to find other ways to help them, and we will.

Next, let me turn to the issue of returns on CPF monies. Mr Yeo Guat Kwang had asked about this. We have to take a long-term perspective on CPF returns. In fact, over the long term, CPF interest rates have provided reasonable returns, on top of inflation. Over the last 10 years, for example, the return on the Special, Medisave and Retirement Accounts (SMRA accounts), after accounting for inflation, was 2.5% per year. Over the last 20 years, it was 2.2% per year, real returns, after accounting for inflation. This was despite the extra 1% interest on the first $60,000 which we introduced only in 2008, despite this starting only in 2008, when you look at the last 20 years, the average real returns is still 2.2%.

If you look forward now, the compounding effect of this extra 1% interest, on top of market determined long-term bond rates will, over the long run, help to shore up members' CPF savings, especially for those in the lower income group who benefit most from this extra 1% interest. Current interest rates are very low, because of extremely easy monetary policies of the US. This may persist for another two years or so, but few people expect such low interest rates to stretch over the longer term.

We should also bear in mind, as I mentioned earlier, that a large proportion of CPF savings of Singaporeans is, in fact, invested in housing, which is a hedge against inflation.

If a typical 55-year old median earner considers the rate of return on his total CPF savings – comprising not only what he still has in his CPF balances but what he took out and put into the home, the CPF savings component of the home – if he adds it all up and computes the total return on his CPF savings, it would have been about 6%-8%, or in real terms, 4%-6% per year, on average, until he reaches 55.

So, apart from the savings he gets from CPF LIFE, he can choose to realise some of the gains he has accumulated in his property through the various ways I discussed earlier, plus he has a place to stay in, quite important, because in many developed countries, you have to factor in rental cost in retirement. Coming out of retirement stream of income, you still have to pay rental cost.

We will nevertheless review our CPF system regularly to ensure it meets Singaporeans' needs, especially as we live longer, which brings me to the next part of my response, which has to do with CPF LIFE.

2013 will be a milestone year for the CPF. From 1 January next year, the majority of members turning 55 will join CPF LIFE, instead of the Minimum Sum Scheme. Members with balances of above $40,000 in their Retirement Accounts will be automatically included in CPF LIFE, while those with lower balances may opt in.

CPF LIFE is a significant enhancement. The current Minimum Sum Scheme provides payouts for a limited period – slightly more than 20 years. In contrast, CPF LIFE provides Singaporeans with an income for life, doing away with the worry that savings may suddenly run out towards the end of their lives.

In fact, for Singaporeans who are aged 65 today, about half of them are expected to live beyond 85, and one-third are expected to live beyond 90. We have to keep reminding ourselves of that – one-third of the group, that is, 65 today, is expected to live beyond 90. Future cohorts of those who will reach 65, including those who are going to reach 55 in the next few years, will live even longer. That one-third figure is going to get larger. So, more and more retirees will outlive their CPF savings if they were on the Minimum Sum Scheme. CPF LIFE is therefore an important and timely evolution of the Minimum Sum Scheme.

There are still some misconceptions about CPF LIFE. Some people think the Government introduced CPF LIFE to hold on to their money for life. You can read about this rather easily, by the way. Actually, all it means is that you get paid for life under CPF LIFE, instead of for about 20 years under the Minimum Sum Scheme. CPF LIFE does not change how much you can withdraw from the CPF in cash, and it does not change how your savings in other CPF accounts can be used.

The second misconception is that some people believe you will end up losing your CPF savings if you do not live long enough under this new pooled insurance scheme. If you do not live long enough, you are unlucky, you will lose your CPF savings. But this is not the case because when you are on CPF LIFE, you will leave a bequest. The bequest goes to your loved ones, not to other CPF members, and not to the Government certainly. You will get all of your capital back, either through your monthly payouts, or in a bequest that you leave to your family and loved ones.

We have had some experience operating CPF LIFE since late 2009, when members above 55 were able to opt into the scheme. This was an opt-in phase in the last two years. About 73,000 members, in fact ,signed up for CPF LIFE – not large compared to the total number of eligible members we have, but this 73,000 is already equivalent to the total number of private annuities in force today. We did not market CPF LIFE aggressively during this opt-in phase.

Mr Seng Han Thong asked for a breakdown of the various plans that members have opted for. Members could choose from four plans – Plus, Balanced, Basic and Income plans – different levels of bequest and different levels of payouts. The higher the payout, the lower the bequest.

The most popular plans were the Plus and the Balanced Plans, with nearly 90% of members opt-in for either plan. They preferred the features of these two plans – relatively high monthly payouts, but also a bequest. The least popular plan was the Income Plan which does not offer a bequest. In fact, only 3% of this group of 73,000 opted for the Income Plan.

However, this is important and relates to Mr Seng Han Thong's question, we also received feedback during this very useful opt-in phase that members had to put significant effort into understanding and choosing from amongst these four plans. But the payouts between the plans were not so significantly different, as Mr Seng Han Thong more vividly expressed. For instance, the difference in payouts between our two most popular plans – the Plus and the Balanced Plans – is only about 4% on average, the difference in payouts, or about $30 at the projected median balance in 2013 of $90,000.

Both Mr Seng Han Thong and Mr Yeo Guat Kwang had asked what enhancements we might make to the current scheme. Learning from our experience during this opt-in phase, we will make CPF LIFE simpler, starting with the first cohort next year. We will refine the scheme so as to bring the number of CPF LIFE plans down from four to two. It will provide simplicity, but retain the best features of the existing plans.

First, we will combine the features of the Plus and Balanced Plans. These were the two popular options. We combine the features of these two plans into a new option called the Standard Plan. The Standard Plan will also serve as the default plan – the plan that will automatically include members if they do not make a choice.

Compared to the Balanced Plan, which was previously treated as the default plan during the opt-in phase, the new Standard Plan will provide slightly higher payouts. The payouts for the Standard Plan will be very close to the previous Plus Plan. However, members on the Standard Plan will retain the flexibility to use their Retirement Account monies for housing between 55 and 65, just as the previous Balanced Plan allowed. So it borrows from the flexibility feature of the Balanced Plan, and you could use your money for housing until 65 with the slightly higher payouts for the Plus Plan.

A second change – we will remove the Income Plan. It had not been popular. This is the Plan which offered no bequest. It had not been popular, as I mentioned, only 3% of members chose it. There is also a drawback of the Income Plan, in that members may choose the plan without careful consideration and regret their choice later.

A few months into the opt-in phase, the CPF Board wrote to the members who had signed up for the Income Plan to confirm their choice, highlighting once again that it did not offer a bequest. About 30% of them who had chosen the Income Plan thought again about it and changed their minds.

So, even if the member feels he is making the right decision at the time, first, people change their minds; second, even if he feels he is making the right decision at the time, family circumstances can change. That is a reality we are all familiar with. For example, a member who may have been estranged from his child or spouse, but subsequently be reconciled, may prefer to have made a bequest.

Another disadvantage of this no-bequest feature is that you lose all of your savings to the LIFE fund if you pass away not long after you join the Income Plan at age 55. And even if you pass away later but soon after age 65, you lose most of your savings, and your family gets no bequest. It is natural that the next-of-kin will be most unhappy in such a scenario, when the member unfortunately passes away early. After careful consideration, therefore, we decided that as part of the simplification of CPF LIFE in our effort to reduce the number of plans, we will remove this no-bequest Income Plan.

With these changes, CPF LIFE will therefore comprise just two simple choices – the Standard Plan, which you see there on the left [indicating], which will serve as the default plan, and the current Basic Plan, which will remain unchanged. These two plans provide a meaningful choice for members. The Standard Plan will meet the needs of most members, slightly higher payout but still they get a bequest. It will also give members flexibility to use their Retirement Account monies for housing until age 65 years. The Basic Plan will continue to cater to members who prefer a higher bequest and are willing to accept slightly lower monthly payouts. They will also have the flexibility of using the monies for housing even after age 65.

For members who join CPF LIFE when they turn 55 next year, the transition will be a smooth one. We already have the Minimum Sum Scheme that everyone is used to. Monthly payouts begin after the draw-down age of 65, and a bequest for members' beneficiaries upon their demise is also part of the Minimum Sum Scheme. So, those are existing features of the Minimum Sum Scheme. You get a monthly payout after age 65 and there is a bequest upon your demise. This will continue under CPF LIFE. What CPF LIFE does is to extend the Minimum Sum Scheme for life with minimal reduction in monthly payouts. So, we have a scheme that everyone is familiar with, it will continue but CPF LIFE will extend the Minimum Sum Scheme for life with minimal reduction in monthly payouts.

Take the example of a CPF member who has $90,000 in his Retirement Account at age 55. Ninety thousand dollars is the median Retirement Account balance for active members in this cohort. If he were under the Standard Plan, the default plan, his monthly payouts will be only 2% lower than what it would have been under the Minimum Sum scheme, but he will get payouts for life. He has no risk of finding that if he lives long, fortunately, but suddenly the money runs out – no risk of that.

This is why we introduced the CPF LIFE scheme. Members will have income for life and for those who are needy, who have other needs, such as severe medical needs which may crop up for some as they get older, we have to help them through other schemes, which I have detailed in the Budget Statement and which are in many of our existing Government policies which we will review from time to time. Those are budgetary schemes, other ways in which we could help the needy elderly.

These refinements to the CPF LIFE will take effect from 1 January next year, in time for the cohort turning 55 in 2013. We will engage and communicate with CPF members to help them to understand this well, understand the choice they have to make between these two CPF LIFE plans. They will each receive an individualised letter, a customised letter, for themselves a few months before they turn 55.

And for those who already opted into the CPF LIFE scheme over the last two years, they will have the option to switch over to the new Standard Plan before the end of next year, 31 December 2013. They, too, will receive individualised letters explaining the matter, and those who prefer to stay on existing plans can do so.

Finally, Sir, just another change that we are making, a related change also to help raise CPF LIFE payouts in retirement. As Singaporeans work longer, CPF contributions made after age 55 will become an increasingly significant component of their retirement savings. The increase in older workers' CPF contribution rates will further reinforce this. Members would expect that these additional contributions after age 55 should translate into higher monthly payouts once they reach their drawdown age at age 65, and rightfully so.

To help them achieve this, when a member reaches 65, we will automatically transfer his Ordinary and Special Account monies into the Retirement Account, up to the cohort Minimum Sum. This is similar to what is currently performed at age 55. We will do it as well at age 65 because there have been contributions between 55 and 65 and this is going to become increasingly important in the years to come.

The change will not affect how much a member can withdraw in cash from their CPF accounts. Without this new arrangement, the balances may remain untapped in the Ordinary Account and Special Account until the member's demise, unless the member activates a transfer himself. His OA balances would also earn lower interest rates under that arrangement. The change is a helpful one. It will help raise payouts, ensure that everything is swept into the Retirement Account so members can enjoy higher payouts for life.

Sir, the CPF system, together with our public housing system, is an essential pillar of a strong social security system. We have improved it over the years, and made it a unique system to serve the needs of our society. We will continue to build on it and strengthen it, to serve Singaporeans' needs.

Sir, in the current competitive globalised world and uncertain economic conditions, my belief is that we need to continuously strengthen our workforce and build resilience in them. That is one sure way to ensure that our economy can remain competitive and our workers can remain relevant to the fast changing industrial landscape. Thus, I am glad that our Government is investing in our workers' training through the strategic CET Master Plan. Sir, these resources for our workers will be very important and I am confident that we will benefit from it in the long term

Beyond the provision of the good infrastructure like the CET campuses and more, I would like to ask the Minister to update the House on the progress of the CET Master Plan. Are we providing more resources and support for training and the re-training of our workers, especially the low-wage workers and older workers?

As Singaporean workers continue to face new challenges in the uncertain economic landscape, how are we supporting the PMEs, especially the mature PMEs, to cope with upgrading and the challenges of this ever changing economic landscape?

Sir, we have also in the past few years introduced the Workforce Skills Qualification (WSQ) system and other industrial certification standards for our workers to be recognised for their skill sets and also their experiences. I would like to ask whether the training systems and certification standards set up by WDA and the tripartite partners are getting good recognition by industries and industrial practitioners. Are our workers more employable after attending the WSQ courses and other WDA-endorsed courses?

Sir, low-wage workers do not earn enough to meet Singapore's cost of living. The Government recognises this by introducing the Workfare Income Supplement and encouraging re-training through schemes like Workfare Training Support. I too am a strong believer in training, but for low-wage workers, the outcome they seek is better employment conditions or prospects. I recognise that this is a challenging deliverable.

The Workforce Development Agency has disbursed close to $1.02 billion in grants from 2007 to 2010.To what extent has the money poured into training produced the desired results of uplifting low wages?

