Hansard, Wednesday, 22 February 2023

1 Mr Louis Ng Kok Kwang asked the Minister for Culture, Community and Youth for each year in the past five years (a) in how many and what percentage of cases have the 80:20 fund-raising rule requiring at least 80% of funds raised for foreign charitable purposes be applied towards local charitable purposes been waived for fund-raising activities; (b) of the cases where this 80:20 rule is waived, what are the top three target donor groups and beneficiaries; and (c) when will the Ministry next review this 80:20 rule.

Mr Speaker, I note that the hon Member had also asked a Parliamentary Question (PQ) on the same topic last year, at the 8 March 2022 Parliamentary Sitting. So, I also kindly ask him to refer to our reply given then, as it remains relevant.

In the past five years, the Commissioner of Charities (COC) has, on average, granted about 70 waivers of the 80:20 fund-raising rule each year. More than 70% of the waivers were granted for private appeals such as within schools, churches and other organisations to support charitable work in other countries such as school programmes or missionary work. The majority of the remaining appeals granted waivers were for disaster and humanitarian relief efforts.

For example, in 2022, there were 56 waivers granted for private appeals, while 16 permits granted with waivers were for humanitarian relief, such as for the crisis in Ukraine, and natural disasters such as the Pakistan floods and earthquakes in Afghanistan and Indonesia. More recently, waivers were also granted for appeals supporting relief efforts for the Türkiye–Syria Earthquake.

Mr Louis Ng.

I thank the Minister of State for the reply. I should also thank him for meeting up with the non-governmental organisations (NGOs) to discuss this issue and the concerns they have about raising funds. But I think he would also have heard about how difficult it has been for them to get this waiver. For one, I am going to ask whether the Government can be more prescriptive and lay out what are the specific safeguards that are needed in place to mitigate the risks in terms of foreign fund-raising. And second, could I ask when is the next review of the Charities regulations? I know we do that quite regularly.

Sir, I thank the Member for his supplementary questions and also, for speaking up for the NGOs, whom we have met, who also generously and candidly shared about their experiences and also their work and their feedback.

Just to take a step back – the intent of the 80:20 rule is to ensure that these funds that are raised from the public are used primarily to benefit locals and also local causes. A concession is made where a proportion of the funds – in this case, 20% – is allowed to flow overseas for charitable purposes. Why? Because it is important o ensure: one, the accountability and transparency of permit holders since public funds are involved; and two, that the external flow of funds for overseas causes to foreign entities are legitimate.

All organisations have to apply for a foreign fund-raising permit from the COC if there is a need to raise funds for a foreign charitable purpose, and to seek waiver of the 80:20 rule where appropriate or when required.

In the case of smaller organisations like some of the NGOs that we met, who may not have enough resources to monitor its partners and affiliates, these organisations may consider partnering with those who are equipped to do so and who already have valid fund-raising permits in place. We do this in order to mitigate risks and also to reduce restrictions faced during the fund-raising process.

I wanted to give the Member an update that, for example, the COC has already issued seven permits thus far for fund-raising efforts for the earthquakes in Türkiye and Syria. The organisations are: the Singapore Red Cross Society, Rahmatan Lil Alamin Foundation Limited, Mercy Relief Limited, Operation Mobilisation Singapore Limited, World Vision International, Bible Society of Singapore, Buddhist Tzu Chi Merit Organization (Singapore) Limited. In fact, COC granted waiver of the 80:20 rule for all of these permits.

Talking about the criteria, well, given that the funds raised will be used to support overseas beneficiaries, permit holders must: first, have in place an anti-money laundering and countering of the financing of terrorism (AMLCFT) policy; two, exercise sensitivity when conducting its fund-raising activities and also not engage in any activities that may undermine the social and racial religious harmony in Singapore; and three, ensure that the funds raised are used by its beneficiaries in conformity with the laws of their respective countries and in a manner that would not affect Singapore's bilateral relations with these countries.

The COC will continue to review the 80:20 policy and will update the Member in due time. We can and have already been, on a case-by-case basis, waiving the rule, as I mentioned in my reply to the PQ and supplementary questions. We thank the Member for his continued support for organisations who are working hard to support worthwhile causes overseas and, also, to Singaporeans and Singapore residents who have contributed to these causes.

2 Ms Poh Li San asked the Prime Minister in view of the recent disruption caused by the power outage at Microsoft Azure on 8 February 2023 (a) how can Government web services and data hosted on commercial data centres be assured of availability and data security; and (b) what is the Government’s procurement policy in terms of web services and data hosted in data centres owned by Singapore companies compared to foreign companies.

Mr Speaker, outages and disruptions can happen to any digital service, including those hosted on cloud services. The recent service degradation at a Microsoft data centre had limited impact on Government services. Nonetheless, GovTech has been working with Microsoft to fully restore affected services and prevent similar occurrences in future.

In general, cloud service providers offer improved availability, scalability and cost efficiency. These advantages were most evident during the COVID-19 pandemic, when we could quickly deploy services to support national efforts, such as contact tracing, proximity tracking and distribution of face masks.

To qualify for Government procurement, cloud services providers must meet our criteria for availability, resilience and security. The same criteria apply regardless of the service provider’s ownership and location of data centres. The services are regularly monitored to ensure compliance with agreed service levels and stringent security standards. Prior to this incident, cloud service providers had been able to meet our requirement to be available at least 99.9% of the time.

Ms Poh Li San.

Thank you, Speaker. I thank the Senior Minister of State for the reply. I have two supplementary questions. The first is regarding risk management. What is our strategy to diversify the use of different cloud services and data centres providers hosting various Government-linked functions? And the second question is on the degree of control. What degree of Government control do we have over the service providers in terms of such availability and resilience, and also what is the recourse in a situation of failure?

Sir, our cloud services are hosted by three different service providers. So, there is already some diversity in the contractual arrangements that we have and the provision of services from the commercial sector. There is also diversity in the way in which we structure our cloud-supported databases and services, with some things happening on commercial cloud, Government commercial cloud and some things on on-premise solutions. So, there is already some diversity and we will continue to look to see how we can improve the resilience of our cloud service providers and uphold the standards that we have required.

To Ms Poh Li San's second question about the degree of control over the cloud service providers and what recourse, there are service standards that are contractually agreed to and the service providers have every interest in working with us to make sure that they do meet those service standards. But in addition to that, like any contractual arrangement between a cloud service provider and the client, our engineers work closely with their engineers, both in terms of setting up the architecture and also, in terms of trouble-shooting when problems arise. So, that close relationship is part of the way in which we ensure the resilience of our service and the recourse when things go wrong.

Ms Poh.

I thank the Senior Minister of State. In view of the importance of data in our digital society, will there be plans for some form of Government-owned cloud service, for maximising our control?

To be clear, our plans are only for 70% of Government services to be on cloud providers by 2023. We are on track to meet that target. And so, already, we have plans and we have planned for some of our services to be controlled by the Government directly. These would primarily be those that support the work of the security services and agencies that are associated with that.

3 Ms Yeo Wan Ling asked the Minister for Sustainability and the Environment (a) what are the guidelines given to premise owners in the marking out of Designated Smoking Areas within Orchard Road No Smoking Zones; and (b) whether, in the past year, there have been complaints from users on the clarity of these markings.

The National Environment Agency (NEA) has published guidelines on the setting up of Designated Smoking Areas (DSAs) on its website. Under the guidelines, premises owners are to ensure that DSA boundaries must be clearly defined using floor stickers or other forms of permanent marking.

In the past year, NEA received one instance of feedback regarding the clarity of markings demarcating a DSA within the Orchard Road No Smoking Zone. NEA has since conducted checks on the condition of all DSAs within the No Smoking Zone and engaged premises owners to make any necessary rectifications. Besides following up on feedback, NEA has and will continue to conduct regular checks and engage premises owners, if necessary, to rectify any non-conformity with the guidelines.

Ms Yeo.

I thank Senior Minister of State Dr Khor for the answer. My constituent told me that in certain areas, particularly in tourist areas such as Orchard Road, markings for DSAs can be very confusing and property owners have used items such as planter boxes and other objects which are aesthetically pleasing to denote such smoking areas.

Does the Ministry take the view that property owners should have the responsibility in making these clear demarcations when marking out their smoking areas? If smokers who are confused by the marking have channels for feedback, where should they give the feedback to? And should they be fined, is there recourse for further investigations?

I thank the Member for the supplementary questions, as well as for the feedback. As I have noted, NEA publishes the guidelines on the setting up of DSAs. In fact, for certain critical requirements, it is actually legislated in the Smoking (Prohibition in Certain Places) Regulations 2018. Three of the criteria which are legislated are: firstly, it is about the boundary – that the DSA must be clearly demarcated with suitable measures; secondly, it is about the sign – there must be a signage provided either near or within the DSA to say that this is a Designated Smoking Area; and thirdly, you would need to provide at least one disposal receptacle – cigarette butt canister or litter bin with ash tray – within the DSA.

In the Orchard Road No Smoking Zone, there are currently 54 demarcated DSAs, 100 to 200 metres between DSAs, three DSAs are temporarily closed, and six are demarcated with planter boxes. What NEA does is to conduct checks to make sure that the demarcations are clearly done. If it is not, for instance, if there is feedback, then we will work with the premises owners to rectify this, to make sure that they are clearly demarcated.

As regard to enforcement action, if we observe the smoker holding a lit cigarette or smoking in a non-smoking area or smoking prohibited area, enforcement action will be taken. But the offender can appeal, write into NEA with supporting reasons and we will carefully consider the appeal, taking into account the facts of the case to see it there are mitigating factors for leniency to be accorded.

4 Mr Gerald Giam Yean Song asked the Minister for Defence whether there has been any consideration towards raising the allowances for full-time National Servicemen in view of inflationary pressures and increases in the cost of living.

Sir, full-time National Servicemen (NSFs) receive an allowance to support their basic personal upkeep. The allowance takes into account that lodging, food, clothing and medical care are provided for by the Singapore Armed Forces and the Home Team given that most NSFs stay in camp.

MINDEF regularly reviews and adjusts the allowance. Three adjustments have been made over the last 10 years, the most recent being in March 2020. MINDEF will continue to conduct such regular reviews and where necessary, adjust the allowances.

Mr Gerald Giam.

I thank the Senior Minister of State for his reply. Since NS allowances were last increased in March 2020, the cost of basic upkeep has increased significantly due to high inflation that started around mid-2021. So, can NS allowance increases be pegged to the significant increases in the Consumer Price Index (CPI) or the Monetary Authority of Singapore (MAS) core inflation measure, so as to minimise the lag between the increases in cost of living and the adjustments to NS allowances? Secondly, when will the next review of NS allowances be held and can that be brought forward in view of the high and persistent inflation that we are facing?

Sir, I thank the Member for his supplementary questions. As I mentioned in my reply, when we provide a calibration of the allowance for our NSFs, we certainly will have to monitor the overall price levels within the country.

But at the same time, it is also very pertinent for us to know and remember that it is not the general cost of living that actually applies to the upkeep of NSFs. Because as I have mentioned, lodging, food, clothing and medical care – these are items that would impact the overall cost of living. And these are already taken care of and paid for by the Singapore Armed Forces, as well as the Home Team for NSFs.

So, we will take everything into account in the review. And again, as I have mentioned, if you look back over the last 10 years, we have conducted no fewer than three reviews and we will certainly take all these into account going forward as well.

5 Mr Yip Hon Weng asked the Minister for Manpower (a) whether the Progressive Wage Model (PWM)'s approach to wage increases is linked to an expectation of increased productivity from businesses, with the aim of reducing costs; and (b) what steps has the Ministry been taking to assist companies that have implemented the PWM and are facing difficulties in boosting productivity.

