Hansard, Tuesday, 5 March 2013

1 Mr Yeo Guat Kwang asked the Acting Minister for Manpower how will the Ministry ensure that the Singaporean Core will not be eroded in an economic downturn or during significant downsizing of companies, especially for job areas where there are no dependency ratio ceilings for foreign PMETs.

Mdm Speaker, if the Member does not mind, I will be addressing this issue fully in the Committee of Supply (COS) debates next week, but I will provide an overview of how we are addressing the question raised by the Member.

Our focus, clearly, is to look after the interests of all Singaporeans. In the process, we take a multi-pronged approach to build a Singaporean Core in the workforce. The critical issue in the long term is how do we develop and raise the capabilities of Singaporeans and calibrate our Work Pass framework to ensure that foreign workers complement and not just substitute Singaporean workers. That is important. We essentially have two broad strategies, and I will sketch them out.

Firstly, it is how we develop a core of Singaporeans in our workforce. First and foremost, training coming in the form of Pre-Employment Training (PET) and Continuing Education and Training (CET) forms an important pillar in this process. We will continue to strengthen this and enhance the initiatives in this framework. For example, we are strengthening Workfare Training Support (WTS) for the low-wage workers. We also have in place Skills Training for Excellence Programme (STEP) which is largely geared towards the Professionals, Managers and Executives (PMEs).

Secondly, we develop a Singaporean Core also by working with agencies. For example, MAS works with the financial institutions to co-fund programmes to nurture young Singaporeans in that sector.

Thirdly, we also look at developing a Singaporean Core by employment facilitation. So we strengthen Government-funded employment facilitation and

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career conversion programmes to help unemployed Singaporeans and Singaporeans who wish to change careers, including PMEs, of which CaliberLink, which we talked about last year, was an important step in that direction.

The second part in our effort lies with how we structure our Work Pass and foreign manpower framework. As we are all familiar, we have put in place a series of changes in terms of the foreign worker levy (FWL) as well as changes to the Dependency Ratio Ceilings (DRCs). Changes are being made at the Work Permit, S Pass and Employment Pass levels. The S Pass and Employment Pass levels, particularly, will have an impact on our PMEs. The idea, as I said earlier, is how we structure it so that it complements our workforce and ensure that there is a level playing field. This is something that I will be addressing fully next week in the COS.

At the Employment Pass (EP) level, we have already taken some steps last year in terms of restructuring the EP framework where we factor in not just the entry-level pay, but also tiering it to take into account experience. This is important because it also ensures a more level playing field for Singaporeans. And we have extended this change into the S Pass framework as well.

A new area that we are looking at would be to look at the way other countries also implement some of their entry for foreign talent at the EP level category. So we want to look at how to make sure that Singaporeans are given fair consideration in the hiring process. The principle of not discriminating against Singaporean workers should similarly apply in downsizing exercises.

The Tripartite Guidelines on Fair Employment Practices (TAFEP) requires firms to make reasonable efforts to train and develop a Singaporean Core. As mentioned during the White Paper debate on population, we are already putting in place a process where we will investigate non-compliance with the Guidelines and, if proven, we will curtail work pass privileges.

The Tripartite Guidelines on Managing Excess Manpower also urge companies to consider other alternative to managing excess manpower and retrench only as a last resort. And if retrenchment is still necessary after considering other options, the company concerned should carry out the retrenchment exercise responsibly. This includes consulting the relevant union and the affected workers, as well as helping the workers look for alternative jobs. In previous downturns, employers have cut back more sharply on foreign workers as compared to the local ones. Over the 2009 downturn, foreign

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employment levels fell while resident employment levels continued to grow, although more gradually. This same trend was seen in previous downturns in 2001, which is post-911, and 2003, during the SARS period.

During the last downturn, there were also steps that were put in place to assist our workers to stay employed. The Government launched the Skills Programme for Upgrading and Resilience (SPUR) to help employers manage their manpower costs and save jobs through providing high levels of support for employers to send their local workers for training. These also helped companies to upgrade their workers during the downturn and build capabilities for them to search for jobs when the economic conditions recover. In addition, there was also the important Jobs Credit scheme (JCS) where they received a cash grant for workers on their CPF payroll. Both SPUR and JCS, during that period, were particularly important initiatives in helping to make sure that our workers at all levels stayed employed.

So, these are tools in our toolbox that we can draw on, or a variance of that as the case may be, depending on our economic situation in the years to come. But the most important point to emphasise is that the best way to ensure that Singaporean PMEs remain meaningfully employed is to make sure that our economy remains healthy and vibrant, and Singaporeans are also equipped with the right attitudes, aptitudes and skills. Strengthening the Singaporean Core will be one of the key focus for our Ministry in this coming year, and this is something that, as I mentioned earlier, we will be talking in greater details at the MOM COS debate.

I thank the Acting Minister for the answer as well as the assurance that more will be in the pipeline to help our PMEs and to ensure that we build up a strong Singaporean Core in our workforce.

I would also like to ask the Minister whether he would consider upgrading the TAFEP guidelines to make them more effective so that it would be able to strengthen compliance among the employers.

I would like to thank the Member for the supplementary question. TAFEP is an important institution. It is still relatively new by all counts, but I think it is beginning to get really involved in dealing with companies on a range of issues. Strengthening TAFEP is something that we are looking at. As I mentioned earlier, one of the key initiatives that we are going to do is that TAFEP will be investigating more thoroughly in terms of

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discrimination practices. Where companies are not responding, TAFEP refer the cases to MOM and we will also take the necessary steps to investigate and take actions to restrict the privileges accorded to companies, as the case may be.

In short, I would agree with the Member that TAFEP is an organisation that we can strengthen in the years to come.

2 Mr Zainal Sapari asked the Deputy Prime Minister and Minister for Home Affairs what are the reasons for rejections of applications for Long-Term Visit Pass Plus by foreign spouses of Singaporeans who have children of Singapore citizenship.

3 Mr R Dhinakaran asked the Deputy Prime Minister and Minister for Home Affairs as of 31 December 2012, how many foreign spouses of Singapore citizens on Long Term Visit Passes have stayed in Singapore for (i) less than one year; (ii) one to two years; (iii) two to three years; and (iv) more than three years.

Mdm Speaker, may I have your permission to take Question Nos 2 and 3 together, please.

Yes, please.

Madam, as of 31 December 2012, there were 11,736 foreign spouses of Singapore Citizens who were on Long-Term Visit Passes (LTVPs), including the Long-Term Visit Pass-Plus (LTVP+). Thirty percent had stayed in Singapore for less than one year, 19% had stayed for one to two years, 14% had stayed for two to three years and 37% had stayed for more than three years.

Madam, there are increasingly more marriages between Singaporeans and foreigners. Our aim is to help these couples remain together in Singapore. The foreign spouse of a Singapore Citizen is typically granted a LTVP in the first instance. ICA will then require some time to assess that the marriage is stable before it considers the foreign spouse for longer-term immigration facilities.

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The factors considered include the length of the marriage, whether the couple have children from the marriage, and the ability of the Singaporean sponsor to support the family. Where the foreign spouse does not yet qualify for Permanent Residence, we have introduced the LTVP+, an enhancement over the LTVP. The LTVP+ holder is eligible for a range of benefits, including hospitalisation benefits at a level similar to Permanent Residents, and LTVP+ holder is also facilitated in his or her job search as he or she only requires a Letter of Consent from MOM without the need to apply for a Work Pass.