WDA currently conducts an annual survey on the effectiveness of its Workforce Skills Qualifications training. The survey provides a rough snapshot of the return on investment in training. According to the 2010 survey, 65% of companies reported positive outcomes in productivity after training, but only 25% of trainees experienced pay increments after training, while 44% experienced an expanded or new job scope. It appears that training is benefiting companies and making workers work harder more than it is uplifting wages.

At the Budget or National Day Rally speeches, it seems customary to highlight success stories of how some individuals have moved into higher value work after training. Are they the norm, or are they exceptions? What proportion of low-wage workers went for training but saw no improvement in their wages? What sort of tracking or return-on-investment is being done?

Sir, the current Budget seeks to reduce our overall reliance on foreign workers and to cultivate better jobs for all Singaporeans. Yet, a recent The Straits Times article cited an MOM report as noting that two-thirds of jobs created in 2011 went to foreigners, that is, only one-third went to "locals". And, incidentally, the term "locals" somehow includes Singaporeans and PRs. So Singaporean citizens had fewer than one-third of the jobs created, while having to deal with the problems of overstressed domestic resources.

With that, Sir, I have three questions and one suggestion point to make. The three questions I have are geared towards asking the Ministry for more clarity on their definitions and also more clarity on how Singaporeans are benefiting from these jobs. The suggestion point I have is to see how we can be more effective in encouraging more women back to the workforce. Let us begin with the three clarifying questions.

Firstly, why is it that most MOM statistics, with the exception of the unemployment rate, co-mingle Singaporeans and PRs in the segment termed "locals"? This can be misleading, as the official statistics show how well the locals are doing on the job front, but does not differentiate between Singaporeans and PRs.

Secondly, what is the distribution of new jobs created in each of the past 10 years amongst Singaporeans, PRs and foreigners in each segment?

To have a sense of the extent that new job creation benefits Singaporeans, it will be good to know how many jobs have gone to Singaporeans alone, and the percentage that represents. The add-on to that question is what percentage of total pay flows to Singaporeans in each of the last 10 years? This enables us to have a sense of whether Singaporeans have a fair share in the high-paying jobs created.

Thirdly, in 2011, our resident unemployment rate was 2.9%. This was higher than our overall unemployment rate of 2%. How would our situation look if we combine the current or projected structural unemployment of Singaporeans? There is definitely enough evidence on the ground that PMETs in their 40s and 50s are finding it hard to be re-employed, even with significant pay cuts.

There was a recent Channel News Asia programme dated 27 February and a report on CDC donations that revealed that in 2011, 27,300 residents had employment and training assistance. However, only 10,800 found jobs. Should we take this to mean that the job placement success rate was only 39.5%? If not, what is a more accurate way to interpret this information?

Sir, what these questions attempt to do is to understand the basis of our official unemployment rate calculation, and help reconcile official numbers with ground experience.

Finally, let us talk about the suggestion to get more women back to the workforce. It is a good one. And the latest statistics are very encouraging. In 2010, the numbers showed that 71.2% of the women aged between 25 and 64 are working, up from 69.4% in 2009. But for older women, aged 55 to 64, the figure is still very low at 43.4%. The good news – there is plenty of help available to help younger working women get back to work. From the "Back to Work" and flexi-work programmes started by Government agencies, to websites like Careermums.com to Mums@work to the newly formed WEWAM – it is a nice name! WEWAM. It stands for Women Empowered for Work and Mothering – there seems to be plenty of outreach programmes.

What this House and the Ministry perhaps should know is that there are also many women's groups and associations who have stepped up to help. These groups tend to be sector based, and one such example, if I may, is the Financial Women's Association, which has helped women in finance who lost their jobs during the Lehman crisis, find new jobs, and which is still championing the networking of women who wish to return back to work in the financial sector. The Singapore Council of Women's Association has also successfully pioneered the Women's Register to mentor women needing help in the workplace. However, these many outreach programmes need support in order to succeed, especially to reaching out to the women who need help, and especially for older women who may not be that Internet savvy. These women's groups are run by full-time working mothers like me who have limited time and resources and, hence, in order for them to be more effective, they need funding, administrative and execution support for their various initiatives. They will also need some time and some help in advertising some of their good work that they can do, in order to reach out to a wider audience and in order to place more women in the right sector and in the right jobs. So, my suggestion is – may the Ministry provide some umbrella support to these various women's groups and to help link women looking for job with the right association and the right channels that are already available?

Mr Chairman, the Government's commitment to reduce the number of foreign workers at the S Pass and the Work Permit levels in Singapore received largely positive support by many Singaporeans. However, many professionals are concerned that the Government has not sent similar signals for the Employment Pass (EP) segment which concerns PMETs and professional jobs that Singaporeans hope to be given more opportunities to prove themselves in the face of competition.

I believe most PMETs are prepared to face foreign competition and recognise the value and the foreign expertise if they are better qualified and have the expertise to offer that locals are not able to provide. Can MOM share what is the rate of tightening of EP categories compared to S Pass and Work Permit categories? Has the MOM conducted studies on capability or experience gaps of Singaporean PMETs and how they can maximise job opportunities at this level, as in a globalised economy it may not be practical or realistic to lock in all professional employment to Singaporeans? But can we adopt a policy whereby employers should justify what if Singaporeans cannot fulfil the role, or one who is currently employed within a company cannot be groomed into the role before a foreign professional is recruited if their competency levels especially are similar?

What is MOM's assessment on how more Singaporean PMETs can take leadership and management positions and how the Government can help at this level? There are many foreigners heading our local companies, including banks and public-listed companies. Can these leadership positions otherwise have been filled by local PMETs with the right competency, skills and experience? In our small market, our local PMETs sometimes like the exposure and the opportunity to run large-scale business units or projects. Thus, how can we help our level PMET workforce overcome this inherent weakness?

In terms of training, PMETs, according to a Labour Force report of 2011, are "most receptive" and "active in training". On average, PMETs' participation rate in training is about 6.8 days a year in 2011. Can the Government do more to help PMETs with training and job facilitation as they have specific needs which may not have been fully met under our current CET framework?

We would also like to ask if there are measures to help middle-aged or older PMETs – with Singapore's economy facing more challenges in the upcoming years, it is more likely that middle-aged PMETs will lose their jobs with the structural changes in the economy – and how this group will be given more assistance by the Government.

Finally, the SEC scheme is a welcome move, thanks to the Finance Minister. This gives assistance to older workers up to 65 years of age and those earning $4,000 a month. But many PMETs are earning above $4,000 a month. In fact, we have seen more of them earning more than $4,000 substantially since 2011. Can the SEC help our older PMETs and can we extend the age limit to above 65 years old since the Government encourages lifelong employability?

Sir, this group called the Professionals, Managers and Executives (PMEs) is going to form the majority of our workforce in the coming years. In my engagements with PME union members and PME residents, we have found out some key challenges and issues which concern them.

First, older PMEs getting employment, being retrenched, unemployed and re-employed; second, for female PMEs, they are concerned about flexible work arrangements and ease of rejoining the workforce after being laid off for some time; third, young PMEs facing under-employment and contract employment; fourth, competition from foreign PMEs; fifth, career advancement and learning opportunities to move up the career ladder; and finally, sixth, mismatch of current skills and future jobs.

These are some of the concerns. I would like to just focus on a few as I have highlighted the others during the Budget debate. Firstly, we need to have a better and deeper appreciation of the issues, challenges and opportunities facing PMEs. For a start, we need to know potential PME jobs within the intermediate term. Our current students and future PMEs are particularly concerned about their future job prospects. For example, in the latest NTU Career Fair in February 2012, it is widely reported that the number of job vacancies had dropped from 4,500 to 3,000. I believe for many of them securing a job first may be all that matters. All PME segments in whichever life stage would also like to understand where the future growth sectors are and whether the remuneration will commensurate with the investment of time and efforts in the area of discipline that they have taken on for their education, continuing education and work experiences.

By the same token, the issues and challenges facing PMEs are varied and sometimes complex. It is therefore appropriate we set up a PME taskforce to examine the specific concerns and issues involving and concerning PMEs and possibly at a tripartite level especially for issues revolving around unemployment, employment, under-employment and employability.

On the vulnerability of older PMEs, those above 40 years of age, what can we do to help "future-proof" their jobs? I foresee that more and more of them will be affected by layoffs during restructuring exercises. They may have top qualifications such as Masters or even First Class Honours. Nonetheless, once retrenched, they take a long time to find the next job. It is not uncommon that they will take at least half a year to one year to do so. Some are forced to go overseas to look for greener pastures whilst others have to take on significantly lower-skilled jobs or embark on a freelance career. Speaking to some of these PMEs online and offline, we should not just look at the employment of these PMEs but also the quality and pay of their new jobs. The current approach to scaling up career fairs for PMEs is but one approach. I feel we should also try to change the perception of employers about older PMEs. I would like to therefore propose a three-pronged pre-emptive approach to disprove such a perception that older PMEs are not as valuable – namely, conversion, placement and employee-cum-employer education.

On conversion, the Government can first work with the private sector by promoting better career mobility through different tracks for PMEs. For companies who are prepared to hire PMEs from a different industry, there has to be greater funding for a career conversion programme in terms of both training and wages on a once-off basis. We should embark on a drive to get our employers to support this programme. On placement, the public sector should lead by example in setting a better rate in hiring PMEs who are aged 40 and above. The current rate is about 1,200 per year which is about 9% of new hires. To signify a change in paradigm, I feel the public sector should take the lead and raise this hiring percentage and perhaps even raise it higher during times of economic uncertainties. On employer and employee education, we should promote the hiring of older PMEs, investigate any discriminatory practices and provide a formal mechanism for the aggrieved to seek redress, and older PMEs should be equipped with the knowledge of the employment landscape and opportunities.

I would like to seek further clarifications on how a better link for our Continuing Education and Training and Skills Training for Excellence Programme, the CET and STEP systems, can correspond to the life stages of a PME.

First, when a typical Polytechnic or University graduate seeks to land his or her first job, their concerns will be usually on the pay, career prospects and development of their job. I mention job and not career as the former is defined by a financial need which is understandable as the graduates need to pay off their study loans. Our current approach is to provide the maximum catchment of prospective employers for the graduates to embark on their first job. I would therefore like to suggest a closer collaboration between the educational institutions and WDA on a more proactive approach. This can be a start to map out the career needs and history of the individual PME. The State's involvement in this is important as prospective employers can have access to a ready pool of PMEs with different expertise for the various vacancies. From the PMEs' perspective, they can have a more detailed understanding of the employers they are working for since this is a national database.

Second, continuing with the life stage, after five to 10 years of working, the individual PME may have at least one or two job switches. He or she may have a clearer sense of the longer- term career that they want to be involved in and the particular industry they want to be in. We ought to find a mechanism to capture this information as well on a participation basis by the PMEs. This is important as it will help to cut down on funds invested into unnecessary training, studying or skills upgrading if there is a clear job profile that the PME is going for. There has to be a clearer link to the qualifications obtained, how it has helped to raise productivity and thereby leading to a real wage increase. Coupled with other life stage needs at this time such as setting up a family, our PMEs need a national training infrastructure to be future-ready. Many years ago you could learn something in school and use it for the rest of your life. This has changed. The entire landscape has changed. Previously, we used to learn, work and then retire. Now it will be: learn, work, learn, work, learn, work and then retire. Second-skilling is now ever more crucial to ensure employability especially during uncertain times. In order to motivate the individual to take a larger interest in his or her own skills and capabilities, I would also like to urge the Government to study the successful lifelong learning models in Scandinavian countries such as Denmark and Sweden. This is in terms of how public spending in adult education can help to enhance the creativity and innovation of our workforce, adding value to them and helping them to raise their pay. I further suggest that whatever amount the individual has invested into his or her upgrading should be eligible for tax relief as well and that the current tax relief limits should be reviewed. Similarly, there also ought to be a tighter framework and subvention for students and adult learners who are enrolled in private universities. Can we consider establishing even more adult education colleges so that our PMEs can undertake study sabbaticals if needed and supported by the employers?

In the third life stage, where our PMEs are 40 years old and above and have their own families, future proofing their jobs becomes a top priority.

To sum up on the three life stages that I have outlined, I hope to see the Government play an even bigger role to support PMEs in their career development beyond what we see today. Are there plans to set up a national PME jobs databank? For our local PMEs, I have mooted previously for a PME Capability Development Fund. There is an entire train of activities in enhancing the employment and employability of PMEs. It is not merely placing them in a job but in the right job. Before we land them a job, there is a need for proper career counselling and even professional coaching. Some PMEs I spoke to said all they need is for us to connect them with prospective hirers and they are more than able to do the rest. Unlike traditional job fairs utilising a one-to-many approach, PMEs will require one-to-one or one-to-a-few approach as the types and range of PME jobs, requisite capabilities and development opportunities are extremely diverse and vacancies are mostly one to a few in a single company. Efforts needed are thus more extensive. Are we able to develop new capabilities to train, equip, re-design, counsel, coach, place, retain, and nurture our PMEs? Resources required are going to be huge. This PME Capability Development Fund can well be for the tripartite partners to tap on to train and equip PMEs including second-skilling them and also rolling out initiatives and programmes identified by the PME taskforce. There is also the possibility of setting up a "one-stop shop" to meet and serve the needs of PMEs. It could well be a comprehensive resource portal for PMEs with updated information and pointers and also link to job search engines including coaching and pre- and post-job placement career counselling.

