Hansard, Monday, 28 February 2022

1 Ms Joan Pereira asked the Minister for Transport with the recent surge in COVID-19 infections among bus drivers reported on 15 February 2022 (a) what has been the impact on public bus transport; (b) whether this has resulted in longer waiting times for commuters; and (c) what are the mitigating measures to ensure public bus transport availability.

Mr Speaker, Sir, as the Omicron variant is more infectious, we have seen an increase in the number of COVID-19 cases in the community. Due to high vaccination and booster rates, as well as tight safe management measures, infected bus captains, or BCs, account for less than 5% of the total BC population.

LTA and the bus operators are watching the situation closely. If we face a large increase in the number of infected BCs, the contingency plans will be activated to ensure that essential bus services continue to operate. That is the key. And this includes lengthening of bus service headways, starting with low demand bus services. Some of these plans have already been implemented, with about 90 bus services experiencing increased waiting times of not more than three minutes. Where possible, LTA and the bus operators will also deploy more double-deck buses for services with higher loading.

Sir, I would like to thank our commuters for their continued understanding and support for the hard work and sacrifices of our public transport workers, as we ride this wave together.

Ms Pereira.

Thank you, Speaker and I thank the Senior Minister of State. I have a supplementary question. May I know if bus companies have a group of reserved drivers or maybe even recently retired drivers that they can turn to in times of need? If not, this would be something LTA might want to consider, moving forth.

Sir, I thank Ms Pereira for her feedback, her suggestion. I think that is a good point. We do have a group of recently retired and also former BCs. We have been reaching out. As Ms Pereira is aware, we are trying to increase the number of local BCs by reaching out to more individuals to join us, to take on this important and meaningful role, to be part of the public transport workforce.

At the same time, we know that it is not easy to train a BC, because it takes time. So, while we try to bring back the former BCs, retired BCs, we also need time to train new ones. This is an ongoing effort. We want to do both: we want to bring in new BCs to join us, to grow our workforce for public transport workers; and at the same time, if we can bring back some of the former BCs as well as those who are recently retired, that will also help.

If I may also make a call to commuters that during this period, what is very important is to keep everybody safe on our public transport system. So, please cooperate with the safe management measures, including wearing your masks on MRTs, on trains, minimise talking. These are all simple but effective steps to keep everybody safe.

2 Ms Joan Pereira asked the Minister for Health regarding the approximately 21,800 people aged 18 and above whose COVID-19 vaccination status had lapsed on 14 February 2022 (a) what is the general profile of these individuals; (b) whether the Ministry has information on why these people do not take their booster jabs; and (c) whether there are plans to reach out to these individuals to assist them to receive the booster jab.

Mr Speaker, Sir, amongst the 21,800 individuals aged 18 and above, whose vaccination status had lapsed on 14 February 2022, 38% are work pass holders, 14% are Permanent Residents and the remaining are Singaporeans. The Ministry of Health (MOH) is unable to ascertain the reasons for them not getting their boosters, but indications are that many of them are overseas.

As for the Singaporeans who are not boosted, the majority are seniors aged 60 years and above. A common reason for not getting booster jabs is that they seldom go out, they feel adequately protected with their primary vaccination and they prefer to delay their booster vaccination.

MOH will continue to encourage individuals to come forward and take their booster shots when they are eligible, using SMS reminders, making vaccination as convenient as possible and, also importantly, deploying Mobile Vaccination Teams to the heartlands to reach out especially to seniors.

3 Mr Leon Perera asked the Minister for National Development (a) what measures are being taken to reduce the negative impact on sensitive intertidal habitats like Changi Beach in view of increased visitorship; and (b) what is the Government's position on managing public access to sensitive intertidal habitats.

4 Mr Yip Hon Weng asked the Minister for National Development (a) whether visitation numbers to Changi Beach have increased in the past two years and, if so, by how much; (b) what is the impact of such an increase on marine life in the intertidal zone; (c) what are the measures implemented by NParks to curb the increase in human traffic and destructive human activity to marine wildlife; and (d) whether there are plans to extend the Parks and Trees Act to the intertidal areas of beaches in Singapore to deter destruction of marine life.

Mr Speaker, Sir, Mr Yip Hon Weng and Mr Leon Perera have asked about the management of marine wildlife at intertidal areas, such as Changi Beach. Mr Leon Perera1 has also asked about enforcement efforts against marine poaching, for a subsequent Sitting. I will address Members' questions together.

Over the last two years, we have observed a general increase in the number of visitors to our beaches, including Changi Beach. There has also been an increase in visitors to the intertidal zone, especially during low tides. Most of the visitors are families that come in small groups to explore the area, during public or school holidays.

We are committed to protecting the biodiversity of our coastal and marine ecosystems, including our intertidal zones. To assess the health of these ecosystems, NParks conducts long-term habitat monitoring in collaboration with academics and volunteers. Recent data indicates that our marine biodiversity is generally in good condition, with little change in the composition of the marine ecosystem within key habitats since 2016.

Our native wildlife species, including threatened marine species such as sea turtles and stony corals, are also protected under the Wildlife Act. For example, individuals who are found guilty of trapping or selling protected wildlife species without approval may be subject to a fine of up to $50,000, or to an imprisonment term of up to two years, or both. Over the past five years, there have been no cases prosecuted for the poaching of marine wildlife under the Wildlife Act or its predecessor, the Wild Animals and Birds Act. We will continue to review our measures to safeguard our marine species and will take enforcement action where necessary.

Since 2021, with the increase in visitorship to these areas, we have also stepped up outreach efforts at various intertidal areas to raise public awareness on protecting marine wildlife. For example, NParks has deployed more officers and galvanised many volunteers to remind visitors to refrain from touching, trampling and collecting marine wildlife. Most visitors are cooperative and return the marine wildlife when advised to do so. In addition, we have put up more signs around the intertidal areas, to educate visitors on how to interact responsibly with marine wildlife. NParks will continue to step up these efforts.

We are discussing with our partners, such as the marine conservation community, volunteers, businesses and the local community, on ways to manage the number of visitors at intertidal areas, in a way that supports nature conservation while keeping these spaces open for public recreation. For example, last weekend, we held a workshop with various partners to discuss how we can work together to educate visitors on Singapore's rich marine biodiversity and to better manage our intertidal sites. We are also assessing the possibility of strengthening protection for marine organisms under the Wildlife Act.

As we transform into a City in Nature, all of us have a part to play in protecting and caring for our rich biodiversity, so that our future generations can continue to enjoy our natural heritage.

Mr Yip Hon Weng.

Thank you, Mr Speaker. I thank the Minister for his response. I have a few supplementary questions. Will the Ministry consider publicising where are these areas so that public are aware that these are eco-sensitive areas? And two, will the Ministry consider working with schools to better educate children on such eco-sensitive areas?

Yes, we will consider both measures. On the former, publicising these areas, the media have been giving coverage to the sites that have been impacted. The low tide days and times are also well-known, publicly available information, and hence, you see the crowd converging on these sites when we reach those seasons.

For schools, we continue to work with our schools through our programmes to work with young people to better understand how to relate to wildlife, including in our marine habitats.

5 Mr Louis Ng Kok Kwang asked the Minister for Manpower with regard to the proposed legislation on workplace discrimination which the Government is considering (a) whether the Government will consider including a prohibition against attendance bonus, which is a disincentive for employees taking medical leave when they are sick; and (b) if not, why not.

Mr Speaker, I refer the Member to MOM's earlier reply to Dr Shahira Abdullah and Mr Leon Perera on 14 February, where we explained that the Tripartite Guidelines on Fair Employment Practices (TGFEP) already require employers to appraise and remunerate employees in a fair and objective manner, taking into consideration the employees' performance and contributions. Attendance-related incentive schemes that consider sick leave utilisation are contrary to this principle. Companies should therefore review and make adjustments where necessary.

From next year onwards, the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) will engage and advise employers who still continue with such schemes to stop doing so. If they continue with the practice, TAFEP will recommend to MOM to take enforcement action, which could include the suspension of work pass privileges.

The Tripartite Committee on Workplace Fairness is deliberating on the scope and design of legislation to enshrine the TGFEP in law. The key objective of this new legislation is to provide a strong statement against workplace discrimination and broaden the range of actions that can be taken when workplace discrimination on the basis of characteristics such as age, nationality or race occurs.

Together with tripartite partners, we adopt a range of approaches, such as guidelines and education, that are effective in addressing various workplace issues. It is not necessary to rely on legislation as a solution to every workplace issue.

Mr Louis Ng.

Thank you, Sir. I thank the Senior Minister of State for the reply. I just worry that if we just leave it as guidelines, it does not show that we are placing enough importance on this issue. There are workers that are out there who are sick, who are going back to work, so that they can get these attendance-based incentives. And I think the Government has to step in here to show that we are putting a strong importance on this issue and to protect our workers, so that at least when they are sick, they can get enough rest.

I think we can do that through legislating this into the upcoming legislation on workplace discrimination.

Sir, in my main reply, I already said that from next year onwards, the TGFEP will deem such actions as contrary to the principles of the TGFEP. So, TAFEP will engage employers and recommend that they stop doing so or we will take suspension of work pass privileges as an enforcement action on employers who continue to do this practice.

6 Mr Yip Hon Weng asked the Minister for Manpower (a) what is the current number of foreign remote employees hired by companies based in Singapore; (b) what is the number of foreign remote employees broken down by industry; and (c) what measures is the Ministry taking to discourage excessive offshoring of quality jobs.

MOM does not track the number of foreign remote employees hired by Singapore-based companies.

COVID-19 has led to remote working becoming more commonplace. This may prompt many companies to consider offshoring activities to lower cost locations, particularly for lower value-added work. This is not a new phenomenon. We have seen in the past, activities such as garment manufacturing and call centre operations being offshored to lower cost locations. At the same time, our economy transformed and shifted towards higher value-added activities such as Advanced Manufacturing and Fintech. This transformation created high value-added jobs in Singapore.

As an open economy that taps into the world market, we must continue to ensure that Singapore remains the preferred location for trade and investment, and we need to continue to move up the value chain. The anchoring of global companies will help to preserve and also spur the creation of good jobs. Together with our tripartite partners, we will continue to help our local workforce to reskill and upskill for future jobs and skills.

However, our success cannot be taken for granted. It is critical that Singapore remains open to global trade and be welcoming to foreign manpower that complements our local workforce. This is why MOM regularly updates our foreign workforce policies to ensure a high-quality and diverse foreign workforce together with a strong Singaporean Core. If we do not strike the right balance, firms will not only offshore the lower value-added work but may also have to bring the higher value-added work elsewhere where they can form the best team. This will mean fewer opportunities for future generations of Singaporeans and is certainly something that we would want to avoid.

Mr Yip Hon Weng.

Thank you, Mr Speaker. I thank the Minister for the reply. My supplementary question is as such: are such workers, foreign remote employees subject to foreign workforce levers such as levies and quotas, as well as CPF payments? Will there be plans for them to subject to such levers and CPF payments in the future?

Mr Speaker, the answer to both the questions is no. I have covered in an earlier Parliamentary Question reply with regard to the types of employees who would require CPF contributions. However, if these companies should change the context of the contracts and the agreements that would attract levies and CPF contributions out of Singapore, we will review this. But, at this point in time, to both his questions, the answer is no.

7 Mr Leon Perera asked the Minister for Trade and Industry whether JTC's mandatory solar deployment scheme can be expanded to all tenants, with JTC offering (i) incentives for tenants with short remaining leases to make up for the inconvenience and (ii) to own solar installations and lease these to tenants with the shortest remaining leases.

8 Mr Leon Perera asked the Minister for Trade and Industry whether there are any plans to develop a set of landlord-to-tenant solar energy purchasing guidelines and to promote such arrangements, given the mutual benefits of lower-cost rooftop solar energy.

Mr Speaker, Sir, can I have your permission to take Question Nos 7 and 8 together, please?

Yes, please.

Thank you, Mr Speaker, Sir. For commercial and industrial buildings which deploy solar power on a solar leasing model, the solar developers typically sell the solar energy captured to building owners who would use it to offset the electricity consumption in common areas. For instances where the solar installation is owned by building owners, the solar energy is typically used for common areas by the owners.

Electricity charges and savings are negotiated between the landlords and tenants as part of their overall tenancy agreements. With this in view, it is not appropriate for us to provide guidelines on solar savings alone.

Nevertheless, landlords can consider taking reference from practices established by JTC Corporation (JTC) aimed to encourage solar adoption. JTC adopts a two-pronged approach to encourage solar adoption amongst their lessees. First, JTC runs the SolarRoof programme. This was initially started to solarise JTC's own buildings. SolarRoof was expanded in 2020 to other buildings to make solar adoption more accessible for lessees, including those with shorter leases. Today, JTC's lessees can choose between two solar deployment models, both of which do not require any upfront capital outlay if JTC's appointed solar vendor for the SolarRoof programme is used.

The first model available is through rooftop licensing, where lessees can lease their space to any solar vendor for solar panel installations in return for a rental fee. The second model is solar leasing, where lessees allow vendors to install solar panels on their rooftops and they pay a discounted rate on the electricity generated which offsets their electricity consumption.

JTC implemented the mandatory solar deployment scheme in 2020, as highlighted by the Member. This scheme requires lessees with a new or renewed land lease with JTC of more than 15 years, and with at least 800 square metres of contiguous rooftop area, to carry out solar deployment. Lessees can adopt the two deployment schemes under the SolarRoof programme if they do not wish to own the solar panels themselves.

The Member will be glad to know that JTC is currently studying even more options to push solar adoption further, especially for lessees and tenants with short remaining tenures.

The Government will continue to review ways to incentivise and promote more solar adoption, including co-creating solutions with private developers and industry players, as well as work with stakeholders to maximise solar energy adoption in Singapore.

Mr Leon Perera.

I thank the Minister of State for her answer. Just one supplementary question which is in relation to creating incentives to retrofit, for those that are not covered by the mandatory rule where there is a new tender or new construction, for existing facilities where there is no mandatory rule. I think in some cases, there is an issue where the landlord is not incentivised to really do a solar deployment, which may be able to benefit the tenant. I am wondering whether this is something that the Government can look at in terms of specifying guidelines whereby the benefits can be shared by the landlord and the tenant and there may be electricity generated that goes beyond what is needed for common areas.

Such guidelines may be able to incentivise both the landlord and the tenant to do a solar deployment in cases where it is not mandatory. So, is that something that we can look at?

Mr Speaker, I want to thank the Member Mr Leon Perera for his supplementary question. Please allow me to share that solar energy is currently the most viable renewable energy in Singapore and the Government is committed to continue to accelerate our efforts to promote solar adoption. We are on track to achieving the solar panel deployment target of two gigawatt peak (GWp) by year 2030, which is equivalent powering 350,000 households annually. In fact, since 2015, our solar installed capacity has increased by nine times to over 560 megawatt-peak (MWp) in the third quarter of the year 2021.

Earlier, I cited JTC's mandatory solar deployment scheme. I would like to share that currently a total of 224 MWp has been deployed across JTC's industrial estate – 224 MWp, compared to the 560 MWp I mentioned earlier. So, it is about 40%. This includes JTC's vacant industrial land and buildings owned by JTC and its lessees.

I want to assure Mr Leon Perera that JTC's mandatory solar deployment scheme ensures that the lessees, which means the owner of the building, solarise their rooftops in line with the national efforts to increase our solar energy adoption.

The prerequisite for the mandatory solar deployment scheme is established by JTC in consultation with the solar vendors. For example, as per current market practice, the typical contracting period for solar installation is between 15 years and 20 years, and a minimum of solar installation area of at least 800 square metres is required for the solar deployment for this to be viable. These requirements are needed to ensure that both the lessee as well as the solar vendor have sufficient runway and skill to amortise the upfront fixed investments into the solar panel installation.

Having said that, I want to assure Mr Leon Perera that any lessee with shorter lease period of less than 15 years, or even smaller rooftop space of less than 800 square metres, they can still engage the solar vendor, including JTC's appointed solar vendor to participate in the SolarRoof Programme.

I also want to reassure him that JTC is currently seeking new solar vendors who are able to service shorter contract periods so that we can benefit the lessees and the tenant of shorter compact periods. And in fact, JTC is also engaging existing tenants in land-based facilities to explore the possibility of a license fee sharing model. And in addition, as part of the SolarRoof programme Phase Three tender, which was just launched in November 2021 three months ago, both rooftop licensing and solar leasing rates for shorter contract period options of less than 10 years will be made available.

9 Mr Louis Ng Kok Kwang asked the Minister for Defence (a) whether there are any COVID-19 safe management measures in place for full-time national servicemen (NSFs) who book out but are required to return back to camp before the end of the same day; (b) if so, what are they; and (c) whether there has been an increase in COVID-19 infections in camps brought in by these NSFs.

Mr Speaker, Sir, I thank the Member for the question. The Singapore Armed Forces (SAF) has measures to protect its personnel, including Full-Time National Servicemen (NSFs) against COVID-19 and to prevent large outbreaks. These include vaccination, testing and safe management measures (SMMs), as well as rapid containment in the event of cases.

More than 99.7% of SAF personnel have received two vaccination shots and close to 87% have received booster shots. To detect COVID-19 infections early and to minimise its spread, the SAF has also instituted regular testing and SMMs, such as smaller group sizes and mask-on policy where possible. Service personnel, including NSFs, who booked out of camps are reminded to adhere strictly to SMMs even when they are outside and to monitor their health closely. Those who fall ill, who are sick, are only allowed to return to camp when they have recovered. Those who test positive for COVID-19 are to adhere to the national protocols.

Even with these measures, our weekly infection numbers have increased by about 17% from the previous week, along with the surge in community cases due to the Omicron variant. Most of these cases were brought in from the community and detected through our routine tests.

While there has been limited onward transmission within our camps and bases, and the vast majority of SAF personnel who contracted the virus have exhibited either mild or no symptoms so far, we are not taking things for granted. Infections have the potential to spread. We are tracking the numbers closely and remain ready to adjust our measures if necessary.

Order. End of Question Time. Introduction of Government Bills. Second Minister for Finance.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 10-11 on the Order Paper are reproduced in the Appendix.]

[(proc text) "to provide for the issue from the Consolidated Fund and the Development Fund of the sums necessary to meet the estimated expenditure for the financial year 1 April 2022 to 31 March 2023," (proc text)]

[(proc text) recommendation of President signified; presented by the Second Minister for Finance (Ms Indranee Rajah); read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY2022/23, and to be printed. (proc text)]

[(proc text) "to make supplementary provision to meet additional expenditure for the financial year 1 April 2021 to 31 March 2022", (proc text)]

[(proc text) recommendation of President signified; presented by the Second Minister for Finance (Ms Indranee Rajah); read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY2021/22, and to be printed. (proc text)]

Mr Speaker, may I seek your consent and the general assent of Members present to move a Motion to allow a Ministerial Statement by the Minister for Foreign Affairs on "The Situation in Ukraine and its Implications" to be taken now.

I give my consent. Does the Leader of the House have the general assent of hon Members present to so move?

[(proc text) Hon Members indicated assent. (proc text)]

Leader, please proceed.

Mr Speaker, I beg to move, "That, notwithstanding Standing Order 91(2), a Ministerial Statement by the Minister for Foreign Affairs on 'The Situation in Ukraine and its Implications' be taken now."

Mr Speaker, the Minister for Foreign Affairs Mr Vivian Balakrishnan wishes to make a Ministerial Statement on "The Situation in Ukraine and Its Implications". As Members know, this matter has arisen suddenly and escalated rapidly in the last few days.

Ordinarily, the Budget debate takes precedence over other business. However, given that the Ministerial Statement seeks to update Members on the Singapore Government's position on the urgent situation in Ukraine, a serious security crisis which has implications for the international order, global economic outlook and also for our national economy, it would be good for Members to hear from the Minister for Foreign Affairs before the commencement of the Budget debate.

[(proc text) Question put, and agreed to. (proc text)]

[(proc text) Resolved, that, notwithstanding Standing Order 91(2), the Ministerial Statement on The Situation in Ukraine and its Implications be taken now. (proc text)]

Ministerial Statement. Minister for Foreign Affairs.

Mr Speaker, Sir, we are witnessing an unprovoked military invasion of a sovereign state as we speak. Ukraine is a large country with a multilingual and multi-religious population of approximately 44 million people. It has a long history, with complex relations with Russia and other states in the region.