Applications for LTVP+ are considered holistically and there may be a number of reasons, such as the employment status of the Singaporean spouse, as to why the application may be unsuccessful. In such cases, the foreign spouse would be on an LTVP in the interim period, until he or she is eligible for an LTVP+.

Order. End of Question Time.

[(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 2013 to 31 March 2014", (proc text)]

[(proc text) recommendation of President signified; presented by the Deputy Prime Minister and Minister for Finance (Mr Tharman Shanmugaratnam); read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2013/2014, and to be printed. (proc text)]

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[(proc text) "to provide for making supplementary provision to meet additional expenditure for the financial year 1 April 2012 to 31 March 2013", (proc text)]

[(proc text) recommendation of President signified; presented by Mr Tharman Shanmugaratnam; read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2013/2014, and to be printed. (proc text)]

[(proc text) Order read for Resumption of Debate on Question [25 February 2013], (proc text)]

[(proc text) "That Parliament approves the financial policy of the Government for the financial year 1 April 2013 to 31 March 2014." – [Deputy Prime Minister and Minister for Finance]. (proc text)]

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

Mdm Speaker, thank you for allowing me to participate in the Budget Debate. For "a better Singapore". That is the essence of this year's Budget.

The strategic thrusts of this Budget are the two main pillars of intensifying the drive for higher productivity and restructuring the economy for Quality Growth and taking major steps to ensure a fair and more Inclusive Society. The point that I want to emphasise is that it is important that the two are taken together.

Otherwise, the initiatives for Quality Growth in this year's Budget taken on its own could, as many have expressed, just lead to higher cost for businesses and have the inflationary impact for Singaporeans who are already concerned with the high cost of living.

On the other hand, for an Inclusive Society, if we only take steps to mitigate income inequalities, especially for the lower- and middle-income group, without quality growth and building capability of all Singaporeans and having quality

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jobs, this will not be sustainable.

Growth and quality growth is absolutely necessary. While growth is important, Singaporeans must also feel that we can actively participate and benefit from this growth – in areas of opportunities, jobs, real income and, more importantly, well-being.

It is important that we recognise that it is precisely the concerns of having or not the chance to actively participate in the growth and benefiting from it that is causing angst that we are hearing many express.

I had said during my speech on the recent Debate on the Population White Paper that it is imperative that we "pay attention to the concerns of citizens and of what our citizens are experiencing today." Worries about the cost of living, affordability of healthcare, especially as we are getting older, access, reliability and affordability of transportation, access to quality jobs, access and quality of education for our children, and affordable housing. Until these concerns are addressed, people are not going to be able to focus on the future of Singapore as many are concerned with addressing their current concerns.

Deputy Prime Minister Tharman touched on the need to strengthen and sustain social mobility. As he rightly pointed out, "meritocracy alone will not assure us of this". Education is a key lever for social mobility and we, therefore, must do more and should start early in childhood for the disadvantaged. Members of our Government Parliamentary Committees (GPCs) will touch on this point later. This will also ensure that all Singaporeans, regardless of our circumstances, have the capability and access to opportunities.

This Budget also touches on the importance of well being, especially for older Singaporeans. We must ensure that we take care of our older Singaporeans and address their anxieties over the uncertainties of their quality of life and future, especially after they stop working. While this will vary for each person due to their circumstances, they share concern of health, quality of their daily activities and affordability, as they are drawing from their existing savings once they leave the workforce.

Let me now touch on the first thrust of the Budget which is accelerating our efforts to drive higher productivity of businesses for Quality Growth. Our GPC for Finance, Trade and Industry has been very busy. We have been gathering received feedback from businesses as well as our Resource Panel members. Concerns were raised on the impact of the pace of the measures proposed in

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the Budget to accelerate restructuring of companies. Similar concerns were also raised during the Budget Dialogue that I had with residents who manage businesses.

Many recognised the need for measures to restructure. The tightening of foreign workers inflow is with the intent to accelerate efforts by companies to improve their productivity and compete. Programmes and initiatives are needed to support companies to restructure their businesses and we do need investments to support the development of workers. While many agree on all this, getting the balance and the pace right will be crucial.

Many expressed that if we are not careful, while wages increase and if businesses are unable to upgrade fast enough, this will cause businesses to scale down, move out of Singapore or close, if they are unable to restructure quickly. This will also mean that Singaporeans will not have jobs because many of these smaller companies offer jobs for our Singaporeans today.

The measures on further tightening of the foreign workers inflow will be painful for businesses. So, while recognising current and future manpower constraints, we must ensure that companies, as many of them as possible, especially our SMEs are given the right support to upgrade. We must ensure that businesses not only understand the $5.6 billion Three-year Transition Support Package announced in the Budget but, more importantly, we must make every effort to put in and ensure that as many companies as possible take advantage of these schemes.

The Three-Year Transition Package includes: the Wage Credit Scheme (WCS); the Productivity and Innovation Credit (PIC) Bonus; and the Corporate Income Tax (CIT) Rebate.

The WCS is to support companies co-fund 40% of wage increases for Singaporean employees, earning up to a gross monthly income of $4,000, over the next three years as businesses restructure. I am glad to see the recognition by the Government that acceleration of growth will take time, and hence three years to enable transition, WCS, I must remind everyone is a Progressive Wage System as the intent is to raise wages in line with the market.

While our median total household incomes have risen in the last five years by 17%, much faster than many of the markets in the region, there is a need to raise real wages for Singaporeans in line with market growth and to address concerns of the cost of living for many Singaporeans. I cannot stress more that

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especially for the lower-end wages, there has been stagnation and re-rating has taken far too long.

As WCS is co-funding, companies will have to share the cost of increased wages. WCS enables wages to rise and to some extent without adding to the full cost that companies have to bear and, hopefully, this will avoid full inflationary impact. This will enable workers to also keep their jobs while companies need time to transition for more productive growth. The critical point is that businesses must upgrade. Many have asked what happens after three years. The point is transition needs time but we must transition. We must upgrade. Otherwise, with wage increases, they will not be able to sustain the additional cost and, if not, they will go out of business and jobs will be lost. So, I cannot reiterate this enough – that getting the balance right will be crucial.

I encourage companies to leverage the existing PIC schemes with enhancements in the new PIC Bonus as well, which is really dollar-for-dollar matching over three years and above existing PIC benefits. This Bonus will also benefit smaller companies more as it encourages a minimum spending of $5,000 for businesses to undertake productivity investments.

During a recent pre-Budget Dialogue that I participated in that was run by the Institute of Certified Public Accountants Society (ICPAS), the discussion was on how we recalibrate growth. Industry leaders made good suggestions on the need for the Government to have policies and schemes that are more relevant as companies restructure and move up the value chain, especially in the Service Sector. There were suggestions to support knowledge creation activities, provide greater incentives to encourage greater build-up and exploitation of intellectual property (IP) in Singapore. To differentiate Singapore-based companies, we could also further promote branding to help Singapore sustain our attractiveness as a world-class business hub. There were also suggestions to consider helping companies during the implementation of their investment projects overseas. Especially in the initial period, it would be useful to help tide over unexpected losses in this period, and encourage more companies to venture overseas and yet remain rooted in Singapore.

Another area of cost concerns raised by many businesses is high rentals. Rental forms a significant cost for businesses in Singapore. There needs to be more measures to assist businesses to reduce rental without distorting markets.

While there were no direct schemes this year in the Budget to address rentals, the Corporate Income Tax Rebate (CIT) introduced is targeted to help

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businesses cope with cost pressures during the transition and I guess rental cost could be one of them.