In continuing the theme on PMEs, my final area of concern is with regard to strengthening measures to help female PMEs cope better with the challenges of managing their careers and raising their families. The lack of family-friendly work practices and flexible work arrangements is forcing many women to delay starting their families or, even worse, give up their careers. May I ask the Minister what more could be done to introduce a more conducive working environment for back-to-work women, in particular, female PMEs who wish to re-join the workforce after an extended period away from work? Without flexible work arrangements, it would be difficult to encourage our families to have more children. I am aware MCYS is aggressively developing our childcare services and providing support from various angles. However, we also need to get employers to provide better work-life balance as this is critical to support women with families.

Mr Chairman, unlike the US and many of the economies in Europe, Singapore has had economic growth, a strong job creation and low unemployment. This is an enviable position to be in. Singapore must continue to have quality jobs so that Singaporeans will continue to have good job opportunities and real wage growth.

The education profile for Singaporeans in the workforce is set to improve as the younger cohorts entering the workforce are better educated. Residents employed in 2011 who are degree-holders are up 17%, from 2001. Including those with diploma and professional qualifications, the share is 47%. Close to 52% of residents employed in 2011 were in professional, managerial, executive and technical jobs. Resident unemployment is also low in 2011.

Against this backdrop of skills and profile of our resident labour force, we must ensure that we continue to have good career prospects for PMETs as they form a large portion of our labour force. Singapore continues to be an attractive base for companies to locate their regional and hub operations. This creates good job opportunities, especially higher-end PME jobs. While we need to maintain Singapore as an attractive and open market for talent, can the Ministry share what strategies are there to incentivise companies based in Singapore to ensure development of local PMEs and skills transfer to build a strong and relevant local talent base for higher-end jobs? What placement help is also given to help PMEs who have been displaced, especially in the later part of their careers?

The hon Mr Patrick Tay had talked about the Government doing more with regard to helping with the placement and training of PMEs. I would suggest that if there could be better incentives to help companies build partnership with companies to scale the capabilities and focus on development of PME resources so that we can ensure that they continue to be relevant as the jobs change, as they move higher into the higher end of the PME roles. And I really like to understand what closer partnership the Ministry is planning with regard to working with companies, rather than the Government doing it themselves.

I also would like to ask what measures are there in place to ensure that relevant skills are being developed for quality jobs. One of the things we may not be cognisant of as we look at having PME jobs for Singaporeans, is that Singaporeans also have the opportunity to get out of Singapore. The PMEs in Singapore actually have opportunities and continue to have opportunities. One of the things we must do is to ensure that we do not lose that talent base as well and therefore it is imperative that we continue to look at how we can keep our local PMEs in the high-end jobs.

(In Mandarin): [Please refer to Pg 1985-1986 for Vernacular Speeches.] Mr Speaker, Sir, firstly I would like to declare that I am the President of the Singapore Chinese Chamber of Commerce & Industry (SCCCI), and Managing Director of Pacific International Lines. Last Thursday, Deputy Prime Minister Tharman said in Parliament that Government will go out of its way to reach out to SMEs, via working with the business associations, Enterprise Development Centres, and CDCs. This is to ensure that SMEs could benefit from all assistance schemes. At the same time, the Government would be making more land available under the Government Land Sales Programme to help reduce rental overheads. It has also declared exercising greater flexibility in the foreign worker policy. This move has my wholehearted support.

On raising productivity, I feel that effective communication and timely policy adjustments would enable the Government and businesses to work together to address business challenges. This is indeed the objective of our active participation in the Budget debate. I take this opportunity to share what we have encountered when promoting various government assistance schemes. In 2006, SCCCI set up the Enterprise Development Centre with the support of SPRING Singapore. Over these five years, we discovered this common problem. Start-ups and "micro companies", like HDB neighbourhood shops and shops in Chinatown, Little India and the Malay Village, cannot meet the application criteria because they are simply too small.

EDC@SCCCI holds regular briefings or workshops in Mandarin to explain Government policies to businessmen. When our EDC staff make calls inviting them to participate in these sessions, they get this standard response: "I don't need to listen. In any case, our company is too small and can never qualify." Going forward, Government and associations need to look into improving the promotional outreach, and simplify the application procedures. This is to ensure that more SMEs could really take good advantage of these schemes. This is truly the challenge faced by the Chamber and the government agencies. As Deputy Prime Minister Tharman has said, the Government is prepared to go out of its way to help the SMEs, and hold their hands to help them improve productivity.

There is a Chinese saying: "A capable man needs three helping hands to do a good job." Every successful entrepreneur would go through an initial phase. He may be full of ambition and passion. If he cannot find workers, he would be fighting a lonely battle. At such a time, any solution would be most encouraging and gratifying. Hence, I would like to suggest broadening manpower sources and adjusting the management process and remuneration for part-time workers. This would encourage students, housewives and older individuals to re-enter the workforce by working part-time. This would relieve the labour shortage for "micro companies" and SMEs. This year, the Ministry of Manpower has relaxed the policy to allow foreign spouses to apply for employment under the Long-term Social Visit Pass-Plus. This move would also help to relieve the acute manpower shortage.

One of the Chamber's members has indicated that part-time workers prefer to be paid in cash upfront. If we were to let go one foreign worker, the company needs to recruit two or more part-time staff to fill the vacancy. If the Ministry of Manpower could allow employers to pay part-time workers like housewives in cash and waive CPF, these part-time workers could have more ready cash. Employers could cut down on administrative work and this could be one way of raising productivity. Thus, I hope the Ministry of Manpower could consider relaxing the policy of CPF for part-time workers to encourage more employers to recruit them.

My second point is on Special Employment Credit (SEC). Engineers, professionals, managers and other older middle-income workers would be affected by the economic restructuring. Under the SEC, employers who employ older workers earning $3,000 or lower, could get 8% wage subsidy. For workers with a monthly wage of between $3,000 and $4,000, the SEC would be lower. For those earning more than $4,000, SEC would not apply. However, the older workers who earn more than $4,000 are also the people whose service companies would like to retain. Thus, I would suggest that the Government raise the salary level for SEC, to include this group of middle income workers.

Finally, I would like to emphasise that foreign workers are an important component of the Singapore labour force, and they have also made great contributions to Singapore's economic development. Foreign workers are not cheap labour. They take up jobs in industries that most Singaporeans are either unwilling to take up or unable to undertake. Hence, training provided by companies should also be extended to foreign workers. This would enable them to improve their skills and effectiveness, and raise overall productivity.

Sir, weaning the economy off foreign labour requires us to look inwards to our existing pool of elderly workers, retirees and homemakers. We share the view of the Finance Minister that many of our homemakers in Singapore who retire early are willing to work either part-time or full-time. We are a small nation, we are a small population. It is imperative that we find ways to maximise our manpower needs to meet the requirements of the economy to grow and to compete globally.

Older workers as potential employees in the workforce differ in abilities, desires and needs. Hence, re-integrating them into the workforce may call for customised approaches depending on their abilities and situations. Re-integrating the retired professional versus integrating the production worker will require a different approach. I would like to know what programmes MOM has to encourage industries to re-design work processes to cater to elderly workers and how successful these programmes have been.

Homemakers who wish to join or re-join the workforce are another pool of human resource. However, attracting them into the workforce has a different set of challenges. I would also like to know what progress has been made in this area so far.

Given the various schemes in place, for training and re-training, how does the Ministry measure the effectiveness of its programmes and what other strategies does the Ministry have to further encourage these groups to go back to the workforce? Besides working conditions, attractive pay and flexi-working hours, I believe proximity to their home is another important factor for them. The Government may want to relook at the land use and usage of property in residential areas to allow some suitable industries to be located within the residential zones.

Sir, as we reduce our dependence on foreign labour, getting Singaporeans to fill these gaps becomes very critical. We still have a large proportion of women who are not working but are contributing meaningfully to their families. We noted that women with young children aged between 0 and 12 years old are more likely to quit the workforce to focus on the development of their children.

Unlike the developed countries like Sweden, Finland and Norway, we do not have a double hump for women's participation in the labour force. Our women leave their jobs to take care of their children and many never return to the workplace and thus resulted in a single hump. The longer the women stay out of the workforce, the more challenging it will be for them to return. Most employers also become more reluctant to employ them. I think we should take the approach of prevention is better than cure.

Mr Chairman, Sir, as women become more educated and more are carving a niche for themselves in their careers, they find themselves hard pressed because of the lack of flexibility in how work is being done. If we are going to call ourselves an inclusive society, then women should be given the opportunity to work, have a family and be able to take care of their loved ones while still having a career with progression and decent pay. And the only way to do so is to ensure that we have a culture that supports flexi-work in our workplace.

Getting women back to work is not just providing a lactation room but also requires the support and the change of mindset of employers and fellow workers to provide the conducive and supportive environment so that our women can return to work and juggle their responsibilities, to have a work life balance without having to feel guilty that they could not perform their multiple roles well and ultimately they have no alternative but to quit their jobs.

We would like to see more support from the employers who are willing to offer flexi-work arrangements and are willing to do job re-design. Given that there is a tightening of foreign labour, I think this is the best time for us to really look at tapping on this available pool of women to encourage them to come back to the labour force.

Mr Chairman, Sir, allow me to share the case of Joanne that the NTUC's Women Back to Work Programme has helped. She is 40 years old and she has one eight-year-old child and a sickly father. She is a graduate working as a bank officer earning some $3,000 a month. Joanne quit her banking job in 2005 when she found that she had to juggle between her young daughter, who was one year old then, and her father who suffered a stroke. In 2007, after nursing her father back to health, she decided to return to the workforce. After trying for a year, she was very disheartened that no employer was willing to consider her at all. Subsequently for Joanne, she came across the NTUC Women's Development Secretariat (WDS) who worked with enlightened employers who were mindful of the gap. In October 2008, they finally secured a job for her with a financial company as a deals executive. Today, I am glad to say that she is still employed as a senior executive.

I believe that for every Joanne that we helped, there are many more out there needing support, especially our female PMEs. Besides the existing efforts that the Government has made, I would like to ask the Ministry to consider the following: (i) being the largest employer, to take the lead by creating more flexi-work for women in the public sector; (ii) to consider some forms of incentive or tax relief to help women who do not rely on domestic help but very much dependent on nannies or their relatives for child care help and support. And I think this will also continue to encourage women to return to the workforce; (iii) I support the call by Mr Ang Hin Kee to extend the Special Employment Credit to employers to recruit back-to-work women in the workforce. I understand the Minister's view, and we are not giving up and we are trying again; (iv) to launch annually a nationwide "Flexible Work Arrangement (FWA) Campaign" to generate more awareness as well as to encourage companies to implement FWA in a more concerted way; (v) besides offering flexi-works funding to companies, try to make it fit the process of claim user-friendly and also make it more attractive to tap on, with minimal restrictions and administrative procedures; (vi) to adopt additional measures to support back-to-work PMEs who face greater obstacles compared to the rank and file women as opportunities are even more limited for them, including developing a database of both the employers and the back-to-work PMEs to support job-matching efforts.

Sir, last but not least, I would like to ask the Government to make every attempt to encourage our women to return to the workforce. They have gone through the different challenges in life and are mature and responsible. I am confident that most will be resilient to stand by their employers. Especially during the tough time when the company is facing crisis, you will see that women are like tea leaves – you will never know their strength until they are in hot water. We will be there for you.

Sir, three areas of recommendations: First, on job re-designing and job re-creation, and expertise for low-income jobs. Sir, beyond enforcing best sourcing and offering cash grants to the SMEs and industries such as cleaning and F&B which host jobs that are typically low paying, low skill and low appeal, MOM should seriously assemble a team of job designing and job re-creation expertise to help transform these jobs.

I remember when I was a young officer at an American multi-national, all staff from production operators to our managing director must return our used utensils to a belt that led to the back of the cafe where the cafe workers then pick them up for washing.

The cafe workers when they were not cleaning also took on additional duties in food preparation. Their uniforms were specially designed and all of us "internal customers" treated them with respect and dignity. This was the best practice some 20 years ago. It is sad that the cleaning and F&B sectors of today have not progressed that much or beyond that.

I therefore seek MOM's further intervention to enhance the cleaning, lower-end F&B sectors, and the like. Can turn-around teams help study and design the jobs and the work environment in such a way that these jobs can be expanded and made more dignified? If these jobs are better designed and presented, perhaps fewer locals will shun the job and there is no need for such a high percentage of foreign workers in this industry.