Mr Speaker, the Progressive Wage Model (PWM) is underpinned by the longstanding tripartite principle that wages should grow in tandem with productivity to be sustainable over the long term. To do this, both workers and employers need to play their part, and they can tap on the range of resources and initiatives rolled out by the Government and tripartite partners.

Workers need to improve their skills so that they can be as efficient and as productive as they can be in their jobs, even as wage rises. Through upskilling, workers can also put themselves in a better position to take on larger and more complex job roles. And in particular, workers in PWM job roles are guided by the tripartite-endorsed PWM requirements on how best to upskill. They are also supported by the Workfare Skills Support (WSS) Scheme, which provides training support to lower-wage workers, as well as the broader SkillsFuture movement.

Beyond improving each worker's productivity directly through training, businesses must also take ownership in driving wider business transformations to improve productivity. Our Progressive Wage moves are complemented by the Industry Transformation Maps, or ITMs, which map out growth and transformation plans for 23 sectors across the economy. Businesses can find support for their transformation journeys through various Government schemes, such as the Productivity Solutions Grant. They can also consider working with the National Trades Union Congress (NTUC) to set up Company Training Committees, or CTCs, and tap on the NTUC CTC grant, launched in 2022, to transform business processes, redesign jobs and improve work prospects for the workers.

The Government recognises that the efforts to raise productivity take time and that, in the immediate term, businesses may face cost pressures arising from Progressive Wage moves. As such, the Government has provided schemes to help businesses defray some of these costs in the transition. The Progressive Wage Credit Scheme (PWCS) co-funds the wage increases employers give to their lower-wage workers from 2022 to 2026. And as announced in Budget 2023, the co-funding support for PWCS will be enhanced up to 75% for the qualifying year 2023. Meanwhile, the WSS Scheme provides employers with an absentee payroll of 95% of basic wages when their workers are sent for training.

As we expand PWM to uplift lower-wage workers, we will continue to support businesses to improve their productivity.

Mr Yip Hon Weng.

I thank the Senior Minister of State for his reply. I wish to ask the Senior Minister of State, which PWM sectors have greatest potential for productivity increase and what is the Ministry doing to improve productivity for these sectors?

Mr Speaker, I am actually tempted to say that every sector is a good sector, but I will answer direct.

Thus far, all sectors with PWM have shown potential for improvements in productivity to achieve long-term sustainability, alongside uplifting wages for their lower-wage workers. So, each PWM sector has embarked on their respective transformation journeys and each one is backed by ITMs. Typically, when we look at even the recent ones like food service and retail, we have ITMs to back them up by the industry. And these are also supported by Government and tripartite partners through various schemes.

So, we want to make it a point that it is not just about the workers' productivity alone. Because the workers can get skilled, trained and then, basically, they would be more productive, but they can only do so much if the business does not transform. So, you need the business to also move on the productivity drive because they can redesign jobs, they can put in place automation, sensors and so forth.

We have seen that in security, for example, which have seen very good progress. And with the newer industries or newer PWMs, like retail, for example, we are looking at areas such as putting in the Jobs-Skills Integrator, which I think the Ministry for Trade and Industry (MTI) is trialling. These are ways in which we can potentially improve the productivity levels.

But it is not just on the worker. I would say that it is all three in tandem: the worker, the business, the industry. They would all have to transform at the same time and, therefore, you will see varying degrees of productivity improvements.

Hence, my point was, we do see good progress in terms of productivity. Some of these take more time than others. But there are certainly others that have greater potential. The outcomes vary, depending on how different companies progress and how different sectors progress.

I also want to add on that service buyers and consumers also have a role to play, because I think we have also moved into procuring services based on outcomes, rather than just head counts. And, therefore, this will enable service providers have greater flexibility to transform how they deliver services and bring in innovation. If you are just looking for the lowest cost at the maximum headcount, this is not going to help the industries either to transform. That is why we were moving to outcomes based models. This will help us also help the service providers improve business efficiency and productivity.

6 Ms Poh Li San asked the Minister for Home Affairs in view of the 32.6% increase in scam cases and 13 scam syndicates busted in 2022 (a) whether more resources will be deployed by the Ministry and relevant agencies in the financial sector to deal with the growing case load; and (b) whether more can be done in collaboration with other law enforcement agencies in other jurisdictions to track and arrest culprits responsible for the scam cases.

Mr Speaker, Sir, with the resources the Home Team has, the Home Team has reorganised ourselves for greater efficiency and effectiveness. For example, the Police set up the Anti-Scam Command in March 2022, to consolidate and optimise resources and expertise in scams across all their units.

The Police also partner stakeholders from the public and private sectors in our fight against scams, to complement and supplement our own capabilities. They worked with the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) to co-locate staff from six major banks at the Anti-Scam Command. Staff from the Government Technology Agency (GovTech) are also co-located at the Anti-Scam Command to support Police investigations in Singpass-related scams. This has enhanced the Police's capabilities to more expeditiously stop more people from falling prey to ongoing scams and freeze bank accounts before the scammed monies flow out of Singapore.

MAS also works closely with the Standing Committee on Fraud of the ABS to drive anti-scam efforts in the financial industry. This includes implementing robust measures to safeguard customers, such as putting in place an emergency "kill switch" for customers to swiftly freeze their bank accounts which they suspect may have been compromised.

The Police have leveraged technology to enhance our ability to deal with scams and facilitate quicker decision-making. For instance, they use analytics to detect and block scam websites. This includes tools that look out for tell-tale characteristics of scam websites.

As scammers are mostly based overseas, our efforts to solve scam cases depend significantly on the cooperation from foreign law enforcement agencies. We are keen to enhance collaboration with foreign law enforcement agencies, but this will depend on their capacity and receptivity.

Where possible, the Police work with overseas counterparts to exchange information and conduct joint operations to dismantle scam syndicates. In 2022, close collaboration between the Police and foreign law enforcement agencies led to the successful takedown of 13 scam syndicates.

Since 2017, the Police have been a member of the multilateral platform called the Asset-Recovery Interagency Network – Asia Pacific. The network spans 28 member jurisdictions within the Asia-Pacific region and aims to increase the effectiveness of members' efforts in depriving criminals of their illicit profits.

INTERPOL also plays a crucial role in our fight against scams. They provide a platform for the Police to collaborate and share intelligence with the larger international policing community. In 2022, the Police participated in Operation HAECHI III, a global operation coordinated by INTERPOL over five months to tackle cyber-enabled financial crime. About 1,000 suspects were arrested and over US$129 million worth of virtual assets were seized.

Enforcement alone, however, is not enough. We have also put in place upstream measures to try to prevent scammers from approaching Singaporeans in the first place. Such measures include working with telcos to block SMSes sent from unregistered sender IDs and overseas calls attempting to spoof domestic phone numbers.

Ultimately, the best defence against scams is a discerning public. We have stepped up our public education efforts. This year, the Police, together with the National Crime Prevention Council, launched the new anti-scam campaign called, "I can ACT against scams", which calls on the public to take concrete actions to protect themselves and their loved ones by taking the three key steps of ACT. A for ADD(ing) security features, such as installing the ScamShield app; C for CHECK(ing) for scam signs and to verify with official sources; and T for TELL(ing) authorities, family and friends about scams.

Ms Poh Li San.

I thank the Minister of State for her replies. I certainly agree with the importance of education. I have been also very supportive on-the-ground, for all the education efforts. I have one supplementary question. Are we prepared to trade off speed and convenience of transactions to protect our users, at least, until we see a drop in scam cases? And I was also told that seniors are now stopped being given the PayNow facility by banks. But the question is, instead of excluding our seniors from tools like PayNow, for large transaction amounts, are we able to get the banks and financial institutions to look at how they can differentiate, say, new PayNow numbers from the usual list, so that the banks can have enough time to pre-screen the numbers before these big amounts of transactions are allowed?

I thank the Member for her supplementary question. Indeed, we need to balance having an efficient and effective banking system, versus having security features in place to protect our customers. As such, we have been discussing with the banks to look at whenever they are pushing out new innovative products and services, that they have a security-by-design concept and to set transaction limits at reasonable amounts to prevent possible huge losses of monies, should customers unwittingly fall prey to scams.

I have mentioned earlier that to secure banking channels, the MAS has been working with the ABS to introduce additional safeguards. This includes the removal of clickable links and emails or SMSes sent to consumers and the introduction of a cooling period for activation of a new digital token.

This particular point about the introduction of a cooling period is an important point, especially when it involves seniors. They may, unfortunately, sometimes be conned, scammed into setting up an Internet banking facility. They may unwittingly add beneficiaries to their banking services who may be scammers. And that is why the introduction of a cooling period for the activation of new services is an important step.

7 Mr Louis Ng Kok Kwang asked the Minister for National Development (a) whether the Ministry has studied the effectiveness of the enforcement powers provided to inspectors with the Royal Society for the Prevention of Cruelty to Animals in England and Wales and officers with the American Society for the Prevention of Cruelty to Animals; and (b) whether the Ministry will consider providing similar enforcement powers under the Animals and Birds Act to selected non-Government animal welfare groups in Singapore.

Mr Speaker, under the Animals and Birds Act, there are regulations and enforcement powers in place to safeguard animal welfare. Beyond putting in place laws and regulations, we take a multi-stakeholder approach to prevent cruelty to animals. For example, we work closely with stakeholders such as animal welfare groups and veterinarians to raise public awareness on responsible pet ownership.

We also take a serious view of all acts of animal cruelty. NParks investigates all feedback on animal abuse and will not hesitate to take the appropriate enforcement action.

As of now, we do not plan to confer enforcement powers to non-governmental organisations. However, we will study and learn from international best practices where appropriate, as we review and update our regulations.

Mr Louis Ng.

Thank you, Sir. I thank the Senior Minister of State for the reply. I do understand that we have an increasing number of animal welfare cases and complaints, as well, and also very limited manpower at AVS. So, could I ask whether we could study, not extending enforcement powers to all animal welfare groups, but maybe a select few, like the SPCA, who is already investigating animal cruelty on the ground?

Two, I thank the Senior Minister of State for saying that they are going to review international practices, but could we also review local ones where we have NEA already having the community volunteer programme, where they have basic enforcement powers given out to members of the public. So, whether MND can review that programme and see whether it can extend it also to AVA's work?

Mr Speaker, the short answer is, of course, we will review all local and international best practices. I sympathise and empathise with where the Member is coming from. Every time we read about cases of animal cruelty or abuse, we take those very seriously and we investigate. However, just to clarify, based on our data, we have not observed an increase in the number of animal cruelty and abuse cases over the last few years.

The number of feedback on animal cases has increased, partly because of greater public awareness of such issues. Our NParks officers and our relevant officers who are delegated the powers to investigate, look into every single feedback seriously. By far, the large majority of all the feedback is not related to animal abuse or cruelty. In fact, most of the time, they are feedback around nuisance about animals, for example, poor hygiene, smell or sometime, just neighbourly disputes. A very small proportion of the feedback is related to animal cruelty.

Having said that, there are indeed real challenges in terms of investigating those cases. The challenges include, for example, a lack of eyewitnesses or direct evidence, for example, CCTV footage, or that carcasses have been disposed for some time and post-mortem analysis is not possible, or that cases are not reported or are reported late.

That is where we work very closely with the animal welfare groups. They are valuable partners and stakeholders in this effort, raising public awareness, looking into those issues and making sure that cases are followed up quickly and expeditiously. So, I thank the Member for his suggestions and feedback. This is something we will continue to look at.

Order. End of Question Time. Minister for National Development.

[Pursuant to Standing Order No 22(3), provided that Members had not asked for questions standing in their names to be postponed to a later Sitting day or withdrawn, written answers to questions not reached by the end of Question Time are reproduced in the Appendix.]

Mr Speaker, Sir, with your leave, may I make a factual clarification to my closing speech at the 7 February 2023 Sitting, during the Motion debate on Public Housing? [Please refer to "Affordable and Accessible Public Housing, and Public Housing Policies ", Official Report, 7 February 2023, Vol 95, Issue 82, Motions section.]