Ukraine became independent in 1991, with the collapse of the Soviet Union. Shortly thereafter in 1994, Ukraine was persuaded to give up its nuclear arsenal, at that time the third largest in the world, by signing on to the Treaty on the Non-Proliferation of Nuclear Weapons.

In return, Russia, the US and the UK, via the Budapest Memorandum on Security Assurances, "reaffirmed their obligation to refrain from the threat or use of force against the territorial integrity or political independence of Ukraine, and that none of their weapons will ever be used against Ukraine except in self-defence or otherwise in accordance with the Charter of the United Nations (UN)" – words which perhaps ring quite hollow today.

Since then, the Ukraine has faced considerable domestic political turmoil, exacerbated by the separatist movements and tensions with Russia. Twenty years after the Budapest Memorandum, Russia annexed Crimea in 2014 whilst the world watched. Conflicts on the ground in Donbas have continued for the past eight years, with episodic limited ceasefires.

And beginning in spring 2021, Russia massed over 100,000 troops at its borders with Ukraine. In January 2022, cyberattacks were launched against the Ukrainian government websites. On 21 February 2022, Russia recognised two breakaway Ukrainian regions and announced that Russian troops would start performing what it called "peacekeeping operations".

On 24 February 2022, Russia announced the start of a "special military operation" in Ukraine. This was followed shortly by air, land and sea attacks on multiple targets across the whole of Ukraine. Russian ground forces, including armoured formations, rapidly entered Ukraine from the north, the south and the east, and have reached the capital Kyiv.

While Ukraine is far away from us, we are following the crisis with grave concern. Its economic effects can already be felt here, for example, in rising electricity and petrol prices. Minister Gan Kim Yong will address the economic issues later today. But these are not the principal reason the situation in Ukraine is important to us.

The events in Ukraine go to the heart of the fundamental norms of international law and the UN Charter that prohibit the use of force and acts of aggression against another sovereign state. Russia's invasion of Ukraine is a clear and gross violation of the international norms and a completely unacceptable precedent.

This is an existential issue for us. Ukraine is much smaller than Russia, but it is much bigger than Singapore. A world order based on "might is right", or where "the strong do what they can and the weak suffer what they must", such a world order would be profoundly inimical to the security and survival of small states.

We cannot accept one country attacking another without justification, arguing that its independence was the result of "historical errors and crazy decisions". Such a rationale would go against the internationally recognised legitimacy and territorial integrity of many countries, including Singapore.

That is why we are a staunch supporter of international law, and the principles enshrined in the UN Charter. The sovereignty, political independence and the territorial integrity of all countries, big and small, must be respected. Singapore must take any violation of these core principles seriously, whenever and wherever they occur. And this is why Singapore has strongly condemned Russia's unprovoked attack on Ukraine.

It is heartbreaking to see the heavy casualties and loss of many innocent lives, resulting from this unjustified attack and act of war. We strongly urge Russia to cease this offensive military action immediately and to work for a peaceful settlement in accordance with the UN Charter and international law. We also call for safe and unhindered access for humanitarian assistance to Ukraine and all those in need.

Singapore is doing our part. The Singapore Red Cross has pledged a contribution of US$100,000 to support communities affected by the current crisis, in cooperation with the Ukrainian Red Cross Society and the International Federation of Red Cross and Red Crescent Societies.

This will provide essential relief supplies, such as hygiene kits, family kits and household kits for the vulnerable who have been displaced by the conflict. In addition, the Singapore Red Cross has launched a public fundraising appeal to support the impending massive humanitarian operations that will be needed. The Government will also contribute US$100,000 to this humanitarian operation through the Singapore Red Cross.

Mr Speaker, there are important lessons for us to draw from the current Ukrainian crisis.

First, whilst international law and diplomatic principles are essential, they are not sufficient. The Budapest Memorandum was supposed to guarantee Ukraine's security by three nuclear powers – Russia, the US and the UK. But agreements are only meaningful if the parties respect them and if they can be enforced. The invasion of Ukraine demonstrates how quickly a vulnerable country can be overrun, especially when confronting a larger and more powerful opponent. This is the acute reality for all small countries and Singapore is no exception.

Russia's annexation of Crimea in 2014 and Iraq's invasion of Kuwait in 1990 are stark reminders of this. You cannot depend on others to protect your country. Thus, we must never lose the ability to defend and look after ourselves. And this is why Singapore has invested consistently to build up a credible and strong SAF and to maintain National Service as a fundamental element of our nationhood. The capability of the SAF must be undergirded by Singaporeans' resolve – the iron determination of our people to fight and die, if need be, to defend what is ours and our way of life. Without such capability and resolve, no amount of diplomacy can save a country.

Second, it is all too easy for a small country to be caught up in the geopolitical games of big powers. Small countries must avoid becoming sacrificial pawns, vassal states or "cat's paws" to be used by one side against the other. In a speech delivered in 1973, former Prime Minister Mr Lee Kuan Yew had shared his agreement with Julius Nyerere, the then-President of Tanzania, who had said, "When elephants fight, the grass suffers".

This is why we work hard to maintain good relations with all our neighbours and with the big powers. When situations arise, our assessments and actions are based on clearly enunciated and consistently held principles that are in our own long-term national interests. Instead of choosing sides, we uphold principles. This is worth repeating. Instead of choosing sides, we uphold principles.

Consequently, we conduct our foreign policy in a coherent and consistent manner. We also become reliable partners for those who operate on the same principles. However, there will occasions when we will have to take a stand, even if it is contrary to one or more powers on the basis of principles – as we are doing now.

Third, as a young nation, it is vital for us to maintain domestic unity and cohesion, bearing in mind how easily internal divisions can be exploited by adversaries, especially in this Internet age and the advent of hybrid warfare.

Dividing and weakening an opponent internally, overtly and covertly, has become a standard complement to conventional warfare. Therefore, our domestic politics must stop at our shores. And I thank all Members of Parliament for adhering to this precept. And I would share that I have also shared this point with the Leader of the Opposition, Mr Pritam Singh.

Fourth, safeguarding one's sovereignty and national interests often requires some sacrifice and pain. The Ukrainians are paying the ultimate price for freedom with their lives and livelihoods. The rest of the international community that is taking a stand against naked aggression through sanctions will also have to bear some pain and pay a price. Singaporeans too must understand that standing up for our national interests may come with some cost. We must be prepared to deal with the consequences, to bear the pain, to help one another and to stand up together.

We continue to value our good relations with Russia and the Russian people. However, we cannot accept such violations of the sovereignty and territorial integrity of another sovereign country. We will continue to work with our ASEAN and international partners to take a strong stance against the invasion of Ukraine, and to end further violence and bloodshed, and to de-escalate tensions.

We also participate actively at the United Nations. Three days ago, a draft resolution was presented at the UN Security Council (UNSC) to condemn Russia's aggression against Ukraine. Singapore was one of 82 co-sponsors of this Security Council resolution. As expected, Russia, as a Permanent Member of the Security Council, vetoed that resolution. So, the resolution was not passed even though 11 of the 15 Security Council members voted in support and the remaining three members – China, India and the UAE – abstained. The UN General Assembly (UNGA) will be debating a similar resolution later today. General Assembly resolutions are not subject to a veto, but neither are they binding. However, as a responsible member of the international community, Singapore will comply with the spirit and the letter of the UN General Assembly's decision.

Singapore has always complied fully with sanctions and decisions of the UNSC, but we have rarely acted to impose sanctions on other countries in the absence of binding Security Council decisions or directions. However, given the unprecedented gravity of the Russian attack on Ukraine and the unsurprising veto by Russia of a draft UNSC resolution, Singapore intends to act in concert with many other like-minded countries to impose appropriate sanctions and restrictions against Russia. In particular, we will impose export controls on items that can be used directly as weapons in Ukraine to inflict harm or to subjugate the Ukrainians. We will also block certain Russian banks and financial transactions connected to Russia. The specific measures are being worked out and will be announced shortly.

We must expect that our measures will come at some cost and implications on our businesses, citizens and indeed to Singapore. However, unless we as a country stand up for principles that are the very foundation for the independence and sovereignty of smaller nations, our own right to exist and prosper as a nation may similarly be called into question one day.

I note that Dr Lim Wee Kiak1 and Mr Zhulkarnain Abdul Rahim2 have filed Parliamentary Questions on the current situation in Ukraine, especially on the steps taken by MFA to help Singaporeans in Ukraine. I would be happy to address their concerns in a clarification after this and if the concerns are sufficiently addressed, they can consider withdrawing the subsequent Parliamentray Questions and save time.

Mr Speaker, in the lead-up to Russia's military operation into Ukraine on 24 February 2022, MFA had issued two Travel Advisories on the situation in Ukraine on 26 January and 13 February respectively. We advised Singaporeans in Ukraine to leave as soon as possible via commercial means while it was still possible to do so at that point in time. Singaporeans in Ukraine were also urged to e-register with MFA, so that we could render consular assistance to them. Following our first Travel Advisory, seven Singaporeans left Ukraine via commercial options before the conflict erupted.

Since the launch of the Russian invasion, another three Singaporeans have left Ukraine and made their way across the border into Poland. We are still in touch with eight Singaporeans currently in Ukraine who are spread across several cities. We are aware of at least one other person whom we are still trying to contact. Singaporeans' safety remains our priority concern. MFA has been in contact with them, and we will assist them wherever and however possible. We are also exploring options for them to leave the country if the situation permits. In the meantime, Singaporeans who are in Ukraine are advised to seek shelter in place, be vigilant and to heed the advice from the authorities. Those who have not yet e-registered with MFA should do so immediately.

Mr Speaker, this is a time for us to come together and to stand up for principles, uphold principles which are core to our survival, our existence as an independent, sovereign nation. [Applause.]

Any clarifications? Mr Gerald Giam.

Thank you, Mr Speaker. Given that Singapore has cordial relations with the US, Europe, Ukraine and Russia, to what extent have the recent events put our efforts out of balance? And how can we maintain our interest vis-à-vis all the parties?

Secondly, are there concerns that the recent events in Ukraine might trigger similar territorial incursions elsewhere, notwithstanding different geopolitical interests and settings? And how may this impact Singapore's interests?

Mr Speaker, I thank Mr Giam for his salient questions. We do have excellent relations with the US, with the EU, with Russia. And of course, we have diplomatic relations with Ukraine as well.

The Member's questions on balance, I would address by bringing us back to first principles: that we do not take sides, we uphold principles. And in this case, the principles at stake are independence, sovereignty and territorial integrity. And I explained just now that Singapore's foreign policy is consistent, is coherent. In fact, it is almost always predictable.

And I can tell you now, from experience, from the past six to seven years with the privilege of representing Singapore on stage, is that big powers and our neighbours and middle powers have also gotten used to the fact that it is not personal, it is professional, it is principled. We take a position based on these principles which we believe to be essential for our long-term national interest.

And I can also tell you, although there is no time to go through all the details now, that even in my tenure over the past six or seven years, I have had to say no, on occasion, to every single superpower. But it has not stopped us from being able to sit at the table, look at each other's eyes, shake hands, explain where we defer, why we defer and at the same time, to pursue areas of cooperation where our interests align and where our principles are shared. So, this is not new, this is not a new posture. This in fact, is a posture that we have adopted for every single year since we have been independent. And I am maintaining that tradition.

The second question: are the events in far away Ukraine possibly a model and inspiration or an invitation for similar incursions elsewhere? I will not speculate where other clashes will erupt around the world except to tell you – and I am sure you are also aware as a former diplomat yourself – that we are not short of hotspots in the world.

Again, I will bring us back to this fundamental point that we talked about – deterrence. For deterrence to work, first, we ourselves must have the capability to defend ourselves. Nobody else will shed blood on our account. Secondly, having the capability – the arms, the ORBAT and all the funding that this Parliament provides to MINDEF – capability without resolve, without, as I said earlier, that iron determination to fight and die, to defend and protect what is ours and our way of life, without both capability and resolve, it would not deter anyone.

And there is one additional dimension: that your partner or your protagonist on the other side must also have arrived at that same conclusion – that you have both the capability and resolve to defend. That is how you secure peace in a dangerous world.

In the larger point I am making, is that, yes, we are standing on principle, and yes, we may even have to pay a price, but this is a price worth paying for the future existence, independence and prosperity of Singapore.

Mr Vikram Nair.

I would like to thank the Minister for taking a very clear, principled position and explaining how Singapore stands on this. I have two clarifications. The first is the United Nations has always been an important institution, at least for setting the benchmark against aggression. But would this send a message that it will be difficult to restrain big powers from engaging in acts of aggression and is there more the world community can do in this respect? I know Singapore is just a small voice in that, but is there more that the world community can do in this engagement?

The second is, in relation to specific measures that Singapore may take, this will be elaborated on later, but I think it will be important for whatever we do in this message to send the clear signal that we stand against these acts of aggression and the UN Charter must be upheld.

I thank Mr Nair for his questions. It is always difficult to restrain big powers or emerging big powers, who will always give precedence to their national interests defined on their terms. So, let us have no illusions about this. For what it is worth, having international law, having avenues of peaceful resolution on disputes, having the United Nations with its Charter, having instruments like the Security Council and the General Assembly, capable of establishing norms, capable, sometimes – assuming there is no veto – of arriving at Security Council resolutions, is valuable. As I have said, that is why we are such staunch supporters of international law and the United Nations. We have to be, because the alternative is "might is right" or the strong do what they can and the weak suffer what they must.

But, my point is that you cannot rely on that alone. Every country, big or small, has to have the capability and the resolve to defend itself, then to make common cause on the basis of principle with other like-minded countries. And for what it is worth, try to establish norms of state behaviour. But human history is replete with conflicts, conflicts which when you look back in hindsight make no sense, brought far more harm than any objective that was sought at the beginning, or simply miscalculations.

So, again, I am making the point that for what it is worth, we uphold principles, we do not take sides. And that is the formula to preserve our future security and prosperity.

Mr Zhulkarnain Abdul Rahim.

I thank the Minister for the elaboration and detailed explanation. I am thankful for the answers to my Parliamentary Question as well, wherein I asked about assistance to fellow Singaporeans who are embroiled in that conflict.

I have two clarifications. First is, I think both the virus and violence are taking a toll on the people in the Ukrainian region. So, it is going to be a great humanitarian crisis and the refugee situation in Eastern Europe will also be unprecedented. What can ASEAN and Singapore do to alleviate the situation over there, particularly, given that COVID-19 is still raging amongst us and there would be some need to render assistance in that regard?

Secondly, I am told that for small countries, we do hold true to the principle of international law and we denounce the notion of "might is right". But at the same time, we still need to know the lay of the land and navigate our way through. So, what are the implications in terms of international order, particularly for Singapore and smaller states, given this particular crisis that is unravelling before us?

I thank Mr Zhulkarnain for both questions. He is right; the virus and violence are a perfect recipe of humanitarian disaster, which is occurring right now. I explained earlier in my statement that the Singapore Red Cross has contributed US$100,000. The Singapore Government will also contribute to that and I am sure members of the public will also be generous. And we will work through the Ukrainian Red Cross, the International Society of Red Cross and Red Crescent Societies.

At the ASEAN level, ASEAN has taken a stand that there needs to be mutual respect for territorial integrity and sovereignty. I hope there will be a humanitarian impulse from ASEAN as well. Specifically, for the citizens of ASEAN who may be stranded. I just want to share one little anecdote which also illustrates the point. I said that three Singaporeans managed to cross the border in a perilous time. I can say that at least one did so in a convoy together with Malaysian citizens who were crossing the border into Poland. And I thank my counterpart in Malaysia for that.

Similarly, on the ground, I am sure we will continue to work with each other, look out for citizens of ASEAN and where possible, "tumpang", "gotong royong" and help one another. I think these are teachable moments, good opportunities for ASEAN to demonstrate value and solidarity with each other where it matters.

The second question on what are the implications of this crisis? Well, as I said, there are multiple. First off, we already feel the economic impact and Minister Gan will be dealing with this later today.

The abrogation of international law and norms is a clear and present danger especially for small states like us and that is why we have had to take such a principled stand. As I said, standing up for principle is not cost-free. So, we also have to be prepared for that. But, if the world continues to watch with folded arms, we are headed into a much more dangerous world.

After the end of the Second World War in 1945 and the establishment of the European Union, I think many people thought war on the European Continent was unthinkable. Clearly, that rosy view is wrong, and you are watching, again, war on European soil in an advanced beautiful capital today. The point is if norms are not complied with and if borders can be trifled with, on the basis of all kinds of justifications and sometimes even pretext, then it will be a much more dangerous world, and especially for us. So, bear in mind that, actually, we are taking a stand not just for this particular crisis, but we are taking a stand for our long-term survival, prosperity and peace.

Dr Lim Wee Kiak.

Thank you, Mr Speaker. I have two clarifications. One is on Ukrainians who are currently in Singapore. I would like to know how are we providing assistance to them if their Social Pass or work pass expires. Are we going to help them to extend, while their country is currently in crisis now? Does the Minister have the numbers as to how many Ukrainians are currently in Singapore, for whatever reasons?

Number two, what is the proper channel for us to channel resources to help now? The Minister mentioned about Red Cross is one resource. Will the Government have a concerted effort to have fundraising efforts from the public to help the Ukrainian, rather to have multiple websites and we do not know which is the one that is approved and authorised?

Also, currently, the Ukrainian President is calling for the foreign legion to help the country, for fighters to come in. If any Singaporeans were to volunteer to become a fighter to go to Ukraine, will the Government object or will the Government stop them? What is the stand on these things?

That is actually three questions. I do not have the figures on Ukrainians who are currently in Singapore and the passes that they are on. This is something which ICA and MHA would look at and I am not in a position to give any blanket assurances on that. I think I will also have to reiterate our long-held position that we cannot take refugees because we are one of the most dense cities or states in the world. Nevertheless, we will look at it case-by-case, depending on the merits of the particular situation.

On channels, my advice would be to support the Singapore Red Cross. I think that is clear, reputable and safe. The Red Cross and Red Crescent Societies were created precisely to have a role in such conflict situations. So, I would encourage people who are minded to provide humanitarian assistance to work through the Red Cross.

On the third question about the foreign legion, again, I will have to come back to principle. Singapore does not take sides. Singapore does not allow the import of foreign politics into Singapore's domestic environment. Similarly, Singapore cannot support the promotion or organisation of armed groups, whatever their justification, into other countries. Our long-standing rules and regulatory system must continue to apply. Singapore Citizens, your duty is to Singapore, to fight and die if need be, to defend our national interests and to take a long-term view of what our national interests are. So, I will leave it at that.

Mr Leon Perera.

I just have one clarification for the Minister for Foreign Affairs. Will the Government be exploring the initiation of a common position on this very grave issue with the other ASEAN member states? Is that something that is being considered? Is that something that will be looked at, in spite of the challenges in doing so, which obviously do exist and that is very clear?

Thank you. The short answer to that is yes, all the foreign ministers and our officials have been in intensive contact over the last few days. As I have said, we recently – in fact, I think just a day ago – issued an ASEAN common statement.

I will be frank and tell you that the 10 of us will have a variety of views, but I am glad that we were able to issue a consensus statement that reaffirmed mutual respect for sovereignty and territorial integrity. I also hope that there will be cooperation on humanitarian assistance to Ukraine and, as I said earlier, also cooperation on helping each other's citizens emerge safely from a conflict situation.

Mr Lim Biow Chuan.

Sir, if I may voice my support for the Government's stand on the Ukraine situation. May I ask the Minister, considering China's stand in the United Nations on the invasion of Ukraine, how would this affect our relationship with China?

Second clarification is that, would the Minister be able to clarify or explain what MFA thinks about Russia's statement that they will be "putting nuclear forces on high alert". What does that mean? Would Singaporeans who are staying in NATO countries be considered safe or would there be advice that they were to evacuate from those countries as well?

Mr Speaker, I am the Foreign Minister of Singapore and I would hesitate to speculate as to what China's full position and actions will be. But I can make the following observations. China abstained at the vote on the resolution that was presented to the United Nations Security Council.

The second point is that China has expressed some solidarity, at least more so in recent times, and some sympathy for Russian concerns. My third observation is that I believe China does hold firmly to the principle of independence, sovereignty and territorial integrity. Beyond that, I do not wish to speculate but I do want to assure the Member that we have been, as always, in constant contact with my Chinese counterpart. In fact, President Halimah and I were in Beijing, I think just three weeks ago. I am not even sure that the Olympic truce has expired yet and I will not be able to reveal details. But we, certainly, had an opportunity to listen to the leadership of China's views on unfolding events. But that was three weeks ago, before the hot conflict emerged.