Given the high cost of COEs, allowing owners of commercial vehicles the flexibility to renew their COEs for five years with extension for another five years does help to ease cash flow. There is also the additional cost savings of one year 30% tax rebate for goods vehicles, buses and taxis.

Our success to get as many companies as possible to take advantage of the Three-Year Transition Package and other schemes announced as they restructure will in some way help mitigate the concerns of the inflationary impact with the increased cost.

As we spoke to businesses, there was a call – and I do not know how to say this nicely – there was a call for clarity on the policy measures. This will enable businesses better certainty and help them plan better. There was a sense that although there were directions given on policies to businesses, for example, the tightening of foreign workers' quotas, property cooling measures, and so on, there is a greater need for greater predictability and simplicity.

So, rather than talk about the negative, I will give an example of a positive. Last year, our Resource Panel members cited a very good policy change that was made and this was in the change of rental for Hawkers Centres. This will give an example of how a good policy was made. Simple and achieve the objective. The policy gave clarity on the rental conditions preventing subletting and it did not stipulate a reserve price and hence did not add cost to the process. This directly, therefore, benefitted the hawker and made the process simple and gave certainty.

Let me talk about the further tightening of foreign workers especially in the Services and Food & Beverage (F&B) industries. Members of our GPC Resource Panel discussed the opportunity to better leverage the part-time and hourly wage workforce through WIS. WIS today covers full-time and part-time workers but does not cover hourly wage workers. There is a suggestion for WIS to cover hourly wage workers. Agencies like WDA can play a role in providing a framework to get a base of regularised reliable hourly wage workers and potentially part-time workers as well. We see this trend in mature markets. The outcome will be good as there will be many benefits: it will provide replacement workforce for small and medium enterprises (SMEs); a more flexible wage market; SMEs can also compete better with multinational corporations (MNCs) for resources; and they will enable more Singaporeans to participate in the

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workforce and, perhaps, also attract younger folks. This might give our young folks a little bit more taste of the workforce before really entering it.

Mdm Speaker, let me now touch on the measures in the Budget for a more inclusive society, and also to highlight some of the income inequality issues and doing more for older Singaporeans.

I am heartened that we will be doing more for retirees. I had on several occasions in this House raised my concerns on the need to do more for retirees as they out of the labour force and unable to benefit directly from economic growth. Their concerns and anxieties stem from cost of living and uncertainties as many depend on their savings to finance their living expenses. I had asked that we refine the criteria used for means-testing for eligibility for transfers like GST vouchers and CPF top-ups, and so on. An increasing number of residents that I meet are retirees who may be asset rich but cash poor or are living with their families in private apartments or landed property. Current criteria used would mean that they continue to be left out. I do hope that we can consider this request. This request was also recently raised by Parliament's Estimates Committee.

The middle income group. I would like to touch on the middle income group as this is a large part of Singapore's population and this is the segment that is impacted most by the effects of income inequality. Many in the middle income group are most impacted by the need to care of their parents and children, and they also aspire to have quality jobs. I am glad to see that this Budget has several measures to benefit the middle income – ranging from managing the home front on costs by providing MediFund top-ups, increasing rebates on Services and Conservancy Charges, reducing Personal Income Tax and maid's Levy Tax. It also anchors on the future with measures to level up preschools, having student care centres and expanding the Opportunity Fund to enhance social mobility for aspiring young ones. The Budget also looks into ensuring job prospects continue to have a positive outlook and wages can be boosted by the Wage Credit Scheme as companies restructure for higher productivity.

To address the growing concerns on healthcare and affordability especially with an ageing population, MOH, I am glad to hear, will be conducting a review on healthcare financing.

I did not intend to speak about affordability of cars with the tiered Additional Registration Fees which I felt was fair, given that it is progressive and there was no impact on the economy range of cars. However, with the recent

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announcement on MAS' policy on restrictions on loan tenure and maximum loan-to-value for vehicle loans, I am concerned on the impact on needs-based car owners.

For many families, while they do take public transport, having the flexibility of a car when you need it, does help especially when you have young children and older members in the family. While I understand the need to encourage financial prudence of buyers, the sudden and somewhat drastic changes introduced will make it difficult for many to own even an economy car. Take the example of a Mazda 3 or a Toyota Altis. I believe they fall in the range of cars with OMVs below $20,000 and hence will not see any increase in Additional Registration Fee (ARF). However, with the new financing restrictions, in order to buy this range of cars, with the loan-to-value (LTV) ratio of 60% – I checked this last night – these cars still cost about $130,000 to $140,000 today. You will have to pay approximately $50,000 cash upfront and you are subjected to higher monthly loan repayment amounts, given the shorter loan tenure. I am not an advocate of increasing the car population. I am not an advocate of buying a car because it is an asset that depreciates immediately when you buy it. But I will say to you that there are people who do need to own a car on a needs basis rather than for luxury, and I am worried that this group will be priced out. I am asking that we relook at refining this area for needs-based car ownership which I believe the economy range of cars cater to.

Employment. Access to jobs is important. Current sentiments are that foreign workers compete for the same jobs especially professionals, managers, executives (PME) jobs. There is a perception that this reduces employment opportunities for Singaporeans.

We must, however, be careful that this sentiment does not grow out of proportion as it will impact Singapore's ability to attract the right talent that is needed to complement Singapore's workforce for quality growth and hence higher employment opportunities for Singaporeans.

I am glad that Deputy Prime Minister Tharman point out in his Budget speech that our Employment Pass (EP) policy will ensure that firms in Singapore remain able to recruit the best teams, including both locals and foreigners with the skills and expertise that companies need to compete internationally. At the same time, we must maintain a level playing field for Singaporeans with respect to jobs and progressive opportunities. And there will be – as I understand – further calibration and adjustments to the policies.

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While we put a framework in place to ensure that firms give fair consideration to Singaporeans in their hiring, I think another important area that our GPC members and our Resource Panel members discussed was also about ensuring that a level playing field, not just in terms of access but also in terms of skills and upgrading is done. There was discussion and ideas on the need for continuous up scaling and re-development of Singaporeans to enable them to have the right skills and experience for the PME roles available.

A suggestion was to encourage companies to hire Singaporeans by giving subsidies for Singaporeans who are hired so that they can go for skills training. This is much like the programme that IE Singapore had previously. This scheme gave Singaporeans a chance to live and work in China while they would not have otherwise considered for cost and skills reasons. Why not extend this programme to the PMEs in targeted areas? Economics will encourage employers to hire Singaporeans who are then more eligible as they pick up requisite skills and more effective in the various job opportunities available.

We Singaporeans have a track record of self-reliance and hard work. What we must ensure is that Singaporeans continue to feel that we have access to opportunities and aspirations for better lives for ourselves and our families, and that this does not become out of reach. These include good quality jobs, job security, housing, amount of time spent on commuting, accessibility and affordability to transportation, leisure − I say "leisure" because this is an important area that I think Singaporeans do not place enough time and effort on − and worklife balance. I believe that this will be key to uniting Singaporeans to do our part to build a better Singapore for all.

Mdm Speaker, I have, in several of my speeches in this House, said that we must push forward for growth but at the same time we must create an environment that is inclusive, and that people feel that they have "Hope" − hope to chase their dreams, and that they are able to achieve more for themselves and their families. The Government plays a crucial role in enabling and creating that ecosystem that Singaporeans feel that they can run their own race and have a fair chance for success. The Government cannot promise success but it must have the vision and provide the environment for Singaporeans to believe that they and their families can do better and to succeed in Singapore. Mdm Speaker, I support the Budget.