Please do.

Sir, in my closing speech, I mentioned that the Proximity Housing Grant was one of the housing grants that HDB offers for the purchase of HDB flats. I would like to clarify that the Proximity Housing Grant is offered to eligible buyers only for the purchase of resale flats and not for the purchase of flats generally.

Personal explanation, Mr Leong Mun Wai.

Mr Speaker, thank you for allowing me to make this explanation. On 7 February 2023, when I was giving more details on the Affordable Homes Scheme during my closing speech for the public housing Motion, I have said the following, "will the scheme actually increase the holding cost of the buyers? I called that a breakeven price, meaning the land cost is determined today, you add on the interest payment and what would be the price going forward when the buyer wants to sell the flat in the market. The idea is that, this breakeven price should not be much higher than the current price for the current HDB owners." [Please refer to "Affordable and Accessible Public Housing, and Public Housing Policies ", Official Report, 7 February 2023, Vol 95, Issue 82, Motions section.]

The last phrase should read like this: "this breakeven price should not be much higher than the breakeven price for the current HDB owners." I would like to make this clarification and correction for the record.

Second Minister for Finance.

[(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 2023 to 31 March 2024", (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 FY2023/2024, and to be printed. (proc text)]

[(proc text) "to make supplementary provision to meet additional 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 FY2023/2024, and to be printed. (proc text)]

[(proc text) Order read for Resumption of Debate on Question [14 February 2023] [1st Alloted Day] (proc text)]

[(proc text) "That Parliament approves the financial policy of the Government for the financial year 1 April 2023 to 31 March 2024.” – [Deputy Prime Minister and Minister for Finance]. (proc text)]

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

Mr Pritam Singh.

Sir, my speech is in two parts. In the first part, I will speak about the overarching thrust of the Budget. In the second part, I will address three specific areas covered by the Deputy Prime Minister: one, Jobs and the new Jobs-Skills Integrators; two, the raising of the CPF income ceiling; and three, the increased grants for buyers of HDB resale flats.

Let me start with my views on the principal thrusts of the Budget.

At last year's Budget, which was titled "Charting our way forward together", the Deputy Prime Minister outlined the Government's approach towards strengthening Singapore's social compact. Deputy Prime Minister Wong reiterated a commitment to further improving social policies, saying that this would be a multi-year agenda to prepare Singapore for the future. The Workers' Party sees this year's Budget as another plank of that multi-year agenda. This Budget also coincides with the Forward Singapore exercise launched last June. The Forward Singapore exercise is intended to build on the expression "social compact" that was employed at last year's Budget.

My view is that Singapore's social compact must be one where we move forward together as one Singapore to tackle an unpredictable and potentially disruptive future. We must guard against a split in society, where the rich and the well-off high-earners are pitted against the rest of Singapore.

To achieve that end, significant work needs to be done. I say this because one theme that was carried by some outlets, both mainstream and online, was that this year's Budget was, I quote, a "Robin Hood" Budget. Referring to it as such pits one group, high-earners and the rich, against the lower- and middle-classes.

For those of us on the ground, our social trends are clear – a rapidly ageing population, a belief that social mobility for younger Singaporeans contrasts markedly with that in our parents' generation and a view that meritocracy has developed a perverse edge, allowing the well-off to move ahead much faster than the broad middle-class.

Aljunied GRC Member of Parliament Leon Perera will speak more on this theme in his Budget speech. These are forces that have to be properly managed and it is critical for any Government to make the fight against inequality a central policy agenda and to decisively intervene to lift those at the bottom.

It would be remiss of me to say that the Government has not made moves in this regard. In his Budget speech for example, Deputy Prime Minister Wong spent time highlighting how disadvantaged children need an early leg-up.

If Singapore does not do more, a threat that has loomed large on the horizon in the last few years, of the potential emergence of "two Singapores", may become reality.

One Singapore is connected to the world as a hub economy. It is where high salaries and opportunities abound and where locals and crucially, many foreigners too, power diverse nodes of the economy. This Singapore gives meaning to the promise and lure of Singapore and how we remain relevant to world. It is a Singapore that always strives to be at the cutting edge of global developments.

The other Singapore is one where the majority of Singaporeans live. It is one where there are perceptions of slowing social mobility, connected to the reality of high housing prices. Today, the prospect of upgrading to a condominium or a landed property, unlike in decades past, is not as realistic for HDB home owners. Buying a car is an out-of-reach luxury for most people, unlike in many other countries.

I have also heard it summarised this way. In the past, you may not have done well in school, but if you were prepared to slog and save, you could become rich and successful. Today, the view is that once you have not succeeded academically, even if you slog for years, success, let alone wealth, may not follow. These "two Singapores" could easily become a reality that causes frictions in society.

Singapore is a tiny red dot and both these Singapores would unavoidably rub up against each other. There is no countryside to retreat to, where the pace is slower and prices of things are lower than in the city. Human nature and the instincts of envy and chauvinism and a narrative of haves and have-nots can quickly poison society and accentuate cleavages. With people living cheek-by-jowl, such views can easily take root and manifest themselves in cruel ways.

As much as the Government endeavours to keep society open and bring new businesses and opportunities to Singapore and Singaporeans for the greater good, it is that second Singapore, where a very broad middle of Singapore lives and works and plays, which should never find itself unmoored and cynical about the future of Singapore.

There are some Singaporeans within the bureaucracy and they include members of the Executive and other senior civil servants, who are fixated about keeping Singapore relevant to the world, thinking of how to enlarge the pie even as they keep the other eye on making sure the pie does not get smaller. Their efforts cannot and should not be underestimated or ignored. It is not lost on many Singaporeans including the Workers' Party that it is because of these efforts and those of their forebears that we have the capacity to propose other redistributive policies for our fellow Singaporeans today.

I note the moves through the Budget to better equalise opportunities through fiscal intervention, such as raising taxes and duties for high-end property and luxury vehicles. And I note also the policies that came through last year, such as hikes in personal income taxes. In contrast, when some commentators characterise the Budget as a "Robin Hood" budget, they reinforce the perception of "two Singapores" being created.

To combat both the perception as well as the reality in some quarters of "two Singapores" inexorably emerging, redistribution must be at the core of Government policies. To that extent, the Workers' Party supports the idea of a progressive society, where those who earn more pay proportionally more in taxes. Equally, we honour the centrality of a strong work ethic even as we are not only empathetic but also sensitive towards the disadvantaged and those who need extra support.

The interventions of the Workers' Party for this debate would be in the spirit of this review of our social compact, envisioning how best society can position itself for an unpredictable and potentially far more disruptive future.

I will now go on to the second part of my speech that will address three specific announcements in the Budget. In as much as the Budget is titled "Moving forward in a new era", a look back at the past is a useful guidepost for the new policies that are being introduced.

Onto the first point of jobs and specifically equipping and empowering workers through the Jobs-Skills Integrators, the Budget seeks to ensure that training translates into good employment outcomes. Labour market intermediaries are being developed for two purposes: first, to ensure that training leads to real jobs; and second, to ensure job placement for those who have been properly trained.

At first glance, the initiative holds much promise as many jobseekers may not have information on what opportunities there are out there, what they should train for or what organisations will need their new skills.

The Deputy Prime Minister announced that the Jobs-Skills Integrators are being piloted for the precision engineering, resale and wholesale trade sectors. To get a sense of how this initiative might fair, we should look at past efforts in these sectors.

In a 2016 press release on the Industry Transformation Map, or ITM, for the precision engineering sector with respect to digital manufacturing, the then-Minister of Trade and Industry reported that the move towards digital manufacturing would see the creation of 3,000 PMET jobs by 2020. Specifically, the press release noted that the workforce could expect strong support from the Government and that a new skills framework for precision engineering would be launched under SkillsFuture Singapore. In addition, employers and workers would be equipped with insights on career pathways for 13 occupations, job roles, and specifically training programmes. Professional conversion programmes were also promised to support the reskilling of mid-careerists who were keen to embark on new careers. Sir, what has become of these training and placement efforts and how are they qualitatively different from what the Deputy Prime Minister has proposed in the Budget?

A sum of $4.5 billion was committed to the first Industry Transformation roadmap. When the Government was transiting to ITM 2.0, I asked in this House when the Government's report card on the first ITM would be ready. The Government replied that it was still early days and those details were not available. We have yet to hear in this House a proper accounting of the success or otherwise of the first ITM. I hope the Government can provide some details in this regard.

Separately, on job placements. The then-Minister for Manpower Minister Lim Swee Say announced at Budget 2017 that the Ministry of Manpower (MOM), specifically Workforce Singapore (WSG), had roped in two foreign job matching firms, namely Ingeus and Maximus, to help unemployed professionals with their job hunt. It was reported that Ingeus and Maximus would work on an outcome-based payment model. In 2019, WSG reported that the two appointed firms had demonstrated an ability to deliver satisfactory placement outcomes, which were comparable to that of NTUC's Employment and Employability Institute (e2i) with more than six in 10 PMET jobseekers finding jobs within two months after tapping on Workforce Singapore and e2i's career matching services. Crucially, this move came after WSG stated that it had worked with four local employment agencies, but with I quote "lacklustre results" where the placement rate was less than 50%.

I note that the new Jobs-Skills Integrators have not been named. Can the Minister tell us who they are and what KPIs will be used to determine the effectiveness of this latest pilot and which agencies will anchor this initiative? Can the Government also flesh out the fiscal outlay set aside for the Jobs-Skills Integrators?

Sir, related to the issue of jobs, Sengkang GRC Member of Parliament He Ting Ru will speak about the announcements that pertain to the Baby Bonus and more specifically work and family life in Singapore. Separately, Sengkang GRC Member of Parliament Louis Chua and Hougang SMC Member of Parliament Dennis Tan will speak on the changes to the Working Mother Child Relief.

I wish to add some comments on the extension of paternity leave. I understand some employers, particularly smaller SMEs, may find greater difficulty in accommodating two further weeks of paternity leave for their staff members because of manpower and operational challenges. It is a legitimate concern but I hope employers can empathise with the importance of strong families and the lived reality of raising children in Singapore. The time dedicated to raising children is in addition to other filial responsibilities such as spending time with our seniors and parents. This is a fact of our Asian culture. Many parents endeavour to strive hard and chase the pot at the end of that rainbow at the workplace for a better future for our children.

More paternity leave is certainly welcomed and I hope SMEs make the adjustments necessary to accommodate male employees, just the same way as they do for their female employees with respect to maternity leave.

To better negotiate this transition, employers should review the important mindset shift that the Government has sought to cultivate for some years and that is the hiring of mature workers. SMEs should adjust and constantly reconsider their HR policies and job scopes to hire seniors permanently, with a view to make up the temporary absences of younger staff not just due to either paternity or maternity leave, but also due to those unplanned days and events where young children fall ill and parents scramble to make alternative plans.

For this reason, I support the extension of the Senior Employment Credit (SEC) up to 2025. The SEC pays up to 8% of wages, up to a salary of $4,000 a month. However, for workers between the ages of 55 to 64, this contribution from the Government pays only up to 3% of wages. For example, a company that hires a worker who earns $3,000 and is between the ages of 60 and 64, the company would get about $90 for that senior hire.

I believe employers can be given more support to encourage them to hire senior workers. Studies should be carried out to see how the SEC can be increased to better motivate employers to hire seniors. In view of our rapidly ageing population, has the Government undertaken any studies to consider the fiscal impact of raising the SEC?

There must be an upside for employers as we undertake this cultural shift towards making the workplace more family-friendly. Notwithstanding the efforts thus far, greater support towards senior employability will open new vistas for our SMEs.

Sengkang GRC Member of Parliament Jamus Lim will cover other Budget initiatives for businesses such as the Enterprise Innovation Scheme and advance other important Workers' Party alternatives, whose time we believe have come, such as the Redundancy Insurance.