I do not want to speculate into the Member's second question about the impact of elevation of the nuclear alert. There are nuclear powers in the world. And every time a nuclear power gets into a hot war, we need to be very, very concerned. Beyond that, I do not wish to speculate except, again, to express our hope that there is so much more to lose from letting the situation get out of control. So, our hope is that restraint will apply, there will be an immediate cessation of hostilities and violence. I believe there had been some arrangements for negotiations to occur between Ukraine and Russia at the border with Belarus, perhaps today or maybe even as we speak. I hope those negotiations will bear some fruit.

The Member's point is that this is a dangerous time and we all need to be concerned.

Ms Denise Phua.

Speaker, I thank the Minister for clarifying Singapore's stand. Beyond declaring our principles, I would like to ask if the Government would review the ongoing initiatives and projects, whether economic, defence or cultural, with the Russian government and any of the government-linked organisations, especially for those based in Singapore, and decide after the review, what action it will take that will support the principles that the Minister had just articulated?

Mr Speaker, we have spent quite a lot of time already on this subject. And as I have said, we are working through the details. So, I do not want to run ahead and I do not want to engage in speculation but to just make the point that we have no quarrel with the Russian people. I think the Member was indirectly alluding to the project that we have on the Russian Orthodox Church building and I would imagine that this is a project which, in my own view, should continue because this goes beyond the politics and the conflict which is going on right now.

Order. End of Ministerial Statement. The Clerk will now proceed to read the Orders of the Day.

[(proc text) Order read for Resumption of Debate on Question [18 February 2022] [1st Allotted Day] (proc text)]

[(proc text) "That Parliament approves the financial policy of the Government for the financial year 1 April 2022 to 31 March 2023." ‒ [Minister for Finance]. (proc text)]

[(proc text) Question again proposed. (proc text)]

Leader of the Opposition.

Mr Speaker, what caught my attention about the Budget speech was the Minister for Finance's characterisation of the Budget as a first step to renew and strengthen Singapore's social compact towards a fairer, more sustainable and more inclusive society. The Workers' Party agrees with this important direction in pathfinding the way forward for our little red dot. Workers' Party Chair and Member of Parliament for Aljunied GRC, Ms Sylvia Lim, will speak further on this, with inputs on inclusivity and innovation in her Budget debate speech tomorrow.

However, there are aspects of the Budget that are of concern to us. We disagree with the decision to raise the Goods and Services Tax, especially at this time, and the Workers' Party Members of Parliament who speak after me will put forward alternative ideas for revenue generation.

I will outline the Workers' Party's position on the GST and briefly introduce the areas that Workers' Party Members of Parliament will speak on. Then, I will share my views on the main prongs of the Budget.

First, the GST increase. While the GST hike was anticipated, it comes at a difficult time for our people. Inflation is on the upswing and prices are high. Supply chain disruptions are having an outsized impact on people's purses. There is real concern on the ground that the announcement to raise the GST will lead to price rises across the board. In fact, some price rises have already occurred, with speculation that these were in anticipation of a GST hike.

The Workers' Party's position is that the Government need not raise the GST. There are other options for raising revenue. A Straits Times column last month discussed the urgency of rebuilding public finances in the face of Budget deficits and the drawdown of reserves. The GST was held up as being one of the largest and most stable revenue sources, difficult to replace with any other kind of tax. The impression created by the article and similar arguments was that raising the GST is the only viable option for financing offset packages for the needy and healthcare, and to balance the Budget. We disagree that there are no other options.

The Workers' Party has previously raised several proposals in this House, both on taxes, as well as adjustments to the reserves framework. These options do not constitute a raiding of the reserves, as the PAP enthusiastically and inaccurately portrays. We have supported the call for fiscal prudence as a principle of governance. But we also believe that the judicious use of progressive tax measures can achieve wider societal goals in Singapore.

Within this term of Parliament, we have proposed a wealth tax and raised the prospect of more progressive corporate tax policies. We have also supported the carbon tax.

The Government, for its part, has not rejected further wealth taxes outright but spoke of the difficulties of implementing some of these tax measures. These will have to be proactively explored, particularly in view of the limited impact of some measures announced in the Budget, which had been characterised as a tax on wealth.

For example, on the additional registration fee, or ARF tier, for luxury cars announced by the Minister for Finance, a senior manager of a large car dealership which includes luxury vehicles in its stable, was asked if the higher ARF would curb spending on high-end cars. He was quoted in The Business Times as saying: "It is possible, but I think there's still enough wealth going around".

As the Government continues to explore wealth taxes, the Workers' Party's view is that a distinction needs to be made between different types of wealth taxes. We should recognise the legitimate accumulation of wealth through effort and tangible business activity, especially that which creates jobs for Singaporeans. Even as there remains scope for wealth taxes, the values of entrepreneurship and equitable reward for hard work can, nonetheless, be recognised and even promoted through tax rebates or relief for such individuals. However, wealth accumulated through capital appreciation should be dealt with differently and taxed accordingly in the name of a fairer and more inclusive society.

The Workers' Party has also previously asked if we can tweak the reserves framework and the way reserves contribute to our Budget. We have proposed including a portion of land sales into recurrent revenue and also an adjustment of the Net Investment Returns Contribution (NIRC) allowed for recurrent spending to be raised to 60% from the current 50%. The Government has disagreed with these reasonable suggestions.

In 2001, then-Prime Minister Goh referred to the reserves as a golden goose. The Workers' Party remains of the mind that we can continue to grow the golden goose, but at a slower rate. The impending population bulge for our seniors portends stress lines for our healthcare needs and our welfare system. The Minister projected that, starting from current levels of healthcare spending and assuming increases at a similar rate in the next 10 years, the Government could be spending $27 billion on healthcare yearly by 2030, compared to $11.3 billion in 2019.

But, the fact is that our population is getting older and living longer. While it is responsible to ensure that wastage is minimised as far as possible, our healthcare needs will likely be on an upward trajectory.

For the very Singaporeans whose energies contributed to the reserves and who have played their part to fatten the golden goose, spending for them in their golden years and at their time of need should not even be a question. Moderating the growth of the reserves also improves intergenerational equity and accounts for the changing needs of Singapore and its people.

It must be noted that the Government has shown, over time, that they are of a similar mind. At the 2001 National Day Rally, then-Prime Minister Goh said that the reserves must be protected and fattened. However, changes to the reserves scheme have been implemented by subsequent PAP Governments. The 2008 change of the Net Investment Income to Net Investment Returns (NIR) with the immediate conclusion of up to 50% of NIR contributions from MAS and GIC and the inclusion of Temasek in the NIRC formula in 2015 were all deliberate moves. These changes have made the NIRC component the largest source of revenue for the yearly Budget from around $2 billion in 2006 to close to $22 billion for the upcoming financial year.

This number will only continue rising. This is despite the fact that the Government's adjustments have slowed the rate at which the reserves grow. Here, I ask that the Government not rule out changes to our Budget framework. Just as we should not kill the golden goose, we should also not fatten the golden goose at the expense of the people's well-being.

On the necessity of a GST hike, the Workers' Party has also made the point that the Government should lay out its revenue and expenditure projections for the rest of the decade. This is so that the necessity of a GST hike can be considered properly and with greater introspection. We note that the Government has resisted the publication of such revenue and expenditure projections, but the publication of such information is not unusual in other jurisdictions.

Just last week, on 23 February, the Hong Kong government issued its budget statement. At Appendix A, the Hong Kong budget includes a medium range forecast of its revenue and expenditure positions for each subsequent year up to fiscal year 2026 to 2027, with assumptions laid out.

Can the Minister tell us why MOF does not make such medium-term forecasting a part of our public-facing budgetary process? And, more specifically, does MOF have such projections at least up to five years in the future? And what is the hesitation in publishing these projections? Doing so would allow the public to have an in-depth insight as to the need to raise GST and the sustainability of public finances in the years to come.

The question of projections with respect to public finances must also be considered in the context of the absolute necessity of raising the GST at this point in time. For example, a Business Times article today advanced the view held by market watchers that Singapore could potentially make a net gain in terms of revenue from the global move to introduce a standardised minimum corporate tax rate.

Even so, it is of little doubt that the GST has been put to good use by the Government to finance spending. But after more than two decades, its drawbacks remain. The GST is a regressive tax that hits lower-income earners harder. And this fact has been recognised since the GST was introduced in the early 1990s. My colleague, Sengkang GRC Member of Parliament, Ms He Ting Ru, will speak more about the GST.

Like now, the concerns back in the 1990s were about the average Singaporean worker who was vulnerable to increases in the prices of necessities. Today, with offset packages targeting low- and middle-income Singaporeans, it is the middle-class that is particularly anxious. In spite of the headline-grabbing GST offset package announced at this Budget, there is an anxiety as to how much prices will rise in future over the period the offset package would cover.

In addition to the concerns about spikes for specific Consumer Price Index (CPI) items, there are also concerns about minor price hikes across the board that will hurt cumulatively, not too different from the analogy of the frog in a pot of gradually boiling water. Should the aggregate of price rises be significant, the impact of the additional offsets may not be as optimistic as highlighted in Annex F–2 of the Budget Statement for 3-room and 4-room HDB households where the enhanced Assurance Package is estimated to offset the GST hike of 11.8 and 7.9 years respectively.

As Singaporeans well know, no offset package lasts forever. The Government expects that, in time, Singaporeans will internalise the GST hike.

At this Budget debate, the Workers' Party will raise additional alternative proposals to raise revenue so as to stave off the GST hike. In particular, Sengkang GRC Members of Parliament, Louis Chua and Jamus Lim, would explore other levers for revenue generation. Apart from the reserves' framework, the alternatives proposed are not inconsistent with the principle that recurrent expenditures should be backed by recurrent revenues.

What continues to weigh heavily on Singaporeans today is the rising cost of living, including for the middle-income or "sandwiched" class.

Cost increases in electricity, gas and transport were thrust upon Singaporeans last year and over the last few months. Energy prices continue to rise. The enthusiasm with which the Government spoke of the electricity retail market in 2018 as a means to manage the cost of living has become decidedly more muted with the exit of multiple retail players. In December, the electricity tariff for households was raised by 0.6% and there was a recent revision of household refuse collection fees which took effect last month after a previous hike in 2017.

A TODAY article from late October last year quoted the Monetary Authority of Singapore (MAS) predicting that food, preschool and healthcare costs may go up this year. In view of the current economic outlook, it is safe to say that this is a foregone conclusion.

According to data released by the MAS and MTI last week, the headline CPI remains at what it was last December at 4%. CPI data from last month show that utilities and other fuels rose 11.8% compared to a year earlier and transport is up 12.7% year-on-year.

Lower-income Singaporeans, working Singaporeans and middle-class Singaporeans are all being hit very, very hard.

There is also a pattern of increasing public transport fares over the last three years, as shown in information from the Public Transport Council. While adult card fares were alternatingly increased and reduced between 2014 and 2017, they were raised by six cents in 2018, a further nine cents in 2019 and then another three to four cents in 2020. While measured in cents, these increases are by no means small to many who have to incur these costs every day – not as a luxury or as discretionary spending, but as an unavoidable expense simply to get to work and back.

About three weeks ago, ComfortDelGro Taxi announced an increase in fares by 8%. Just last Friday, all the other taxi companies announced that they would follow suit. All these and the other inevitable price hikes to come over the next five to 10 years will blunt the impact of the GST Assurance Package, to say nothing of the psychological impact of the package's reduced effectiveness against a backdrop of rising prices.

The Workers' Party's position on the GST notwithstanding, I welcome the announcement of the formation of a Committee Against Profiteering to address concerns that some businesses could use GST as a cover to raise prices. I would like to raise a few issues relating to the Committee.

First, in order for this Committee to be effective, the public should be clearly informed as to what evidence they would need to file a complaint with the Committee. Otherwise, it would be a case of the word of a person against that of a business.

Second, at a time when inflation due to the supply chain crunch is a real concern, some businesses may have good reason to raise prices, or a legitimate reason to raise prices. For example, because of the rising price of raw materials and not under the pretext of the GST hike. This may cause misunderstanding amongst the public about resorting to the Committee to investigate the price hikes. But if rising business costs are due to supply chain woes, then prices should correct in time and even fall as the supply chain crunch eases. If they do not, then it would be legitimate for the Committee to inquire why this is the case.

Third, the Committee should look into the businesses that move to raise prices before the GST hike is introduced. It should not rule out looking into complaints of such pre-emptive price rises that try to bypass the Committee's terms of reference. SMEs, hawkers and sole proprietors should be allowed to respond to the Committee if they have been falsely or unfairly accused of raising prices.

Finally, the Committee should closely track price rises at heartland shops where many Singaporeans purchase food and essentials. Minister of State Ms Low Yen Ling has written to me to nominate one Member from the Opposition benches to sit on this Committee. I have extended this invitation to our Parliamentary colleagues from the Progress Singapore Party (PSP) and Non-Constituency Member of Parliament Ms Hazel Poa has agreed to sit on the Committee.

Let me now move to topics other than the GST.

The Workers' Party is of the view that the Budget is broad-based in providing assistance to individuals and businesses to address both immediate as well as short to medium term concerns. Specifically, it provides a useful transitional support such as the Small Business Recovery Grant to businesses in eligible sectors that have been hit hard by COVID-19. One input we have is to ask the Government to actively consider appeals from businesses that fall outside the eligibility criteria on a more flexible and case-by-case basis as far as possible.

We also support CPF transition offsets to help phase in the raising of employer and employee CPF contribution rates for senior workers. This raising of rates is vitally important in supporting the retirement adequacy of senior workers.

What was not fleshed out in significant detail was the Minister's commitment that the Government intends to refine how Employment Pass (EP) applications are assessed to increase certainty and transparency for businesses. Even while it is a given that Singapore will always be open to foreign talent, we must always prioritise Singaporean talent who represent the Singapore Core. If a Singaporean can do the job or be trained to do the job, the Government should not inadvertently make it easier or more convenient to resort to hiring foreigners. I hope Minister will share more details of the Government's thinking on the new EP framework in his wrap-up speech.

The Budget also renders important support to businesses to ensure that our workers at the lower end of the salary spectrum will see meaningful salary increments.

In this regard, I hope the Minister for Finance can consider moving more decisively to ensure that Singaporean workers who take home less than $1,300 can rely on the PWM Credit Scheme to raise their wages immediately. With the PWM Credit Scheme as announced by this Budget, I would argue that this can be achieved forthwith instead of waiting for all PWM sectors to be rolled out incrementally before the low-wage situation for these workers is addressed. Let me explain.

Assuming that we want to provide immediate relief to the 32,000 full-time Singaporean workers who earn less than $1,300 with a generous $400 a month wage hike for 13 months each financial year, a back-of-the-envelope calculation shows that it would require about $167 million year to significantly uplift the well-being of these lower-income workers. This sum would constitute 8% of the $2 billion set aside under the Progressive Wage Model (PWM) Credit Scheme and only 9.2% of the $1.8 billion that the Government has committed each year over the next five years for this scheme. I hope the Government is persuaded to move quickly on this even as discussions on PWM sectors are ongoing. As they already earn very low salaries, these 32,000 workers can and should be supported with higher wages immediately.

A second intervention I would suggest for low-income workers amongst us concerns the changes to the Workfare Income Supplement.

The Finance Minister has introduced a new minimum income criterion of $500 a month. There was no such criterion in the past. The Minister has said that the policy intent of this is to encourage part-timers and casual workers to take up regular full-time work.

However, this new criterion will penalise part-timers and casual workers significantly. There are legitimate reasons why Singaporeans take up part time or casual work. Some may be caregivers who do not have the flexibility to take up the full-time work. Others may not be able to stand for eight hours a day, for example, in a food and beverage setting for various reasons, including their advanced years. For some individuals, full-time work can be gruelling; for others, retraining is easier said than done. Yet some others simply cannot find full-time work in the limited areas they are qualified for and take what part-time or casual work they can find.

According to the MOM Labour Force, Singapore 2021 data set, there were 46,600 residents who earned less than $500 a month last year. The new criterion will deny the work for Workfare Income Supplement to these workers.

I would urge the Minister for Finance to remove this criterion so that our most financially vulnerable workers can benefit from Workfare.

The Workers' Party believes that the Government can move the needle for these low-income earning Singaporeans in a decisive way. It would be consistent with the philosophy of this Budget: "Charting our way towards a fairer, more sustainable and more inclusive society" to alleviate the financial stress of our most vulnerable Singaporeans.

In his Budget speech, Aljunied GRC Member of Parliament, Mr Faisal Manap, will speak on other segments of Singaporeans who continue to be left behind because their plight has not been adequately addressed.

Next, the carbon tax. Singapore's net carbon emission goal, as part of our green transition, recognises the important shifts that are taking place across the globe. The Budget announcement of a carbon tax of $50 to $80 per tonne of emissions by 2030 is consistent with a commitment to mitigate the climate emergency. Hougang Single Member Constituency Member of Parliament, Mr Dennis Tan, will focus on Singapore's transition to the green economy in his Budget speech.

More generally, Workers' Party Members of Parliament have made several interventions and suggestions during the debate on the climate Motion in this House last month, covering subjects such as greenwashing, just transition and accelerating electric vehicles (EVs) adoption, amongst others.

I note the Finance Minister's commitment to provide U-save rebates to the cushion the impact of the carbon tax on households from 2023. Going by the Government's own calculations taken in a linear way, it would follow that a carbon tax of about $ 75 per tonne could potentially increase utility bills by $2 a month. However, unlike the new tiers for personal income tax, the upper end property taxes and ARF hikes for luxury cars announced at the Budget, the Minister did not reveal the absolute quantum of revenue the carbon tax is projected to bring in up to 2030.

The Government should reveal these figures. This is not only for the purpose of showing how the carbon tax revenue would be utilised to support decarbonisation, this information will allow meaningful debate to take place on the funding for these decarbonisation measures and whether and how cost of living pressures for the average Singaporean could be further alleviated through the carbon tax.

Before concluding, I am reminded that in Singapore, "A"s are not usually given for effort, but for outcomes. With this Budget position as a first step in renewing and strengthening Singapore's social compact, the Government should reveal how it reports on initiatives that were previously announced and whether they met their goals. The new social compact ought to require a report card that goes into far greater detail than the bi-yearly Singapore Public Sector Outcomes Review.

Let me explain using the Industry Transformation Maps, or ITMs, as an example. A transition is taking place from the original ITM to ITM 2.0, which is now dubbed the ITM 2025. I wish to ask if there is it is a report card of what has been achieved by the initial ITM, especially for deliverables where Singaporean workers are supposed to benefit.

In previous exchanges in this House, notably in 2020, we received assurances that Singaporeans are benefiting and are prioritised in such efforts to generate quality jobs so there was no need to worry. To date, however, we do not have a detailed data set, sector-by-sector of how many jobs were generated by ITM 1.0 since its inception in 2016, 2017, and how many of those jobs went to Singaporeans and at what wage levels?

The ITM 1.0 roadmap set out to develop new and redesigned jobs with better wages provide more overseas opportunities and more strongly support Singaporean workers' upgrading and skills deepening. Without numbers, however, it is hard to tell whether these broad and lofty goals were achieved. The overall picture maybe rosy with rising wages and low unemployment maintained. But the precise deliverables of the ITM have to be followed up upon, to know whether outcomes have been meaningful or whether alternative approaches to improve outcomes should be considered.

A significant goal of the ITM was to further the interests of Singaporean workers. To this end, the timely reporting of ITM 2025 outcomes should be made a key objective of this Government. When I asked for specific figures for the first ITM outcomes and what it has achieved for Singaporean workers, MOM stated that more time was needed before we could obtain the full data.

Surely, enough time has passed for such data to be available, as the planning for ITM 2025 is well underway? If such data is released, it can ameliorate the persistent angst surrounding competition between Singaporeans and foreigners over job opportunities.

Further, making such information accessible will help Singaporeans better understand the overall economic landscape so that they can develop their skills in specific industries. This is really about empowering the Singaporean worker to make informed choices surrounding their economic future in line with the nation's.

In this regard, the announcement of further adjustments to foreign manpower policies announced by the Finance Minister is instructive. The value proposition for businesses to hire Singaporean workers ought to become more compelling, given the anticipated increases of S Pass qualifying salaries and separately, foreign worker levy hikes announced in the Budget.