Next, on Continuing Education and Training (CET) for the Disabled. Sir, the typical workforce in Singapore benefits from the structured CET that is rolled out very well by MOM under the WDA since the last recession. The CET programme for the able-bodied workforce has gone from strength to strength with expanded offerings and target groups like the PMEs. However, there is little attention or resources allocated to ensure that the workforce comprising the disabled (PWDs) is continually trained and can count on lifelong learning to ensure that their skills are relevant and their employment sustained. If the CET issue is not addressed, the Special Employment Credit for the disabled (PWDs) will lose impact soon as their skills will become obsolete due to a lack of lifelong structured training and development. I urge the Ministry to provide headcounts, expertise and funds to form a CET taskforce to work with key disability groups in Singapore to develop a future-proof special-needs workforce.

Finally, on Proactive Career Management. Sir, the Government has expended millions of dollars to ensure the Singapore workforce is relevant and can work for as long as they wish to. I wish to highlight the need to inculcate in all Singaporean workers, the PMEs especially, the ability to retrenchment- and future-proof themselves through more proactive career management on their own. Prevention is better than cure. It is often too late and too traumatic to receive career counselling only when one is retrenched or displaced, or about to be retrenched or displaced. I urge the Ministry to take the lead in launching bite-sized, multi-lingual training programmes delivered in the appropriate media, to coach Singaporeans, especially the PMEs, how to proactively manage their careers and make themselves retrenchment- and future-proof.

Mr Chairman, thank you for allowing me to touch on issues pertaining to the changing profile of our local workforce. Firstly, our local workforce is ageing. According to the annual reports on labour force in Singapore, about 18% of our workforce was more than 50 years old in 2001. In 2011, 10 years later, more than 30% was above 50 years old. The median age of our workforce had also increased from 38 years old in 2001 to 42 years old in 2011. In view of this, how can the Government help companies to change the way they operate to take into account the ageing workforce besides providing Special Employment Credit?

Secondly, as we transform our economy to be less reliant on foreign workers and seek expansion in new growth areas, how do we ensure that our CET system can stay relevant for the workers and employers? I understand that MOE is also pumping more resources into CET. Thus, how does MOM plan to coordinate with MOE in CET for better synergy?

Thirdly, MOE is working very hard to provide vocational training to Persons with Disabilities (PWDs). The desired outcome is to get more PWDs to be employed so that they can also contribute to the society. However, we cannot assume that the vocational training for the PWDs will last them a lifetime. PWDs need CET like any other workers. How can WDA or e2i help in this area?

Mr Chairman, when the labour movement advocated the review of CPF rate for mature workers last year, some employers were concerned that it might increase their manpower cost while others said that, that was the adjustment they had to make.

Similarly, many mature workers are of the view that their CPF should not be reduced just because they hit the age of 50 while other workers, especially the lower wage and contract workers, feared that their employers might lower their wage to offset any increase in CPF. That is what the Chinese say:“有人欢喜,有人愁” . There will be people who are happy; there will be people who will be worried.

The announcement of the Special Employment Credit indeed made everyone happy as the credit (8%) is adequate to cover the increase in mature workers' increased CPF rate. This is a good case of tripartism at work. However, to achieve the employment rate for older persons, aged 55 to 64, of 65% by year 2015, as the national target, the challenge of how to match the skill gap between the jobs available and the mature workers remains. We need the tripartite effort to resolve the issues at the workplace and most of which is how flexible we are in work arrangements.

For employers, may I suggest, instead of being inclined to ageism, we should look at ways of harnessing the "intrinsic value" of the older workers? There are definitely things which younger persons cannot do as well as the older persons. For employers, may I suggest to embrace opportunities given by employers to adopt new ways of applying the tacit knowledge which they possess? And for the Government, that is most important, to provide funding on training systems which facilitate such positive shift in employment of older workers. So instead of looking at just basic employability and vocational skills, there are soft skills which older persons need to acquire before they can transit to new jobs.

Sir, many Members of this House have spoken about the ageing population. Yes, our population is ageing and the pattern of retirement is changing rapidly in Singapore. People are increasingly coming to terms and understanding the impact of living longer and the need to adequately prepare for an extended period in retirement. These changes in demographics represent a squeeze on those of working age, as well as on the Government, as we look to provide retirement incomes and healthcare for the ageing population.

The economic benefits of prolonging working lives should not be underestimated. There is a key link between health and productivity. If you have a population that is healthy and productive later into life, not only do they contribute longer to the economy, but they also help to lessen the burden on the society. Employers must prepare for a new employment landscape of an ageing society with a growing pool of older workers. This entails a change of mindset as to how employers perceive our senior workers who are and will get much fitter and able to work much longer than 65.

Sir, allow me to relate two real life cases to illustrate my point. Albert, aged 62, is now working as a Property Officer. Although he is still healthy and energetic, he is worried that he will be told to retire or take on a lesser role in the same organisation soon. He wants to continue working in the same job that he believes he is good at. He knows that if he were asked to retire, it would be difficult for him to find a similar job. Albert feels that his performance is on par with his younger colleagues and if not better, considering his richer work experience and ability to relate better with people of all ages. He wonders why an older worker is viewed and treated differently.

My second example relates to Michael, aged 65, who will retire end of this month. He has been very loyal to the organisation, having worked there for over 40 years. He is on a yearly contract since reaching his retirement age two years ago. He is still able to work well with no let up in age, ability and agility. He receives good appraisals for his performance yearly and he is still able to contribute at the same level for another few more years. However, he now has to take on a lesser role in the same organisation. In fact, it is a waste for someone with a vast experience who is able to work and want to work, but has to retire or redeployed once he reaches retirement age. Sir, I am sure there are many more of such examples.

I would like to ask the Ministry to relook at the relevance of the retirement age and how it can help promote and support pro-elderly employment with no age discrimination or prejudice. People can be more productive into their 60s and 70s, and the last thing we want is to lose their talent and enthusiasm from the workplace due to an arbitrary retirement age. The Government can continue to actively support companies and older workers with training, job re-design and workplace restructuring. So, instead of justifying their employment purely from a cost and renewal angle, it is time employers recognise their contribution, loyalty, seniority and experience with a pay that is fair and just. There should not be any age discrimination where we have to make older workers cheaper to be employable. The concept of a "retirement age" is becoming irrelevant, whether it is a desire to stay connected or active at work, reach a certain nest-egg number, dealing with health-care costs, or grappling with mortgage debt, more workers are deciding to delay retirement.

Although the Government can help and support employers with various schemes to retain older workers, both public and private employers need to change their perception and attitudes on how we treat our older workers. It is time for employers to embrace them, treat them with dignity and give them a rightful place in our workforce. Taking the words of the hon Member Patrick Tay, it should be " work, learn, work, then play and come back to work again".

As we think about the concept of "work, learn, play and come back to work again", I propose that we take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Order. I suspend the Sitting and will take the Chair again at 3.30 pm.

Sitting accordingly suspended

at 3.11 pm until 3.30 pm.

Sitting resumed at 3.30 pm

Debate in Committee of Supply resumed.

Head S (cont) –

Sir, ours is an open economy and with globalisation, Singapore's workforce and companies based in Singapore are vulnerable to the impact of the current global uncertainties and jobs of Singaporeans will be affected. In the event of a protracted subpar growth scenario in Singapore, will there be measures and help extended to workers and companies, especially those in the externally oriented sectors, to assist them to cope? Will there be programmes to help companies weather the impact of economic downturn and to prevent any large retrenchments and keep unemployment rate low? Will there be support to help workers retrain so that they will be able to move to other industry sectors that may be less affected and have employment growth opportunities?

Asia continues to present opportunities for growth despite the uncertain economic conditions that we see from the EU sovereign debt crisis as well as the current weak economic conditions in the US. What are the Ministry's strategies to provide assistance to companies and Singaporean workers to maintain and grow our employment base to continue to be able to capture the growth in Asia?

Mr Chairman, I understand that the drive to raise wages for Singaporeans will involve bringing in new and higher-paying industries to Singapore. A corollary of this is that some other industries may die out. Now, in a recent Institute of Policy Studies called "Singapore Perspectives", economist Hui Weng Tat suggested a possible increase in structural unemployment. But, in particular, he noted a rising share of those among the unemployed with post-Secondary level education and a rising share of PMETs will be among those retrenched.

In The Straits Times report on 16 December, it is also noted that six in 10 workers retrenched between March and June last year were holding PMET positions. One of the other difficulties that The Straits Times reported was that only around half of the laid off PMETs managed to find jobs within six months. To me, this suggests that there exists a potential for structural unemployment. The people who might be heavily affected by this include the PMETs. Is there any assistance for people currently working in industries that may die out to ensure that they can get jobs in the new ones that may emerge?

Sir, I thank all Members for their thoughts and suggestions.

Let me begin by first saying that the focus of what I will be sharing today really is about developing a Singaporean core in our workforce. There are three main themes I would like to highlight. One, our responsibility is to make sure that good jobs are available for Singaporeans. Secondly, it is to make sure that there is a good work environment for our workers in Singapore and, in particular, I would like to highlight our older workers, the disabled, the low-wage earners, and also PMEs, which a number of Members have raised concerns about. And thirdly, it is about how we continue to develop Singaporeans in order to nurture them as well as to help them to remain employable so that they can provide for their families.

Let me first start with an update of our labour market.

Last year, we created 121,300 new jobs. Our annual average overall unemployment rate dropped from 2.2% in 2010 to a 14-year low of 2% in 2011. These figures are lower than any of the 34 OECD member countries, and Asian NIEs like South Korea, Hong Kong and Taiwan.

For Singapore citizens, unemployment also fell from 3.4% in 2010 to 3% in 2011.

Ms Tan Su Shan raised a few questions. I would like to state that traditionally we have reported our manpower statistics based on the resident workforce as this is in line with international norms and reflects the labour market attributes and outcomes by differentiating the permanent pool of workers, which largely comprises Singaporeans, PRs and the non-transient population. Nonetheless, we also recognise that going forward, there is increasing public interest over how Singaporeans particularly are faring and how they are performing. So we complement our statistical publications on residents with occasional papers on Singaporeans in the workforce. For example, in October last year, we provided analysis and statistics on the employment rate, unemployment rate, and incomes of Singapore citizens. In addition, we are now regularly releasing key labour market outcomes for Singaporeans – for example, unemployment rate on a quarterly basis, median and 20th percentile incomes annually in our regular statistical releases.

To Ms Tan Su Shan's question, I think what is important is for us to look at the actual outcomes for Singaporeans – in terms of their income and employability because that ultimately is where the rubber hits the road. Despite going through three downturns in the last decade – at the turn of the century with the dotcom bubble burst, the SARS crisis and then the 2008 crisis – the median full-time Singaporean worker has done reasonably well. Real median income gains averaged 2% per annum in the last five years from 2006 to 2011. This is real median income. Including employer's CPF contributions, this would average about 2.5% per annum. At the 20th percentile level, the real income grew at 2.2% per annum between 2006 and 2011.

In contrast, median incomes have mostly either stagnated or declined in real terms in economies like Japan, the UK, the US and Taiwan.

The employment rate of Singaporeans aged 25 to 64 also grew steadily over the decade, from 73.7% in 2001 to 78% in 2011, and this is one of the highest internationally.

As shared earlier, unemployment is low. Even among Singaporean PMETs, it is low at 2.4% in 2011. We cite these figures, not to make ourselves feel better, but it is important to use them as reference points and markers to compare ourselves with how other developed countries are faring in this fairly challenging climate. And I would suggest that while the figures may seem low on its own but from a contextual basis in terms of how other countries are doing, in the midst of fairly difficult circumstances, I think we are not doing too badly.

Ms Tan also talked about structural unemployment, which we monitor closely. One of the key indicators is the resident long-term unemployment rate. Our resident long-term unemployment rate is and remains low at 0.7% in 2010, and ranged from 0.5% to 1.4% in the past decade.

Our labour force has remained resilient through the ups and downs. From our perspective, a key reason is that the Continuing Education and Training (CET) system, and our education system, which is part of the larger landscape, has enabled our workforce to remain globally competitive. By being globally competitive, companies can thrive and when companies thrive, jobs are created for our people to keep them employed.

Let me now talk about CET and how we are looking at improving it. Mr Zainudin Nordin had asked for an update on what we have achieved with CET.

In 2011, almost a quarter of a million workers went through WSQ training, of which 68% were lower-skilled workers, and about 44% of them were aged 40 and above.

In a 2011, WDA survey of a very sizeable sample size, 12,500 trainees, most of them found WSQ training useful and this is from the trainees' perspective – 90% of them reported better work performance. I will elaborate later.

Mr Zainudin and Mr Ang Wei Neng also asked how we keep our CET system relevant. This is a very important question. Our WSQ is benchmarked against world standards which WDA develops in close consultation with key industry representatives because it does not make sense if the training has no relevance to the industries, so we try to make sure that it remains relevant. Currently, our WSQ system comprises 30 sectoral frameworks, with more than 14,000 courses. MOM works closely with MOE on a whole-of-Government approach towards CET.