One additional point on paternity leave I wish to address is that some have commented that men be excused from their NS duties for the year they are child is born. Speaking as an NSman, I would be very cautious about moving in this direction. I would suggest leaving it to unit commanders to determine how best to accommodate the specific requests of their servicemen as they have been doing so for many years already. If a unit is having a major exercise of conducting a critical operation, the needs of the Singapore Armed Forces (SAF) or the Home Team agencies cannot and should never be compromised.

Sir, the second Budget announcement I wish to address is the move to help middle-income Singaporeans save more for their retirement by the raising of the CPF monthly salary ceiling. CPF rates and income ceilings have been used as a macroeconomic counter-cyclical tool in decades past to combat recession, help employers save jobs and the prospect of slower economic growth.

The Finance Minister stated that the salary ceiling was last raised in 2016. While this is correct, it should be noted that the salary ceiling of $6,000 was first put in place in 1985. In response to economic uncertainty, it was reduced to $5,500 in 2004 and further reduced to $4,500 in 2006 before re-establishing itself at the 1985 of $6,000 only some 30 years later in 2016.

There is much catching up to do with respect to retirement adequacy, particularly since so much of our CPF funds are dedicated to housing. Because of the importance of retirement adequacy in the longer term, the Workers' Party supports the rise of the income ceiling to $8,000. However, I have a few questions for the Deputy Prime Minister.

First, in view of the policy reason for this new salary ceiling which is to allow Singaporeans to save more for retirement, I am of the view that it would have been appropriate to simultaneously reconsider the percentage of CPF funds credited into the three CPF accounts with a higher proportion allocated to the Special Account.

For example, currently out of 37% of total wages for a member aged 35 and below, 23% of the CPF contributions is allocated to the Ordinary Account. The contribution to a member's Ordinary Account drops to 21% when the member turns 36 years of age and is gradually reduced in five-year intervals to reach only 12% when a member returns 56.

In contrast, contributions to the Special Account increased from 6% to 7% when a member turns 36 years of age and peaks at 11.5% between the ages of 50 and 55. To achieve the Finance Minister's policy intent of better retirement adequacy, a reduction in the range of 1% to 2% in the allocation to the Ordinary Account from one's early years in favour of the higher interest-bearing Special Account in step with the salary ceiling hike would serve the retirement needs of Singaporeans better. The CPF system after all is designed primarily for our retirement needs. May I ask the Minister if such a redistribution was considered; and if not, why not?

On this point, Mr Speaker, numerous studies have been conducted on the income replacement rate, or IRRs of pension funds worldwide. The IRR is the ratio of retirement income to pre-retirement income. The World Bank recommends that countries should aim for an IRR of 53% of net final year wages or 78% of net average lifetime wages. For many, their CPF LIFE payouts are unlikely to meet this threshold since much of our CPF funds are locked up in housing.

The Deputy Prime Minister stated that the Government was considering what more can be done to enhance retirement adequacy in its Forward Singapore deliberations. The decline in retirement adequacy in the past was mitigated by the appreciation of home values. However, the Government has also stated that housing is unlikely to see steep rises in value as in the past.

The Government should begin a deep conversation to re-centre the CPF system towards its original purpose, especially as the cycles of job disruption, job redesign and job obsolescence become more pronounced and frequent in the face of rapid technological advancement.

There have been suggestions made most recently by former Nominated Member of Parliament Walter Theseira to reduce the usage of CPF funds for home purchases. This call was met by consternation from the public because of the already high prices and the reduced affordability of housing. However, achieving better retirement adequacy would require a hard look at how much the CPF system dedicates towards home ownership. More affordable public housing will inevitably improve retirement adequacy.

This leads me to the next part of my speech – the announcement that CPF grants will be increased, which is for the ostensible purpose of making resale flats more affordable for first-timers. Sir, over 6 and 7 February this year, this House debated the Motions on affordable and accessible housing. Some 10 days later, the Leader of the House was quoted in The Straits Times saying, "but I think in the longer term, we are looking to see how we can make housing more accessible and affordable".

From this it would appear that at the highest levels, the Government intends to intensify its efforts in this regard. Also, in a Facebook post of 12 February, the Minister for National Development alluded to going beyond building an additional 2,000 to 3,000 short-wait flats by 2025. The Minister said that the HDB will recalibrate its building programme from 2025, so that short-wait time flats form a larger proportion of our new flat supply than before.

While the details for the moment are restricted to broad thinking, these public pronouncements were followed shortly by the Deputy Prime Minister's Budget Day announcement of higher CPF grants for resale flat buyers.

Almost immediately, there were concerns about the impact of such measures on house prices by property watchers, especially for larger flats and those in popular areas. Would they feed into higher prices and only make a future correction even sharper when the reality of lease decay for resale fats set in? I hope the Minister can share the Government's thinking behind this move and the assessment of its intended effects, particularly in view of 11 quarters of growth in HDB resale prices.

While these additional grants may appear on the surface to be a panacea, there is a real prospect of home prices rising to match the new grants for eligible first-timers. This could happen as a response to the increase in grants. But more likely, price rises could happen because buyers will be tempted to bid more for a flat they want because they know they have the additional grant to enhance the price they can pay. Aljunied Group Representation Constituency (GRC) Member of Parliament, Gerald Giam will further elaborate on the affordability of resale flats in his speech.

More fundamentally in line with the renewal of the social compact through Forward Singapore, would the Deputy Prime Minister share more details on the differences between the valuation of land for public and private use? I asked some questions about this recently in this House and asked if the establishment of a committee akin to the Land Working Group of the Economic Review Committee of 2002, but one that would include Ministry of National Development (MND) and Housing Development Board (HDB) to review the principles of how land is sold for public housing would be something the Government would consider.

Specifically, I also call for an understanding of the principles and rationale behind the market discount of up to 15% of land allocated for Government land sales and industrial Government land sales and the sale of some private land even below this market price threshold.

In addition, I enquired how such sales of private land below market valuation intersected with the Government's call that HDB land not sold at market valuation would amount to a raiding of the reserves. The Government should reply to these questions which are asked with a view to considering alternative approaches the valuing of land for 99-year leasehold public housing. These are questions that members of the public are interested in, particularly since the details and principles of this subject have not been significantly ventilated in public.

To illustrate the public interest in this matter, on 11 February, Gov.sg released a set of infographics on Telegram. The lead slide was titled "Does disregarding land cost mean BTO flats will be cheaper?" The second last slide put across the Government's narrative as follows: "Selling land below fair market value = eroding reserves. This diminishes resources available for you and your children." As of 21 February, 176 individuals gave the post the thumbs up while a far larger 553 individuals chose the emoji which I would describe as showing they were not being convinced.

In the spirit of refreshing our social compact, I renew my call for the Government to also release the price of land for specific public housing, projects and their associated subsidies on a BTO project basis, so that Singaporeans can more meaningfully engage the Government in the course of the Forward Singapore exercise.

Before I round up, I mentioned in the first part of my speech that the Budget titled "Moving Forward in a New Era", would find the past to be an important reference point. The release of an occasional paper by the Ministry of Finance earlier this month on medium-term fiscal projections has been helpful to the extent that it responds to the calls by the Workers' Party at the last Budget for additional details on medium-term projections. Singaporeans would recall that this was a call that had been made even earlier when the Goods and Services Tax hike was first mooted. Like the Finance Minister's Budget, the occasional paper was unable to shed significant light on the impact of the Base Erosion and Profit Shifting 2.0 (BEPS) on our fiscal position. However, it did hypothesise the prospects of greater corporate tax revenue collection under Pillar Two, which it said is expected not to deliver any fiscal upsides as any additional revenue would be ploughed back to encourage investments into Singapore by way of grants.

With the Minister’s announcement in this Budget to top up the National Productivity Fund by $4 billion for, I quote, "investment promotion", the impact of BEPS is likely to be a significant question mark with regard to the Ministry’s medium-term fiscal outlook. Sengkang GRC Member of Parliament Louis Chua will speak more about BEPS and share his analysis of the Budget in his speech.

Be that as it may, the Workers' Party looks forward to more of such papers and recalls its proposal two budget cycles ago for the establishment of a Parliamentary Budget Office for a closer scrutiny of the Government's budget. In view of tighter fiscal environment in the years to come as predicted by the occasional paper, such an office would hold much promise for greater Parliamentary and public scrutiny on Government expenditure and whether programs are worth the taxpayer monies that have been allocated to them.

In conclusion, Sir, in an Institute of Policy Studies' Study of Social Capital in 2017, the report stated, the sharpest social divisions in Singapore may be based on class, instead of race or religion. The perception of two Singapores that we must guard against which I raised earlier in my speech reinforces the point that fiscal redistribution, better social protections and greater support for our most vulnerable Singaporeans must remain a mainstay of our future budgets. It is imperative that policies should be continually refreshed and reviewed, including the applicability of the principles they were originally based on. Singapore, a young country, where Singaporeans feel, live and experience the emotions of nationalism and citizenship must continue to thrive in a fair, broad and balanced way, so that we leave a better future for today's generation and those that come after. Mr Speaker, the Workers' Party supports the Budget.

Mr Liang Eng Hwa.

Mr Speaker, as in every Budget, there is always some "give and take" on the part of everyone. I will first speak on the "give and take" part and thereafter, on Singapore's longer-term positioning in the new era.

Sir, Budget 2023 gives Singaporean households a major lift to tide through the period of high inflation and defray the impact of higher Goods and Services Tax (GST) rates. The further upsizing of the Assurance Package and the permanent GST Vouchers, coupled with the newly introduced Cost-of-Living Special Payments, the increased Community Development Council (CDC) Vouchers, doubling of U-Save and topping up of the Child Development Account (CDA), demonstrates the Government's commitment to journey through this difficult period of rising cost with Singaporeans.

The various support measures have been thoughtfully formulated with significant cash component and targeted assistances towards essential cost items like electricity, Service & Conservancy Charges (S&CC), medical and education.

For the businesses, the Enterprise Financing Scheme and the Energy Efficiency Grant are extended to help companies weather the immediate challenges of tighter financial conditions and higher energy prices.

This Budget also enhances various measures to support Singaporeans at various stages in life and in various circumstances.

Sir, I can understand the angst of young Singaporeans wanting to own their homes at the soonest possible time. I welcome the further measures to help first-time home buyers improved chances of owning Build-To-Order (BTO) flats with the additional ballots as well as the higher CPF Housing Grant to help first-time home buyers purchase resale flats as another option.

In my conversation with young parents, many told me that while they cherish the joy and fulfilment of being a parent, they are often worried about the costs of raising their children. Understandably, we all want the best for our kids.

Currently, there are already a generous set of support package such as the Baby Bonus Scheme, preschool and education subsidies to support parenthood as well as the various tax benefits. But every bit of additional help the Government can give to our young parents would be most appreciated.

Sir, while I applaud the increased Baby Bonus and CDA, which would avail more disposable cash to parents to meet the costs of raising their child, I do receive mix reactions on the changes to the Working Mother's Child Relief (WMCR). Middle-income group parents will see some cash impact with the WMCR no longer pegged to a percentage of income.

On the seniors' front, we can expect the healthcare needs to increase in the years ahead. I am already seeing these increases in my constituency at Bukit Panjang, where there are more requests to help pay for healthcare related and hospital expenses. We are also building more senior care centres at the neighbourhoods to serve seniors who need more longer-term chronic care services at more convenient locations.

Hence, I support the top-ups of the Eldercare Fund by $500 million and the Medifund by $1.5 billion. These are the funds that we often tapped to help our senior residents meet their ageing related expenses.

The extension of Senior Employment Credit (SEC) and Part-time Re-employment Grant are helpful support to enhance seniors' employability, while the increased co-funding share for Progressive Wage Credit Scheme, Enabling Employment Credit and the Uplifting Employment Credit are meaningful additions to support the more vulnerable segments of our society.