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Mdm Speaker, thank you for allowing me to join the debate.

Building a better Singapore for Singaporeans through quality growth and an inclusive Society − this is the goal of this Budget. The Labour Movement stands with the Government on this because we believe that it is the whole purpose of nation-building − build a better Singapore for Singaporeans through good growth and an inclusive society.

From our perspective, the coming three years will be critical in making sure that this transformation of economy works and that in the process, we value every worker. Actually, if you look at different segments of the workforce, in some ways, the transition has already begun a little while back. Take, for example, in the area of the ageing workforce, the tripartite partners worked hard to enable our older workers to continue contributing and earning, and for companies to hold on to this precious manpower over the last few years. As a result, you find that the whole notion that you have to value the mature worker more in order that the person would be motivated, would want to do so and, at the same time, the company would be able to derive value from what this worker took root. And the result has been positive. So, if you look at the employment rate for older workers aged 55 to 64, for example, it went up from 56.2% in 2007 to 64% in 2012. With the re-employment law enacted and taking effect from 1 January 2012, this effort was given a further boost.

I just cite this as an example of a transition in the area of older workers that has been taking place and my fellow Labour Members of Parliament will touch on other segments of the workforce such as the low wage workers, the PMEs, new job entrants, women workers and the self-employed. In each of these areas we can observe progress. Yes, there has been progress, but I think we must all also agree that much more needs to be done to tackle the serious challenges that we face. We must increase the momentum in each of these areas.

The nub of the challenge that we face, in my view, lies in the low and sometimes negative productivity that we have been facing for the past number of years. Research everywhere has shown that there is a strong correlation between productivity, competitiveness and the long-term standards of living of a country and its population. So when we have chronic low productivity, then what it really means is that it would drain our competitive lead and eventually gnaw away our future.

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We have to tackle this, and we cannot tackle these increasingly difficult times simply by doing more of the same; more of what we have always been doing, for example, in the area of manpower − looking to foreign manpower as a source, to just add to the workforce, and then to use that to solve the problems of production. That was in the past and it has also contributed to a scenario of lower productivity. Going into the future, we cannot do that anymore. Because if we do that, then the pay of our low wage workers will never go up and our middle-income PMEs will also face less than fair competition from a too-easy influx of foreign manpower.

That was why I called for serious Government's attention to flagging productivity back in 2009 and I was glad to see stronger and more focused Government's action since, to spur productivity across different industries. That was also why the Labour Movement pushed hard for the Progressive Wage Model for both Rank and File and PME workers. We must never let up on the skills, productivity and career progression of Singaporean workers but we must help create the proper conditions for a sustained improvement in real wages across the board. This is basic to inclusiveness and social cohesion.

This year's Budget contains important components to strengthen the momentum to transform so that Singaporeans will benefit at the end, and I see three in particular: the tightening of the foreign manpower inflow through lower dependency ratios; increasing the price of foreign manpower; and the WCS.

Tightening on the inflow of foreign manpower and increasing the price of foreign manpower will put pressure on companies to rethink their operating models and methods, and to try even harder and more creatively to tap Singaporean manpower sources.

I know that many businesses have deep concerns about the manpower cost impact. Hence, I welcome the WCS which will lighten the manpower cost pressure on employers as they undergo the necessary and serious restructuring in the coming three years. I urge companies not to hanker after the past anymore and instead focus on this new reality, and transform to emerge even stronger, and the Labour Movement will work with you and support you in this.

With regard to building the momentum to value every older worker, I have three proposals to make. First, I once again urge the Government to initiate tripartite discussions as soon as possible to take stock of the progress of the re-employment law since it came into effect on 1 January last year, and in particular to consider how soon and how best to further extend the re-

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employment age band from the current 62 to 65 years to 62 to 67 years. I made this call because of the tight labour market, the need to slow down the net inflow of foreign manpower, the need for companies to preserve experience and expertise, the improved health profiles of succeeding cohorts of older workers, and the requests from older workers to further facilitate their continued employment where they wish to do so and can continue to work. I call upon the Government to indicate a time frame to start this discussion.

Second, I urge the Government to direct its policy and funding support toward workplace healthcare cost-sharing and insurance arrangements so as to render them more affordable and equitable to both workers and employers. Recently, the Government has reiterated its commitment to the older generation of Singaporeans that it will ensure that healthcare costs for them would be affordable. Older workers are part of this generation of Singaporeans whose efforts and contributions have made Singapore succeed and be resilient. The State should do more to encourage and help our older workers stay healthy. This can be done, for example, through appropriate workplace wellness initiatives, a review of the differential premium pricing and use of ElderShield payout, and grants and tax credits for qualifying corporate health insurance arrangements. Each of these areas has much potential for refinement and improvement.

There is also a need to address the worries of both workers, older workers and their employers, on increasing healthcare costs, both outpatient and inpatient, that are associated with ageing. These worries show up consistently in surveys and research both locally and overseas, and have a direct and adverse effect on the employment and re-employment prospects for older workers. Also, many companies and organisations terminate prior co-payment arrangements with their re-employed workers and re-start them on different arrangements that are generally more onerous to these workers, that is, the re-employed worker having to shoulder more of the cost burden at the point where he is getting older. The explanation commonly given is that the change of the type of co-payment arrangement arose from re-employment being a new episode of employment. In other words, you are a fresh employee even though the person has been working for that company for very many years. And because of this, this has led to calls on the part of workers to say, "In that case, then give me an extension of the retirement age instead of re-employment because if you do it that way, I am covered under the old arrangements."

But as we recognised, re-employment has its advantages. It is more flexible than extending the statutory retirement age. Therefore, the simplest solution would be to allow re-employed workers to continue under their prior co-

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payment arrangements. Our unions are keen to work with the Government and companies to further lower this hurdle to employability and achieve a good outcome for all sides. Addressing this healthcare cost well will be a big step toward activating this resource fully for individual, industry and the national good and, perhaps, the public sector could set an example.

Third, I draw attention to the ADVANTAGE! Scheme. Whether it is big companies or SMEs, finding effective ways to tap every viable local manpower resource will be crucial. Older workers are a valuable, tried and tested resource. This is especially pertinent now as foreign manpower inflow is going to be more tightly managed. Making work and the workplace more age-friendly is no longer just a good-to-have icing on the cake, but will now form a much more core purpose.

The current ADVANTAGE! Scheme has gone through numerous tweaks over the years to encourage the employment, retention and re-employment of older workers. It currently funds efforts through its Capability Development Grant for SMEs and its Employability Enhancement Grant.

According to Government figures released in February this year, the Advantage! Scheme has provided $57 million so far, to help some 3,500 companies recruit and retain employees aged 40 and above since 2005. Altogether, some 25,000 workers have benefited and out of that $57 million, some $24 million or 42% went towards redesigning jobs to make them more age-friendly, with each company on an average receiving $16,000 in grants.

So, we can say that there has been outcome from the Scheme, but it is not sufficient and is not significant enough relative to the number of companies that we have who employ older workers, and relative to the pool of older workers we have and is growing.

As this is the primary scheme to spur such older worker-centric initiatives, we must make sure that it can do the job of helping significant numbers of companies restructure and re-equip to employ and make good use of the growing pool of older workers as our population ages.