Mr Zainudin also spoke about the need to have creative and innovative workers for a knowledge economy. Ms Jessica Tan asked how we can help locals seize good job opportunities through skills transfer.

We all know that the nature of work is evolving and the environment is changing as well and workers who are prepared to apply their skills in a more diverse and flexible way will stay relevant. What this means is that on-the-job training becomes critical. This is something that Mr Gerald Giam talked about, and this is something that we have been placing emphasis on and will continue to emphasise on that.

For instance, EDB's Initiatives in New Technology or what we call INTECH grant funds for training in such growth areas, and the Strategic Attachment and Training Programme (STRAT) funds overseas on-the-job training with leading companies. On average, over 3,500 locals were trained under these programmes annually over the past five years.

Mr Zaqy Mohamad stated that Singaporeans are ready to take greater ownership over their personal development. I agree and think that this is important. WDA is seeking to make CET more accessible, personally relevant, and individual-centric.

By end March this year, WDA will launch its revamped website, where users can obtain information on industries and occupations, and identify suitable career options and training pathways for themselves.

For those who prefer further personalised assistance, they can still approach our career centres at the Community Development Councils (CDCs) and the Employment and Employability Institute (e2i).

Mr Patrick Tay, Mr Zaqy Mohamad and Mr Zainudin expressed concerns about the challenges facing PMEs and how we can help them with training and job facilitation. Mdm Halimah Yacob raised similar concerns during the Budget debate. We fully recognise that PMEs, who are the fastest growing segment of our workforce, have very diverse professional development needs and is a group that we need to pay attention to.

The percentage of employed Singaporeans in PMET jobs grew from 42% to almost half, 49% over the last 10 years. If we just look at PMEs alone, it is nearly 30% of employed Singaporeans.

We are therefore looking at how to improve our competency-based CET offerings for PMEs to complement our academic CET programmes, and we are open to suggestions from PMEs and employers on what would be most useful to them. Again, staying relevant is important, so feedback is critical.

The Skills Training for Excellence Programme (STEP) was introduced last year to better support the CET needs of our increasing PME workforce. Within one year, there are now more than 500 courses available under STEP and over 50,000 PMEs have undergone the various programmes. In addition, 360 STEP scholarships for Singaporeans valued at $12 million have been set aside for eight sectors, which include aerospace, retail, tourism and healthcare.

Many PMEs take initiative to upgrade themselves. But many have also fed back to us that they need more assistance to find the right job. This year, we will focus on employment facilitation and we will introduce three programmes to help PMEs:

Firstly, we will officially launch CaliberLink, a one-stop service point for PMEs that integrates training assistance with career services. CaliberLink will complement the existing career centres based at the CDCs as well as that operated by e2i.

PMEs can look forward to services such as career coaching, training advisory, career transition programmes, networking sessions with employers and employment facilitation. CaliberLink will allow us to effectively and holistically assist PMEs.

In December, I corresponded. I received an email from Mr Tan Wei Thong. He is a professional who, after working several years in China, wanted to return to Singapore to be closer to his family. He shared his views about what could be improved and shared about some of the challenges and difficulties he faced. I received an email from him actually just a few weeks ago, and he told me that career consultants at CaliberLink helped him with resume and interview skills workshops, and provided job referrals to prospective employers. The knowledge he gained complemented his own job search efforts and he found a job as a Director in a regional manufacturing company. I was very happy to receive that email from him. This is because CaliberLink is pretty much at a soft-launch stage, but to have such a response from the public at such an early stage, is encouraging. I hope he will be one of CaliberLink's many success stories in years to come.

Secondly, WDA will appoint the Association of Small and Medium Enterprises (ASME) as a Programme Partner to manage Max Talent, which is a pilot Place-and-Train programme for SMEs to recruit and retain PMEs. So in the focus, in terms of helping PMEs, we are also looking at how do we then help SMEs in the process.

Some Members spoke about helping SMEs hire talented Singaporean workers. This programme, we believe, will help achieve this. Besides enhancing the talent pool and capabilities of SMEs, who traditionally would highlight that they find difficulties recruiting and attracting PMEs, it also widens opportunities for PMEs themselves and to realise that SMEs also offer very positive and very viable career opportunities. ASME will work closely with SMEs to provide PME vacancies and to help them improve their HR management. For PMEs, ASME will help to place them and equip them with the essential management skills and knowledge. The programme will start in April 2012. WDA will provide more details.

Thirdly, we have studied how countries like Australia and the UK have successfully leveraged on the private sector in providing employment facilitation services. WDA has begun to engage private sector agencies, discussing with them how best to tap on their expertise and resources to improve our employment facilitation efforts to better match different segments of the workforce, including PMEs, to jobs.

Mr Patrick Tay has made many useful suggestions which we will consider as we refine our CET system to better support PMEs. As Members can see, PMEs is one big area of focus for us going forward this year and the years to come.

In terms of CET supporting the economic restructuring effort, Ms Jessica Tan and Mr Vikram Nair asked what we are doing to help companies and workers in a possible slowdown or during restructuring. Mr Heng Chee How suggested monitoring job displacements and matching displaced workers to firms who need workers. I think this is a very good suggestion and we fully support it. WDA and e2i will step up job seeker and employer outreach efforts as economic growth potentially slows this year.

Unemployed, vulnerable, and needy job seekers often have needs that go beyond job assistance. This is something important to recognise. Therefore WDA will now increasingly collaborate with community groups, grassroots and self-help groups to establish a structured referral process to ensure that these job-seekers get the comprehensive help that they need. Not just in terms of helping to find jobs but in the process of getting to know the applicants and their circumstances more personally, we may help to link some of them who have needs that go beyond the jobs, with the various agencies involved to provide a more complete set of assistance.

There are also two additional measures that we intend to introduce.

Firstly, for companies, as Deputy Prime Minister Tharman announced in the Budget Speech, we will enhance training subsidies and absentee payroll support for SMEs. SMEs will receive 90% training subsidies when they send their local employees for the Singapore Workforce Skills Qualifications (WSQ) and other certifiable courses and academic CET courses. About 8,400 courses will potentially fall under this scheme.

Additionally, SMEs can also claim higher absentee payroll funding at 80% of basic hourly salary capped at $7.50 per hour. This is a significant increase over the current cap of $4.50 per hour. This three-year initiative takes effect from July 2012 and will cost an additional $30.5 million per year, benefiting an estimated 8,000 SMEs and 65,000 workers a year.

Secondly, for workers, WDA will expand the intakes of Place-and-Train (PnT) programmes, including the Professional Conversion Programme (PCP), and cover more growth sectors such as Animation and Biomedical Sciences. This will provide more options for those who are willing to consider a career switch, whether by choice or by circumstances.

Ms Vany Ramakrishnan, for example, successfully switched from working in a bank to leading a team of 35 Guest Service Agents in Marina Bay Sands after taking a WSQ Diploma in Tourism under the PCP. Through her dedication and diligence, she has been promoted twice after two years on the job and currently earns almost 50% more than when she first started.

Besides giving individual Singaporeans more pathways to fulfil their individual aspirations, our CET system is also designed to help businesses restructure and to improve their productivity through upgrading the skills of their workers.

Mr Zainudin and Ms Low Yen Ling asked how we will maximise our limited pool of workers and facilitate job-redesign to improve productivity. Our main strategy to achieve this is through the various productivity roadmaps which have been endorsed by the National Productivity and Continuing Education Council (NPCEC).

CET plays a very important role in these roadmaps by ensuring that our workers have the required skills to be more productive. We have made good progress and already have CET strategies for nine of 16 NPCEC sectors. And we will continue to work hard at this.

For instance, in the Precision Engineering productivity roadmap, WDA, together with EDB, SPRING and Nanyang Polytechnic, will be nurturing 2,800 highly skilled Master Craftsmen in Singapore over 10 years. Through the establishment of a progressive career pathway and WSQ training certifications, we will enhance the attraction and retention of skilled craftsmen in the industry. WDA will be providing $7.7 million to support this initiative, which will enable our companies and workers to move into more complex and higher value-added activities.

All our efforts to raise productivity of workers rely on businesses that believe in the value of training good people, and workers that believe in taking the step to up-skill and contribute more. It takes two hands to clap, and the Government and the agencies will step in to facilitate that process.

The right team can make significant improvements at the workplace – Advanex is a manufacturing firm that sent 10 of its managers for WSQ productivity training in 2010. Subsequently, they streamlined some of their work processes to halve the number of steps and reduce the time needed by three-quarters. They even managed to save enough floor space to start renting the excess to other users.

Mr Christopher de Souza spoke about the importance of improving productivity so that workers benefit. Advanex did just that by leveraging on WSQ courses and their employees' creativity. And this is what we hope to see more of; because it shows how productivity improvements can be simple, can be ground-up, but produce very real and very significant impact for companies and for workers.

On bringing economically inactive Singaporeans back to work – several Members have asked how we can help them or vulnerable workers participate more fully in the workplace and to contribute more. Tapping this latent pool of workers can also help companies address their manpower needs in a tight labour market. The numbers go up to about slightly over 150,000 of them.

Mr Teo Siong Seng proposed waiving CPF contributions for employers who recruit home-makers for part-time work. Now, while this may lower the cost of hiring these workers, it will be, in their case, at the expense of their retirement adequacy because many of them would have very little CPF to begin with, because they have been out of work for a long time. Many home-makers actually choose not to rejoin the workforce largely because of a lack in suitable flexible working arrangements, or because they lack the confidence and skills to go back to work.

Hence, our approach is to both tackle the barriers to them re-entering the workforce as well as to give them the opportunity for skills upgrading through CET. As Members Mr Low Thia Khiang and Ms Mary Liew pointed out, one of the first things that needs to be done is to promote flexible work arrangements. Flexi-Works! Scheme and the Work-Life Works! (WoW!) Fund help companies do this. In 2010, 35% of establishments offered at least one form of work-life arrangement to their employees, up from 25% in 2007.

Despite the progress, there is still much that the Government and tripartite partners can do. During the Budget debate, Mdm Halimah called for the review of our assistance schemes. Ms Mary Liew also asked if we could make these schemes more user-friendly and less restrictive.

So, together with our tripartite partners, we will review and improve Flexi-Works!

Home-Fix is one company that has tapped on the Flexi-Works! Scheme. They offer flexible work timings and permanent part-time arrangements which allows them to hire economically inactive persons such as housewives, who are then able to balance work and care-giving responsibilities.

Ms Georgiana Francis is one such employee who managed to re-enter the workforce, even while she had a young child to care for, due to the permanent part-time arrangement offered by Home-Fix. Clearly, providing flexibility in working arrangements can attract economically inactive persons back to the workforce and allow workers to better manage both work and family responsibilities. And as we begin to tighten the workforce, in terms of the availability of the foreign workforce, I think this is one area which companies should seriously consider expanding so that we can look at bringing more of these people into the workforce.

My colleague, Senior Parliamentary Secretary Hawazi Daipi will speak more on low-wage workers later. Let me just say that the CET needs of vulnerable workers are of key concern to us. Ms Sylvia Lim asked how much low-wage workers benefit from training. I think that is a valid and important question. In fact we asked that of ourselves all the time, not just for low-wage workers, but for all workers – does training help? Mr Low Thia Kiang also asked about the effectiveness of these training programmes. As Ms Lim had noted, the Workfare programme provides both an income supplement and generous training incentives. In 2011, close to 50,000 low-wage workers benefited from the Workfare Training Support (WTS).

Training alone may not lead to immediate wage improvements. Rather, it must be a result of improved productivity which, amongst other factors, depends on the knowledge and skills of the worker and whether these are effectively applied to the job and workplace. It is true that sometimes actual improvements in profits may not filter down to the workers immediately, but a rational employer would have to do his calculations and adjust wages commensurate. And this is something that we will encourage companies to do. Otherwise, he would not be able to retain his good staff.

Ms Lim mentioned data from WDA's annual WSQ Training Outcome Evaluation Survey. In 2011, 90% of low-wage workers said they performed better at work as a result of the training. This is from the low-wage workers' perspective. This is not a feedback on the courses itself but after they have re-joined the workforce. Ninety-five percent of companies surveyed also agreed that the training improved the performance of their low-wage employees. In addition, 88% of low-wage trainees indicated that they will continue to take up other WSQ courses. So this is actually very important because it shows that for the workers themselves, they find a tremendous value in undergoing this training. And I would suggest that it is not just in terms of skills, but because they are better skilled, I think it also brings with that a higher degree of confidence and also enhanced their own respectability at their workplace. And this can only auger well for the long-term for the individual.