With the minimum qualifying salary for new S Pass holders increasing from $2,500 to $3,000 this September and further increases already forecasted for September 2024 and 2025, it would be useful for the ITM framework to proactively track, disclose and identify which are the ITM sectors are more reliant on S Pass holders and where there could be opportunities for Singaporean workers. Businesses will also benefit from this information as they can be incentivised to redesign jobs to attract Singaporeans.

The same expectation should be set aside for the large taxpayers' dollars set aside for national plans like the Research, Innovation and Enterprise 2025 Plan where $25 billion has been allocated from 2021 to 2025. The outcomes of such initiatives should be a major feature of the new post-pandemic social compact where the Government seeks to renew between citizens and the Government. My colleague, Aljunied Member of Parliament Mr Leon Perera will explore the national goals the Government should focus on aggressively, including poverty alleviation, inequality and social mobility. Ready access to data on outcomes of Government initiatives, including multi-year ones will greatly support all three prongs that Mr Perera will advance.

To conclude, COVID-19 was and remains a generational crisis. But it has also proven to be a priceless opportunity to reflect on the robustness of our social compact and the live reality of Singaporeans, particularly at the lower- and lower to middle-income levels. It is also an opportunity to reflect on our values as a people. How much do we value the efforts and contributions of those around us, regardless of social economic class or nationality? How does the Singapore system recognise the effort and labour of those who work with their hands like our conservancy and landscape workers, or those who invest their lives in looking after the needs of others or nurturing future generations of Singaporeans, such as our teachers and our nurses? What about our artists and sporting talents? And what about the foreign workers in our midst? Their living and working conditions must be a priority for not just their well-being, but our well-being too. I say for our well-being too because caring for others establishes the standards that we set for ourselves on the type of people we wish to be.

While COVID-19 has been debilitating for the economy and for many families, from a community perspective, it reminded us of the nurse, the teacher, the cleaner, the security guard, the bus captain and so many others who continue working to keep Singapore on an even keel. The efforts of these Singaporeans make my colleagues in the Workers' Party and I proud to the Singaporeans. These times have shown the resilience of our people, a subject my colleague, Aljunied GRC Member of Parliament, Mr Gerald Giam, will peg his Budget speech upon.

The Workers' Party notes the broad thrust of the Budget and supports the call of greater fairness, sustainability and a more inclusive society, a philosophy that comes with much promise of the future. However, the Workers' Party will object to the Budget as we disagree with the decision to raise the GST.

Mr Liang Eng Hwa.

Mr Speaker, Sir, following the Budget Statement on 18 February, we have watched, with grave concerns the tragic developments in Ukraine. I echo the statement by the Foreign Affairs Minister that we are shocked and appalled by the blatant aggression and are saddened by the loss of lives and destruction there. It once again reminded us of the importance of our own ability and our will to defend our sovereignty and our independence. We must expect no one else but ourselves to defend what is ours.

Sir, the conflict may be half the world away from us, but its implications and ramifications will impact us in many ways, amongst others, its' effect on the global economic recovery as well as the elevated oil and gas prices. Can I ask the Finance Minister for an update, notwithstanding the Foreign Affairs Minister's Statement, as to whether the Ukraine situation will have a bearing on the Budget that he delivered on 18 February; and also, what other implication or impact will there be for our economy?

Sir, now my take on the Budget.

Social compact is not a new concept to us. It has always been the underpinning core values of the Government, manifested in many of our policy formulations. It is a vision that galvanises us as a nation and unites us in our commitment to care for each other. Yet, after listening to the Finance Minister's Budget Statement speech, the meaning of social compact took on a refreshed and more tangible feel and operationalised versions of sorts or more realisable.

Over the last decade, countries and democracies around the world including Singapore, have been grappling with three deep-seated issues. Firstly, the widening income and wealth inequality brought about by globalisation and the proliferation of knowledge-based economy. Secondly, the stagnation of very slow wage growth for our lower-wage workers. Thirdly, climate change crisis. How do we manage the pace and the trade-off to pivot to a low or net-zero carbon society?

Budget 2022 will stand out for how we have made decisive and bold moves to tackle these issues head-on and to build a fair, inclusive and sustainable society.

Let me start with the tax changes announced.

In the Budget, we saw significant increases in the income tax rate as well as the wealth taxes: property tax, luxuries car taxes in the ARF. These increases will bring in an additional revenue of $600 million for the Government, not quite a needle-moving number that can pay for the projected rise in expenditure due to its narrow base. But it helps to steepen the overall progressivity of our tax structure and towards a fairer system.

Corporate tax changes are also expected to come next. The two-percentage point increase in GST will happen in 2023 and 2024, by one-percentage point step each. Coupled with this increase will be the massive upsized $6.6 billion Assurance Package to cushion the impact of the GST increase.

The GST increase and the upsized Assurance Package put together, actually further enhance the overall progressivity of our tax structure. This is because the Assurance Package will have more than adequate payouts and rebates to cover at least five years of additional GST expenses for the majority of Singaporean households and about 10 years for the lower-income households. The existing permanent GST Voucher scheme will also be enhanced to provide continuing offsets for the GST expenses of the lower- to middle-income household and the retirees' household.

On the other hand, the higher income and the wealthier will pay more GST, especially with the two-percentage point increase, as they tend to be higher spenders, bigger consumers and hence, will contribute more to GST.

Sir, over the last decade, we have been adding more social support features into our social security structure, which has helped improve the progressivity of the overall system, such as Workfare for the low-wage workers which, in essence is a negative tax; Silver Support Scheme, which targets Singaporeans in the lower 20% in terms of lifelong income; higher permanent GST offsets targeted at lower-incomes, seniors and smaller housing types; means-tested subsidies in public housing, healthcare, education, tilted in favour of lower-income and that majority of Singaporeans do not not pay income taxes.

Taken together, it attested to the system of social compact that we have always wanted where the better-off contribute more and those with less contribute less and will receive more benefits and support to help them cope with life.

In recent years, as income and wealth disparities continue to widen, the view that the better-off should contribute more in taxes has gained traction and it is heartening that in Singapore, we are also hearing calls from the high-income earners and those who are wealthy themselves. This reflects our values and mutual responsibility amongst ourselves as a society and as a nation.

Of course, there is often this argument that rising income or wealth taxes may diminish our competitiveness, or that wealth is mobile and can be easily moved to a jurisdiction with no or low taxes. Yes, we have to be watchful of this possibility but we should also not underprice ourselves.

Singapore has its very compelling proposition as a triple-A rated global hub, excellent infrastructures, deep and diverse talent pool, trusted and enforceable legal and regulatory structure, strong and stable Government, amongst others. We are rated among the best place to live in the world and we are a nation that is always passionate about excelling ourselves and constantly charting ahead and investing for a better future. And this is the Singapore premium.

We cannot just count on low taxes or lower costs as a way to attract investments and talent. It is not sustainable. The significant moves on tax structure in Budget 2022 demonstrates our confidence and also our self-assuredness as to what Singapore can offer. We have to keep working on strengthening each of these fundamental propositions and not only safeguard but also keep growing the value of this premium.

Sir, the other major move in this year's Budget is in the uplifting of income for the lower-wage workers and to tackle inequality. In a globally connected and knowledge-driven world, those equipped with in-demand skills and know-how tend to be duly compensated for their expertise. Salaries of the top earners have seen their income rise at much faster pace. We are not averse to that. On the other hand, the incomes of our lower-wage workers continue to stay stagnant or not keeping up with the rise in cost to live a better life. We are concerned with this widening income inequality and that is why we have Workfare and other skills upgrading programmes, among others, to intervene and uplift the wages of low-income Singaporeans.

In this Budget, we saw significant expansions to the Progressive Wage Model (PWM). It will be extended to more sectors with an aim to cover 94% of our full-time lower-wage workers and through an accelerated pace of implementation. The Government will co-fund the wage increase of low-wage workers through the Progressive Wage Credit Scheme (PWCS). Businesses with workers earning up to $2,500 per month will be assisted with co-funding of 50% in the first two years and 30% in the next two years. Those earning between $2,500 and $3,000 will also receive support, but at a lower co-funding ratio.

In a related move, companies who employ foreign workers will now be required to pay all their local employees at least the local qualifying salary of $1,400 per month. And to complement the Progressive Wages move, the Workfare Income Supplement (WIS) will also be significantly enhanced. The qualifying income gap will be increased to $2,500 and also extending to younger workers, aged 30, as well as increased payouts amongst the various WIS enhancements. These various measures amounted to a very substantial package to uplift the wages of the lower-income workers about $1.8 billion per year over the next five years or totalling $9 billion for both PWCS and enhanced Workfare.

Of course, fiscal interventions alone cannot be the only way to uplift wages. Businesses and consumers will also have to contribute their share to help raise the income of our lower-wage workers. And we should continue to encourage and support our lower-wage workers to upskill, so that they can also move up the wage ladder. Sir, this is a realisable step to strengthen our social compact and to tackle inequality.

On decarbonising Singapore, I applaud the bold moves by the Government. The announced carbon tax increases are steep, increasing five-folds, from $5 to $25 per tonne in 2024 and thereafter, by ten-folds and more by around 2030. It is thick enough to bite or hurt and can nudge and change behaviours and business practices. The sharp carbon tax increases demonstrates the Government's resolve to achieve net-zero emission by around mid-century.

Since our founding, we have always kept long-term environmental sustainability in mind and, in fact, have been ahead of the curve. In the 1970s, we have already scaled up the greening of our island by sustained tree-planting programmes and safeguarding our nature reserves. We mounted ambitious efforts to clean up our rivers, build comprehensive sewage, waste infrastructure, amongst others.

But this coming series of carbon tax increases will be our most ambitious move. It will have significant cost implications to businesses and households. Hence, without transitory support, some businesses may not be able to cope and some may exit. So, I welcome the clarification by the Finance Minister that the Government does not expect to derive additional revenue from the carbon tax levy. The carbon tax raise will be used to cushion the impact to households and businesses, as well as make decisive investments in new, low-carbon, more energy-efficient solutions.

Sir, although Singapore accounts for around 0.11% of the global carbon emissions, we strongly believe in contributing to the global efforts and see it as our moral obligations as citizens of the world. We should leverage on this major decarbonisation effort to catalyse the development of the green economy and to entrench ourselves in this global green transition and to create jobs, create opportunities.

Finally, Sir, I would like to touch on the current waves of cost increases. I have raised this concern in earlier Parliament Sittings, including whether we can delay the increase of GST, given the cost pressures at the moment. I thank the Finance Minister for listening to the feedback from Singaporeans and on the ground, firstly to delay the GST to start from 2023 and in two staggered one percentage point steps; and secondly, to introduce the $560 million Household Support Package to help Singaporeans to cope with their daily expenses arising from the current cost pressures.

Sir, allow me to continue in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, the recent spate of price increases is a cause for great concern for Singaporeans. Whether it is electricity, food or transport, we can feel the overall trend of inflation and the pressure of rising cost of living.

Most of the goods we consume are imported, so any rise in international inflation, especially energy prices, will have a direct impact on domestic consumer prices.

While we have comprehensive measures to cope with the inflation, such as using a strong Singapore dollar to offset rising prices of imported goods, expanding and diversifying our sources of imports, and a slew of packages to help the low-income group, they do not fully offset external inflationary pressures.

Fortunately, in this year's Budget, the Finance Minister has added a $560 million Household Support Package to help Singaporeans cope with rising cost of living.

The package offers up to $285 worth of U-Save rebate per household living in HDB flats, an additional $200 top-up to every child and student's Edusave account and another $100 CDC voucher which is very popular among Singaporeans.

As the international situation and global supply chains continue to be unstable, I hope the Government will continue to pay close attention to consumer price fluctuations, especially utilities, and expand the package when necessary to help Singaporeans cope and tide over this difficult period.

Mr Speaker, I am also glad that the Finance Minister has responded positively to Singaporeans' concerns about the impact of raising GST this year. He has postponed the timetable to next year and the following year and will raise the GST one-percentage point per year in two years' time. This will significantly reduce the inflationary pressure.

Many Singaporeans feel that while GST increase is inevitable, it is better later than early. It is better to raise it in two tranches than two-percentage points in one go.

Most importantly, we will have a $6.6 billion enhanced Assurance Package to help most Singaporeans offset the impact of higher GST. For example, under this package, each adult Singaporean will receive a cash grant of between $700 and $1,600. The Government will also give out $600 to $900 in GST vouchers to lower-income elderly Singaporeans.

Other subsidies include a U-Save rebate of up to $570, and $200 worth of CDC Vouchers for each household next year and the following year.

The total amount of these rebates is substantial and will be sufficient to offset the increased GST amount that most Singaporeans will have to pay over the next five years. For low-income families, the increased GST amount can be offset over the next 10 years.

For example, a family living in a 3-room flat with two children will receive nearly $5,000 worth of assistance from this Assurance Package, but roughly, this family will only have to pay an additional $400 GST. In other words, the subsidy that this family will receive is more than 10 times the additional GST they need to pay. Retirees living in 4-room flats will receive subsidies that can fully offset the extra GST they have to pay. For utilities, 1-room and 2-room households will receive rebates of up to eight to 10 months, 3-room and 4-room households will receive rebates of up to four to six months, and 5-room households will receive rebates of three months.

Mr Speaker, our tax and grant regime has always been inclined to helping the poor. The tax changes this time round further strengthen this characteristic by raising the income tax and wealth taxes for high-income earners on one hand and expanding the assistance and subsidies for lower- and middle-income families on the other hand.

Those with better incomes or wealth can afford higher taxes because of their better economic conditions. Most of them are also consumers who spend more, so their GST contributions are also higher than those of the lower-income groups.

According to MOF figures, 60% of the GST collected come from high-income earners and tourists. Under our overall tax and grant system, low-income earners will receive a $4 subsidy for every $1 of tax paid. The middle 20 percentile will receive a $2 subsidy for every $1 of tax paid. High-income earners will receive a subsidy of $0.30 for every $1 of tax paid.

These figures demonstrate vividly that our tax and grant system is really focused on taking care of lower-middle-income Singaporeans. I think this is a fair tax system that we aspire to.

This year's Budget reflects our pursuit of the spirit of social cohesion and joint advancement of all Singaporeans.

(In English): Sir, Budget 2022 to charge the new wave forward to realise our vision as a fairer, greener and more inclusive society, we want to level up our society, secure the well-being of our people and at the same time, we need to grow our economy, create exciting future opportunities to build our best home.

Every of the above that we want to do for the good of Singapore and for the good of people require financial resources. It is meaningless to have big plans and big ideas, but does not come with sound and sustainable financial plan to fund them. We need to have a clear mind how we intend to charge the way forward. But at the same time, we also need to have a clear mind how we can find the means to pay for these new ways.

Budget 2022 strengthens the foundations of our long-term funding plan, which is sustainable and fair, and it opens up further exciting possibility ahead for Singaporeans and Singapore. Sir, I support the Budget.

Ms Foo Mee Har.

Mr Speaker, Budget 2022 will be remembered for the significant tax changes announced. One of the main Budget announcements was that the GST rate hike will be delayed and spread out over two steps – one-percentage point per step on 1 January 2023 and another one on 1 January 2024. This move by the Finance Minister brought some relief to concerns amidst rising prices. We all know that it would have been more expedient for the Government to effect the total increase in one go and the earlier the better for the Government. But we appreciate the sensitivity shown to delay it and do it in two separate steps. So, this is appreciated.

Sir, Budget 2022 takes decisive steps towards strengthening our social compact. It unveiled a slew of taxes that impacts the wealthy – ranging from personal income tax, property tax as well as luxury car tax. These taxes are expected to raise $600 million of additional tax revenue per year when implemented. Taken by itself, this amount may not appear large. However, property-related taxes such as Additional Buyer Stamp Duty (ABSD) have in fact contributed significantly to our revenue base over the years.

Let me share. In 2021, Stamp Duty collection increased to $6.45 billion, that means a $2.55 billion increase in one year as compared to 2020, and that is 66% increase in one year. ABSD was further increased just a few months ago in December across all categories except for first-time local home buyers. The ABSD rate for foreign buyers now sits at 30%.

As ABSD targets mainly property investors, this has effectively become a form of wealth tax, apart from acting as a policy measure to cool the property market. Whilst I know the Government may not consider this as a stable form of revenue base for the Government, I think investors should not hold out much hope for the ABSD to be lifted, as it is now a significant part of Government revenue. In fact, we should expect more to come on the property front, including the low hanging fruit of injecting further progressivity to the basic buyer's stamp duty from the current 4% for properties valued at $1 million and above, for higher tiers to apply to more luxury homes.

Sir, our tax structures continue to be more progressive over the years. It was only recently in 2017, when the top tier personal income tax bracket was increased to 22%. Yet, this Budget proposes to increase it again, further to 24% from 2024. In Singapore, top 10% income earners who pay Personal Income Tax already foot approximately 80% of total personal income tax collected.

Sir, our unique system of taxes and transfers have been effective in addressing income inequality. We have seen a steady decline in our Gini coefficient from 0.45 in 2010 to 0.38 in 2020, after transfers and taxes. In this Budget, the Assurance Package – designed to cushion GST impact for middle- and low-income households, was boosted to $6.6 billion. Another $9.5 billion over five years is being set aside to support the Progressive Wage Model and Workfare Income Supplement scheme, benefiting 94% of full-time low-income workers. Sir, this is commendable and well-timed.

Our system is designed such that for every dollar of tax paid, the bottom 20% of our residents receive about $4 of benefits back, the middle-income residents get about $2 and the top 20% receive about 30 cents of benefits. I think we have all understood how it works, my colleague mentioned this earlier too. The principle of helping those with less inherent in our system of taxes and transfers has gone some way to moderate the vagaries of globalisation and inequality.

Mr Speaker, rather than depend so heavily on taxes to redistribute wealth, can we also not tap on strong spirit of giving amongst wealthy families?

Globally, increasing numbers of wealthy individuals are engaging in philanthropy. A "Global Philanthropy Report" by Harvard identifies some 260,000 foundations with total assets of more than US$1.5 trillion. In Singapore, we have also seen more privileged individuals "giving back", including the setting up of private charity funds with $200,000 and more.

More and more family offices are setting up in Singapore, with strong mandates to do good and to give back to society. We should therefore enhance our philanthropic policy framework to accommodate new forms of giving and encourage the establishment of more foundations, of greater sophistication.

Currently, our policies are geared towards straightforward forms of giving. But wealthy families aspire to make significant contributions beyond plain chequebook giving. They hope to tap their financial resources, unique capabilities and networks, in creative ways to make an impact. They want their gifts to be transformational and so do we. Enhancing our policies around philanthropy can help establish Singapore as a philanthropic hub – a pillar of excellence to build alongside our hub status for finance and sustainability.

This intent to promote Singapore as a philanthropic hub is not new. Several changes to taxation and regulatory framework were indeed made by then-Second Minister for Finance, Tharman Shanmugaratnam, in Budget 2007. However, the concept of philanthropy has evolved rapidly over the years. Wealthy families and philanthropists are keen to explore new models such as social impact bonds, impact investing, venture philanthropy and so on. Have our current policies kept up with the times?

In its early days, Singapore benefited in similar ways from generous giving by visionary philanthropists and organisations, such as Tan Kah Kee, Govindasamy Pillai and Ngee Ann Kongsi, to build our communities, our schools and our hospitals. Today, we have a window of opportunity to work alongside a new generation of philanthropists, using modern, innovative and creative ideas, so that their contributions can be a fulfilling experience for both the donor and the beneficiary.

Mr Speaker, Budget 2022 sends the strongest signals yet to businesses about the need to get serious about transformation and going green.

The Finance Minister announced Singapore's commitment to sustainability by bringing forward the timeline for the country to attain net-zero carbon emissions by and around mid-century. To achieve this, the carbon tax will be raised progressively to $50 to $80 per tonne of emissions by 2030, higher, much higher than many had expected. The higher carbon taxes will accelerate our drive towards a greener economy.

Sir, I support the Finance Minister's ambition to sharpen our competitive edge and capture growth opportunities in the green transition. We should aspire to be the leading location in Asia for expertise in carbon services and be the trusted regional marketplace for carbon credits. However, we need to carefully navigate this journey to go green, to avoid dislocating our industries or losing our attractiveness as an investment destination.

We will need to take an ecosystem approach for the transition, laying clear frameworks, standards, roadmaps and sector-based solutions to build green capabilities and collaborations. We will need to champion green financing and be the preferred issuer of green bonds to enable sustainable investments across sectors. We will need incentives – incentives to green our buildings and step up investments in sustainable development and renewable energy.