I believe that the ADVANTAGE! Scheme needs a significant boost in how it incentivises job redesign for age friendliness, and on helping companies employ and retain older Singaporean workers. The Labour Movement stands ready to actively review the scheme with the Government and to also actively promote the use of such funding with unionised companies so as to make work

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and the continued employment of older workers easier.

Mdm Speaker, valuing every worker is what gives the worker a stake in the economic and social progress of this country, and valuing every worker is the litmus test of our resolve and commitment. In this transformation, we must make sure of that.

(In Mandarin): [Please refer to Vernacular Speech.] Mdm Speaker, in the next three years, our economy must undergo a complete transformation. During the process, we must respect and value every worker. This is because, not only do the companies need to transform during the process, the workers also need to upgrade and work together with the company to achieve this aim.

When we talk about valuing every worker, we definitely must not overlook our elderly workers because these elderly workers made many contributions towards nation-building, and also towards businesses. Therefore, in the next three years, the three suggestions that I have proposed will promote the employment of older workers and their health. In terms of healthcare costs, it will allay their concerns over medical bills.

I hope the Government can help our businesses through various ways and schemes, and take good care of our elderly workers through job redesign. If we can do that, our transformation will be successful.

Mdm Speaker, the PAP government Budgets have always put the lives of Singapore citizens front and centre for the past 47 years. This Budget is no different. We should never take for granted our determination, ability, and effort to balance the Budget, and even to generate a surplus for future generations. Our ability to raise and spend money wisely and prudently allows us to build a fair and just society where the benefits of progress are spread widely to most people.

The Budget is aptly themed "A Better Singapore: Quality Growth, An Inclusive Society". It is right to assure an Inclusive Society. It is also right to ensure a cohesive society. A stronger cohesive society will enable us to work together to improve productivity as employers and employees, and to defend our nation as fellow citizens. A progressive taxation structure compels those who have the most to give more to help those who are left behind. Those who have done well in life must know that our society has enabled their ability and

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hard work to achieve their fullest potential. The progressive nature of this Budget taxes high living, not hard work. High income earners who choose not to buy expensive cars or live in the most expensive properties will be minimally affected by the tax increases.

Madam, the intense, important and insightful debate on the population white paper shows that Singaporeans care passionately for a better Singapore. The Government and the people stand side by side to achieve this aspiration. Ensuring social cohesion results in a better Singapore. Diverse views can come together for the survival, success and sovereignty of Singapore.

Nation building has always been our Government's preeminent focus since independence. Therefore, we must support more shared national experiences, strengthen social norms and values, and sustain social mobility to strengthen social cohesion.

Madam, there has been much discussion on what the Singapore Core is, and who forms the Singapore Core. I do not think it is so simply defined as whether one is born in Singapore or not. Affinity, love, loyalty and patriotism are emotional feelings, not a birth certificate in black and white. Flashing a pink Identification Card (IC) does not necessarily mean one is a Singaporean at heart. What do Singaporeans identify ourselves with? Meritocracy and multiculturalism are values we hold dearly. Appreciation and pride of our local culture is another indicator.

Why does Tao Li seem to be more accepted as a Singaporean even though she is born in China? The fact that she spouts Singlish and loves char kway teow must have something to do with it. Our colloquial and rojak language skills and local hawker food may not build us strong linkages internationally in trade but they help us identify ourselves as fellow Singaporeans, especially when we are overseas.

While we all want Singapore to continue to do well economically, we cannot neglect the bedrock of our economy, which is our sense of belonging that binds us as a people who are passionate about making Singapore our home and doing our best for the country.

Local food and its culture are part of our national identity and provide shared memories and experiences across generations. We must be proactive in preserving, protecting and promoting our national identities such as our local food culture. As part of my research for today's speech, I recently met up with

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Dr Leslie Tay of "ieat ishoot ipost". He is a popular food blogger and also a medical doctor. He sees patients in the morning and at night, and in the afternoon, he goes around hunting down good hawker food and shares his insights and findings. His passion gets him going and makes his life more enjoyable and fuller. Likewise, as a country, while our budget allocates financial resources to keep our economy going, we must not ignore the intangible things that keep us together.

Using our local food as an example, they are not just perishables to keep our stomach full, to titillate our taste buds, to satisfy our cravings, or just the job of NEA to build 10 new hawker centres, although that is a very much welcomed change in policy. According due attention to our national identity has to be a whole-of-Government effort.

First, we should teach our student to use more local cooking equipment and learn more local food during the Home Economics classes. Why learn only how to use the frying pan when we can also learn how to use the wok? Why only bake muffins when we can also make huat kueh? Why only bake carrot cake when we can also fry carrot cake? Secondly, NEA and AVA may want to balance the importance of preserving local food culture as ensure food hygiene. For example, there are not many coffee roasting places left in Singapore. One of the owners was asked recently by AVA to cool their coffee beans on metal trays rather than on the floor which they had been doing so for more than the past 50 years. Hygiene cannot be compromised, but why not ensure cleanliness of the floor rather than going by the book that assumes trays will always be cleaner. This requirement has reduced the coffee throughput, increased the production time, reduced productivity, and potentially puts their business at risk.

In addition to NHB's work of putting artefacts in museums, and Preservation of Monuments Board marking the Civilian War Memorial as a national monument, we could look at recognising living traditions and cultures such as local food stalls which have heritage value. Some stalls have been around for generations, and together we should find ways to allow them to continue cooking in traditional ways and help them to carry on their trade. In Mandarin, Madam.

(In Mandarin): [Please refer to Vernacular Speech.] We are going to celebrate Singapore's 50th National Day very soon. Local hawker fare has also been part of our lives for the last 50 years. They are a crucial part of our local culture. We should seek out hawker food and hawker stalls with 50 years of heritage, the familiar brands, and accord them with the status of national heritage food. While these master artisan hawkers are still alive, SPRING

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Singapore should help them preserve their cooking methods and the longevity of their business. When the Government cut down on foreign labour, it pointed out that the F&B industry needs to increase productivity. We can understand the Government's intention but the problem is that those who can restructure successfully are probably the group enterprises. These hawker stalls usually only employ one or two helpers, thus MOM could give them more flexibility. On the other hand, if these master artisan hawkers are willing to share their trade secrets, we can also work with MediaCorp to look for humble and hardworking disciples to learn from the masters in reality television shows, and the prize for the winning disciple, besides the cooking skills, can be one year rental wavier at a hawker stall under NEA.

(In English): Madam, we must create and preserve more shared common spaces that are affordable to all Singaporeans. The decision to allow social enterprises to run our hawker centres help ensure that Singaporeans, rich and poor, are able to enjoy local food at affordable prices at the same places. Our hawker centre stalls rents must be kept affordable and not be completely subjected to market forces.

Our public attraction admission fees such as that of the Zoo and Night Safari can cost up to $72 and $116 for a family with two children. These fees are very high for the estimated one-quarter million families earning $3,300 a month at the 20 percentile of Singaporean resident household income level in 2012. Like what Gardens by the Bay has done, we should lower prices of our public attractions for locals, to ensure that our poor and rich enjoy these common spaces. Even as we expand the accessibility of more shared common spaces, we must aim to preserve memories of national importance. This serves an important purpose of reminding us where we come from, so we can be more certain of where we are going. Just when the new Sports Hub is under construction, the recent effort of using the old spectator benches of National Stadium in innovative designs is refreshing and commendable. Many Singaporeans remember the many cheers of joy and tears of disappointment when our soccer team won and lost at international matches. I am glad our National Stadium will not have its naming rights sold, so that our roar can still be called the Kallang Roar.