That such a large proportion indicated they are willing to continue training, I think it is an indication of WSQ training. But this is something that we will continue to monitor and to make sure that we improve. And we recognise there are costs to training. But these should not stop workers from taking the first step because even a little training will go a long way. For example, Mr Mohamed Hardi was previously working as an odd-job worker. Career consultants at Northwest CDC helped him enrol in a five-day Forklift Driver Training Course and find a job at Caterpillar Pte Ltd for an almost 50% increase in salary.

We cite real life examples to illustrate possibilities and inspire Singaporeans to continuously upgrade and up-skill. And they are not exceptions but realities which Singaporeans should aspire for. Like I said earlier, the feedback from the workers themselves is a clear indicator of the value that these training provide for older workers.

Mr Seng Han Thong spoke about how it is important to help older workers go for training. As I shared earlier, 44% of people who obtained WSQ training in 2011 were above 40. That is about 109,000 older workers. The perception among some employers that older workers benefit less from training is something we hope to correct.

In fact, older workers who go for training are more likely than younger workers to have a positive experience. From the earlier mentioned survey, we also found that 82% of workers aged 50 and above found training useful, as compared to 77% of workers aged 30 and below. Seventy-four percent of older workers were also more motivated at work, as compared to 66% of younger workers. And this feedback is something that companies should pay attention to as well as to look at who they might choose to employ, especially as we are now encouraging re-employment; and this something that reflects well of older workers.

Our CET system must also be inclusive and cater to Singaporeans with special needs. Ms Denise Phua and Mr Ang Wei Neng have suggested extending CET to persons with disabilities. Given the customised needs, our approach is to let organisations with expertise in this field take the lead in developing such programmes and WDA will play the supporting role. For example, the Centres for Training and Integration (CTIs) initiated by the Enabling Employers Network (EEN) and supported by MCYS and NCSS provide structured training for persons with disabilities through on-the-job training and placement programmes. WDA has been supporting these programmes since July 2011, and will provide over $600,000 in funding.

WDA will also provide 90% pilot funding for Workplace Literacy and Numeracy (WPLN) assessment for students from selected Special Education Schools, Assumption Pathway School and Northlight School. The WPLN credentials are recognised in lieu of GCE qualifications by about 3,700 employers and allow progression to vocational education courses. We hope that more employers will come on board.

As we restructure our economy for sustainable growth, we need to ensure that this growth is inclusive. Mr Zainudin Nordin spoke about the importance of preparing our workforce and workplaces for an ageing population. The ageing population is a demographic reality. This is something that is going to happen. The percentage of our labour force aged 55 and above has more than doubled from 8.5% in 2001 to 18.2% in 2011. The employment rate for residents aged 55 to 64, encouragingly, rose to a new high of 61.2% in 2011 from 59% in 2010. Our older workers will also become more educated over time. The experienced and valuable members of our workforce who can contribute long into their silver years, with the right workplace arrangements. Many companies are already recognising this.

Based on findings from MOM's 2011 Survey on Retirement and Re-employment Practices, the proportion of companies that allow the employees to work past 62 has increased from 77% in 2010 to 79% in 2011. With the Retirement and Re-employment Act (RRA) in effect since 1 January this year, we expect the employment rate of older residents to continue to improve towards our target of 65% by 2015 which will bring us closer to the older worker employment rates in mature economies such as Japan and Sweden.

We want to ensure older Singaporeans always have the choice to keep working if they are able to and if they want to, whether to better sustain ourselves in retirement or simply to remain active in society and to derive satisfaction from a meaningful job. We will help older Singaporeans who want to keep working in two main ways.

Firstly, the enhancement of a Special Employment Credit (SEC). As outlined in the Budget Speech, the SEC will be enhanced from this year to provide employers with continuing support to hire older Singaporeans. Mr Teo Siong Seng had asked whether if we could lift the wage cap of SEC for PMEs who earn higher than $4,000 to benefit. In the Budget debate, Mr Patrick Tay expressed similar concerns for the employability of older PMEs due to increase in CPF contribution rates. This group of PMEs would largely comprise senior executives and professionals. Some of them clearly with deep expertise and experience will continue to be highly sought after. But there will also be those who will find difficulties in their new job late in their careers. We will be introducing several job facilitation schemes targeted at PMEs this year to help them. And some of these have been elaborated earlier.

Spreading out our SEC budget thinly to cover all older workers, including such senior executives, would mean that we can only give SEC up to 4% wages, instead of the 8% we currently give. It is instructive to know that at $3,000, SEC covers about 70% of older Singaporeans. As it moves up to $4,000, it covers 80%. The SEC itself actually covers between 70% and 80% of our older workers.

Second, the ADVANTAGE! Scheme will be extended until March 2013, to provide generous funding support to help companies to re-design jobs, work processes and workplaces to make them more age-friendly. I totally agree with Mr Low Thia Kiang that integrating older workers into the workforce requires different approaches for different groups. The best way to illustrate this is to show the example of St Luke's Eldercare who has re-designed jobs for its older workers.

They are a voluntary welfare organisation that offers care services for seniors. Over 90% of its local staff are aged 40 and above. St Luke's recognises the importance of enhancing its work processes to make it age-friendly.

So, with the help of the ADVANTAGE!, they equipped all passenger vans with hydraulic wheelchair lifters. This is a very simple idea and a very simple enhancement, but one that has a big impact on helping its older workers perform their jobs better. It reduces the physical strain on the care staff and drivers. Every day they have to lift the immobile elderly up onto the vehicles and with this simple device it has made it a lot easier for them. And this also reduces the number of employees needed to perform certain tasks.

Mr Ang Wei Neng asked what we are doing to help companies change the way we operate to fit an ageing workforce. I think St Luke's Eldercare harnessing ADVANTAGE! is one good example of how it can be done and we encourage more companies to follow suit.

Mr David Ong also suggested doing away with the statutory minimum retirement age, something which has been talked about. There are many different models out there in the world. We have surveyed and taken a look and explored the various models, and we have decided to adapt our re-employment model from Japan. And Japan today enjoys one of the highest employment rates for older workers.

So, the RRA had only come into effect this year and implementation has by and large been smooth. Nonetheless, we need to monitor its progress and to make sure that it remains effective. We must also continue to equip our workforce with the right skills. Employers should take the initiative to encourage the development of their older employees and the adoption of age-friendly jobs at workplaces. I think we all need a concerted effort by society at large because there is a fundamental belief in the value of older workers in the contributions they can make. And it is important for us to remember that as we look after older workers, the younger workers are also looking on because they eventually themselves will also become older workers themselves. I think it is also a reflection of the values that we hold as a society in terms of how we regard our older workers.

Let me now move on to the topic on managing the inflow of foreign workers. As the Committee would have appreciated during the Budget debate, there are really no easy answers to the issue of foreign manpower. Despite the various measures announced, such as SEC, some have asked why we have not done more and implemented more quickly? On the other hand, we also hear from Singapore business owners and HR managers who say that changes have taken place way too suddenly and will affect their operations and plans. Can we calibrate it? Can we hold back? Can we slow it down? We fully understand where all these different perspectives are coming from. I think their concerns and frustrations are valid from their perspectives. However, as a Government, we have to manage all these tensions that pull in different directions. We need to find a balance where our economy can thrive and create better jobs for Singaporeans. That, at the core of it, is what we are trying to.

Meanwhile, we must ensure that Singaporeans remain at the core of the workforce. Members, Jessica Tan, Foo Mee Har and Mary Liew, have asked how we can encourage employers to develop Singaporeans as a core of their workforce. The tripartite partners released a set of guidelines on developing a Singaporean core last October. Employers are expected to adhere to the guidelines. They should make reasonable efforts to attract and consider Singaporeans for job positions on merit and to train and develop the potential and careers. Since the launch of these guidelines, the Tripartite Alliance for Fair Employment Practices (TAFEP) has reached out to employers and responded to allegations of discriminatory employment practices. So far, each employer that TAFEP had approached, following a complaint, understood and accepted the need to abide by these guidelines.

Most employers believe it is in their interest to develop Singaporean workers and they do not condone discrimination. We met a number of CEOs in our various dialogues and one of them, who was quite forthright, said that he was genuinely surprised to hear TAFEP's feedback and feedback from his own Singaporean employees themselves about how some perceived discrimination was taking place at the workplace. He said that he would address this issue. Many employers have shown TAFEP their efforts to recruit Singaporeans. Some have even taken extra steps to review the hiring patterns of the individual business units to check for and to address biases.

Alongside these guidelines, which are important, I think we also have another arm of our effort which is to ensure the quality of foreign manpower. Mr Heng Chee How has expressed concerns about the possible sharp rise in the Employment Pass (EP) stock during an economic upturn. Mdm Foo Mee Har suggested employers show proof that they try to hire Singaporeans before being allowed to hire EP holders.

Requiring such proof will subject employers to additional administrative hurdle, lengthen their hiring process and add more friction, costs and rigidities. It will be more onerous for employers, particularly SMEs, who may have other pressing HR needs and fewer resources, to deliver such proof quickly and affordably. And we think that it will affect labour market flexibility and that is a key part of our competitiveness and this will also affect the viability of some of these companies in their decisions to come or stay here. And that in turn will affect creating jobs in Singapore. But this is something we have to bear in mind and we have decided to take a more pragmatic approach for now, to regularly review our EP criteria to ensure that only high-calibre EP holders are brought in to complement our local PMEs.

With regard to PMEs, as highlighted earlier, a tremendous amount of effort will be put in to help all PMEs not only just upgrade themselves but in terms of job facilitation as well. We recently took two significant steps. The first was in July 2011 when we raised the salary requirement for EP holders. Then again in January this year, we raised salary requirement as well as tightened quite significantly their legibility criteria. I would like to remind Members that we have to be very careful in these policies. We need to find the right balance. The skilled foreign manpower bring with them expertise, knowledge and network that our economy needs in order to grow and create better jobs for both our PMEs and rank-and-file Singaporeans. I think having an open and diverse workforce is important to Singapore because not only for Singaporean companies but foreign companies. It ensures that they remain viable and they are able to thrive and, in so doing, they create jobs for Singaporeans.

Mr Zaqy Mohamad asked how EP holders have been affected by our tightening measures as compared to the Work Pass and S Pass. It is not possible to compare the impact of the measures as they have been introduced for the various Work Pass categories and they are quite different. And we target the foreign workers quite differently. The measures for EP holders focus on raising quality while those on S Pass and Work Permit holders are mainly price mechanisms – that is, levy increases – to moderate growth in numbers.

We are only halfway through the levy increases which began in July 2010 and will run through July 2013 while the EP tightening measures only took effect last month. As Deputy Prime Minister said earlier, if the foreign workforce continues to grow rapidly despite all these measures, we will have to further consider changes and further measures to dampen reliance on foreign workers. These steps have been taken in the last few years. The economy has been doing well, companies have been doing well. So, notwithstanding all that, the demand has continued to be quite high. So, this is why we are stepping up our efforts to manage the numbers.

Let me now spend some time to talk about the Dependency Ratio Ceilings (DRCs). Several Members today and at the Budget debate, suggested a finer differentiation of the DRCs between industries rather than just between the various broad sectors.

Mr Low Thia Kiang suggested tightening DRCs in industries where Singaporeans can be trained to take up jobs and relaxing them in industries which have difficulties attracting Singaporeans. Our broad sectoral approach already recognises that in some sectors like construction, it is much harder to attract Singaporeans. That is why their DRCs are more generous.

This concern that Mr Low and other Members have raised is a very relevant one. Our current approach takes it into account. The question really is about the practical side and the implementation side of the house. It is about how much more can we go down into the details and how much more finely we can disaggregate the industries, while still achieving, and it is important to remember this, the broader objectives of reducing overall growth of foreign workers to within one-third of the workforce and boosting productivity. Those objectives remain important.

Deputy Prime Minister Tharman addressed this issue earlier but let me take the opportunity to reiterate. There are three reasons to highlight. Firstly, we need to achieve an overall reduction in the growth of foreign workers but most industries that we speak to – the companies, in the emails they send us and when they come to speak to us at the various dialogues, say that they are different, they cannot find Singaporeans, they need to have more foreign workers. Almost consistently, many of them will say that they need more foreign workers. In fact, the industries calling for more foreign workers are the same ones that contributed most to the foreign workforce growth in the past five years. Mr Low's point about easing the DRCs in sectors such as these where they find it difficult to hire Singaporeans, would have the effect of opening the floodgates further because many of these companies themselves are already hiring many foreign workers. So, it is something we need to be very careful about.

Furthermore, these companies also have much lower productivity levels as compared to their counterparts in developed countries. So the construction industry is one which I highlighted earlier. I would acknowledge that it is not easy to bring in young Singaporeans into that sector but it is a very large industry. There are some of the more professional jobs which we believe, by a change in job scope, by change in the income levels or the wage levels, young Singaporeans could be attracted to move in. But, importantly, in terms of the reliance on foreign workers, it is an industry that has way too many foreign workers when you compare to the construction industry, say, in Australia, and some of the developed countries, say, in Japan. So we believe that by tightening this in some of these sectors, it will force productivity improvements and that, in turn, would have a significant impact on the overall numbers of foreign workers in Singapore.