Sir, the higher carbon tax will translate to elevated energy prices impacting businesses and households, and the increase will be significant. This is especially so for the manufacturing sector with utilities making up to around 9% to 10% of their operating costs. So, I urge the Government to ensure transition measures will be in place to cushion the increase in electricity costs.

Sir, in many of my interactions with businesses large and small, the most frequently cited concerns relate to manpower constraints, an issue that has been further exacerbated by COVID-19 restrictions. The planned increases in qualifying salaries for employment pass and S Pass holders, which will take effect from September, will hurt. With the tight labour market, employers shared that the $500 dollar increase in work pass qualifying salaries will likely translate to just "forced" salary increases for their foreign workforce, as there are few alternatives in the foreseeable future.

Sir, the use of salary thresholds is a blunt instrument that does not take into account specific skills requirements and gaps in the market. A points system which considers a range of non-salary factors will make the work pass system more transparent and economical. The higher work pass thresholds have triggered international firms to review the sustainability of their operations in Singapore.

Many businesses worry about how they may weather the storm in the coming years. Increase in taxes, higher carbon and energy prices, as well as higher local and foreign manpower costs are the main challenges. Companies need urgent help to fast track digitalisation, reskilling of local workers as well as job matching to aid their transformation. They are also screaming for the Government to calibrate the timing, the timing of new policies to provide some breathing space for the transitions.

Mr Speaker, the outlook for rising costs is worrisome. After reaching a near-decade high of 2.4% in January, Singapore's core inflation is anticipated to possibly exceed 3% and above in the second quarter. More economists are predicting that given the externally driven inflation catalysts, they expect inflation will be sustained at high levels for up to two years. With the Russia-Ukraine crisis, crude oil prices have been soaring and hitting over US$100 today. Sir, I would like to ask the Finance Minister whether the Government will do more to help households and businesses if inflation turns out to be more persistent and higher than expected?

Finally, Budget 2022 is estimated to be the third straight budget-deficit year for this term of Government. Whilst I do agree with the expansionary policy to ensure that recovery will be sustained, so I support the Budget, it is equally important that we do not lose sight of the fiscal prudence that has defined Singapore's approach to budgeting. The Government commonly accumulates surpluses in the early years of its term to ensure that the constitutional requirement to achieve a balanced Budget is achieved.

Sir, I would like to ask the Finance Minister, given the new emerging risks to our recovery and growth, especially given the Russia-Ukraine crisis, how will the Government respond, if we will not be able to achieve a balanced Budget for this term of Government? With that, Sir, I support the Budget.

Ms Janet Ang.

Mr Speaker, I am honoured to join in on this year's Budget debate. I would like to declare that I am Council Member of Singapore Business Federation (SBF) and hope to represent the business community's perspective. If I may start with a quote from Martin Luther King, who once said: "The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy." I believe that men and women, we all are standing at times of challenge and controversy right now.

Mr Speaker, Sir, the Singapore business community is very appreciative of the strong and decisive actions by the Government in dealing with survival issues in 2020 and preparing to emerge stronger with "Test, Trace and Vaccinate" in 2021. Singapore is amongst one of the most inoculated against COVID-19 with, I believe, 86.1% of population vaccinated and with low casualties. Still, we see how the Omicron strain, while fortunately not as deadly as Delta, is causing stress in our healthcare system and a slow-down in our easing of safe management measures and opening up of borders.

We cannot afford to be complacent. Our muscle for alertness and resilience has been developed and put to the test time and again over the past two years, and we must continue to keep it well-oiled and ready for action, but at the same time, not be paralysed by fear. So, gratitude to everyone from the Multi-Ministry Task Force, to our healthcare workers and essential workers on the front lines who have helped keep the lights on and the rest of us safe. A big thank you, from all of us, to all of you.

Mr Speaker, my personal take on this year's Budget announced by Minister Lawrence Wong is the following: one, it is a Budget that balances short-term and longer-term objectives; two, it is a Budget that recalibrates Singapore's financial and fiscal policies to ensure sustainability going forward; three, it is a Budget where all Singaporeans can play a part in returning our economy to a state of readiness for growth while caring for those amongst us who are more vulnerable and who have less; and four, it is a Budget that invests in the future of our people and our businesses to be ready for new engines of growth even as Singapore continues to have to strengthen our healthcare defences to tackle the evolving pandemic situation and maintain public health stability.

Whether it is the $500 million Jobs and Business Support, or the timing of the GST rate hikes; whether it is the carbon tax increase to signal the urgent action for de-carbonisation, or the R&D budget for the Singapore Green Plan 2030; whether it is the investment in new capabilities of our people and our local enterprises, or the rollout of the Assurance Package and the uplifting low-wage workers with Progressive Wage Model implementation, it is a Budget that has taken an integral development approach to ensure that our people, our environment and our economy progress in tandem and in harmony.

Whether Budget 2022 delivers on its design now depends on how well Team Singapore executes.

In the latest National Business Study conducted by SBF, businesses that reported being negatively impacted by COVID-19 declined from 63% in 2020 to 32%. There is growing optimism as eight in 10 firms are confident about sustaining their operations in 2022, compared to seven in 10 firms in the previous survey. Nearly half, about 47%, of businesses are confident that the economy will improve in 2022, compared to 31% of businesses in the previous survey. I must add that the survey was pre-Russia-Ukraine situation.

Businesses adopt a cautious outlook towards global and regional economic climate. In the survey, businesses reported that manpower cost and availability are key challenges that they face, along with demand uncertainty, travel restrictions and changing regulatory environment.

However, 2022 will expect to see more job openings and better compensations as businesses look to build up their human capital. Companies are focusing on digitalisation, re-engineering of work processes and diversifying supply chains as key areas of business transformation. Even though most firms are aware of the importance for digitalisation, many lack manpower and resources to transform their businesses. Businesses need Government support in technology adoption and development of human capital as they push towards a more digitalised future. So, assistance with digitalisation remains the top area of support reported by businesses, with 43% desiring Government help in this aspect.

Support towards human capital development rose to be among the top three areas of business support needed in 2022, with 37% of businesses reporting a need for such assistance.

The level of business internationalisation remains consistent with 2020. This is another area that they are counting on Government and the whole-of-society's support. There is no evident drop-off even in the face of travel restrictions. China, Vietnam, Indonesia and Malaysia continue to be the popular destinations for expansion. Meanwhile, geopolitical risks including the US-China continued trade tensions, the acceleration of inflationary risks, the escalating costs of energy and the recent Russian-Ukraine military conflict will dampen the optimism going forward. Still, we need to focus on what we can influence and keep moving forward.

Budget 2022 does cover many of the areas that the businesses have called out for Government support:

everyone is relieved to hear Minister Lawrence Wong announce deferring and staging GST rate hike implementation;

the continued support for businesses to invest in new capabilities like digitalisation and automation is very much welcomed by the business community but the escalating costs of IT manpower and the shortage of IT skills continue to be a challenge;

Singapore being open to the best global talents to complement our local workforce gets the thumbs-up by both local business leaders and leaders of MNCs, though they still worry about policies not being aligned to the goal; and

a Budget carrying both the stick and the carrot to rally our businesses into action toward achieving our Singapore Green Plan 2030 is acknowledged as inevitable and that there is a lot of work ahead of all of us.

For the purpose of my speech today, I would like to speak on four issues and put forward some ideas which have come up in my discussions with industry leaders and trade associations and chambers (TACs). We hope the Government can support and help to address these.

First up is manpower availability and costs. The business community in general is concerned with manpower availability and costs as it is. Some sectors in particular, F&B and construction, are very concerned with the adjustment to Foreign Worker Policies (FWP) in this year's Budget. These industries have been hit hard with labour shortage, exacerbated by border restrictions. And many companies in these industries have participated actively in WSG-organised recruitment fairs over the past two years in an attempt to hire more Singaporeans to fill the open positions but have had little success. These industries are local industries, and their manpower cannot be offshored. Our restaurants and our BTO flats depend on them being able to have the workers. It is hoped that the Government can look into sectorial differentiation when implementing the changes to the FWP at least for the foreseeable short- to medium-term.

Some manufacturing companies which are more labour intensive are concerned that there may be a hollowing out of manufacturing to lower-cost locations. Perhaps, we might have to accept that outcome as inevitable considering Singapore's scarce labour resources. Meanwhile, I would like to suggest that Government and industry could get together to review the costs across the entire supply chain of our key industries and consider our strategic competitiveness end-to-end. This will also help identify supply chain risks and identify actions to mitigate supply chain disruptions which we have experienced during the pandemic.

There is also a suggestion by TACs for an Alliance for Action (AfA) to be set up to look into manpower issues for overlapping industries.

Next point – SMEs need capital and credit, talent and network. Singapore has had an aspiration to grow global champions from amongst our local enterprises. Temasek-linked companies have done Singapore proud in putting Singapore on the map, whether it be DBS or SIA, pre-COVID-19, or Keppel or Singtel. Outside of tech companies like SEA or Grab or Carousell and other tech companies, the question is why our Singapore medium-sized companies do not get the same lift?

It boils down to a lack of capital, talent and network. Last year during the Committee of Supply, I applauded the $1 billion "Local Enterprises Funding Platform" set up by Temasek and the Government. I did suggest for the support be extended beyond the large local enterprises (LLEs) to include our local SMEs, or at least, the medium-sized companies. In Singapore, we have promising mid-size companies which may be "stuck" due to a lack of capital, lack of access to tools and networks especially for going beyond Singapore, and lack of leadership and expert capabilities needed to break out and stand out. With some support by way of talent, capital and network, we give ourselves a better pipeline of global champions in-the-making.

Let me segue to share with you two stories, which saddened me a little, but I thought I should share. The first story is the story of the M&A journey of a Singapore mid-size company. When they were looking for partners, they received 40-over NDAs signed by companies from all over the world but none from Singapore. The next story starts off well with how the Government's Temporary Bridging Loans (TBLs) and Enterprise Financing Scheme (EFS) were going to help our local companies tide over the difficult COVID-19 times. Unfortunately, the relief was short-lived as the companies found their commercial credit lines with their banks terminated and transferred to the Temporary Bridging Loans (TBLs) and Enterprise Financing Scheme (EFS) offered by the Government. I am sure these are sound credit risk decisions made by the bankers. But for the SMEs, they are in a tight spot. Perhaps there are misunderstandings in the implementation of TBL and EFS that needs both sides to dialogue and move forward. It would be interesting to see how many of such cases did happen. That said, the SMEs do welcome the announcement that Minister Lawrence Wong made in this year's Budget that EFS will be enhanced to include Merger and Acquisition and Trade Loans.

Talent is a big topic and a big challenge. I will focus today on one small suggestion: that is, getting our cohort of Public Service scholars to get their feet wet and their hands dirty by being assigned to our promising SMEs for a year or two, or even six months, as part of their bond. This experience will, in fact, equip them with the empathy they will need when crafting policies for the country and sharing the talented resources with our SMEs.

Leveraging IP is also an exciting opportunity for our companies but our local enterprises who have attempted to do so, share that IP filing and registration need deep pockets. Some of the TACs have requested for Government to consider providing funding support to guide and enable businesses to actively leverage on intangible assets as a competitive advantage. This would include leveraging on overseas IP owned by Singapore companies. I believe that MinLaw and IPOS are already supporting but perhaps SMEs can be made more aware.

Point three, going green. Our businesses have woken up to the Singapore Green Plan 2030 vision as a call to action for today. It is no longer something to think about tomorrow. The carbon tax rate increase and the roadmap ahead are a clear conviction that sustainability is a matter of importance and of immediate action. The writing is on the wall. COP26 targets are not just the Government's business. They are everyone's business.

Sir, our companies, however, need help from getting educated on everything "green and sustainable" to how to set their net-zero plan. Financial support for green transition is critical for businesses as they map out their net-zero plans. I will speak more about what is needed during my cut with MSE. For now, suffice to say that the "Made-in-Singapore" brand needs to soon carry a new mark of global sustainable standard.

My fourth point, investing in our people for the future. To navigate a tight labour market, businesses are turning towards building a strong local core through enhancing recruitment efforts and offering competitive wages. Businesses will continue to upgrade their team's skills and upgrade their expertise and knowledge, and the support by Government via the SkillsFuture Enterprise Credits, the newly set-up NTUC administered grant for transformation plans and other programmes, for example: schemes to support ICT, will all go a long way.

Minister for Education Chan Chun Seng has in recent speeches called out the key role that the IHLs – ITE, Polytechnics and Universities – can play in partnering our enterprises to skill up and transform.

I would like to share a couple of examples of Industry-IHL partnerships targeting at addressing skills gaps in the industry, with the hope of inspiring more to do so. I declare that I am the Chairman of Singapore Polytechnic (SP) and so, pardon me if my examples are from SP.

The first example is how industry can proactively work with IHLs on their curriculum to enable the students to be work-ready, job-ready when they graduate. The SP faculty at the School of Chemical and Life Sciences developed an opportunity for deeper linkage with industry via the Diploma in Perfumery and Cosmetic Science. The School co-created the Industry Now Curriculum (INC) with industry experts like IFF-Lucas Meyer Cosmetics and Johnson & Johnson Pte Ltd. The innovation involves three semesters of learning in class and lab, one semester of a co-supervised "live" industry projects sponsored by industry partners including start-up companies like NUSMETICS Pte Ltd. The students then go on to complete their final two semesters in a year-long internship with an industry partner. The feedback has been very positive and to-date, 41% of the first cohort graduating May this year are already offered jobs. With the positive feedback on the course, the second cohort of students undergoing INC have doubled in size.

The second example is a bold eco-system collaboration. SP designed and setup an Advanced Manufacturing Centre in collaboration with 16 industry partners including experts like TÜV SÜD Digital Service, ASTech Pte Ltd, Bosch Rexroth, Delta Electronics and Onn Wah Tech Pte Ltd, and others. Together, they curated the "Advanced Manufacturing Learning Journey" curriculum focused on enabling companies to re-imagine and re-think manufacturing processes. Since the launch in October 2020, 177 companies and 632 professionals have gone through the "Advanced Manufacturing Learning Journey". More than 20 companies have taken the next step to work with SP to assess where they are and have gone on to develop projects with SP staff, some involving SP final Students as part of their Final Year Projects (FYPs), while others have SP students working projects as part of their internships.

There are many initiatives which all the IHLs have rolled out to support industry. The call to action is for all our Singapore companies to accelerate the reskilling of their workforce for transformation and for the Singapore workers to seize the day and get re-skilled to stay relevant in the dynamic, fast-moving workplace. The Government has put their money squarely on investing in our people to be ready for the future. So, it takes all to work together.

Mr Speaker, while we are in this Chamber, there are people, businesses, homes and institutions in the cities of Ukraine being bombarded by artillery and aggression of the Russians. How can this be happening? If it can happen to Ukraine, can it happen to us? I shudder at that thought. Singaporeans must not think it could never happen. What are the lessons for us to draw on? One thing for sure is that our total defence and diplomatic corps cannot be over-emphasised. Singaporeans cannot take our existence as a nation for granted.

Our founding fathers, Mr Lee Kuan Yew and his old-guard colleagues wrote our Singapore story. They had the courage to dream big, to create a "First World oasis in a Third World region". Their rallying cry was for this "mudflat to become a metropolis".

We were poor then, but we were certainly rich in spirit. Many of our forefathers were immigrants. Many were the Work Permit holders, Employment Pass (EP) holders and S Pass holders of their time. Some may have come as workers, others as merchants and traders from afar. Yet others came as missionaries, as teachers and nurses. Singapore had nothing then. We were nothing. Why did they come? I will wait for Mediacorp screenwriters to tell that story!

Whatever the reasons that brought them here to our shores, they had the grit to defy all odds and in spite of the diversity of race, cultures, language, religions, our forefathers and mothers, uncles and aunties bonded together behind that big dream. And so, here we are today, having inherited a Singapore that is one of the world's globally recognised city state with strong governance, high trust, smart, innovative and hardworking people, though a little "kiasu" or risk adverse at times.

Through the COVID-19 crisis, we saw how well we could ride the rolling waves of the pandemic with our reserves and the resilience of our people; the reserves that have been built over years of prudent fiscal discipline and strong monetary and economic excellence. In the wake of the pandemic, we saw the hearts and minds of Singapore citizens and residents reflect the care, the generosity, the empathy and the love for neighbour – whether our essential workers or our migrant communities.

Going through the storm is one thing. Building back up is where we are now, and we must not fall into potholes of narcissism, discouragement and pessimism. I believe that Singaporeans at the core have a strong sense of integrity and a deep sense of responsibility to our work, to our family, to each other, to our country.

As we learn to live with COVID-19, we must learn fast to tackle this next pandemic of climate change that is already upon us. We must take responsibility for the development of our own skills, leveraging the support that the Government is providing. Together, let us not wait for the fish to be handed to us but let us learn to fish for ourselves, our family and our neighbours, and live the dream that our forefathers could only imagine.

Let me close with a few lines from our NDP 2021 theme song, which I hope will inspire us to join our hands as we "Chart our New Way Forward Together". I will not sing for you, but here are the words:

"There were times we were uncertain,

But we just kept walking on.

It's always darkest just before the dawn.

See this island, every grain of sand.

Hear this anthem, it's the voices of our friends.

Come whatever on the road ahead,

We did it before, and we’ll do it again."

With this I conclude with my support for the Budget 2022. [Applause.]

Assoc Prof Jamus Lim.

Mr Speaker, in my speech, I wish to explain why raising GST is a bad idea at this point in time, how it will also be bad for working families and what we can do as alternatives to raising GST to meet our fiscal needs.

Minister Wong began his speech by painting a cautiously optimistic picture of both Singapore's as well as the global economy. We grew by 7.6% last year, exceeding even the upper bound of MTI's forecast. Unemployment also plunged to 3.2%, close to pre-COVID-19 levels. And exports, the traditional engine of growth for our economy, expanded by around 12%. With growth, employment and trade figures strong, there is some justification for a renewed sense of confidence as we emerge from the pandemic.

But the economic picture is not all peaches and roses. In January, inflation clocked in at 4% compared to prices a year ago and the highest prices in almost a decade. Higher prices have been exacerbated by an overall increase in the cost of living in the city, which has already been rated as one of the most expensive in the world. And tailwinds from the generous fiscal stimulus as well as the favourable external environment will fade further. Growth, accordingly, is expected to fall to around half that of last year.

It therefore strikes me as premature to be contemplating any form of tightening in the stance of fiscal policy at this time. While the removal of wage support for all but the most hard-hit sectors of the economy was prudent and economically sound, going in the other direction of making fiscal policies more contractionary takes a sensible argument to an absurd conclusion. Doing so would introduce unnecessary frictions into what is still a nascent recovery. It runs the risk of shooting ourselves in the foot, of scoring an own goal.

But this is precisely what will occur with an increase in our Goods and Services Tax (GST). The example of Japan is prescient here. Japan applied consumption tax hikes – their equivalent of the GST – three times in recent history: first in 1997, then in 2014 and subsequently in 2019.

The first two times, GDP collapsed and the economy promptly went into a recession. Inflation also jumped. What is worst, the subsequent collapse in output meant that the tax increase itself failed to produce sufficient revenue to justify its increase. The most recent time was also accompanied by a recession, although this time, the effects were exacerbated by the onset of COVID-19.

While the most recent Omicron variant has turned out to be less detrimental to economic performance than earlier ones, this episode is a reminder to us that a GST hike would rob us of the precious opportunity to revive support for the economy if, knock on wood, some unforeseen Pi or Rho variant – and I understand I am showing off my very limited knowledge of the Greek alphabet here – were to emerge.

In Singapore, we last hiked GST in 2007. This did not trigger a recession the following year. The economy eked out a 1.1% growth rate in 2008. But it nevertheless represented a sharp drop in activity compared to 7.8% the year before.

Back then, we were helped by the fact that on both years, global growth remained in positive territory. This time round, the global environment may be less favourable. The International Monetary Fund forecasts a slowing of world GDP growth from an anticipated 4.4% this year, to just 2% in 2023 and 1.6% in 2024. Thus, global growth will be slowing just as the burden of an increase GST will be kicking in.

A hike in GST is unarguably a contractionary fiscal policy that could offset what had hitherto been a very healthy consumption and investment growth over 2021. The private sector, by anticipating the anticipated tax changes and the need to save more, could further scale back on spending today.