These moves, among others, are part of the overall effort to build a stronger social compact and a more compassionate society.

Sir, but as in every budget, besides the giving by the Government, there will some taking as well. Budget 2023 outline some policy adjustments that would have some impact to Singaporeans.

The higher marginal Buyer Stamp Duty for higher-value properties and the upward adjustment of the Additional Registration Fee (ARF) is very much in keeping with our approach to steepen the progressivity of our tax structure and where the better-off contribute more.

The 15% increase in tobacco tax would add costs to smokers, of course, but I hope that it would help discourage the overall consumption in tobacco products.

Sir, at Bukit Panjang, we have a Platform Delivery Workers Support Group where I regularly met and engaged the delivery workers. While they appreciate the good intention of Government to improve protection and retirement adequacy, they are also very concerned on how the changes to CPF contributions and other implementations would impact the viability of the delivery business and eventually their livelihoods.

So, I would appeal to the Government, to not only provide transitional support to these workers but also dedicate resources to help with the reskilling and re-employment should their livelihoods be impacted. We will await more details on the transitional support in the MOM COS debate.

One other measure that I have also heard concerns is the phased increase of the CPF monthly ceiling to $8,000. As inflation is expected to stay elevated in the next few years, my concern is that raising the ceiling at this juncture would add further cost pressures to businesses and also reduce the take home pay of middle-income households, just when they need the cash to meet the higher cost needs. While I can understand and support the rationale for the raise, I hope that the Government can review the implementation timing of this measure.

Sir, while our budgets do tackle the immediate challenges and offer timely and targeted relief, a budget should not be an exercise just about "what’s in it for me" or otherwise. Beyond about how we slice the pie and who gets what, budgets must also be about how can we grow the pie bigger. And here we must not lose sight on the need to grow our economy.

A growing and vibrant economy not only create good jobs; which is the best welfare for workers and best counter against inflation, but growing the economy also generate revenues to pay for our needs and wants. The troubling external environment has made growing our economy an even more uphill task.

The US-China strategic competition continues to intensify and more countries are taking steps to shore up their economic security, through policies to safeguard strategically important technologies and data. We have also seen countries attempting to decouple in areas of trade, technology, finance, investments and people flows.

The US has introduced the US Chips and Science Act while China has also implemented the China Export Control Law, just so that they reduce their vulnerabilities and dependence on other countries.

Last year, the US introduced the US$369 billion Inflation Reduction Act. The original intent is meant to finance sustainable transition in America. However, it now appears more like a state-funded industrial policy plan. The Act has trigger EU and other countries to call for their own policy response measures to rebalance the playing field. These developments will have profound implications how Economic Development Board (EDB) and our agencies attract direct investments into Singapore.

Against this increasingly complex and volatile operating environment, Singapore is also running up against serious resource constraints among others – our ageing resident workforce and rising wage aspirations, carbon constraints and longer-term fiscal constraints. The growing pain question is: how can we continue to grow in a setting of an almost full-employment economy?

Economically, we are not only in full employment of our domestic economic inputs. We are leveraging on significant pool of foreign labour to stretch our overall growth potential; which brings to my next point on economic competitiveness. How do we stay competitive in this daunting external and domestic landscape?

Business costs have risen significantly in the last two years. Though much of it are externally induced such as the rising prices of energy and materials imports, we do increasingly face domestically driven costs pressures. Rising wages, escalating rentals, higher financing costs, impending higher carbon taxes, among others, would have the overall effect of diminishing our economic competitiveness vi-a-vis our competitors and negating the favourable economic attributes that we have.

Therefore, we need an even sharper prioritisation in the allocation of our resources going forward and to pace our policy initiatives roll-out so that it would not add further constraints and tightness in our resource utilisation. In other words, we must pick the battles that play to our strength.

The Deputy Prime Minister and Finance Minister spoke about redoubling our efforts to attract high quality investments and to focus on growth sectors that we can be highly competitive, such as finance, transportation, logistics and advanced manufacturing.

Innovation is another key ingredient. To nurture and sustain pervasive innovations, the new Enterprise Innovation Scheme is introduced, under which tax deductions are enhanced. There is also a new cash conversion component of up to $20,000 for companies yet to turn profitable.

To help support scaling up of the local enterprises, the SME Co-Investment Fund and the Global Enterprises initiative are there to invest and support promising companies to internationalise and to seek global markets. But, ultimately, to overcome our inherent resource constraint, we need to significantly beef up productivity as an economic system.

Sir, I welcome the expansion of the scope for the National Productivity Fund to include the promotion of quality investments in Singapore as a supportable activity. While we continue to work on upskilling our workforce, the productivity of work is not solely dependent on workers.

A company's overall productivity to a large extent depended on management, how resources and workflows are designed and organised, harnessing the use of data, technology, innovation and creativity to invigorate efficient solutions.

We need a more ecosystem approach to rev up productivity and I hope that the ITMs that we have set up can galvanise industry stakeholders to work productively towards this cause.

The Jobs-Skills Integrators is a refreshing approach to tackle stubborn jobs-workers mismatches. This is akin to having relationship managers bridging the information and connectivity gap between employers and jobseekers. So, I applaud the Government for getting down to the micro level to close the gap. It shows the Government's resolve and commitment to improve employability of Singaporeans. I look forward to more positive outcomes in this endeavour.

Mr Speaker, I am heartened that the Deputy Prime Minister has also devoted a significant part of his Budget Statement speech on building national resilience. The COVID-19 pandemic and the effects of the war in Ukraine further underscored the critical importance of being resilient against external shocks, catastrophic events, or a devastating crisis.

During the pandemic, we experienced various supply disruptions, including sudden export restrictions on essential items by countries. The economic blockade on Qatar by its neighbours in 2017 is another reference point. With land, air and sea lanes cut off by its neighbours, the population in Qatar were immediately hard hit by rising food prices and job insecurity. It had to quickly find alternative sources of supplies and to also boost domestic food production.

Singapore has always taken the mindset that there will be a crisis around the corner waiting for us, whether it is the stockpile of food and various essential materials or our Four National Tap strategy for water or our Four National Switches strategy for energy, Singapore will always plan for various scenarios, invest in total defence and be operationally ready for any emergencies.

The war in Ukraine has triggered a major energy crisis in Europe with countries like Germany which heavily depended on Russia for piped gas for their electricity generation, among those most impacted.

And this has led to a major scramble to build LNG terminals to import liquified natural gas to replace the lost supplies from Russia.

Fortunately, in Singapore, our LNG terminal was built more than a decade ago at Jurong Island. It allows us to import natural gas from just about anywhere in the world and not having to depend solely on piped gas. This terminal has not only contributed to our energy security. It has also enabled us to be a major player in the LNG market and help position Singapore as a LNG hub for the region.

At a cost of about $1.7 billion, the terminal was a major financial outlay for the Government then. So, credit goes to Ministry of Trade and Industry (MTI) and Energy Market Authority (EMA) for the foresight and their will to press on with this massive project. I believe Deputy Prime Minister Lawrence Wong was the Chief Executive of EMA then and got the project off the ground.

Sir, my point to illustrate this example is that resilient building also requires significant financial commitments and hence, the need to have the adequate fiscal capacity. There are many more strategic projects that are needed to be built to strengthen resilience, to reduce our vulnerabilities – infrastructures, such as climate adaptation, energy diversification, food security and so on, which is why we need to continually strengthen our finances and not the other way round.

Our best defence against any future external shocks, whether it is a black swan event or any catastrophic incident is responsible and prudent fiscal management today.

Sir, the recently released Ministry of Finance (MOF) Occasional Paper signposted our medium-term fiscal challenges. We are heading towards a spending milestone where expenditures is projected to hit 20% of our GDP. Our operating expenditure will keep rising and at a faster pace in the years ahead. Healthcare, education, wage subsidies, security and other social spending are the expected key drivers.

Even in the non-operating expenditure areas, there are also a long list of infrastructural spending items, whether it is investment for capabilities building or for building a more resilient home.

We also need to keep the powder dry, so as to have the fiscal firepower to respond to external shocks or major disruptions which is likely to happen more often, in my view, going forward, and can be even more impactful than the pandemic that we have experienced.

So, we cannot afford to decumulate or stop building our reserves.

Reserves are not only to buffer against a crisis but its returns are also a main source of income to finance the budget, as well as to help maintain confidence in Singapore. Sound, prudent and fiscal management today will enhance our survivability, give us the safety cover when needed and importantly, position us strongly to seize the opportunities in the new era. Sir, I support the Budget.

Mr Foo Mee Har.

Mr Speaker, Budget 2023 coincides with Singapore's DORSCON level finally reverting to green. This is after three long years of restrictions, shielded by extraordinary Budget measures. Even as Singaporeans return to their lives they were accustomed to, the effects of the pandemic coupled with the Ukraine war, has left the Government dealing with the significant inflationary pressures in a more fragmented world. We are debating Budget 2023 one year after Deputy Prime Minister Lawrence Wong was endorsed as the leader of Singapore's fourth generation (4G) political leadership. So, this Budget sets the tone for the years to come.

I am heartened by the Government's decisive moves to address Singaporeans' needs and aspirations. They form the headline in this Budget. These include a slew of pro-family initiatives, coupled with generous support to cushion cost of living pressures and measures to bolster retirement adequacy. Budget 2023 will give Singapore's social compact a significant boost.

But amidst all this good news on continuing support for Singaporeans, Deputy Prime Minister Wong did not shy away from warning us about the sustainability of such Government support. In fact, some economists have cautioned that Government handouts, such as GST Vouchers and our cost of living support measures may increase demand and further stoke inflation pressures. This has, in fact, already happened in other countries where huge government handouts had created a vicious escalation in prices. So, I would like to ask Deputy Prime Minister for his assessment of such risk in Singapore.

Sir, I would like to focus my speech on our need to stay competitive and relevant in the new world order. This is because redistribution is only possible if the economy continues to grow so that benefits of the growing pie from healthy tax revenues can be shared.

Singapore's continued growth in the new era of global development is not guaranteed. It is predicated on our ability to navigate the volatile and uncertain operating environment to steward industries, enterprises and our workers toward long-term, sustainable growth.

Sir, the constant gripes from our business community are around escalating costs and manpower shortage. To employers, especially our SMEs, these Budget measures, such as the raised CPF monthly salary ceiling and the doubling of paternity leave, are like adding fuel to the fire. Even before they have had the chance to fully digest impact of earlier moves, such as cost increases associated with Progressive Wage Model and CPF contribution rate for older workers, employers feel overwhelmed by another flood of pro-worker initiatives.

Sir, it is unfortunate that there is no silver bullet for the longstanding manpower challenges confronting businesses. The war on talent is increasingly a world-wide phenomenon. We have seen moves made by other countries, such as UK's Global Talent Visa and Hong Kong's Top Talent Pass Scheme, designed to attract talent from around the world. Even China, who has traditionally thrived on their pool of over 300 million migrant workers to maintain their reputation as the "Factory of the World", now struggles to attract workers back to their big factory hubs.

So, employers must accept that the tight labour market is here to stay. They must embrace this new normal where the balance of power has shifted from employers to employees. They must up their game in offering compelling value proposition to attract and retain staff, rewarding them fairly, engaging them skillfully and investing vigorously in their capability development.

Sir, through SkillsFuture, we have successfully ignited the movement to embrace lifelong learning. Deputy Prime Minister Lawrence Wong announced the introduction of Jobs-Skills Integrators to further strengthen the SkillsFuture ecosystem. This is a welcome news. We need to urgently shift to a higher gear in order to make training truly count. The task of linking workers' training to securing good jobs is a huge challenge. This requires fundamental changes in how the current lifelong learning ecosystem is set out and governed.

This is an area where strong Government intervention is needed, in the setting of standards, the rallying of stakeholders and the provision of resources beyond the simple training subsidies.