Sports bring people together, especially when we are supporting our fellow citizens in international competitions. New Zealand has a similar population as Singapore and won 13 Olympic medals in the 2012 London Olympics. Almost all the athletes are born in New Zealand. On the other hand, our Olympic winners are all new citizens brought in under the Foreign Sports Talent scheme. We are grateful for their commitment and hard work. However, we must also

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reflect on the criticism of the approach of bringing in foreign athletes and giving them citizenship to compete for Singapore. The wins of these new citizens can sometimes be a pyrrhic victory. Some of them have left Singapore for the country they were born in, such as Li Jiawei and Li Li. Our sports like bowling, sailing and swimming have local born Singaporeans winning at international competitions and doing us proud. We must continue to promote our local talents. Setting up Sports School in 2004 was the right decision. We hope to see more graduates of the school competing and winning at the highest level. Let us be conscious of ensuring our performance at international sport competitions bring Singaporeans together, and not apart.

Mdm Speaker, we have to encourage the social norms that will encourage marriages even as many adults have expressed willingness to be married in a recent survey. Our declining fertility is due to a lack of marriages. Our resident total fertility rate is very low at 1.

2. However, the average number of children born to ever-married females aged 30-39 years is 1.52 and higher at 2.06 for those aged 40-49. Therefore, getting more Singaporeans to commit to each other in marriage is critical to encourage more children. The recently announced marriage assistance procreation package helps, but we can go further given national priority of having more Singaporean babies.

We may have to consider changes in our taxation structure to provide the option for married Singaporean couple to file joint income tax. Their incomes will be taxed at double the tax bracket of a single filer. For example, if the personal income of a single tax filer starts to be chargeable at $20,000, a Singaporean married couple income starts to be chargeable at $40,000 and the subsequent tax brackets would be doubled correspondingly. This applies to whether one or both members of the couple work or have income. This would allow Singaporean married couples to be liable for less income tax and then they can further enjoy more tax incentives when they have children.

Madam, our narrow definition of success related to mainly material success or material possessions likely has compelled many young Singaporeans to delay their marriage so that they can better compete with those without family commitments. Our norms, from using the size of one's pay cheque to define success must shift. I will encourage Singaporeans passionate about this issue to participate in the second phase of Our Singapore Conversation. One of the topics is how do we broaden the definition of success. Every honest job has its intrinsic value. Every honest job contributes to society. We must respect good honest work.

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Our social norm of respecting our multiracial and multilingual society must continue to be strengthened. We have encouraged and supported foreign workers working in the service industries to converse in English to ensure that all Singaporeans are better served. English is a common language to facilitate integration. On the other hand, we must not forget the value and importance of our mother tongues. Our four national languages are used in communication of important government policies. And, in public transport, while the train operators must improve the reliability and the service quality, I recommend that our train operators also takes a more inclusive approach by making announcements in all four national languages whenever appropriate for each station's name.

English is a common language to facilitate integration. On the other hand, we must not forget the value and importance of our mother tongues. Our four national languages are used in communication of important Government policies. In public transport, while the train operators must improve reliability and service quality, I recommend that they also take a more inclusive approach by making announcements in all four national languages whenever appropriate for each station's name. Some may argue that this may be inefficient, but it is important for us to do so for two reasons. First, our elderly who do not understand English would be better served. Secondly, the announcements in different languages remind us that we live in a multilingual society. I remember in the 80s when the MRT just started, there were long announcements in four languages when the trains approach City Hall and Raffles Place interchange stations so that passengers know where to alight to take the next train. As a young person then, it was a very audible reminder to me that I live in a multilingual country, Singapore.

Madam, we must sustain social mobility to strengthen social cohesion. Our meritocratic system works best and will continue to be accepted by all Singaporeans when there is equal opportunity to succeed regardless of family resources. The poor must not feel that hard work and ability are insufficient to work out their stations in life. High social mobility means that the success of our children should continue to depend more on their abilities and hard work than their parents' income and education.

Investing in preschool education and support is critical to ensure equal opportunity to succeed to sustain social mobility. We are providing childcare financial assistance to all mothers – this is good. This helps children to grow up in safe learning environments.

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I support the doubling of our spending on the preschool sector over the next five years to over $3 billion. Investing in children when they are still developing helps them to unlock their potential and contribute more to our economy as productive citizens. I agree that it is also important to bring in more anchor operators so as to benefit more children. This investment will not just increase our nation's competitiveness. It is also what a fair and just society should do. We must take care of the youngest member in our society. We must ensure they have equal opportunity to succeed. We must ensure all Singaporeans regardless of birth and connections can contribute to our country's growth through their hard work and abilities.

Madam, it is unfortunate that the discourse of the population White Paper has been about differences, divides and distinctness. Let us not draw the wrong conclusions from that Debate. We have come far since the founding of our nation. Our Singaporean foodies line up patiently for the best hawker food, regardless if one is a CEO or a cleaner. Our Chinese, Malay and Indian elderly citizens watch TV and enjoy their food and drinks together in coffee shops. Our children play easily together in our HDB playgrounds regardless of race and language. Our national servicemen complete their missions in their uniforms and camouflages, where race and social class melt away. We only have to look around to see how much we already are a cohesive people.

Social cohesion is as critical as a strong economy and robust defence force to ensure the survival, success and sovereignty of Singapore. By ensuring greater shared experiences, stronger social norms and higher social mobility, Singaporeans will be more committed to the country with a stronger conviction of their identities.

I support the Budget because the intent and investment of the Budget will continue to strengthen our social cohesion for a better Singapore, and to ensure the benefits of our progress are widely shared.

Mdm Speaker, thank you for allowing me to join the debate. Deputy Prime Minister Tharman has announced a Budget which sends a clear signal that the Government is determined to pursue what it had set out previously as the strategic roadmap of Singapore's future. Restructure for quality growth and build an inclusive society, with a clear focus on Singaporeans. This year's Budget feels like last year's Budget, but at a higher

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intensity.

Despite a much lower GDP growth of only 1.3% in 2012 and a strong push-back by various business groups, the Government has persisted with its long-term strategy of building quality growth driven by increasing productivity. It maintains its unequivocal position to wean businesses off their dependence on foreign workers. But companies can take comfort that ample help is at hand to support the restructuring – Deputy Prime Minister Tharman has announced a comprehensive Quality Growth Programme aimed at helping businesses upgrade, create better jobs and raise wages for locals. I am heartened by the series of measures that build on previous years' efforts to bridge income gaps and promote social mobility towards a more inclusive society. This year's Budget has been even more progressive, with wide ranging measures to help lower income groups move up the ladder, and also a larger tax liability for the affluent on luxury homes, investment properties and high-end cars. The Government has made a concerted effort to address inequality in this Budget.

Mdm Speaker, the pain of restructuring our economy is further intensified with this Budget. Companies have no choice but to take the bitter pill. They are in urgent need of finding new ways to grow, invest in productivity, reduce their dependence on foreign workers and design better jobs that are attractive to locals. I would like to focus my speech on this restructuring journey that Singapore companies especially the SMEs need to undergo to emerge stronger and leaner, and in this process create better lives for Singaporeans.

Whilst few will dispute the need to increase productivity, most of the concerns voiced have been about the rate at which changes have been imposed. Companies need time to attract Singaporeans to replace foreigners in lower value jobs. Yet significant foreign manpower tightening measures have been announced across sectors and skills levels even as businesses are struggling to cope with previous cuts. This is amidst a tight labour market, escalating business costs and continued uncertainty in the external environment. There is heightened anxiety about the compressed period of transition expected of companies, and whether it poses an unnecessary risk to their viability.