A GST hike is also particularly ill-timed because it holds the potential to stoke already elevated inflation. While the direction of inflation in the future is anybody's guess – and economists have a particularly dismal track record of predicting price dynamics, one that would make a weather forecaster blush – it would not be surprising if inflation remains elevated through till year end. Supply chain constraints have not resolved as quickly as previously anticipated; energy prices are high and could rise more in response to geopolitical tensions and the likelihood of global sanctions; labour markets are tightening, spurred by the global great resignation and lying flat movements. Indeed, MAS expects as much, having raised its latest forecast of inflation to the 2.5% to 3.5% range.

Moreover, this state of affairs may even become a more lasting fixture. There is a risk that inflation expectations have become unmoored from the traditional 2% health by advanced economies worldwide and is now permanently higher by up to half a percentage point, compared to prior the pandemic. And if this turns out to be the reality, then rolling out a GST hike at this time will only add fuel to the inflation flame, which is already starting to burn uncomfortably hot.

It is for this reason that any delay of the hike, were it to occur, is critical, as opposed to the historical pattern of rolling out increases in July. Doing so in a staggered fashion – 1% in 2023 and another in 2024 – will certainly cushion the impact. And this measured approach is echoed by economists and observers, and SMEs have also expressed their relief about the delay.

But the key question, Mr Speaker, here that remains is this: will the Government stand ready to potentially re-examine the timing with a view toward an even more significant delay should macroeconomic conditions remain unfavourable for a tax hike come 2023 and 2024?

Should the Government proceed with a tax hike at the pre-announced dates, will they complement the hike with a justification based on the contemporaneous economic situation?

But why raise GST at all? The reason provided by MOF is that our revenue needs have risen, especially with regard to providing healthcare for a rapidly ageing population. There is no doubt that we should do more to take care of the elderly among us – the Merdeka and Pioneer Generations that have contributed so much to bringing Singapore to where it is today, as well as generations that will enter their twilight years in the future.

My concern, Mr Speaker, is whether GST is the ideal instrument for doing so. On its face, GST fulfills many of the criteria economists traditionally look for, in optimal public finance. It is efficient because taxing all of consumption usually does not distort spending behaviour compared to taxing income or other taxes specific to certain goods and services. It is broad-based, meaning that it can raise significant revenue across a large population and it is simple. Unlike income, we do not need to futz around with appropriate measurements and exemptions. You just pay a fixed fraction of what you buy, period.

While this is precisely why we do not rely on GST alone to raise income, there are also some problems. It is generally sound to diversify the Government's revenue stream as opposed to relying on narrow forms of taxation, more recent research has questioned whether consumption taxes are truly more efficient, especially if we relax some of the standard assumptions. But perhaps, most importantly, most people believe that it is actually easier to ensure that income taxes are progressive, that is, those who are better able to afford a higher tax burden, pay more. The GST is a flat tax rate applied to all purchases of goods and services, which hits lower-income households disproportionately more. In and of itself, it is, therefore, regressive.

The Government's solution to addressing regressivity has been to pair GST with a voucher system, where cash rebates of a certain amount albeit not matched directly to actual spending, are issued to lower-income households. This transfer can indeed be progressive and it may be the case that the overall tax system, even after raising GST, will remain progressive. But an increase in GST will, in and of itself, reduce progressivity, which means we end up less progressive than compared to the status quo.

I, therefore, welcome the Ministry to clarify if the plan to raise GST while expanding the scope of the permanent GST Voucher (GSTV) scheme would be net for the nation as a whole be more or less progressive, relative to a scenario of not increasing GST at all.

This is because we all understand that the generous $6.6 billion Assurance Package, while certainly welcome during the transitional period, will not last forever. After all, the earnings of lower-income groups have been eroded comparatively more as a result of the pandemic. Prices are rising everywhere and furthermore, support payments via the COVID-19 Recovery Grants will expire by year end.

I have focused much of my remarks on the importance of supporting the less fortunate, not just because of some heightened notion of equity. Many studies have pointed out pandemic-induced changes will have lasting effects on incomes, savings, educational attainment and other socio-economic outcomes for poorer households.

Mr Speaker, the poor were already relatively behind prior to the pandemic. As a society, we can ill afford to have them fall further behind. It will be an affront to our sense of equality, of opportunity and genuine meritocracy as well as a stain on the morals and values we hold as a society.

Finally, it is worth recognising that the permanent GSTV scheme leaves important gaps for certain groups that fall beyond the remit of the programme. Income threshold for qualifying for GSTV will exclude those above the 40% percentile of earners. This means that those earning more than around $2,800 a month – a decent but hardly comfortable salary – will face the full force of the GST increase once the transition period concludes. While cut-offs have to occur somewhere, it is worth remembering that many households in this income bracket are also in the "sandwiched generation", who face expenses of supporting their aged and retired parents, as well as their young, school-going children.

One alternative – but admittedly more complicated – scheme for enhancing the progressivity of the GST is to consider GST where progressivity is built right in. This means the purchase of goods and services that the wealthy are much more likely to purchase – fancy cars, high-end properties, first class tickets and luxury experiences – be subject to a higher rate of taxation.

The Government has in this Budget and over the past year taken some significant steps in this direction. An increase in the Additional Buyer's Stamp Duty (ABSD) by 5% and 10% for the second and third properties is welcome, if a little blunt, since it does not entail any associated minimum value, and PR and foreign purchasers confront even steeper rates.

The Budget further sharply increases property taxes for homes with annual value exceeding $30,000. It remains to be evaluated whether these additional taxes successfully target the wealthy, or whether much like the ill-fated estate tax, they end up affecting mainly upper-middle and marginally higher-income households while the ultra-rich retained their ability to shield themselves from progressive taxation. It will also be valuable to revisit in a few years' time whether such taxes move the needle, in terms of freezing and reversing the rising income and wealth inequality in Singapore.

The other question that inevitably arises is, are there no alternatives to a GST hike?

Mr Speaker, I will submit that there are. My colleagues at the Workers' Party have in the spirit of providing credible alternatives work out several additional levers, where if deployed, could stave off the need to increase GST. We have worked out the revenue possibilities for each of these levers which could amount to close to the $3.6 billion expected in revenue from a GST hike.

One lever which we call, say, "the corporate tax lever", accepts the broad premise of the OECD-led effort to implement a global minimum corporate tax rate of 15% known as BEPS. We assume a reasonable loss of corporate and personal income taxes arising from the agreement of 20% and 10% respectively and full compliance of the corporate tax rate to the new global minimum for multinational corporations, which amounts to about the two-thirds increase in the effective rate from current levels. However, we allow small and medium enterprises to retain their current 3% effective rate. This could generate $3.45 billion.

Another lever which we call "the wealth tax lever" puts asset taxation at the front and centre of revenue generation. We adopt the Government's current threshold of 10 years required for land leases to be classified as permanent, above which land sales receipt must be fully channelled into reserves and extract just the first nine years for recurrent expenditure, while redirecting the remainder into reserves. We also incorporate the Government's proposed property tax changes expected to generate an additional $380 million. And finally, we follow the net wealth tiers that had been previously proposed in this House to derive revenue from this channel under very modest recovery assumptions and this could generate $3.7 billion.

A third lever, which is the reserves' contribution lever, the Workers' Party had spoken at length about this possibility before. To reiterate, we can reduce the share of reserves interest income that we send straight back to reserves currently held at 50%, to a lower but absolutely still respectable 40%. Importantly, this does not constitute a draw on the reserves stock. The level of reserves will not go down, but merely represents a reduction in the rate of accumulation of reserves and this alone could generate $4.31 billion.

The final lever, which we call "the externalities lever", entails increasing so-called sin taxes – those levied on gambling, alcohol and tobacco – as well as carbon-generating activities for which we apply an increase to $80 a tonne but channel only half the revenues towards mitigating the transition and encouraging the adoption of green technologies. We limit the increases in each of these channels to no more than 28%, which is what the GST increase will entail. And these additional increases will then allow us to increase the effective corporate tax rate to just 8% and this would generate $3.65 billion.

Of course, I would be the first to admit that the Government, with its army of Ministry analysts and superior access to data and information, would be able to fault some or all of the assumptions underlying these scenarios.

What then is the purpose of this exercise? First, it is to put on the table the tantalising possibility that we can, in fact, choose not to raise GST by adjusting some of the levers available to us. We have deliberately worked out the math behind each of these alternatives such that any single one of these levers will be sufficient to meet the revenue needs that raising GST will offer.

Second, we will also show that even when we mix and match among the proposals to craft a revenue mix that we can accept – after all, the math suggests that any single one of the levers will be sufficient to fill the GST hole, much less alternative permutations and combinations of them.

And third, and perhaps most importantly, is to underscore our desire to engage in good faith debate on whether there are genuine options available to us in meeting the revenue hole, other than raising GST. The most thing for us is to cease stating "I wish", but to start stating "I will". We must instead consider nothing impossible and treat possibilities as probabilities.

Allow me to end with a few quick reflections on several aspects of this year's Budget.

In last year's Committee of Supply debate, I flagged the importance of elevating our national R&D expenditures to a share closer to that of most innovative nations in the world. I am happy to hear that the Government will continue to increase public R&D spending but I will only add three points.

First, more can be done given how we still lag the OECD average for total R&D spending; although, of course, we need to ensure that our outcomes match our inputs. Second, we should ideally direct this towards downstream activities that the part of R&D, and hence, the stated goal of elevating local firm R&D is the right one. And third, the guiding principles of the BEPS agreement means that one acceptable way to lower the effective tax rate for our SMEs and to continue attracting foreign investment is to do so through R&D tax credits.

I am, likewise, heartened to hear of the continued efforts to improve the lot of our low-wage workers. The Workers' Party has repeatedly called for a roll-out of the minimum wage for Singaporeans and the Local Qualifying Salary (LQS) effectively institutes such a floor for a significant majority of Singaporeans.

Progressive Wage Model (PWM) is being rolled out to additional sectors, but I am left to wonder if the Ministry has evaluated how many workers would still remain uncovered by either the LQS or PWM stipulations. If there is room to increase the LQS to an amount of $1,600, which roughly corresponds to a take-home salary of $1,300.

Finally, I believe that the Small Business Recovery Grant targeted at SMEs in the sectors hardest hit by COVID-19 is a good example of how fiscal policies should be timely, targeted and temporary. Simplifying the qualification process for this application, however, would surely be welcome.

Mr Speaker, there is much to like in this Budget which has embedded many elements that I believe will help us improve both efficiency as well as equity in our economy. But stubborn reliance on raising the GST in spite of alternative, more progressive forms of revenue generation is the fundamental reason why I cannot lend my support.

Mr Christopher de Souza.

Mr Speaker, Sir, this was not an easy speech to draft, but I hope it will be taken in the right spirit.

We can have all the right fiscal policies in place and the mettle to see them through, notwithstanding the pain and pinch, but what we have not sorted out is political succession.

Singapore has the unique capability to plan decades in advance across many policies – manpower, trade, climate change, defence, to name a few. But we must ensure that we have successive generations of leaders to see those policies to fruition and, Mr Speaker, I say that political succession planning is key in this regard.

Just last year, I stood here to talk about what I had hoped to see in our 5G Prime Minister. That race should not matter, that he or she should be able to lead the leaders into 2040 and beyond. I focused on 5G because at the time it looked as if the 4G Prime Minister was secured – Deputy Prime Minister Heng.

Yet just a few weeks later, the bombshell came. Deputy Prime Minister Heng had taken himself out of the running citing several reasons. Do not get me wrong. I respect the Deputy Prime Minister for that. It was an act of selflessness in the face of a force majeure, being the pandemic. In short, the Deputy Prime Minister said the next Prime Minister should have a longer runway to the premiership and a long run in the premiership. That he, meaning the Deputy Prime Minister, was not getting any younger and the pandemic was still getting longer. So, Singapore was at the heart of Deputy Prime Minister's decision. I respect that but it does not solve the issue of succession.

To make Singapore's long-term plans work, such as those contained in this year's Budget, Singapore must have a long-term leadership succession plan. These are not my own personal musings. A recently published book by Shashi Jayakumar entitled "A History of the People's Action Party, 1985-2021" was launched by the Prime Minister late last year. Dr Jayakumar is not one to mince his words. He had to be as accurate in his analysis as he could be because many of the people that he wrote about are still alive. What was a central focus of his book? Renewal – principally, leadership renewal.

I was at the book launch and should at this point, declare that I have known Dr Shashi Jayakumar for 20 years. We were University mates and I count him as a close friend. But putting personal affiliations aside, there were several themes that struck me as I listened to the three speeches given at the book launch.

The first speech was given by Peter Schoppert, Director of NUS Press, the publisher. Let me quote two poignant points he made which put into context why the book and themes such as renewal had to be accurately recounted. This is what Schoppert said, and I quote:

"It's a brave historian who writes a contemporary history. That historian is brave on at least two fronts. First, the contemporary historian writes about people who are very much with us. You will see in the book that interviews form a very important source for the book and, of course, interviewees have their own views and they can read what you said about them, they can answer back. They might even be in the room when you launch the book. They might even be invited to launch the book for you. Secondly, the contemporary historian must give a judgement on events as they are still current, as they are still playing out."

Being the author, Dr Shashi Jayakumar was invited to deliver a speech about the book at its launch. What he chose to focus on was insightful and piercing. I quote: "There are many themes and ideas in this book and I do not have time to enumerate on all of them, but I did briefly want to highlight two points. The first is renewal – this is felt to be an urgent imperative. From the very beginning, Party files showed that Mr Lee Kuan Yew was thinking about the issue at an extraordinarily early point, from the early 1960s in fact. I really find this amazing. In this area of renewal, things that would see fruition much later, time and again, would be thought of by Mr Lee and others within the Party from a very early stage."

Prime Minister was invited to launch the book and Prime Minister, too, picked up on the importance of renewal. I quote Prime Minister: "A pivotal general election had just taken place in December 1984. In that election, many of the PAP old guards either retired from politics or stepped down from leadership roles. In the new Cabinet, from the founding generation – only Mr Lee Kuan Yew, Mr S Rajaratnam and Mr EW Barker remained. After the election, the younger Ministers chose Mr Goh Chok Tong to be the leader and he became the first Deputy Prime Minister."

Two Opposition candidates were elected. Mr JB Jeyaretnam in Anson re-elected and Mr Chiam See Tong in Potong Pasir for the first time. At the post-election press conference, Mr Lee interpreted the election results using a biblical reference. He described it as the inevitable transition from the Independence generation to a new generation of voters who knew not Joseph.

Prime Minister went on to say, "The Party's early years, pre-1985, were full of drama and excitement, whereas the post-1985 story has been one of relative calm and stability. Year after year, Singapore continued to sustain its strong growth and rapid transformation. We carried out two leadership transitions smoothly – from the 1G to the 2G, and then from the 2G to the 3G. This has been a story of stability and progress. Of evolution, not revolution. Of patient building and improving. Of ensuring that tomorrow will be better than today. This book recounts how the PAP continuously transformed and renewed itself over the decades."

So, renewal is key, Sir, and we need to concretise the plans for it. Before I go into the meat of my speech, let me respectfully ask a few questions.

What if Senior Minister Teo Chee Hean were 15 years younger? What if Senior Minister Tharman were 15 years younger? They would be ideal candidates for the 4G Prime Minister-ship. Or what if Minister K Shanmugam, Dr Vivian Balakrishnan or Dr Ng Eng Hen were just 10 years younger? They, too, would be ideal candidates for the 4G Prime Minister-ship.

The point I am getting at is that I can appreciate that there are many constraints in choosing a leader – age, years in politics, circumstances beyond one's control. To get my point across, let me share what leadership means to me. And here, I offer a very humble parallel through the lens of sports.

In secondary school, Junior College (JC) and in the club leagues, I was asked to captain hockey teams. I accepted the invitations. Was I the best hockey player on the team? No. In every team I captained, there were three or four players better than me. So, why was I asked? Maybe because I could read the game; maybe because I had deep friendships with everyone on the team; maybe because I was able to decipher what our potential as a team was and worked our guts out to materialise that potential. Whatever the reason, I gave it my best shot and the players better than me also became part of the team's cause.

When I moved on to play for Singapore in the men's national hockey team, we chose the best person for the captaincy. It was not me. There were four or five of my teammates who were better players than the captain who was chosen. So, why was he chosen? Because he could read the game better than any one of us. He could gel a team better than any one of us and he understood his opponents and their tactics well.

The point I am getting at is that we cared less about who the captain was. We were more concerned about how Singapore was faring on the scoreboard and, when we played in Malaysia and India, the matches could get very tense.

Sure, choosing the right teammate to wear the captain's armband is important. But what mattered more was the whole team's performance. What mattered in any stadium we played in, whether on home soil or internationally, was what was on the scoreboard. What is Singapore's score? Is Singapore up or is Singapore down? What do we need to do better for our performance as a team? For whom? Ourselves? No. For Singapore and the Singapore flag we wore over our chest.

The point I am making is that you, the 4G, can choose someone who is not necessarily the smartest, but you need to choose someone who is the best fit to bring together a team. You have in your ranks hon Members – Chan Chun Sing, Lawrence Wong, Ong Ye Kung, Tan Chuan-Jin, Desmond Lee, Edwin Tong, Tan See Leng, Indranee Rajah and many others. There was Ng Chee Meng but we had sadly lost him in Sengkang. Among the 5G, you have hon Members Sim Ann, Chee Hong Tat, Zaqy Mohamad, Janil Puthucheary, Alvin Tan, Desmond Lee, Sun Xueling and many others, first among equals – primus inter pares – team effort. We lost Amrin Amin and Lam Pin Min who would have been key members of the 5G team. I miss Amrin and Pin Min. They were exceptional Members of Parliament. Now, please do not get me wrong. I, for one, have no ambition whatsoever to be Prime Minister, in case that is already not obvious.

Here is another caveat. If I did not mention a Member's name in the speech, please do not read anything into it. I only have 20 minutes to give the speech and I do not want to breach the time limit.

The point I am making here, and the point behind this speech is: for us in Parliament to show the world that, in the middle of this pandemic, we can even sort out the succession plan. We do not need to think variant-to-variant, day-by-day, month-by-month; rather, Singapore plans decade-by-decade. The manifestation of such far-sightedness is our leadership renewal. We must get it right and we must make the world aware of the succession plan.

Please do not mistake me. Do I think we have the best man as Prime Minister now? Yes, absolutely. Around the dinner table, when we meet over a meal, my father and mother would say to me, "Is Prime Minister alright? Is Teo Chee Hean alright?" These questions come up, especially when Singapore is going through tough times and tough spells. These are real concerns. It is a concern for the person. My response to my parents is that: "Prime Minister and Senior Minister are fighting fit but that the load is heavy to carry."

Please do not misinterpret me. The point I am making is that we have solid leadership now, but we must, with utmost imperative, line up the future Prime Minister and his or her deputies, so that they get the longest runway possible before taking over the controls in the cockpit.

Again, so as not to be misunderstood, I would hope that even when the 4G is in place and holding the reins, Prime Minister, Senior Minister Teo, Senior Minister Tharman and the seniors in Cabinet will stay on as Senior Ministers or Coordinating Ministers to shepherd the new team.

Allow me to move to a different but somewhat related point. Allow me to share some private-sector perspective on this.

I am a lawyer at Lee & Lee. My clients, including MNCs, look very carefully at political predictability when making decisions as regards which country to invest in. Time and again, my clients have shared that Singapore's predictable political environment gives them confidence to invest their business, human capital and infrastructure long term in Singapore. Germane to that is their understanding of Singapore's political succession planning. And, here, I am talking about political succession planning within the PAP.

Is this a speech better suited for a Party conference or a speech in Parliament? I would say it is an appropriate and relevant speech to be made in Parliament because the PAP and its succession planning have been organic to Singapore's success story. Along with PAP's effort, coupled with the sweat of Singaporeans, Singapore has transitioned from third world to first and become a choice destination to invest in the 2020s.

It is with this belief and principle in mind that I make the propositions today, that is, the ruling party of the day – the PAP, must swiftly choose the next Prime Minister and next Deputy Prime Ministers and give them as long a runway as our current Prime Minister can manage.

This reminds me of a conversation I had with hon Member Sitoh Yih Pin in Morocco. We were there to learn counterterrorism measures and whether Morocco's counterterror tactics could be deployed in Singapore. In between the busy schedule, Sitoh and I spoke about political succession among the 4G. Why? Because we like to play political chess games? No. The backbenchers discuss these things between themselves because we want to see Singapore succeed. Sitoh is a real fighter. He has no need to mince his words. So, we talk frankly.