Evidently, Deputy Prime Minister has set his sights squarely on fixing this, and I look forward to understanding Government's plan to take SkillsFuture forward in the upcoming Ministry of Education (MOE) Committee of Supply (COS) debate.

Mr Speaker, our overall response to the revamp of international tax rules under Base Erosion and Profit Shifting (BEPS 2.0) initiative, will be important. We have historically leveraged tax incentives to encourage multi-national enterprises (MNEs) to place high value functions in Singapore. BEPS 2.0 will impede Singapore's use of tax incentives to attract new investments, requiring us to compete on other capabilities to anchor quality investments.

Deputy Prime Minister Wong announced that the implementation of Singapore's Domestic Top Up Tax (DTT) is currently planned for 2025. He also announced the $4 billion top-up of the National Productivity Fund to include investment promotion as a supportable activity, along with a very generous new Enterprise Innovation Scheme (EIS) with up to 400% tax deductions on qualifying expenditure, with potential to enjoy tax savings of nearly 70% of investments.

The question is whether such moves will be sufficient to attract business investment into Singapore during this period of global change. Other countries, such as US and China, are rolling out vast subsidies to build up their strategic industries. Countries in the region are also strengthening their competitive positioning with respect to costs, manpower and energy. The transition to a low-carbon future will also present significant challenges given Singapore's inherent limitations in energy resources.

So, Sir, there is no shortage of support schemes to help companies based in Singapore build capabilities and invest in innovation. On top of these, the Government has committed significant resources to R&D over the years, including investing $25 billion from 2021 to 2025 to catalyse research, innovation and enterprise.

MNEs who operate across jurisdictions understand the attractiveness of our schemes and are well-positioned to take full advantage of the benefits the schemes offer. We have also nurtured a vibrant start-up ecosystem in Singapore, including a cohort of Singapore-based unicorn startups with valuation exceeding US$1 billion.

But more can be done to help our SMEs leverage public R&D and innovation capabilities to build new products and solutions. This will require a closer nexus to be drawn between them and our public research institutes and Institutes of Higher Learning. Catalysing high-impact research and translating them into enterprising innovations that benefit industry and society, should be a prioritised KPI when granting research funds. Sector-based innovation roadmaps and solutions are the way to go, in nurturing an innovative SME ecosystem.

Sir, one distinctive strength that has always stood in Singapore's favour is our trusted brand.

Our trust quotient has now been further strengthened by the way in which we navigated the pandemic. Investors value our open economy, as well as the safety, reliability and transparency that the Singapore system accords them. With MNEs building resilience to secure their supply chains post COVID-19, we must leverage our trust premium to seize the re-shoring opportunities. We should also fully leverage this window of opportunity to expand key sectors such as finance, services, logistics and transport and manufacturing to leap forward.

Sir, for FY2022, I applaud the Government for rolling out three successive packages, totally more than $3.5 billion, that were not in the original budget to address cost of living concerns, especially for the lower- and middle-income families. This is funded entirely from stronger than expected revenues. Rather than record a surplus, the Government acted nimbly and tapped into its fiscal space to help people cope with inflation. I think that is commendable.

Special transfers, including top-ups to endowment funds and trust funds, were revised to $9.2 billion in FY2022, representing a $2.9 billion increase from the estimated figure.

This I would like to ask the Deputy Prime Minister to share the reasons behind the top-ups and how this may impact Singapore fiscal space in the years to come.

Mr Speaker, I would now like to speak on Singapore's fiscal challenges. The Occasional Paper put out by the Ministry of Finance projected a fiscal gap of $7.5 billion to $15 billion over the medium term from 2026 to 2030 mainly to fund healthcare, uplifting lower-wage workers and improving childhood education. The projections have not factored in future policy moves such as additional spending to further strengthen our social compact and economic competitiveness.

It is clear that the Government will need to continue to review and adjust its fiscal strategies.

Taking the cue from the Government's recent tax moves, it is right that we continue to make our taxes progressive, as in the case of this year's increase in stamp duties for higher-end properties and luxury cars. On other areas worthy of review include a lift in gambling and alcohol taxes, as well as introducing tax on sugar.

With limited fiscal space, it is imperative that the Government continuously review schemes to assess value for money and have the discipline to retire programmes appropriately.

Lastly, we need the fiscal buffer to give ourselves enough capacity to deal with future shocks, including black swan events like the COVID-19 pandemic, as mentioned by my hon Member, Mr Liang Eng Hwa. Sir, I agree with the Deputy Prime Minister's position that our financial reserves are our greatest insurance. With that, Sir, I support the Budget.

Mr Leong Mun Wai.

Mr Speaker, Sir, we welcome the financial assistance that the Deputy Prime Minister has announced in Budget 2023 to help Singaporeans cope with the rising cost of living and inflation. However, we are not sure whether more of the same short-term ad-hoc financial assistance will strengthen the resilience of Singaporeans and help them move forward in a new era.

The dozens of short-term handouts, like CDC vouchers, Assurance payouts, our Cost-of-Living Special Payment, Public Transport vouchers, and so on, are more likely to breed dependency – "what is in it for me?" – but unlikely to strengthen resilience.

We have said many times in this Parliament, that we need long-term programmes to give Singaporeans Comfort over their current and future financial positions. Before they can concentrate on becoming Innovative workers and enterprising risk-takers to build Singapore into a competitive information economy.

We do not understand why the Government is reluctant to implement long-term programmes. Although, according to our estimates, Singapore has sufficient fiscal resources to fund these programmes without drawing on the national reserves. The Government likes to argue that alternative policy proposals will raid the reserves. But Singaporeans should note that this is a baseless allegation.

Singaporean should have guessed, from the COVID-19 experience, how large our reserves are and how strong our fiscal position is. If we do not have that, the Government would not be able to commit to a $100 billion COVID-19 response package, which is equal to more than 20% of Singapore's GDP in 2019.

In the end, the Government spent a total of $72 billion, fighting COVID-19. But the interesting part is how the Government has funded it. The Government did not need to draw $72 billion from the reserves but only $40 billion because it was able to find $32 billion of excess fiscal resources in the Budgets of 2020 to 2022 to fund the balance.

On top of that, in the same three years, the Government was able to set aside $24 billion from the Budget to top up various endowment and trust funds whose spending are for future years.

Hence, we can say that there is a total of $56 billion – $32 billion plus $24 billion – of excess resources in the Budgets over the past three financial years. This translates into an annualised amount of about $18.7 billion a year.

This amount is roughly equal to the Net Investment Return Contribution (NIRC) allocated to the Budget each year. This is proof that the NIRC has always been a slack in the Budget, which is normally not used to benefit Singaporeans in the year it was allocated.

The Government has argued that the NIRC is pooled with the rest of the budgetary resources and used for other purposes. But by setting aside a sum of money almost equal to the NIRC in trust funds and endowment funds. It is equivalent to not spending the NIRC in the current year.

In fact, there may be more slack in the Budget because we cannot understand why the total expenditure has stubbornly stuck at the $100-billion level in 2023. The total expenditure was only $75 billion in 2019, the year before the COVID-19 pandemic. It shot up to $100 billion from 2020, presumably for fighting COVID-19.

Hence, we have expected the expenditure to drop significantly in 2023 as we wind down the exceptional COVID-19 expenditures.

We look forward to the Deputy Prime Minister explaining with specific figures why the total expenditure has not come down.

However, even ignoring the potential spending cuts, it is quite safe to say that we have excess fiscal resources each year, mainly from the NIRC, which can be deployed more proactively for the benefit of low-income and middle-income Singaporeans. In 2023, the NIRC has reached a new record of $23.5 billion.

The Progress Singapore Party (PSP) has always been confident that we have excess fiscal resources from the NIRC and other potential spending cuts. That is the reason why we have argued during the Budget 2022 debate, that there was absolutely no necessity to increase the GST and other taxes to increase revenue.

This year, PSP will present an alternative Budget with long-term programmes to give Singaporeans an idea how our budget can be restructured to better strengthen their financial security.

First, the alternative Budget will implement the Affordable Homes Scheme and Millennial Apartments Scheme to reset the public housing policy. This is a single most-important long-term structural programme that will boost the financial security of Singaporeans.

In Budget 2023, the Government has increased the CPF Housing Grant to help young Singaporeans buy resale flats. While we agree that young Singaporeans need help with affordable housing, the CPF grant may not be the best solution because it will further inflate the resale market.

This will necessitate higher CPF grants in the next round and the cycle will repeat itself. In order to get out of this vicious cycle, we need a more fundamental solution and PSP has proposed the Affordable Homes Scheme and the Millennial Apartments Scheme as one policy option. With the schemes, every Singaporean in each generation will enjoy an affordable HDB flat to start a family, without sacrificing his retirement in the future.

So, we do not understand why the Government said such schemes would negatively affect the future generation.

To counter other narratives that the Government is spreading, we would also like to reiterate that the schemes will not cause a sharp fall in resale prices because the demand and supply situation remains tight and the Affordable Homes sellers will need to sell above current resale prices in order to earn a profit.

On the other hand, Singaporeans who want to sell their flats after the Minimum Occupation Period need not worry about paying a big clawback because the breakeven price for a seller will be roughly the same whether under the current BTO scheme or the Affordable Homes Scheme.

The Affordable Homes Scheme and Millennial Apartments Scheme will not draw down the reserves. Although land cost is waived for Singaporeans who live in HDB flats for their entire lives, most Singaporeans aspire to upgrade and about half to two thirds of the deferred land cost will be paid to the reserves eventually. In the alternative Budget, we have budgeted $2 billion a year from the excess fiscal resources to reflect the upfront investment cost.

Second, the alternative Budget will promote the financial security of middle-class Singaporeans as a priority.

It is the decline of the middle class that has given rise to the "two Singapores" that the Leader of the Opposition has described just now. While the middle class may not be a homogenous group, it stretches roughly from the 20th percentile to the 80th percentile income brackets and is the group targeted by the Government for spreading the tax burden over as wide a spectrum of the population as possible. In contrast, the top 10% income bracket is doing well because Singapore's tax regime favours them and the bottom 20% do not pay taxes.

It is not wrong as a fiscal principle to spread the tax burden as widely as possible. However, middle-class Singaporeans are already overtaxed relative to their income. Personal income may be low but there is a whole range of indirect taxes they pay: the GST, high housing prices, stamp duties, MediShield and CareShield premiums, COE, ERP, ARF, foreign domestic worker levy and so on.

During Budget 2022, besides the GST, we have spoken out against the property tax increase which affected middle-class Singaporeans. This year, the stamp duty and ARF increases will affect them again.

In the alternative Budget, PSP proposes that some of the tax increases of Budget 2022 and 2023 should be reversed. GST will be reverted to 7% and property taxes for owner-occupied properties will be restricted to those with annual value of more than $50,000. The stamp duty increase will be limited to properties that are worth more than $3 billion and the ARF increase will be limited to cars with Open Market Value (OMV) of more than $60,000.

PSP believes if tax increases are really necessary, they should be targeted at wealthy individuals and corporates.

PSP would also budget $4 billion for the nationalisation of the MediShield and CareShield schemes, which we first recommended during Budget 2021. This will relieve, especially middle-class and senior Singaporeans, of the anxiety over ever rising healthcare insurance premiums.

After the HDB flat, healthcare expense is the largest drain on the CPF savings of Singaporeans. While we should maintain the MediSave Account for Singaporeans to share in their healthcare expenses to prevent over-consumption, the existence of multiple healthcare insurance schemes has added unnecessary costs and complications to the healthcare system. By taking over the whole healthcare insurance, we hope the Government will be in a better position to develop an optimal healthcare system together with the new Healthier SG initiative.