To give more liberal DRCs to some of these industries will actually lead to fairly perverse outcomes. They will constrain the growth of high-productivity industries, because remember, the overall objective is to bring down and to manage the overall numbers. As we liberalise in some of these sectors, which actually draw on many foreign workers, it will mean that some of the high-productivity industries, we will need to tighten it and actually that will affect them more significantly. So it will be actually counter-intuitive because it will constrain the growth of high-productivity industries while we incentivise some of the low-productivity industries. And this will also affect their capacity to create more jobs and good jobs for Singaporeans.

Secondly, we cannot and should not take it as a given that it is difficult to hire Singaporeans today and therefore it will remain so. I think if we look at many of the developed countries in Europe, for example; and Germany is a good example, some of the jobs that Singaporeans seem to shun here – educated, competent Germans are undertaking those jobs. In the same way, we believe that a lot of it has got to do with how we re-design the work and the work environment, and wages also have to move. So if we continue to give such industries more foreign workers, they will not have any incentive to improve productivity and change the nature of work in order to draw in Singaporeans into these areas. These good jobs can be created. And I totally agree with Ms Denise Phua who raised that we need to re-design jobs and the environment. In developed countries, we see that happening and we believe that this can be done in Singapore as well.

Several industries experiencing manpower shortages have conceded that remuneration, job image and work conditions are, in fact, important factors which need to be addressed to attract local workers. And this is something that we believe can be done and should be done.

Industry associations play a very important role in this. Mr Zaqy Mohamad asked how MOM plans to help SMEs share best practices for productivity gains. This sharing of best practices is quite critical. You will find in industry one company complaining about how difficult it is, but in the same industry, a rival competitor took everything on board, began to change and actually began to thrive. How do we manage the exchange of good practices and ideas? It is not easy but it is something that we should endeavour to do and that is where associations and federations come in. My Ministry has already started work with the Singapore Retail Association and the Singapore Hotel Association on initiatives to attract locals and to increase productivity, including industry benchmarking and job re-design.

Thirdly, industry-specific DRCs are difficult to implement in reality. Mr Low Thia Kiang also acknowledged that actually the range of SME operations is very complex. We fully agree. It is exceedingly complex. And it is precisely because it is complex that it is very difficult to then go in and start differentiating every industry because every one is fairly unique in their own way and will have their arguments about why they should benefit from more liberal DRCs. It is important to also highlight this point with regard to the DRC that, actually, most companies in Singapore are not maximising their DRCs. There is still space for them to hire Singaporeans and to hire foreign workers, if they need to.

The boundaries between industries are not clear-cut. As Deputy Prime Minister Tharman explained, especially for some of the bigger companies, they may reside in terms of their work nature, they are both production, manufacturing as well as services. For some of these companies, you actually provide them an advantage over the very SMEs that some of the Members have raised about why we should look after them. This is why we think that having a broader-based sectoral approach would make sense.

The detailed micro-management of DRCs will literally amount to a central planning system for the allocation of labour. The fact is that technology changes, jobs change, work environment changes. We have seen that happen even within the span of just a few years. It will become very difficult for the Government to be constantly tweaking the system to allocate foreign workers differently, as industry and work conditions change. This has a tremendous impact in terms of uncertainty for businesses and it will affect their long-term planning and investments. Firms would not know whether to invest in productivity to try to attract locals or not, or to wait for more liberal DRC. Such a system would also be prone to constant lobbying, which would unfairly advantage the well-resourced and the larger industries, to the detriment of the smaller ones, particularly the SMEs.

Let me just say that this is a very complex landscape. It is precisely because it is complex that we need to adapt for this. Our foreign labour framework basically operates as such: there is a DRC and there is a foreign worker levy. The DRC system, we look at the context, the nature of the different sectors, and we define broadly the different DRCs for the work space at large. These define the boundaries. The foreign worker levy will then be the precise tool that will delve into the details and into this complex world. It is transparent, everybody knows what the foreign worker levy is, and companies will then decide how much they are prepared to pay. If they are not prepared to pay, then they re-engineer and change the process. We believe that this system has worked well for Singapore. This is why, in terms of our basic approach, we believe that having this combination of the DRCs, which is differentiated across the broad sectors, and the levy, will be the mechanism that makes sense for us.

Mr Low also suggested that differentiated DRCs would help low-wage workers. We are quite concerned about this because having liberal DRCs in some of these industries which we assume Singaporeans would not be interested in, may actually have the opposite effect. For example, allowing more low-cost foreign workers in the cleaning industry would actually undo many of the initiatives we are taking to encourage companies to best-source. We believe that even in the cleaning industry, there are good jobs for Singaporeans. Liberalising the DRCs will permanently keep out the older and low-wage Singaporeans who may find relevant employment in these industries. Those who remain, more likely than not, will continue to see stagnant wages and poor working conditions because firms are not pressured to restructure. These jobs, we believe, like many other jobs, have the potential to be good jobs, and it is possible to make them so for Singaporeans in the industry. We need to do this re-design across the whole spectrum of jobs that are in Singapore.

As Mr Zaqy Mohamad has asked, we are aware of the pressure on healthcare and social services. That is why we do have focused substantial attention on them through the NPCEC to help them improve their productivity and efficiency by adopting technology and best practices.

MOH and MCYS will talk more about the strategy to ensure adequacy of healthcare and social services manpower, and enhance the attractiveness of careers to Singaporeans in these two sectors during the COS debates. MOM will continue to support the two Ministries to ensure that these two sectors have the necessary manpower to deliver their essential services to Singaporeans.

Members Zaqy Mohamad, Christopher de Souza and Nicholas Fang are concerned about the effect of tighter access to foreign workers on local firms and inflation. Mr Low Thia Kiang also raised that point.

We are aware of the pitfalls and that is why our DRC reductions affect a small proportion of firms, especially those with the highest reliance on foreign workers. These firms largely need only to replace one or two foreign workers, and they have two years to do so. And we believe that there is adequate time for them to re-design and adjust. All our efforts are aimed at encouraging firms to pursue productivity improvements now, a move that will not happen soon enough if we continue with generous DRCs or, as suggested by Mrs Lina Chiam, an elimination of the levy altogether.

Our objective must be – and it is important to come back to the objective – to upgrade and restructure our economy. It is painful but it is something we need to do now, to avoid the pain that we will suffer later as competition continues to rise in the surrounding region and beyond. But we know that the current balance must be adjusted carefully. For firms that need help to adjust to the new environment, we want them to use our generous schemes to restructure and to thrive. This is the best way to help companies make the necessary transition. We cannot afford to keep postponing this.

Let me sum up our focus. At the heart of everything, our people remain at the centre of what we do. We create the conditions to provide good jobs for them. Being able to stand on one's own two feet and to respect the dignity that comes with work, are part of the ethos that our forefathers have handed down to us. When we talk of the low-income earners, notwithstanding the wide range of assistance provided, we believe that providing jobs is the best form of welfare. So when we talk about economic growth, it is not just for economic growth alone. It is not just about the GDP numbers. It is about providing an environment where good jobs can exist for Singaporeans.

As you can tell, developing and nurturing our people is one of our core areas of emphasis. Our CET focus is extensive in scope and breadth, and it complements our education system. This year, we have placed great emphases on PMEs and to assist SMEs. To keep growth inclusive, we are looking out for our elderly and disabled. Low-wage workers are a big focal point and would be covered in greater detail by my colleague, Mr Hawazi.

Managing our foreign workforce is also an important ongoing effort as we seek to maintain our competitiveness while, at the same time, manage the overall numbers and its impact on society.

I would like to take the opportunity to thank our stakeholders and the public for all their inputs and suggestions, many of which we have taken onboard to factor into some of the measures we have highlighted. Most significantly, I need to thank our tripartite partners. Where many countries find that this is a point of conflict, in Singapore, it is a tremendous source of strength where the Government, unions, workers and employers can come together for a common cause.

Mr Chairman, as a result of reduced CPF contributions for older workers over the years, many seniors today have seen their CPF under-contributed to face today's higher cost of living. These older workers, especially those above 60, have low levels of CPF savings due to the lower CPF rates in the last 20 years. Today, many of them also find it more difficult to make ends meet with a limited income and CPF savings. What can the Government do to help our older workers in this category? While the CPF is important, what many of these older workers really need is cash-in-hand to deal with immediate needs of the day, that is, the rising costs of living in stagnant wages. For older workers, I also urge the Government to consider releasing WIS payments more regularly to help them ease their financial burden. Many of our younger low-wage workers, they are daily-rated freelancers or paid-on-project basis. They face a dilemma which some employers are happy to exploit. These employers compensate them with more cash rather than CPF contributions because it seems a win-win situation for both sides. However, without CPF contributions, these low-wage workers will lose out on many of our Government schemes, such as the WIS and housing benefits. How could we better educate them on the disadvantages of doing this? And what measures are in place to prevent such exploitations by employers against our younger low-wage workers?

Mr Chairman, many Members before me have spoken on the important topic of bridging the income gap. But before adding to the list of programme suggestions, I would like to suggest we have better research on Singaporeans' lifecycle of earnings and industry-specific realities.

In MOF's recent research on social mobility, it focused on relative social mobility, or people going up and down the income ladder. There is something unsettling about the research. Yes, we want social mobility and incomes of the lower income to go up. But I do not think we want to do this by pushing the high-income and middle-income earners down the ladder. And we know already of many middle-income earners, who face declining income. Hence, we must worry about declining incomes at all income levels.

Specifically, we need more longitudinal tracking of Singaporeans at the 50th percentile and below income levels. Cross-sectional data gives an incomplete picture of reality as people are dropping in and out of the data set across time periods. Incomes may also have risen because people are working longer hours or taking two jobs in order to cope.

I would also suggest a study to identify the types of jobs that pay these low and declining wages, and to see if structural changes can be made or even industry-specific programmes and incentives given for employers to pay fairer wages. For example, the PAP Town Councils are now paying their cleaners more. How do we get the private sector to follow suit, where cleaners typically earn only around $4 an hour? Better still, how do we bring cleaners into private homes, where hourly rates can even go up to $15 an hour? We need better studies on the factors that affect wages.

Today, in Singapore, we have the highest density of millionaires in the world, earning among the highest salaries, paying among the lowest taxes and purchasing many services at Third-World prices. We have to change this. As mentioned by Mr Ho Kwon Ping and The Straits Times correspondent Radha Basu recently, society and employers need a mindset change to bear the cost of raising the wages at the bottom.

Companies need to practise Corporate Social Responsibility (CSR). Part of good CSR is to train workers well and pay them a fair wage. Companies need to sort out how they earn their profits first, before they do corporate philanthropy to the very same people who might not need their help if they were paid better wages.

We need more social entrepreneurs like Ms Elim Chew and Ms Sim Sin Sin, successful entrepreneurs who have also put much effort into creating opportunities for the less advantaged to hold stable employment.

Lastly, we also need more extensive job and lifeskills counselling. Such counselling is not just for the unemployed or about setting job expectations right. For many, it is also about a personal encouragement and having self-confidence boosted. This may be more effective than any material incentive to upgrade. Deputy Prime Minister Tharman talked about bringing respect for certain jobs. What is even more needed is their respect for themselves and other people's respect for them.

Sir, we need to take care of our workers in the waste collection industry, whether they are locals or foreigners, since the nature of their work can be quite hazardous physically and biologically.

From personal observations as well as from reports from others, these workers sometimes do not seem to be well covered and protected in their attire. Sometimes they may wear gloves only on one hand and not both; they may be in slippers whereas they should rightly be in boots. They should be also wearing protective hats to protect themselves from killer litter, if there is any.

Some feedback I have received indicate that proper attire for these workers are the norm in other countries and I think that Singapore should follow suit as well.

May I verify with the Minister for Manpower what sort of regulations are in place to protect workers in waste collection, in terms of protective attire and uniforms, and what are the plans to step these up?

Sir, I am very happy that the Government has announced that it will only provide contract cleaning and security staff from a list of accredited companies. The underlying motivation is to ensure that workers in these industries are paid a fair wage for their work, and hopefully, companies will be spurred to improve their productivity through upgrading and the use of technology. This is, in fact, a very positive development. But I hope, Sir, we will see more sectors would be considered for this initiative.

Sir, almost all Members in this House have residents who are from low-wage groups, and work as casual and contract workers. Many residents' lives would be significantly improved if only they had better employment conditions, and their employers sought ways to improve their wages through improving productivity, rather than think of ways of reducing or cutting their wage.

Sir, I am totally against the removal of CPF contribution by employers for part-time or casual workers. This could amount to a significant cut to an already low-wage group of employees. Rather than cutting their CPF, we should consider asking the companies to improve productivity and send their workers for training, which will in turn be positive for the companies. I believe that we also need to understand the situation of low-wage and casual contract workers in many other industries.