Sir, I have been in politics longer than many of the potential candidates for the 4G Prime Minister-ship. I entered in 2006 at the age of 30, at the request of the Prime Minister. Many of the candidates for the 4G Prime Minister entered in 2011 and 2015. I come with no personal agenda. I make this speech with no personal agenda.

Here, in this Chamber, I have, for years, been pushing for causes and policy changes under the steady hands of four Speakers and under the watchful eyes of five Whips.

Members, please know, in articulating these views, I have Singapore at heart. My humble message to the 4G is this: please apply your minds to succession planning and articulate swiftly your thinking and choice as regards to the leadership to Singaporeans. They deserve nothing less.

In conclusion, Sir, I support the Budget but we are capable of so much more. Let us show the world what Singapore is made of. In the throes of a crisis, we can pick a future leader and the core team to take Singapore through its next chapter and beyond. That shows the world that we have mettle. That shows the world our ballast in a time of crisis. That shows the world our deep reservoir of resolve and our steely determination to persevere and fight on.

Ms He Ting Ru.

Mr Speaker, the last few years have sometimes felt like something straight out of a storybook: it was the best of times as we witnessed Singaporeans stepping up and volunteering to help the vulnerable amongst us during lockdown. It was the worst of times as we watched the early outbreak in the dormitories unfold, together with reports of terrible living conditions. It was the spring of hope, as we opened up to Phase Three at the end of 2020. It was the winter of despair as, in particular, our key workers and restaurants suffered many reverses and took many steps back in our path towards reopening. Old certainties have been shaken, the script had to be torn up multiple times and many a time, we have been left wondering – and perhaps still are – if the light at the end of the tunnel was actually that of an oncoming train.

And today, even as we struggle to stay afloat amid what feels like endless price increases, we are also faced with understandable anxiety over climate change, the situation in the Ukraine, as we wonder whether we are witnessing the birth of the great conflict of our times. Today, more than ever, we have seen that the way we react when we are threatened, the actions we take when we are under pressure, are the most accurate reflection of our characters, of who we are as individuals, organisations and as a society.

It has not been easy. The various peaks and troughs which we have experienced since COVID-19 hit us have been exhausting and there will be more to come still. Our path to living with COVID-19 is a long one and the fatigue experienced by many of us – from our frontline care workers, young parents, teachers, business owners – is real.

It is also troubling to hear pleas, both online and offline, for our leaders and policy-makers to "come down from the ivory towers" to see what the situation is on the ground. The situation where our people feel and perceive that this Chamber is an ivory tower that is out of touch with reality is highly concerning and one which cannot be allowed to carry on. We should adopt a reflective approach on the possible drivers for this feeling amongst the public and work together to overcome it.

The Budget this year is entitled "Charting Our New Way Forward Together". It acknowledges that a "New Way Forward" is required and that we, in this House, have a duty to ensure that we do so together and that we do not leave anyone behind. This is something we can all get behind. Indeed, the Workers' Party's 2020 Election manifesto's preamble is entitled "A Singapore For All". But the key is to ensure that the formulation of our policies and their effects on the ground move us decisively towards achieving this aim.

As a society, we need to decide together how best to invest in our people, how we should spend our tax dollars. After all, what does it say about us as a society that our senior residents come to us and tell us as a matter of course that they have requested for their medication dosages to be cut down because they cannot afford to pay for the full dosages that doctors have prescribed to them to treat their medical ailments? What does it say about us when our young parents have to make daily choices about how to apply the last dollars in their bank accounts as they cannot afford to buy both nappies and formula for their newborns, when the family is hit by an unexpected job loss through no fault of their own?

These are real-life scenarios that all of us have seen our residents tackle. And while it is true that many helping hands are available, we are often told that much time, energy and stress is involved in navigating the support system. While these systems are in place to prevent abuse – and quite rightly so – we must also ask ourselves and continue to ask ourselves important questions: who we are as a people and what values do we stand for? Do we want our policies to empower Singaporeans to be our best selves or do we restrict Singaporeans from being our worst selves?

As we think about our new way forward together, it is still a key principle that Singaporeans must be self-reliant and we must be responsible. Is this consistent with our laws and policies that are formulated with the assumption that everyone is out there to game the system, on the lookout for unfair advantage for themselves to the detriment of others?

Does this approach not build a culture of Singaporeans trying to figure out what is legal or allowed, rather than applying their own mind to what make sense and is reasonable for both themselves and their fellow citizens?

Another clear example is the current debate surrounding our medical certificate (MC) culture. The requirement for many employers for the doctor's note for any absences from the workplace due to medical reasons stands in stark contrast to my experience in my first job in the city of London. Indeed, in the UK, employers are only allowed to ask for "fit notes" if employees are sick for more than seven days. Workers are asked to self-certify if they are sick for less than seven days. In fact, it was not unheard of for employers to offer "duvet days" to their employees: days off not because they are ill, but because employees sometimes just need some time to rest. These are often structured in a way that works best for their firm or industry, and have been shown to actually increase productivity and the mental and physical well-being of workers.

I am not advocating a wholesale copying of these approaches, but I believe it is worth looking at our own labour market to see what positive changes we can make by studying these examples. To those who worry that these practices may result in people taking advantage, I observed that these practices appeared to work well in a highly dynamic, profitable and productive environment, as the common understanding was that people were serious about their jobs and were willing to work hard in order to progress in their careers.

Indeed, we cannot discount that the financial services coming out of London remain world-leading and innovative. If the argument that these are the things that could not work for Singapore, then we should take a long hard look at ourselves and ask: "why not?", followed by "how do we get there?". How do we move to a society where people are empowered to exercise good judgement and be truly responsible? How do we ensure that people do not succumb to the temptation to indulge in corrupt practices because it is the right thing to do, and not because they have a high salary preventing them from being tempted?

Against this backdrop, I would like to turn to the most pressing problems and issues facing Singaporeans as we emerge from the COVID-19 years. In particular, our residents in Sengkang keenly feel the press of having to deal with lasting financial and social effects of the pandemic. Many of them are members of both the "sandwich" class and also the "sandwich generation", and rising prices have and will continue to hit them hard while they struggle to provide for both the elderly and the very young in their families.

For these Singaporeans, the concept of inter-generational equity, or intergenerational solidarity, is extremely important in ensuring that one generation does not unduly bear the brunt of paying for expenditure of either a future or previous generation.

My colleagues have and will continue to touch on these issues. But while this concept may appear to be remote in Singapore at the moment, I would also note that as we restructure our economy and society, we should be wary of allowing a situation to develop where political outcomes and opinions are, or are seen to be divided strongly along intergenerational lines.

This has been seen in the West in the phenomenon of "Boomer blaming" for everything – from Brexit to toxic work environments that degrade mental health, and only serves to exacerbate generational grievances. And we need to tackle this matter in a holistic way, ranging from creating more opportunities and spaces for the generations to learn from and support each other, and to ensure that our fiscal policies do not, and do not get interpreted as unfairly favouring one generation to the detriment of other generations.

Coming back to the issues surrounding the here and now, the ever-increasing cost of living is a topic that we hear feedback about time and again. Individuals, households and businesses have approached us for assistance with juggling the impact of relentless price increases. They have noted that a final 2% tax increase means a 28% increase in the amount of tax to be paid. They have also noted that there have already been price increases prior to the tax hike taking effect.

Just the other day, I noted during one of my estate walks that a Buangkok coffeeshop stall has put up a sign stating that rising prices have obliged them to increase the price of all items by 50 cents, which definitely far exceeds 2%. Furthermore, global brands such as Nestle have also sounded the alarm and announced that they will increase prices of their products – and these increments will not be captured by any GST Voucher scheme. I fear that the cascading and knock-on effect that such cost increases will be devastating on households already on a knife edge.

Additionally, the war in the Ukraine, which has finally come to a head last week, will only lead to more supply chain disruptions and global price rises, and if it proves to be prolonged, it may end up having a far larger effect than predicted or catered for. We will not be spared in Singapore.

Already, crude oil has hit multi-year highs of over $100 a barrel and stock markets have reacted with volatility. Food prices will not be spared, as Russia and the Ukraine are major exporters of agricultural products, and Russia is one of the largest exporters of fertiliser globally – any drop in supply would lead to an increase in costs, which means farmers will pay more and have to pass it down to the end consumer. Russia is also a major supplier of natural gas, which has implications for us in Singapore, as around 95% of our energy needs are still powered by natural gas. This will only add to the woes currently experienced by our households and the businesses already grappling with huge increases in their energy bills. Notably, politicians in Germany are already advocating a natural gas reserve to shelter consumers from price shocks in the wake of the conflict. All these further underscores the need for our green transformation to take place urgently.

The situation is grim in the near-term. It is why the Workers' Party cannot agree to a GST hike – whether delayed or staggered – especially as we believe not all other alternatives have been exhausted. Yet we also acknowledge that there are long-term pressures on our public purse strings, as we search for a shift towards long-term sustainability on all fronts, be it environmental, demographic or economic. After all, the world cannot keep growing endlessly, a fact illustrated by figures released in November last year which have shown that India's fertility rate has dropped to below replacement rate for the first time ever.

In view of this, we also believe there is room to make our GST system less regressive beyond the current approach to further ease the burden on the lower-income groups. It is why we have to consider if our GST can start allowing for exemptions on certain essential items – treatment that is often seen in the case of other economies. The list of items should be kept to essentials such as food supplies, healthcare and care services, including childcare.

This is what economies, such as the UK, Australia and Japan, currently do and their experiences should inform us as we come up with our own list of exemptions that would be most beneficial to more vulnerable Singaporeans, and to avoid the pitfalls some countries have come across while deciding which items should be exempt and which not. Exempting items such as healthcare, infant care and childcare will also help to ease current and future cost pressures in industries that struggle to fill their manpower requirements with local workers. And I note there are stark implications for those industries with the foreign worker policies which are being tightened by the measures just announced in this Budget.

Additionally, I note that exemptions applying to children's products and childcare would surely be welcome relief for parents or prospective parents and go towards addressing our low total fertility rate (TFR), as financial concerns are often cited as one of the key reasons why people delay having children or decide not to have them. I need hardly add that raising our TFR is an existential problem for us that we have been unsuccessfully trying to solve for decades.

Consumption taxes are regressive by nature. While it is true that exempting essential items from GST is regressive, the alternative of keeping our existing system of no exemptions is likely to be even more regressive. This is because those who are on a lower income spend a far larger proportion of their income on consumption, which is always taxed in our case. Therefore, exempting key essential items from being taxed will significantly reduce the impact on lower-income groups. Additionally, while it is true that higher-income earners also benefit from such exemptions, these items, being essential in nature, should result in any derived benefits being self-limiting – after all, how much more rice can a rich person eat?

Another argument is that it is too expensive to implement these exemptions and that this will increase compliance costs for businesses. However, with the advent of AI and advances in technology, these costs should be much lower compared with when GST was first introduced and any upgrades to accounting or associated software should be a one-time cost for both Government and businesses. Additionally, compliance costs will likely be of far greater concern to smaller enterprises, and I note too that small businesses with turnovers of less than $1,000,000 are not required to register for GST.

How can it be that a country such as Singapore, which has long-prided itself ourselves on having targeted, efficient – even convoluted at times – policymaking, could shy away from implementing a system of GST-exempt items by saying that it is too much effort?

Turning now to how we measure our spending and our progress, I repeat previous calls made in this House to rethink the long-term sustainability of how we measure our progress.

Since its adoption in 1944 at the Bretton Woods Conference as the formal measure of a country's economy, gross domestic product (GDP) has proved to be a useful measure of the progress made by a country. And Singapore has done extremely well from our difficult beginnings.

Yet, in recent years, there has been a sense amongst many of us that GDP does not tell the full picture by any means. In particular, healthy GDP figures in 2021 and 2022, especially compared against the depressed bases in 2020, leave out the entire story of our country. There is a growing acknowledgement that beyond economic growth and survival, we should also thrive as a society and be mindful of the impact that we have on our planet. GDP measurements alone fail to address these shifting values in our current world. GDP alone also does not capture the full picture of how we care for our people.

To illustrate this point, many may not realise that GDP does not measure things, such as planting a tree, and that it does not measure the unpaid household and care labour undertaken by so many of our fellow Singaporeans. Yet, one would be hard-pressed to argue that these do not matter in how we measure our progress as a society.

How do we, therefore, determine whether enough has been done to address concerns about, for example, mental health and well-being? After all, it is clear that there is much work to be done in Singapore, judging by the number of registered psychologists and psychiatrists in Singapore, especially in the public sector. There are also long waits to see counsellors in schools and tertiary education institutes, and concerns have been raised about the quality of support received.

These are but some examples of what should matter to us as we measure our society and how we measure our holistic progress. Many economists have been advocating for years that countries start developing a dashboard which contains a variety of other measures for how well an economy and society has been doing.

Yes, GDP matters, but it does not do well in measuring our human, social and natural assets. A uniquely Singapore dashboard should, therefore, be developed and published together with GDP results. This can contain quarterly or annual measurements of our progress in terms of poverty reduction, social mobility and wealth distribution in an easy-to-understand way, allowing us as a people to understand at a glance what our targets are and the progress we have made or failed to make beyond GDP figures.

The dashboard should also contain measurements of the impact that we have on our environment and planetary health. Lessons can be learned from the introduction and abandonment of the "Green GDP" by China in the early part of the century. Our impact dashboard could, for example, contain indices relating to our emissions, land use changes, waste reduction efforts and have specific measures on how well we are doing in our transition to a green economy – a topic that my colleague Dennis Tan will elaborate more on.

Finally, we need to move from being merely a circular economy – as outlined by MTI in 2019 – to what I think of as a "circular society". This means that while we aim for zero waste in terms of material use and energy resources, we also need to ensure we do not waste wealth, technology and knowledge, have a thriving knowledge commons and a strong culture of philanthropy.

The last point in particular is something I note that this Budget aims to promote through various tweaks to tax incentives and co-funding measures. To know how successful the increase in spending has been, philanthropic indicators on the dashboard could include details such as trends relating to donations and the nature of who is donating.

As little is currently known about how a circular economy or society can promote better social equity, more research is certainly needed – particularly in the local context. Narratives of a circular society can and should be developed, as the long-term sustainability of our country and planet is at stake. We must stop assuming that infinite economic growth is possible and start shifting towards formally measuring our progress on other things that matter.

Mr Speaker, we are indeed at the crossroads, and it will be negligent of us not to put our heads together to figure out how best to chart out a sustainable way forward for Singapore. Headwinds will be strong and frequent in the years to come, and our people will need to demonstrate grit and fortitude to survive and thrive. The difficult environment we see ahead of us will test us and we should not add further to the financial and other burdens of our people by raising our GST when there are other available options. It is therefore regrettable that we must vote no to a GST increase and therefore cannot support this Budget.

Ms Jessica Tan.

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

We are still dealing with the pandemic and it has been challenging for business and individuals. We need to continue to support those still impacted. But we must position Singapore for the future and we must grow our economy to provide opportunities and quality of life for Singaporeans. Beyond growth, we must also ensure that Singaporeans and Singapore have the capability to seize these opportunities.

I will focus on three topics in my speech today. One, investing for growth and the future. Two, strengthening our social compact. Three, inclusion and ensuring that no one is left behind.

Investing for growth and the future. In the Budget debate last year, I spoke about the need for Singapore to grow and to step up the momentum for businesses and individuals to build capability to seize opportunities when the economy opens up. One year on, this call is more urgent. While COVID-19 is still with us, Singapore continues to attract investments in electronics and biomedical manufacturing, as well as new investments across sectors such as agri-food, chemicals and materials. These create new jobs and opportunities. Many of these new jobs are PMET jobs and require relevant skills and competencies. But to be able to seize these opportunities, our businesses and workforce must have the relevant capabilities.

Let me touch on building capabilities. The pace of digitalisation has accelerated as businesses were propelled to go digital to adapt in order to be able to operate in the pandemic. Many are still in the midst of their digital transformation. Now, with climate change, high global energy prices and the Ukraine situation, there is a pressing need for businesses to become more sustainable. We have seen that companies that had invested in digital were better able to pivot and do business in the pandemic.

For companies to become greener, it will require not only funding but more importantly know-how, rethinking of how work is done, how goods are produced and services delivered. Processes and, more importantly, behaviours need to change. We do not want to have to wait for another crisis for our businesses to become more sustainable. Digital can also help with more sustainable business practices. The two are not mutually exclusive. The ambition, as outlined in the Budget, is to achieve net-zero emissions by 2050. How can we ensure that we do not leave our small businesses behind? With the new carbon tax, if businesses do not transition and invest in clean technologies, they will definitely find it hard to survive.

Businesses tend to see sustainability as the need for compliance and cost. What can be done to help businesses understand the benefits, competitive advantage and growth opportunities?

In the joint study that was done by Economic Development Board (EDB) and Enterprise Singapore (ESG), it outlined the role that Singapore can play to become a key carbon service hub. Carbon services can generate new businesses and jobs in Singapore. The estimates are that economic opportunities from carbon services could create a projected gross value added (GVA) of between US$1.8 billion to US$5.6 billion in Singapore by 2050. What can we do to help our businesses build the capabilities to participate in these opportunities and more importantly, to thrive?

Let me now touch on a more immediate challenge that businesses across many sectors are facing, that is, getting the manpower to meet the business demands. The feedback from companies across industries is the difficulty to meet their manpower needs. These range from tech talent to roles across different segments. This is impacting their ability to operate effectively. The impact of the pandemic on manpower and the level of Omicron infections has made the situation even more pressing. As business picks up, the situation will not allow our businesses to address demand and will impact their ability to grow. What targeted support can be given to allow viable businesses to address these current manpower constraints to transform and more importantly, to grow?

Minister Wong in his Budget Statement stressed the need to "redouble our efforts to invest in new capabilities". Technology and digitalisation have picked up pace across all sectors in Singapore. Workers even in non-tech jobs need to understand and know how to use technology in order to do their work. This is not just about how to use the latest technologies and devices as they will continually change. While there will be an additional $200 million to fund enhanced schemes to build digital capabilities in our businesses and workers, I think we also need to look at what support will be given to companies to help workers, especially those in the workforce gain the knowledge and skills they need in this new world of work. These skills are not about having deep technology skills in artificial intelligence, data analytics, or any future technologies but rather how to work with these new and ever-changing technologies to be able to do their work and thrive.

With the greater reliance on digital, the security and resilience of our digital infrastructures are crucial. We need to continually invest and strengthen our digital infrastructures. Minister shared that broadband access speeds will be increased and investments made in future technologies. Can Minister Wong also share what investments will be made to strengthen the reliability and the security of our digital infrastructures?

Let me move on to the point about strengthening our social compact. I thank Minister for a Budget that has heard the challenges and recognised the current cost and inflationary pressures that Singaporeans are facing and for delaying the start of the GST increase to 2030, with the two-step implementation.

I would like to make a few points about the Assurance Package. While the support in the Assurance Package should and does provide more for the lower-income, the Assurance Package does also signal the Government's intent to also cushion the impact of the GST increase to include more middle-income households. This is demonstrated in the components of the Assurance Package of Cash Payout, Additional GST U-Save Vouchers, GST Cash Vouchers for seniors in the Senior Bonus, Medisave Top-ups; and the Community Development Council (CDC) Vouchers to address essential expenditure of families in areas of utilities, groceries, education and health. A subtle but important point to note is that the cash payout eligibility is on assessable income and property ownership, rather than the annual value of residence.

Annual value (AV) of the property is used as the main criterion for means testing and eligibility for many support schemes. While I do not disagree that the value of the property reflects one's means, it does not always mean that all who live in these properties have the means or have more. A point that I have raised previously is the application of the AV criterion for those who live with their extended families in properties with annual value above $21,000. These persons could be elderly parents or siblings who live with relatives as they need care or cannot afford housing. In some of these cases, they do not have means but because of their residential address, they do not qualify for any support. An example is the COVID-19 Support Grant (CSG). Those who have lost their jobs and meet the CSG eligibility criteria, but live in a home of AV above $21,000, regardless of ownership, are not eligible for the COVID-19 Support Grant.

With the trend of smaller families and people marrying later, we do have more couples who have to provide for both their young children and senior parents or relatives. Some call this the "sandwiched generation". I do have such families in my constituency who live in private properties with annual value between $21,000 and $30,000.