Third, PSP is very concerned about the job security and job prospects of Singaporeans. The Government should always be mindful that Singaporeans are disadvantaged when competing with Employment Pass (EP) holders who are exempted from CPF contributions. While we welcome the move to increase the contribution cap to $8,000 to boost retirement adequacy, it will exacerbate the disadvantaged position of the Singaporean PMEs relate to the EP holders.

In the alternative Budget, to level the playing field between Singaporeans and foreign employees, PSP will introduce a $1,200 monthly levy on EP holders, which we have recommended since 2021. This EP levy is estimated to generate additional revenue of $2 billion to $3 billion, which will add to our excess fiscal resources.

In Budget 2023, there is one positive change in the Government's approach, which is the Jobs-Skills Integrator programme. Finally, the Government realises that the funding of skill training should be tied to specific job prospects.

We have always been skeptical about the nearly $1 billion of annual spending on SkillsFuture and all the other spending on retraining and placements of Singaporeans who have lost their jobs, because it is unrealistic to expect all Singaporeans who have been displaced by foreign PMETs to acquire totally new skills and join new sectors. We should have focused our spending on training Singaporeans to acquire skills that help them to hold on to their existing jobs or find jobs in fields with similar required core competencies. A good manpower policy is one that will not allow the displacement of Singaporeans from the job market.

Fourth, PSP will increase the amount of compassionate spending for low-skilled workers and disadvantaged segments of our society. PSP proposes budgeting $3 billion for a living wage, which guarantees a minimum monthly take-home pay of $1,800 for all Singaporean workers. We have recommended this during Budget 2021.

The living wage will allow all Singaporean workers to attain the minimum standard of living. The Progressive Wage Model can remain but for helping workers to achieve a higher wage level than the living wage.

Next, PSP proposes budgeting $1 billion to help the disadvantaged segments of our society by doubling the ComCare payout for the poor and providing an allowance for caregivers and stay-at-home parents in recognition of their sacrifices and contribution to society.

In conclusion, Mr Speaker, Sir, in the Occasional Paper on the medium-term fiscal projections, the Government has painted a scenario of looming current and future Budget deficits. But PSP has pointed out that in fact, there are excess fiscal resources in the Budget that can be deployed better. This is before further potential savings that we can have from spending cuts partly due to the end of the COVID-19 pandemic.

PSP has proposed an alternative Budget to demonstrate how the Budget can be restructured to deploy these resources. For a start, we have increased net spending by about $8 billion – a fraction of the excess resources we have – to implement long-term programmes that will: one, proactively deploy excess fiscal resources in the Budget for the benefit of the current generation of Singaporeans; two, promote the financial security of the middle-class, who are the bedrock of the society, as a priority; and three, reduce socioeconomic ills caused by high property prices by resetting our public housing policy and eventually wean off Singapore's over-dependence on property as an engine of economic growth.

I invite Singaporeans to be the judge of the merits of the proposals in the alternative Budget. Singaporeans deserve better. For country, for people.

Ms Janet Ang.

Mr Speaker, I am honoured to participate in this year's Budget debate. I would like to declare that I am a council member of the Singapore Business Federation (SBF).

Deputy Prime Minister Lawrence Wong delivered his Budget 2023 speech in this Chamber, one day after Singapore declared DORSCON Green. I had goosebumps just thinking about how blessed we have been to have emerged from the COVID-19 pandemic and is in a reasonably good shape.

I am grateful to everyone – from President Halimah and the Presidential Advisory Council to Prime Minister Lee Hsien Loong and his Cabinet Ministers, from the Multi-Ministry Task Force to the hon Members of this House, from our healthcare workers to our public transport workers, from our Police officers and Civil Defence Force to our SAF and diplomatic corps, from our locals to the migrants at the front lines – for leading us through the darkest nights of the COVID-19 pandemic to emerge on 13 February with a bright DORSCON Green and a future full of hope. A big thank you from all of us in the business community to all of you.

Mr Speaker, for me, Budget 2023 is a clear signal that the pandemic is behind us. The Government is clearly moving away from giving handouts to survive COVID-19 to a Budget that invests to build for growth, sustainability and resilience.

At the same time, it is apparent that the Government is mindful of the current business climate driven by high cost pressures, with inflation at a 14-year high level, fuelled by the Russia-Ukraine war, the US-China geopolitical tensions and the hangover of supply chain disruptions caused by COVID-19.

Budget 2023 has been hailed as a redistributive Budget. Those who have more contribute more but everyone contributes what they can and together, we leave no Singaporean behind.

I am glad to see a Budget that appears to have taken an integral development approach that ensures that our people, our environment and our economy progress in tandem and in harmony. Whether Budget 2023 delivers on its design now depends on how well Team Singapore executes together.

For my speech today, let me start with the business lens on Budget 2023, with data points based on the latest National Business Survey 2022/2023.

Business sentiments in Singapore are more positive now with 52% of the businesses being satisfied with the current business climate in Singapore compared to 37% in the prior year. Despite expecting inflationary pressures to persist, 80% of our businesses remain confident in the resiliency of their operations in the next 12 months. Trade grew 17.7% to reach S$1.37 trillion, and, as shared by the Deputy Prime Minister on Budget Day, Singapore’s economy grew 3.6% with resident unemployment below pre-pandemic levels, at 2.8%.

However, as we entered 2023, businesses which had expressed optimism about the reopening of the global economy are now conveying a more cautious outlook as new disruptions surface and geopolitical fault lines deepen: 32% of the businesses stated that they had been negatively impacted over the past six months, with an average decline in revenue of 25%; 66% of both large and small companies have called out: one, overall business cost as their top challenge; two, availability of manpower; and three, retention of manpower following close behind.

They were certainly relieved to hear the Deputy Prime Minister extend the Energy Efficiency Grant (EFG) and the Enterprise Financing Scheme (EFS) to March 2024. These measures will help businesses cope with the unusually high business costs. Meanwhile, cash flow too is a major challenge for SMEs, and it will be of much help if the Government can take the lead to pay all invoices within 14 days, albeit electronically of course. This could perhaps even be the impetus needed for the nation-wide e-invoicing initiative to take off.

As for manpower challenges, 96% of our businesses identified the following as key areas of concern: one, rising manpower cost; two, attracting and/or retaining younger workers; three, new foreign manpower policies that raises cost; four, limited pool of local high-skilled labour; and five, stricter policies that restrict the supply of foreign workers.

Finding sufficient and appropriate manpower to meet their business needs has been a key challenge for our businesses. The new Jobs-Skills Integrators programme should help optimise training and job placements for Singapore businesses and help workers identify the right fit for training and ensure better earnings prospects. The Government might want to consider the TACs and the IHLs in partnership with human capital experts to perform this role.

Employment support is another key feature of Budget 2023. This will help make inclusive workforce closer to reality. Our older workers, vulnerable jobseekers like the physically disabled and the ex-offenders as well as current platform workers are resources who may be tapped and reskilled to work in sectors facing labour shortage. There is definitely a need to channel workers into jobs that are growing or into jobs that are being transformed.

Community initiatives like Yellow Ribbon and SBF Foundation’s Employability Fund and so on, complement what the Government is doing and should be encouraged. For example, SBF Foundation has set up a platform in partnership with social services agencies like New Hope, Daughters of Tomorrow, Singapore Association for Mental Health and SHINE Children and Youth Services to connect enlightened and compassionate companies with vulnerable jobseekers and journey with them from resume writing to onboarding to retention. To date, there are about 100 companies who are part of this network and we hope more will be inspired to come forward. This is the many helping hands approach in Singapore that will enhance employability and give vulnerable individuals dignity and hope through employment.

Lifting the wages of our low wage workers via the Progressive Wage Model is one of the most important policies that this House and collectively as a society we have made. We must not let inequality widen. It is good to see that our income inequality, as measured by the Gini coefficient, has been steadily declining. Kudos to the Tripartite partners for doing what we all know is the right thing to do.

Of course, many opinions have been heard in this Chamber with regard to Singapore having too many foreign workers. And, yet we have our businesses screaming “workers not enough”. Our businesses probably are experiencing “cold turkey” with the new foreign labour policies. Yet, from the many dialogues and engagements with businesses, it just might be that we simply do not have enough Singaporeans to do the jobs that need to be done.

I would like to put forward three recommendations for Government and businesses to consider.

One, more perhaps need to be done to attract local Singaporeans into job roles at or higher than the S Pass and the EP qualifying salary levels. And if there are no takers, we need to understand why.

Two, perhaps the work environment and work conditions can be made more attractive to interest our local Singaporeans. For example, the jobs being enabled by productivity tools, a maximum number of work hours per day, flexible work arrangement, strong skills and career mentoring. If all done well, this could drive improved human capital productivity for the organisation and provide a more effective work-life health for our workers.

Three, tripartite partners will have to find the right balance between capital and local and foreign labour for their sector, and perhaps some re-balancing of foreign quota may need to be worked out.

In short, the paradigm has shifted and 64% of our businesses recognise that it is very important to drive transformation, build capabilities and upskill their workers to become more productive and more competitive. They are glad that there will be a S$4 billion top-up for the National Productivity Fund (NPF) to support their efforts.

Next, allow me to share the story of Singapore Polytechnic undergraduate, Ms Reis Lim who is taking the Industry Now Curriculum in Perfumery, a diploma with up to half of the polytechnic workload over three years made up of work-based training with industry partners, including internships. Reis interned at Senses International, a Singapore-based fragrance manufacturer, acquiring deeper skills in fragrance evaluation. Her outstanding performance led to her being offered a position even before graduation as a fragrance evaluator trainee, a position that is mostly filled by expats. I am telling this story to encourage companies to tap on the polytechnic and ITE students as a valuable skilled pool of resources, right from even when they are still in the IHLs. There needs to be a re-think of the pathways to a career, one of the most important being the alignment of jobs to skills and pay for value.

More than half of the businesses agree that transformation is very important. However, when it comes to R&D and innovation, more than half of the CEOs rated this as “unimportant or only somewhat important”.

As for sustainability, 75% of our SMEs and 54% of our large companies are “not prepared at all or only somewhat prepared” for transitioning to low carbon. With the Singapore Exchange (SGX) implementing mandatory climate reporting for listed companies in selected sectors from 2023, SMEs will increasingly be held to similar expectations as they are critical value chain partners. SMEs that are slow to adopt sound sustainable practices will eventually lose out on business opportunities. There is an urgent need to support the acceleration of SME participation in the green economy. Perhaps the Government can consider a one-off top-up of the PSG specifically for the adoption of sustainability solutions and tools and do some risk-sharing to improve SMEs' access to sustainable financing.

Budget 2023’s highlight for me is the new Enterprise Innovation Scheme. Forwarding thinking companies know that innovation is key to creating new value. With the enhanced tax deductions to 400% of qualifying expenditure on five categories including innovation carried out with the polytechnics and ITE, and even an upfront cash for companies that pay little or no taxes, it is clear that the Government is encouraging innovation and prepared to co-share risks. Singapore companies, especially SMEs, should and must definitely leverage this scheme.

Next, SMEs need capital and talent, access and networks. The additional $150 million for the SME Co-Investment Fund and the enhancement to the Singapore Global Enterprises initiative in Budget 2023 could be helpful to our small to medium-sized companies to build Singapore brands that can last. What is the process of application and criteria for selection to be considered for such capital funding?

To wrap up this section, let me share a quote from fellow SBF Council Member, Ms Kwee Wei-Lin, who is also President of Singapore Hotel Associations, and I quote: “Budget 2023 is a balanced and fair budget and we are glad to see the continued support from the Government in encouraging innovation and productivity, and the support for having a more inclusive workforce. However, the additional CPF contribution will further add to the escalating business costs”. One final feedback from the industry is that Budget 2023 is lacking on measures to support internationalisation.

For my remaining time, I will share my reflections on Budget 2023 beyond the business lens.