To ease the pain of transition, the Budget is packed with "sweeteners" to help companies, including a generous three-year transition support package, especially targeted to help SMEs. Clearly, the Government is not trying to pick the winners but is focussed on helping every SME that wants to upgrade itself and help them take advantage of every scheme.

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The WCS is innovative, and unique to Singapore. The Government co-pays 40% of wage increases for Singaporeans earning up to $4,000 per month, for three years. The Scheme covers 70% of Singaporean workers; the wage subsidy goes directly to them. It provides the twin benefits of helping businesses cope with higher wages in a tight labour market as they upgrade, as well as encouraging firms to prefer Singaporeans and pay them better.

Many raised the valid concern that this wage subsidy scheme is not tied to productivity growth, hence the risk of wage inflation without a corresponding productivity gain. I have heard some workers are already expecting a wage increase. This is a real risk, but I see the power in the simplicity of the WCS so that every business from right across the sectors can easily draw on. There is no need to apply for it; wage credits will be automatically paid out to employers.

I have argued that businesses need time to transition their operations to find new levels of productivity as it takes time to establish new processes, familiarise workers with new machines or induct and train them. The WCS helps companies cushion wage increases in a tight labour market, giving them the "breathing space" they need to ready themselves for the gains that are to come. The Government subsidy is also helpful to buffer inflation in a tight labour market to prevent cost pressures to be passed on directly to consumers. Hence, this Scheme is therefore an economic measure as well as a social one.

Madam, the WCS will help those who are genuinely on their journey to higher productivity, but it will also mean delaying the closing down of uncompetitive firms through an undeserved cost subsidy from the Government. I urge companies to have the discipline of putting in place their respective productivity gain sharing schemes tailored to their own business. This is to ensure wage increases are tied to productivity gains for sustainability beyond the Government assistance period and serves as an incentive scheme to spur higher employee productivity. Madam, no scheme is perfect, and I am glad that the Government is channelling much of the revenue collected from the foreign worker levy back so that all companies will at least have a chance to have a go at restructuring with strong support from the Government.

Mdm Speaker, as the Government rolls out more and enhanced assistance programmes to spur productivity, it is just as important to increase outreach and simplify access to schemes in order to facilitate adoption. Many SMEs still claim that they are not familiar with the support programmes and find them difficult to access. I urge the Government agencies to be relentless in their outreach, in order to help companies adopt best practices, innovate and upgrade their capabilities, access global opportunities, leverage shared

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facilities, and adopt new technology. SMEs will benefit greatly if "one-stop" centres are set up for companies to access a wide range of Government-support schemes.

Beyond process and technology improvements, I believe Singapore companies can do a lot more in people management for higher productivity. Studies have found that happy employees to be the most productive. Singaporean workers work one of the longest hours in the world. According to Gallup's research, only 2% of Singapore's workforce describes themselves as engaged by their jobs compared to the global average of 11%. So, there is much employers can do to go beyond treating their employees as simply a pair of hands, but more as valued talent that needs to be motivated, nurtured and rewarded for high performance. Improving the welfare of staff must be a key cornerstone of any productivity drive.

Mdm Speaker, what is missing in this year's Budget is measures to boost local workforce participation to ease labour crunch. Efforts to tighten foreign manpower must be undertaken alongside initiatives to help employers tap local manpower pools. I was surprised to read in The Straits Times that two-thirds of 500 SMEs surveyed said that inclusive practices such as hiring women and seniors are irrelevant or unimportant to them. Yet women and older workers form a large pool of talent that many employers can tap into.

However, to tap into this source of talent, the workplace needs to be family friendly enough to enable women to work and raise their families at the same time. Also the lack of attractive flexi-work opportunities, including part-time work and home-based work, is a barrier to getting women and older workers back to the workforce. Our success in making flexi-work prevalent in the workplace will unleash a significant pool of Singaporean talent, whilst helping to boost household incomes and reduce income disparity.

The current tight labour market is an opportune time to give pro-family employment practices the impetus it deserves. The Government should accelerate its efforts to champion the benefits of work life balance and provide the know-how and incentives to help companies implement work-life balance and provide the knowhow and incentives to help companies implement work-life strategies. Much more needs to be done to change mindsets and the trust between employers and employees.

I urge the Government to follow the footsteps of other countries in making the integration of work and family a national concern, and not left to the best

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efforts of individual companies or the occasional campaign and promotion by different Government agencies. The large majority of industrialised countries, such as UK and Australia, have some statutory regulations that make it easier for individual employees to request for flexi-work to balance their caregiver responsibilities.

Pro-family employment practices should be set as an integral part of the Tripartite Guidelines on Fair Employment Practices. Whilst not all jobs are suited for flexi work arrangements, the Government should consider legislation in the future to give employees, both men and women, the right to request for flexi work and have their requests seriously considered by their employers. I am very pleased to hear that NTUC is calling for the same set of actions from the Government, as we in the PAP Women's Wing are.

Besides helping companies get access to a wider pool of talent, sensible work-life policies make good business sense as companies with such policies have observed increased employee engagement and productivity, and reduced turnover. Furthermore, it can be a real competitive advantage to companies as a recent NTUC survey found that work life balance is a key factor that makes workers happy.

Mdm Speaker, it would be a big win for Singapore if this restructuring provides more opportunities to enable women not in the workforce to return. The Government should consider extending Back to Work Employment Credit Scheme (BWEC), offering up to 30% to 50% of wage subsidy depending on wage levels, to employers who hire women returning to the workforce for up to a year. This will help employers offset the cost for on-the-job training for these women as they re-integrate back to the workforce as well as any necessary redesign of work arrangements.

This scheme could work in conjunction with an "Internship Programme", where women re-entering the workforce after a long break could adjust and gradually re-integrate into the workforce. Internships allow women and employers to "try things out" without the fear of committing to something that may not work out in the longer term. A Government agency should be assigned the task of proactively facilitating job matching, career re-entry and pre-placement training.

Mdm Speaker, as part of the foreign manpower tightening measures, I am very pleased to see, for the very first time, the Government shifting its position on the need to make changes to the Employment Pass (EP) framework, to

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ensure Singaporeans are given fair consideration in companies' recruitment process. I have spoken in this House on numerous occasions, calling for enhanced rules. With progressively larger number of Singaporeans holding PME jobs, I have asked that the EP framework must ensure that Singaporeans are considered first for vacancies before employers are allowed to bring in foreign professionals. Such labour market test practices are already in place in many leading international centres such as Hong Kong.

Whilst it is critical that Singapore can continue to move up higher value sectors leveraging on international talent that brings expertise, companies' access to foreign professionals must not adversely impact job prospects for locals. I look forward to MOM instituting a labour market test. I also urge MOM to consider that, in industries where there are few qualified Singaporeans, companies are obliged to invest in the training and development of Singaporeans to fill future openings and guard against vulnerability from over reliance on foreigners in selected sectors.

Mdm Speaker, as companies go through the pain of restructuring, we must be prepared that not all companies will make the transition and there will be companies that will close. There will be vulnerable Singaporeans in this transition, whether they become unemployed or structurally underemployed, due to their skills sets. I ask that the Government set up a Restructuring Fund to help affected individuals and their families tide over such difficult times, whilst supporting them with schemes to rebuild their livelihoods.