In the spirit of renewing and strengthening the social compact, Minister Wong has said: "we want every Singaporean to know and feel that he or she has a stake in our society, and that they will not be left to fend for themselves when times are down". I would like to ask if there can be refinement of the use of the AV criterion for eligibility of support schemes? I am not asking for the AV to be removed but rather can it be refined to apply to home ownership rather than residence for extended family members or higher AV for the "sandwiched generation".

I must make a point here. As we look to the Government to continue to provide and support Singaporeans when they need it, as part of the social compact, we too, need to do our part and balance that with what each of us can do. So, as we talk about cost pressures and one of the biggest cost pressures that is now facing us is fuel cost. As a taker, I do also say that individuals and businesses, apart from asking for support – and I will continue to ask for support for businesses and individuals, we all need to do our part to also finds ways to conserve, to be greener. Otherwise, it is just addressing cost but not finding better ways to do things; otherwise, it is not sustainable. I am not talking about "green". I am talking about being able to fund this.

Let me move to my last point about inclusion and ensuring that no one is left behind.

Mr Speaker, Singapore has a rapidly ageing population, the employment landscape of our workforce has changed. Those above 55 years of age make up 25.7% of the workforce in 2020. As part of PAP.sg efforts to better understand senior employability, in the last quarter of 2021, we conducted an online survey with seniors aged 50 years and older; 934 people responded to the survey and 98% of respondents are Singaporeans, 60% are currently working and almost 60% of them have post-Secondary education. We have a balance of male and female respondents. The respondents are from a variety of industries, working in a diverse range of occupations; 98% liked the work they are doing, citing meaningful work and having relevant experience; 60% of respondents who are working face challenges at work, with about one-fifth of them citing challenges like needing to learn new skills, dealing with changes and new norms. Amid the challenge of learning new things, the most commonly cited skills-gap is in learning new digital skills.

With digitalisation and the drive for sustainability, can we rethink how we prepare and enable matured and senior workers – who want and can work – to actively participate in quality jobs in the growth sectors in the post-COVID-19 economy?

I welcome the enhanced announcement in Budget 2022 for the Workfare Income Supplement (WIS). The rise in qualifying income cap from $2,300 to $2,500, and the extension to younger workers aged 30 to 34 will definitely benefit workers and the increased payouts for each tier will provide more support for lower-wage workers. I do, however, want to appeal to Minister Wong to reconsider the introduction of the minimum income criterion of $500 per month. This will impact older low-waged workers or those who are caregivers and need to the flexibility of part-time work. For this group of workers, while they can and do want to work, part-time work may be more suitable for them.

Let me give the example of one of my residents, Mdm Lee – this is not her real name. She is 69 years of age and works as a relief programme coordinator at an eldercare centre. She covers the duties of staff who are on leave or medical leave. Her estimated monthly income ranges from $200 to a little over $500 a month. She is currently eligible for WIS and is appreciative of the support. However, with the minimum income criterion, Mdm Lee is concerned as she will not be eligible for WIS. Will Minister consider a review of the minimum income criterion for WIS, as it will impact those that the scheme is intended to support.

Mr Speaker, I started my speech touching on the importance of economic growth. Economic success is necessary, but on its own, it is not sufficient for Singaporeans to make Singapore home. If we focus only on economic growth, our people will just leave Singapore and go where the economic opportunities present themselves. Budget 2022 sets out to "charting our way forward" I thank Minister Wong for a Budget the aims to "realising our vision of a fairer, more sustainable, and more inclusive society", to "see through the pandemic today" and more importantly, "to build a better Singapore tomorrow." I support the Budget.

Dr Tan Wu Meng.

Mr Speaker, today I will speak on the climate crisis, our climate ambition, our energy security and our survival.

Last year, I spoke about Singapore's burning platform, a world on fire with COVID-19. With natural habitats being destroyed, we must expect more pandemics, some worse than COVID-19. But climate change is a graver challenge than any disease.

So, we need to stress-test our assumptions, test our plans for the future before the future tests us. So, we need to move quickly and boldly.

An earlier generation spoke of mudflats to metropolis in one generation. It happened. And now we face a new ambition, again, born of necessity and survival. Can we go from carbon-positive to carbon-neutral? From what is unsustainable to what is sustainable within one generation? Because that is the implication of reaching carbon net-zero by the middle of this century.

There is not much time and we need to be seriously bold because the climate crisis is about Singapore's survival, whether we stay above water. In 2019, a research paper in the journal, Nature Communications, showed very vividly, with maps, how hundreds of millions of people around the world would be underwater by the end of this century and that is just assuming a low-carbon emissions scenario.

It is our economic survival, too. In a world where carbon border adjustment taxes are being talked about; in a world where consumers choose what to buy, where to work, how to invest based on sustainability; in a world where narratives can shift from free trade to sustainable trade. We need to be ready and it means Singapore needs to raise our ambition to stay above water, to survive and to thrive.

We can only do this fast enough, within one generation, by moving boldly and ahead of the market.

Mr Speaker, our climate response must stand up to stress tests: energy security – for a carbon-constrained world; pandemic security – for a world with new diseases; social security – to ensure a just transition. All these link up with our Total Defence because, if Singapore is underwater, if we cannot keep the lights on, we are not even going to be at the starting line in a challenge. If we are laid low by a pandemic or our people are splintered and divided, we are not going to be able to deal with whatever threats come our way, kinetic or otherwise.

I spoke on pandemic security during last year's Budget. I have spoken on social security over the years. Today, I will focus on our energy security.

Mr Speaker, energy security has been a big issue around the world in recent years, and especially in recent days. Energy security is existential for Singapore. Not just keeping the lights on in our hospitals, in our homes. It keeps our NEWater plants, our desalination plants going. Our water security depends on our energy security. We know what it means if Singapore's water supply is ever called into question. And we need to think about energy security that way too.

Today, from public domain data, about 95% of Singapore's electricity is generated using natural gas. Supplies by pipeline, also LNG terminal, but it is still almost all natural gas – 95%. Some would say it is a serious concentration of risk. Recent events around the world, market shifts, events in Eastern Europe, are a reminder of this.

Electric vehicles (EVs) will further concentrate this risk because EVs also draw energy from the electricity grid. But if the pandemic has taught us one thing, it is that we need to move from "just in time" to "just in case". There is a case for Singapore to further diversify our electricity sources and to do so ahead of the market – for energy resilience, energy security, also to reduce our carbon footprint as part of the climate crisis response.

Sir, there are no illusions about it. There is a price for "just in case". There is a cost to preparing in advance for danger and for crisis. But by strengthening social support in a progressive way, we can help Singaporean families even as Singapore proceeds through a necessary transition, a just transition.

Sir, so, how do we diversify our energy security, reduce our carbon footprint, raise our climate ambition? Solar is part of the solution, but Singapore is small, we are solar-constrained. Even with solar photovoltaic panels on every building's rooftop, on every external surface of every building, solar alone would not be enough.

Regional power grids can be useful, but they do have limitations. When there is an energy crunch, some regional grids will come under the same market pressures as our own. Even if you use an undersea cable, a high-voltage direct current (HVDC) transmission line, that line is still one underwater dredging accident or incident away from being unplugged. So, we need to look at other options, too.

In July 2021, I had asked in Parliament about Singapore's potential as a hydrogen hub, in particular, low-carbon hydrogen, and whether we should move ahead of existing market conditions. We already have established capabilities in the energy and chemicals sector and in transshipment. Mr Speaker, indeed, there is already interest in hydrogen around us and in the region.

Reuters News Agency recently reported that a Japanese-Australian venture has been testing transport of hydrogen, using a ship as a liquid hydrogen carrier. They reported that just this past week, a Japanese-built ship, the Suiso Frontier, delivered the world's first long-distance liquefied hydrogen cargo from Australia to Japan. Early days, but proof of concept.

American think-tank, CSIS, in October 2021, published a commentary. They assess that Australia, by 2030, could well be a "major player" in global hydrogen production and trade. Their green hydrogen, when exported, will need to be shipped to destination markets.

So, the question is, which cities in Southeast Asia have the potential to be a hydrogen hub in the hydrogen economy? Is Singapore among them? And, if so, do we want to be first mover, second mover or too late to move?

Moving ahead of the market will help Singapore build capabilities, reduce the risk that we will be left behind. Starting up hydrogen-based electricity generation and fuel-cell capability will help us build the experience to scale up when we need to. Because the most difficult step is going from no capability to having some hydrogen capability.

On other developments, Mr Speaker, we should also keep a very close watch on developments in nuclear energy, both fission as well as fusion.

The International Energy Agency (IEA) in 2021 observed that nuclear power output avoided about 55 gigatonnes – 55 billion tonnes – of carbon emissions over the past 50 years, nearly equal to two years of global energy-related CO2 emissions.

For nuclear fission, we should continue assessing the safety of small modular reactors and whether a future generation of small modular reactors can be safely deployed in the Singapore context. We should keep on looking at this.

For nuclear fusion, it is still early days, but promising prospects. In December 2021, a team at the Joint European Torus (JET) facility near Oxford generated 59 megajoules of energy for five seconds – enough energy to power 35,000 homes for those five seconds. Again, early days, but notable developments.

Sir, we need not decide yet, but we need to understand and build analyses and skills regarding these evolving and emerging technologies, so that when the time comes, Singapore can make informed choices, even hard choices, about these new energy technologies.

Mr Speaker, when I was born, the global carbon dioxide concentration in the atmosphere was 333 parts per million (ppm). Today, you look at the Keeling Curve, the CO2 concentration is 420 ppm. It is still going up. Climate crisis – still ongoing. Singapore needs to be ready.

In last year's Budget debate, I said: "…we must also ask ourselves beyond what is possible today, what is necessary for tomorrow. What do we need to do, that we cannot yet do?"

Sir, the climate crisis and our climate ambition means we need new capabilities for our energy security and our decarbonisation. Necessary dreams as we face up to necessary realities. I stand in support of this Budget.

Mr Louis Chua.

"It was the best of times, it was the worst of times". Mr Speaker, those were the opening lines from the novel by Charles Dickens, A Tale of Two Cities. Lines which I find to be quite apt to describe the situation we find ourselves in today.

Two years into the pandemic, we are still battling the latest wave of infections brought about by the Omicron variant, with many of our healthcare workers struggling to cope with the stressful working conditions today. COVID-19 fatigue has also meant that many of us cannot help but feel overwhelmed at times even as we try so valiantly to live with endemic COVID-19.

On the economic front, it seems that economic growth is starting to pick up again. Singapore's GDP grew by 7.6% in 2021, with the Government projecting an above-trend 3% to 5% growth for 2022, with total employment seeing the highest quarterly growth – since 2014 – of 47,400 workers in the fourth quarter. Yet, the rosy headline numbers belies the risk to the fragile global and local economic recovery, not least because of geopolitical tensions and rising concerns over inflation, among others, and one cannot rule out the tail risk of a recession in the near future.

Inflation and the rising cost of living, in particular, have been of grave concern to policy-makers globally and the man-on-the-street alike. As shared in one of my speeches in November last year, it was unclear if the current inflationary pressures in the market are transitory or permanent, though the US Federal Reserve has since then dropped the term "transitory" in its description of inflation and with concerns about stagflation now appearing in the market lexicon instead.

Locally, the MAS has been concerned enough about inflation to surprise the market with a tightening of monetary policy in October, given that external and domestic cost pressures are accumulating. And soon after its first tightening in three years, MAS acted again in its second tightening in three months, given upside risk of inflation. Even if what Minister of State Low Yen Ling shared in this House ensues and that inflation is expected to ease in the later part of this year, it does not mean prices are going to come down. It just means that prices will still rise but not jump and still continue to eat into the real incomes of Singaporeans. Who can forget the slew of price increase signs being put up at coffeeshops since the start of the year and the more than 30% increase in fuel prices or the 23% increase in electricity prices since a year ago?

In the context of rising inflation and an uncertain global economic recovery, a GST hike, while delayed, would still be counterproductive, given the potential drag on private incomes, consumption and, ultimately, our GDP.

As my fellow Workers' Party colleagues have shared earlier, there are alternative revenue sources that can and should be considered beyond the regressive tax that is GST, with options to use more of Singapore's existing physical headroom, for example, having the added benefit of minimising the impact to our local households and economy alike.

My speech will thus focus on three main areas which warrant urgent consideration.

Minister Wong made adjustments to residential property taxes and the Additional Registration Fees (ARF) for cars as part of Singapore's answer to wealth taxes. I welcome these changes. When viewed from a glass half-full perspective, it is a step in the right direction when it comes to tackling wealth inequality and strengthening our social fabric – albeit a small step. However, when viewed from a glass half-empty perspective, the measures are a tokenism rather than a meaningful attempt at wealth taxes in Singapore.

Higher property taxes and ARF are expected to result in a $430 million increase in annual revenues and, even if we include higher personal income tax rates, the total annual increase is just about $600 million. This is significantly below what some academics have put forth as possibilities in our conservative estimates of what the net wealth tax could bring at about $1.2 billion annually. For example, in a November 2021 CNA article, Assoc Prof Walter Theseira from SUSS noted that a wealth tax might conceivably pull in a similar amount to raising the GST by a few percentage points, while a Bloomberg article on 16 February quoted Mr Christopher Gee, Senior Research Fellow at the IPS, as sharing that a similar wealth tax rate in Singapore, as that of Switzerland presumably, would generate $2.7 billion in Government revenues.

Consider the case of property taxes which, as the Minister said, is currently Singapore's principal means of taxing wealth. As what Business Times' correspondent Ben Paul shared in his article, "As an owner/occupier of a modest apartment in the core central region, property tax is not a particularly big expense for me. In fact, it is nothing, compared to the maintenance fees and costs of general upkeep for my unit."

While the increase in the headline marginal property tax rates appear high, the actual impact on the households involved are unlikely to be material. As noted in Annex C-2 of the Budget Statement, an owner-occupied condominium in a central location is only expected to see an increase of $200 a year while a very large, landed property is expected to see a $15,400 increase. The corresponding numbers for non-owner-occupied properties are $1,004 and $19,200 respectively. Based on my analysis, a centrally located condominium in Cairnhill that is being leased out as an investment property, only raised rents by 2% to offset the higher property tax rates while that of a luxury development located on Nassim Road commanding monthly rentals of almost $20,000 a month need only raise rents by 7% to offset the higher property taxes. To put into context, rents in 2021 for a private residential property already rose by 10%.

The other tax change is that of introducing a new ARF tier for cars. For a Bentley Flying Spur, which retails for almost $900,000 without COE, the new ARF tier is expected to increase ARF by about $59,000, a fairly large number in itself but represents just about 6%-7% of the cost of the car. For someone who is prepared to pay almost $1 million for an asset that depreciates rapidly over 10 years, is it even meaningful in the grand scheme of things for this person?

Thirdly, higher personal income tax rates are not wealth taxes per se. But I do agree with the principle that those who earn more should contribute more and it is a fine example of what progressive taxes look like. However, the increase appears to be very modest once again, once you work through the mathematics. For example, someone making $1 million in chargeable income would pay a grand total of $5,000 more in personal income taxes, or 0.5% of chargeable income, while someone making $1.5 million would only pay $15,000 more, or about 1% of chargeable income.

I would even argue that the last increase in personal income tax rates in Budget 2015, where the top marginal personal income tax rates were raised to 22% among others, was an even bolder move than what we have today, raising more revenues at $400 million a year back then, as compared to $117 million a year, with today's change. Also bearing in mind that from 2015 to 2019, that is, the latest available year on SingStat, the number of individuals with assessed income of more than $300,000 has increased by 22% within this timespan as well.

I recognise that the Government will continue to study the experiences of other countries and explore options to tax wealth effectively. And I sincerely hope that more meaningful efforts to change our tax system and raise wealth taxes can be made sooner than later. Yes, I agree that taxing wealth has its challenges. But consider a hypothetical case of a multi-billionaire tech founder who made a windfall after his start-up's IPO and has retired from the firm. From time to time, he collects dividends as his income while continuing to hold shares in the listed company, which accounts for the vast majority of his wealth.

Meanwhile, he is renting multiple luxury apartments instead of owning just one place of residence. And does our tax system adequately capture the wealth of what could be one of Singapore's richest? Would this person even be paying income or wealth taxes at all? If we think about the Forbes' 50 richest list in Singapore, just how much of their wealth is in their residential addresses or the cars that they drive?

As highlighted by a 2018 OECD report on the role and design of net wealth taxes, which provide for certain tax design recommendations, in countries where capital gains are not taxed, there may be a stronger justification for levying a net-wealth tax. A similar argument can be made for countries that do not levy taxes on inheritances. Singapore will fit into both of these cases as a country with no capital gains tax, no tax on dividends, no inheritance tax, no estate duties and still has one of the lowest effective personal income tax rates globally. We must guard against only going through the motions when we move towards addressing wealth inequality, while still leaving the least fortunate among us still pleading, "Please, Sir, I want some more".

Let me now speak about corporate income taxes amidst BEPS 2.0, of which Singapore is one of 141 members of the OECD G20 inclusive framework on BEPS.

Corporate income taxes have consistently been the largest contributor to the Government's operating revenues and 2022 is no different, at an estimated $18 billion, or 22% of operating revenues. However, while part of the goals of this Budget is to build a fairer and more resilient tax system where those with greater means contribute a larger share, could there be more scope for certain corporates to pay their fairer share of taxes, especially against the context of a looming GST hike, which ultimately, is borne by the end-consumer and not the corporates?

To be clear, I fully recognise that many local SMEs and small businesses, especially those in the retail and F&B scene, have been struggling to make ends meet amidst the pandemic and the changing safe management measures (SMMs) rules over the past two years. And I applaud efforts by the Government to strengthen our local enterprises. However, it is interesting to note that while more than $29 billion of Job Support Scheme (JSS) funding was provided to corporates in the last two years, it appears that corporate profitability, as a whole, did not fare too badly.

In FY2020, while the Government expected cooperate income tax (CIT) revenues to fall by 18% year-on-year or around $3 billion to $13.7 billion in FY 2020, the actual CIT revenue turned out to be $16 billion, not too far from FY2019 levels. Revised FY2021 CIT revenues are expected to exceed FY2019 levels at $17.5 billion, growing by 9% year-on-year or $1.4 billion, and this is expected to continue into FY2022, reaching a new high of $18.2 billion.

This brings me to my key point on BEPS 2.

0. I acknowledge the Minister's comments that the Government needs more time to study these issues thoroughly and will announce changes in the corporate tax system when we are ready. However, if things go according to plan, BEPS 2.0 is already on the horizon, with the implementation of the two-pillar solution targeted to start in 2023 next year.

I thank MOF and IRAS for patiently addressing my various Parliamentary Questions over the past year on this issue and, I believe, the various public officers involved have done plenty of detailed analysis and scenario planning on this issue by now. With less than a year to go before the implementation of the two-pillar solution and with OECD already having published in December last year the model rules for domestic implementation of the 15% global minimum tax, my question is, what is the Government's current estimates or range of estimates of the net impact of pillar one and pillar two to our CIT revenues?

While Minister Lawrence Wong noted that pillar one will result in a negative revenue impact to Singapore, this is, firstly, limited in scope, as it is expected to apply only to global MNEs with a global turnover of more than €20 billion, with just around 100 of such companies globally. Secondly, it is only 25% of the profits in excess of 10% of revenues that will be allocated away. And, thirdly, I do not believe that profits are being artificially inflated here in Singapore, given rigorous transfer pricing rules.

On the other hand, for pillar two – this applies to a much larger group of MNEs. Any company with over €750 of annual revenue would now be subject to a global minimum corporate tax. In Singapore alone, the Government shared that there are over 1,800 such multinational enterprise (MNE) groups operating here that are unlikely to be affected. As I have shared in this House last year, I hope that the Government will view the global minimum tax reforms as an opportunity rather than a threat, given Singapore's strong non-tax advantages and attractiveness to MNEs, bearing in mind the current average effective corporate tax rate is closer to 3% in YA2019.

If we look at the subset of non-SMEs or those with revenues exceeding $100 million and making an accounting profit, then in YA2019, the average effective corporate tax rate is even lower, at 2%. Profitable non-SMEs contributed $10.4 billion or 64% of total CIT paid by all companies. If we assume a 15% tax rate instead, this could hypothetically balloon seven times to $71.5 billion. Of course, this is purely hypothetical, since obviously, not all companies will be scoped into the rules and there could be some slippage from both pillar one and pillar two rules and the actual impact will be much lower. But the point remains that, technically, even a small shift towards the proposed global minimum rate of 15% could result in significantly higher corporate tax receipts for the Government.