Could MOM share information whether the number of low-wage, casual and contract workers has been increasing over the years and what are the plans to improve the situation of the casual and contract workers?

Are these workers being paid a fair wage and receive their proper rights as stipulated in the Employment Act? Do they or their employers contribute to CPF at the correct rates? Is MOM aware of any practices or loopholes that allow employers to avoid paying CPF or shirk from their statutory responsibilities to their workers?

Sir, the economic climate in the coming years will bear great challenges for our companies and workers as we restructure our economy. I believe it is important that we embark on this restructuring when our economy is strong and the Government is in a strong position to provide the necessary support to our companies and workers to make the necessary adjustment.

With regard to the support given to help low-wage workers, I would like to touch on two areas: Workfare Income Supplement and Best Sourcing.

Sir, the Workfare Income Supplement is a permanent scheme put in place by the Government to encourage older, low-wage workers to find and stay in work, and to help them save for their long-term needs. There have been many strong calls for the scheme to be improved. These include calls for the cash component to be increased; to factor in inflation to determine the quantum; to review the criteria for the maximum payout and many others. I would like to ask whether the Government would be making further enhancements to it based on the feedback from the ground.

On Best Sourcing. Sir, I am heartened by the Government's pledge to take the lead in Best Sourcing as it demonstrates that the Government agencies are responsible service buyers. While this is a good move, I would like to propose some measures, based on feedback that I received from the industry players, to make the impact of Best Sourcing more systemic across Government and private sectors to benefit more low-wage workers.

First, I would like to propose for the Government to consider introducing legislation where all service buyers will be held accountable for the employment conditions of the outsourced workers working under their contract. This would be similar to the Work Safety Health legislation where the main contractor is held responsible for ensuring safety of all workers, regardless if they are subcontractors, as long as they are working at the worksite. This legislation will ensure service buyers, regardless whether they are from Government or private sector, to be more careful in awarding contracts and will only award to reliable service providers with good human resource and employment practices that are in compliance with the Employment Act and conform to good practices as being advocated in Best Sourcing.

Second, I would like to call upon the Government to study the possibility of reviewing existing Government contracts to ensure they are aligned with the Best Sourcing guideline. This is to ensure that our outsourced workers can get the necessary wage adjustment and not having to wait for the contract to end.

Third, I am pleased that MOM is working with its tripartite partners to leverage on the existing cleaning and security accreditations framework to help workers in these industries earn better wages and employment terms. Currently, the Government is working only on the cleaning and security sectors. I would like to ask for the plan or approaches with regard to other sectors where there are low-wage workers, such as landscaping, retail, logistics, F&B and others.

Sir, there is a great urgency to help low-wage workers earn better wages. We need to go beyond moral suasion and leading by example because it is a long road ahead requiring more affirmative action to be taken.

Sir, Deputy Prime Minister Tharman and Minister of State Tan have given the House an overview of the measures our Ministry will take over the coming fiscal year to help Singaporeans achieve retirement adequacy and to build a Singaporean core in our workforce. I will now touch on the measures to help low-income Singaporeans benefit from our economic growth.

As we have heard from Deputy Prime Minister Tharman in the recent Budget Statement, our shared mission is to build an inclusive society and a stronger Singapore. Mr Zainudin Nordin asked about the group that might not be able to enjoy this inclusive growth, especially the number of Singaporeans who are low-wage and do casual and contract work.

Our efforts to help low-wage workers have been focused on the bottom 20% of Singaporean workers. Based on income data of 2011, this group of workers earns a monthly income of $1,500 or less. Over the past few years, the number of workers in the bottom 20% has increased in tandem with the growth in the size of our overall workforce.

Currently, 13% of Singapore employees in the bottom quintile are casual and short-term contract workers. They are those who work on an ad-hoc basis or on contracts of less than one year. This percentage has remained fairly constant over the last three years, although the incidence is slightly higher amongst the low-wage group compared to about 12% of Singaporean employees in general. Our overall share of contract employment in Singapore is not unusual among developed countries. For example, it is 15% in Germany and France, and 13% in Canada.

Helping workers in the bottom 20% is a multi-faceted challenge. Almost half are aged 50 and above, and more than three-quarters have secondary education or lower. They also train less compared to the other income groups, and are more likely to suffer poor employment standards. I agree with Mr Laurence Lien that we need to understand low-wage workers and their challenges better, and that this calls for more research and analysis. We agree, and MOM will consider his specific suggestions further.

Helping low-wage workers also requires sustained efforts on multiple fronts. It cannot be done just by one agency, the Government alone. It has to be a concerted effort by different parties – employers, unions, as well as the Government. It is not a sprint, but a middle-distance race. Mr Zainudin Nordin asked about the approach that the Government was taking. During the Budget debate, Mr Ong Teng Koon also asked how we could raise the wages of those at the bottom.

Our approach is two-pronged. First, we help the lower-income Singaporeans become more productive so that they can earn higher wages. We do so both at the workers' level as well as the employers' level. Through the Workfare Training Support (WTS) and other programmes, we are helping low-wage workers upgrade their skills, so that they can improve their employability, find better jobs and earn more. And through the Inclusive Growth Programme (IGP), we are helping companies improve processes and redesign jobs, so that they can offer higher-value jobs that can pay more to our low-wage workers.

Second, we encourage low-wage workers to work and help create opportunities for them to do so. Again, we approach this at both the level of the worker as well as the employer. The Workfare Income Supplement Scheme (WIS) supplements the incomes and retirement savings of low-wage workers and encourages work. WIS currently benefits about 400,000 workers, with a total annual payout of more than $400 million.

The Special Employment Credit (SEC) provides employers with an incentive to hire older low-wage workers. With the enhancement of the SEC to up to 8% of wages, there is now an even stronger incentive to tap the older workforce to meet manpower needs in a tight labour market.

During the Budget debate, Mr Yeo Guat Kwang offered various suggestions to improve WIS, such as raising the cash component of WIS. Sir, we review WIS every three years and will consider these suggestions when we review WIS holistically next year.

Mr Zaqy Mohamad asked whether WIS can be paid more regularly. Other Members, including Dr Amy Khor, Mr Low Thia Khiang, Ms Irene Ng, Mr Inderjit Singh and Mdm Halimah Yacob, have also asked in the past whether WIS can be paid more frequently to low-wage workers so that they can be used to meet daily expenses.

I am pleased to announce that we will do so, by paying employees WIS four times a year, up from twice a year currently. Each quarter, we will now pay WIS to an employee who works for at least two months in the quarter, and who has an average income in the quarter of not more than $1,700.

The amount of WIS paid out each quarter will be adjusted proportionately. We will implement this change from January 2012, which means the first quarterly payment, which will be for work done in the first quarter of this year, will be received by 1 June 2012.

With these changes, we estimate that about 440,000 older low-wage Singaporean workers will receive WIS, or an increase of about 10% from today. Employees with a steady income will receive payments quarterly, instead of twice a year. While we are making a move to quarterly payments for employees, I should stress that we will not be raising the payment frequency further, as the intent of WIS is to encourage regular and sustained work.

Unlike employees whose WIS eligibility is automatically assessed based on their monthly CPF contributions, self-employed persons (SEPs) are required to declare their net trade income before they are assessed for WIS. While SEPs are given the option of declaring both their mid-year and full-year income, less than 1% of all of them do so. The vast majority of SEPs declare their full-year income and contribute to Medisave to receive WIS once a year. The Medisave contribution that needs to be made by SEP for the mid-year payment is also estimated based on their full-year income, which can result in an over or under-contribution to Medisave. Hence, from this year on, SEPs will be paid WIS once a year based on the declaration of their full-year income. For SEPs who are required to file an income tax return with IRAS, no further income declaration is necessary.

Sir, WIS has become an important pillar of our social security system. Regrettably, not every low-wage worker receives it. This is because some fall outside the CPF system, which is used to administer WIS. So, if they are not in the CPF system, they will not be able to benefit from all the WIS payments. Under the law, not paying CPF is a serious offence that can attract a fine of as much as $10,000 per charge; in other words, $10,000 per worker per month. To compound the problem, some workers also prefer that their employer does not contribute CPF, so that they too can avoid contributing their employee CPF and have higher take-home pay. This may give them a better take-home pay, but certainly this is short-sighted.

As Mr Zainudin Nordin and Mr Zaqy Mohamad pointed out that workers lose out in the end when they do not receive CPF. This is because the Government channels a significant part of its assistance, such as WIS as well as any other occasional top-ups, to the low-income via CPF. Furthermore, they also compromise their retirement adequacy.

To illustrate this, a Singaporean worker aged 55 earning $1,000 per month who is not in CPF net over the past five years would have foregone more than $9,000 in cash and CPF from the Government through the WIS, Workfare Special Payment, Workfare Special Bonus as well as top-ups to the CPF Medisave Account. If we were to include the employer CPF contributions due to him, he would have lost out an additional $11,000. In total, this worker would have lost out more than $20,000 over a five-year period, which works out to be about a third of his overall pay. And we have not counted the interest he would have earned in CPF. The worker who is not receiving CPF, whether because of his own will, or because the employer does not want to pay him CPF contributions, will lose out a lot. I would like to urge all Singaporeans who are aware of any relative, neighbour or friend who are forgoing their CPF to remind them that they are losing out, and urge them to make sure they ask their employers pay them CPF.

An associated problem that Mr Zainudin Nordin raised is non-compliance with the Employment Act (EA). The EA sets out basic employment terms that employers must offer their workers. For example, the workers cannot work for more than 12 hours a day. Workers must also be given 14 days of paid outpatient medical leave per year. However, some employers are unaware of the obligations they have to their employees, while some others deliberately circumvent it.

As Deputy Prime Minister Tharman mentioned in his speech earlier, MOM will step up efforts to bring about compliance with the CPF Act as well as the Employment Act. We will do so in two ways. First, we will step up education of both employers and employees on their obligations and their rights. There are misperceptions to correct. For example, one false impression is that CPF contributions are not mandatory for part-timers and casual workers, such as restaurant workers who only work on weekends or are only called up to help out at large events. This is incorrect. CPF is payable for such employees. To raise awareness, the CPF Board and MOM will launch a media campaign, as well as intensify our outreach in collaboration with NTUC, SNEF and other partners. Second, MOM and CPF Board will ramp up enforcement efforts. We have increased the number of inspections since the start of this year, and we will step this up sharply over the next five years. We will focus on sectors where non-compliance is known to be higher, such as F&B, retail, cleaning and security.

In some sectors, employers attempt to reduce CPF they pay by claiming that certain payments made to the workers are reimbursements. This may form a large portion of what workers receive as take-home pay. Valid reimbursements do not attract CPF. However, many of the expenses may not be valid reimbursements. This is how some employers circumvent their obligations to pay CPF. For example, cleaners and security officers receive large and regular payments as laundry reimbursements. But they typically wash their uniforms at home, rather than incur laundry expenses. We recently encountered a case where the security guard earned a basic pay of $745 but received a monthly laundry reimbursement of $182, based on an income of $745. The laundry reimbursement was close to a quarter of the security guard's basic pay, but the worker did not receive any CPF on it. There are other examples. We will therefore tighten up on enforcement to reduce instances of employers trying to circumvent their obligations under the CPF Act with such malpractices. Workers play an important role in our enforcement efforts. We encourage workers to come together and come forward if their employer did not pay CPF or accord them what is due under the CPF Act and the Employment Act.

Mr Zainudin Nordin and Mr Zainal Sapari have asked whether we will be reviewing existing legislation to protect the rights of low-wage workers, such as holding buyers accountable for the employment conditions of their outsourced workers. We will need to consider any introduction of legislation very carefully in consultation with the tripartite partners, given its potentially wide-ranging impact. But we are not closed to reviewing our legislation where warranted, and we will look into these suggestions further in close consultation with our tripartite partners.

Sir, let me now turn to a different type of challenge faced by some groups of low-wage workers – cheap sourcing. As I have shared with Members at the debate on the President's Address last October, a significant number of low-wage workers are currently employed in outsourced sectors, such as the security and cleaning services sectors. These sectors are often subject to the problem of cheap sourcing, where service buyers award contracts mainly based on price. As a result, service providers bid aggressively low to win contracts, and cut costs by reducing benefits and depressing wages, as manpower is a major cost for such services. When this takes place, low-wage workers bear the brunt, in terms of stagnant wages, poor employment conditions and few opportunities to up-skill themselves.

The Government has been promoting Best Sourcing to tackle this problem. The tripartite partners recently released an updated Tripartite Advisory on Best Sourcing practices that encourages service buyers to outsource responsibly and adopt best practices when doing so. To accompany the Advisory, we also launched an implementation guidebook to provide practical tips for service buyers. It is a detailed guide, providing even sample text that can be replicated in tender documents and contracts. Buyers, who have the will to best source, now know where to find the way.