Mdm Speaker, I would like to reiterate that the Government can only create an enabling environment, rich with opportunity and facility. I urge SMEs to step up, organise themselves, and leverage the available schemes as much and as quickly as they can in order to take their businesses to higher levels of productivity and competitiveness. SMEs are the backbone of our economy and key providers of jobs. This restructuring must result in a revitalised SME sector that is strong and vibrant, for the sake of Singapore's future.

In conclusion, Madam, I thank the Deputy Prime Minister for a balanced and progressive Budget. I support the Budget.

Mdm Speaker, amidst our economic uncertainties and population challenges looming ahead of us which contributed an intense debate amongst Singaporeans, one thing remains a

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constant – that Singaporeans ultimately want a better Singapore for themselves, their families and the future generation.

The Government has always been cognisant of this and has been working resolutely together with the NTUC Labour Movement, in improving the lot of workers with special attention given to low-wage workers. Government has also been instrumental with its $100 million funding in supporting the Labour Movement's push to increase productivity and promote best sourcing initiative that will impact 48,000 workers with close to two-thirds expected to see their wages increase by at least 10% over and above current annual increment when these projects are completed.

Companies that have leveraged on the Inclusive Growth Programme have managed to increase productivity and wages of their workers. Let me share some success stories. A cleaning company mechanised their cleaning operations for a commercial building using specialised cleaning equipment tapping on IGP funding. The salaries of the cleaners working in the building were raised from $840 to between $1,000 and $1,050.

Another example, a security company implemented the CCTV Surveillance System and Visitor Management System between the period September and January or November last year. The project was co-funded using IGP funding. The systems improved on the incidence response time for the Security Officer and time taken to register visitors with zero error rate. Their 170 local Security Officers benefitted through 11% annual wage increase.

Last year, at Power Seraya Gas Station, the union together with the management and the cleaning service provider worked together to re-deploy the cleaners for greater work efficiency and productivity. As a result, the cleaners' salaries were increased between $100 and $250. Power Seraya and the unions were able to do it because they were determined to help the low-wage workers. Many companies can do so by putting in that extra effort to work with the service providers to explore solutions to increase productivity. With the Wage Credit Scheme (WCS), such restructuring efforts can be supported to reward the workers through better wages.

Madam, this year's Budget is to help companies restructure for quality growth and reduce the income inequality. The examples I shared showed that it can be done. However, I acknowledge there will be challenges.

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During my house visit last Saturday, I was given an earful by my resident who was upset that the curb on foreign worker supply and the increase in workers' levy would affect her husband's construction business badly. I understand that as Singapore undergoes this restructuring exercise, many companies, especially SMEs, will face much difficulty and continue the call for the Government to relax the tightening of the foreign worker supply. It would also be difficult to ask them to embark on Best Sourcing as they resort to cheap sourcing of services to cut cost.

Mdm Speaker, the efforts to restructure the economy by reducing our reliance on foreign workers and to ensure a sustained real wage increase through productivity improvements can be a painful exercise for many companies, especially SMEs. I hope that the measures announced in this year's Budget will lessen the pain.

I am also hopeful that the WCS will be used by companies to restructure given the tightening of the foreign labour supply. I hope that WCS is not used by companies to increase their bottom lines by using it to subsidise their usual wage increase. All workers deserve fair wages and it is the moral duty of employers to value every worker and ensure gain sharing with special attention to be accorded to the lower wage workers.

A better Singapore requires more than just a strong tripartite partnership between the Government, workers and employers but also for all companies to have the moral responsibility to ensure workers feel the impact of the WCS as Singapore journeys towards creating a better Singapore for all.

NTUC Labour Movement will continue to call upon our workers to undergo a mind-set change to think and do things differently through training and re-skilling to increase their productivity at the workplace for a sustainable real wage increase in this highly competitive business environment. Companies must reciprocate any increase in productivity through better salary increments for the workers.

While there has been a strong call for minimum wage because of the widening income gap and rising inflation cost, NTUC, through our union clusters, has been pushing for a Progressive Wage Model (PWM) that could help workers obtain salary increases based on a wage ladder concept which incorporates skills, productivity and career progression. My other colleagues will provide more examples of the PWM in the various industries. The PWM offers more than just minimum wage but a pathway for workers to earn better

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wages.

Last year, NTUC worked with the Government and the industry players to propose a PWM in the cleaning industry as an alternative to minimum wage. In fact, the PWM will offer workers starting salaries that will commensurate with their skills, productivity and job responsibility. For example, the PWM for cleaners will see them starting with a salary of $1,000 and progressively moving upwards as their skills and job responsibilities increase. The PWM gives recognition to the training these workers have gone through. Through collaboration with NEA, the PWM was tied up to the new cleaning accreditation scheme and Government has pledged to engage only cleaning companies with accreditation. MOE, as a service buyer, has come on board and has seen its 3,600 outsourced cleaners' salaries increase by $300. With the WCS, I hope such transition to a PWM could be done at a faster pace with more widespread adoption across many Government Ministries and Statutory Boards.

Mdm Speaker, while I welcome the WCS, I am, however, very concerned that it may not bring immediate or short-term benefit to low-wage workers who are working under outsourced contracts like cleaners, security officers, car park attendants and many others. Many of these companies are operating on an amount that is already specified and fixed in the contract which may last for two to three years with possible options to extend by another one to three years. Hence, there is little motivation for them to leverage on the WCS to increase the salary of their workers.

Madam, I have personally engaged many service providers and service buyers of cleaning, security and landscape industries. All service providers want to offer better wages to their workers and all service buyers want to offer better tender amount but, it cannot be done at the expense of them losing their business and being uncompetitive. They want a level playing field.

Mdm Speaker, bold results to help low-wage workers require bold actions. A level playing field for these service providers and service buyers can be created through licensing. The Labour Movement has been pushing for a PWM that could help low-wage workers obtain salary increases based on a wage ladder concept which incorporates skills, productivity and career progression.

A bold action that the Government can do is to mandate for PWM to be a requirement for licensing to enable companies to operate in sectors like cleaning, landscape and security, which have a high portion of low-wage workers. This, potentially, could also have a ripple effect on wages of low-wage

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workers in other industries. As the WCS provides a Government subsidy for wage increases, I feel that this will go some way in providing some financial support for companies to adopt the PWM.

As a Labour Member of Parliament, I am heartened that the Government has heard the cries of the labour movement, for example, in increasing the qualifying limit of salary for Workfare Income Supplement (WIS), allowing low-wage workers to get more cash from the scheme to help them with meeting their daily needs, as well as build their CPF retirement savings. The PWM, combined with WIS and WCS, is a viable alternative to minimum wage whose impact has been very controversial in countries implementing it.

Mdm Speaker, another bold action that we must take is to make the National Wages Council (NWC)'s recommendations for low-wage workers mandatory for all companies. Last year, many cleaning and security companies were not able to give $50 built-in wage increase to their workers because of fixed contract amount they received from the service buyers. The NWC should also go beyond just recommending a quantum increase in salary for low-wage workers to providing other possible solutions to address the issue of income inequality.

Mdm Speaker, as a society, we must value every worker and see every honest job as a dignified job worthy of good wages. We want to live in a clean and safe environment, but show much resistance to paying more for cleaning, security and other many other essential services. As such, such jobs are caught in a vicious cycle of low wages and low productivity. Service providers and service buyers must change their mindset to enable low-wage workers to earn better wages. The time to make a difference in helping low-wage workers is now with all the funding support that the Government is providing.