Many are comforted that Budget 2023 gives assurance and extra lift for the lower to middle income households and retirees to defray the GST rate increase. I can also see that it is a budget that support families, encourage marriage and childbirth. It is also about tackling the related issues of inequality and social mobility, and providing better care for our rapidly ageing population. These expenditures need to be funded responsibly and Singapore’s approach of keeping our overall system of taxes and benefits fair and progressive is the right thing to do. Our reserves have proven to be our greatest insurance. We have our generations of leaders to thank for their prudence and their stewardship in having shored up the reserves we have today.

Singapore has been blessed in so many ways and if I have to name one, it would be the founding father of modern Singapore, Mr Lee Kuan Yew. There are probably many places which have similar geographic advantages like Singapore but it took a visionary, passionate and courageous leader like Mr Lee Kuan Yew, together with the Pioneer Generation of leaders, to make what many would see only as a large rock in treacherous waters, a mere fishing village and outpost for the British, into who we are today – a Singapore that is admired by many, a Singapore that you and I can be proud to call “Home”. Had Mr Lee Kuan Yew been still alive, he would turn 100 on 16 September 2023. I for one, look forward to paying tribute to his contributions to Singapore and celebrating the memories, legacy and wisdom of this great man.

Notwithstanding the good place that we are in today, there are a couple of challenges that we face in Singapore. And I ask you to indulge me as I share my thoughts on three points.

The first point, I have said it during the recent Motion on housing and I thought it important to raise this here again. In a UBS Global Real Estate Bubble Index Report, it is reported that most households can no longer afford to buy property in the top financial centres of the world without a substantial inheritance. While we do want Singapore to be one of the top global financial hubs, how can we prevent and limit our risk of being in that same situation? How does MAS and MND collectively plan to help ensure that Singaporeans can still get to own our limited residential real estate even as we welcome wealthy family offices into Singapore, whose purchasing power will inevitably drive up property sale and rental prices?

Secondly, I have been in tech all through my career. Tech can do a lot of good for society and has contributed much and its impact will be even more pervasive. But we have also seen the harms that tech can bring about, whether it is online scams, online bullying, unethical artificial intelligence – and the list goes on. We have debated in this House on this very issue, and bills have been passed to safeguard our people and our businesses from potential ills.

But by the time the laws have to be called into play, it is already too far downstream. I am encouraged and proud that Singapore was the first country who tabled at WEF, the Governance Framework for Ethical AI, a couple of years back. This is testimony of our values and our forward-thinking visionary approach. But we know that more needs to be done. Developing Singapore to be a smart nation – that we must continue to pursue. Our challenge is to remind ourselves ever so often that technology must be at the service of humanity and not humanity at the mercy of technology. Technology cannot replace the human contact and encounter, and must not forget the vulnerable. So while the Government and the army of volunteers help our Seniors Go Digital, and support their efforts to keep up with times, there will be many who just cannot go digital and these people must not be denied of essential services.

Thirdly, we have a good number of foreigners who become PRs and citizens over time. How well are we integrating our new PRs and citizens into the social fabric of Singapore? Volunteering and engaging in purposeful and soul-ful activities can bring diverse people together, build bridges for each other to cross as they help and serve the vulnerable communities amongst us. And, of course, even guests who are here on S Pass, EP or work permits, should be encouraged to volunteer and to engage in service in the community.

Our sense of neighbourliness seems to be a challenge as I listen to the nightmares of litter bugs, the "neighbour from hell" and the story of an elderly dying alone in her HDB flat without anyone discovering her for days.

Budget 2023, alone, cannot address these challenges. It will have to take all of us – citizens, PRs, migrant residents, businesses, civil society, social services agencies and Government – collectively to be caring and purposeful in living out our social and civic responsibilities.

On that note about being purposeful, I would like to share a quote by Mr Samir Singh, Chief Marketing Officer, Unilever Asia, during a panel discussion with Minister Edwin Tong at the Company of Good Summit in January 2023. I quote: "Brands with purpose grow, people with purpose thrive, companies with purpose last." And to that beautiful quote, I add my line to close: "Communities with purpose serve." I stand in support of Budget 2023. [Applause.]

Ms Cheryl Chan.

Mr Speaker, as we emerge from the pandemic, the world and Singapore are now facing other challenges brought about by the macroeconomic climate. Prices of goods continue to escalate, access to supply has not returned to normalcy and the headwinds remain strong while we find a new balance and world order.

In my conversations with residents the past week, some welcome the different measures in Budget 2023 to help address the cost of living, others are heartened by the support given to young families and some mentioned that the intent to strengthen our social compact is an area we need to put stronger focus as we progress as a nation. I am also supportive of the various measures to help those in need and how the Government is finding other sources of income to balance a tight fiscal position.

In order for us to manage the challenges ahead and have financial wherewithal to provide for more diverse societal needs, I feel strongly that we must look at the topic of how to ensure Singapore's competitiveness can be sustained in the long run. This cannot simply be a quick fix or measures that allow Singaporeans to cope for the short term, but rather we need solutions that can enable us to navigate more complex environments and external threats which compete with Singapore for both investments and talent.

As I have highlighted in my 2018 Budget debate speech, our competition today is no longer local. The real competition is dynamic and beyond our shores. I believe there are some important factors for our continued competitiveness. Let me explain them.

First, investing in our local workforce and the successful implementation of the Industry Transformation Maps (ITMs). When the ITMs for 23 industries was first introduced in 2016, it was indeed a huge undertaking by the Ministry of Trade and Industry (MTI). To develop roadmaps for each industry which is inherently different in nature, having wide ranging and some unique issues faced in each industry and the broad spectrum of stakeholders to be engaged made this task very challenging. Yet, if we had not taken this first step, it would have been even more difficult today to keep pace with the rapid global market development and more workers would have been adversely impacted by the fiercer competition and the lack of skills to manage the changing nature of jobs.

As we all recognise, skills or multi-skills of any worker cannot be developed overnight. Keeping workers relevant on the long horizon takes more than just policies. SkillsFuture was introduced for this purpose and to send home the message about the need for continuous education training (CET) after formal schooling ends. To better enhance the scheme, Deputy Prime Minister Lawrence Wong introduced the Jobs-Skills Integrators to better match the industries' skills gap and the learning required to be put in place. I appreciate the concept and see the need to plug this gap, but would like to further understand how the current CET curriculum available and ITMs that have made significant progress are pushing the boundaries for industries.

Also, can Deputy Prime Minister Wong outline some of the key industries in which we are trying to develop a competitive advantage in and how the Enterprise Innovation Scheme can complement ITMs and imbue a stronger innovative culture? From a talent pipeline perspective, how are we able to concretely identify the progress of this development and further complement the progress for future strategic investments that we wish to anchor in Singapore?

Second, leveraging overseas network as multipliers to develop our local talent. With a limited population and an ageing workforce, we must, first, acknowledge the need to retain our experienced workforce while we develop the next generation of workers. The pandemic has shown that work can take place virtually, productivity is not determined by the number of hours in an office and innovation can come about through collaboration of great minds. Even with that, we must also allow our talents to explore and venture out as they become co-creators of work clusters globally that provide job opportunities for our workforce.

Attracting top talent to Singapore is one approach and over the years, we have been finding ways to have more global talents augment our ecosystem. Recently, the Overseas Network and Expertise Pass was introduced as we hope to fill the gaps for new emerging growth areas like the digital and sustainability space. It is true that on a broad level, these global talents will have a rub-on effect for our SMEs and make the local ecosystem more vibrant. On the other hand, we are still missing mechanisms that enable these global talents from directly benefiting SMEs through consulting services, being advisers to the local boards, providing expert sessions for the locals to learn alongside or acting as mentors to contribute deeply to the talent development.

As we continue to monitor the efficacy of our measures and initiatives implemented for the dollar value invested, it is probably important, too, for us to understand if there are missed opportunity cost with the current approach.

Third, the Government as a catalyst, innovator or change-maker. Often, when we talk about innovation, it is associated with having new technologies and doing things in a new way. But we sometimes forget that some innovations are not about radically new things, rather a new way of perceiving existing resources or chipping on ideas that were not rigorously pursued under past contexts. As we continue to attract investments to Singapore and create quality jobs for our workers, have we thought about what role the Government intends to play for future nation building?

Today, we maintain our competitive status with heavy investments in skills, knowledge, physical assets and upkeeping the Singapore brand. This is what we have going for us. Indeed, it has given us the competitive advantage even with small acts of innovation. But what we may need to caution is that innovations responding to circumstances that are peculiar to our home context may result in impeding our international competitive success at some point.

For example, a critical resource like energy supply, one that our nation clearly requires from residential to commercial, or industrial demands. We have long known that Singapore has no natural resources, limited land space and no geological attributes to generate much electricity from clean energy sources. But for us to meet our climate targets, we need the value chain to be in place to transport the clean energy sources from other geographies to Singapore. The Government has utilised different options to pilot projects, build partnerships with different countries and urged the private sector to be a strong proponent in developing solutions that may be feasible for our needs.

Thus far, the Government's role continues to be that of a catalyst, a regulator and a facilitator. What if that role changes to be a co-producer with differentiated governance for critical resources that our country needs? Will our pathway to achieving the climate target be accelerated and will this better secure our supplies with greater resiliency and reduce the overall cost of essential resources for our citizens?

Sir, we sometimes need to challenge our assumptions and conventional wisdom and be open in order to succeed. We need to know simply what works, why they work and how to apply them. In fact, it is fair to say that innovation usually requires pressure, necessity and even adversity to thrive.

And I quote what Michael Porter said: "National prosperity is created, not inherited". Singapore, as a young nation, has much more to give and to constantly create for the benefit of our current and future generations. But the Government alone cannot fulfil this task. It takes our citizens, our industries, our talents, our global partners to collectively harness the strength, knowledge and our social responsibility towards one another to materialise our dreams. Only we can define the social fabric and the signature of our society that we wish for. Let us take the lead and not wait for the external environment to shape us, nor be limited by our imagination to achieve greater heights and greater things together. Sir, I support the Budget.

Mr Sitoh Yih Pin.

Mr Speaker, Sir, in my recent speech in this House, I said it was dangerous to not feel pain for a long period of time. Pain reminds us that something needs to be done. If we feel nothing, we do not react. Therefore, we should not aim for analgesia to feel no pain but, instead, aim to ameliorate the pain. Pain is a call to action.

I will take this occasion to speak further about how we should respond to pain.

If pain is slight and fleeting, it can sometimes be dismissed. But when pain becomes more than a niggle here and a mild ache there, and is persistent, it is crucial that we acknowledge its existence and not dismiss it nonchalantly.

It is the same with the polity as it is with the human body. The Government must recognise the pain that people are going through and, more importantly, act on them. Today, there are a number of pain points that are evident.

First, there is high global inflation, coupled with sluggish economic growth. Our local inflation is hovering around 5%.

Second, the Certificate of Entitlement (COE) prices remain high. And here, I am not discomforted by high COE prices for big or luxury cars, but for smaller cars and motorcycles. Many people need either a small car or a motorcycle for work. Workers in the point-to-point transportation and platform delivery industries are good examples.

Third, the wait for HDB flats.

And fourth, the wait for appointments in our public healthcare system brought about by the pandemic and exacerbated by the global competition for nursing and other healthcare manpower.

And of course, the Goods and Services Tax (GST) increase.

The PAP does not walk away from these pain points. We face them head on and we come up with viable and sustainable long-term solutions. But like a good doctor, we know that suggestions for instant pain relief, like instant gratification, is temporary and may cause us greater grief in the future. While we do not profess to have all the cures to all pains, we are prepared to take time to address the root causes of pain, while taking steps to ensure that the pain does not overwhelm us.

Indeed, as the Confucian saying goes: "知之为知之，不知为不知，是知也". Loosely translated, this means that the path to wisdom is to know what you really know and to be aware of what you do not know. The true danger then, lies in what some people call the "unknown of unknowns". Here, we need to gather information and listen to as many people and stakeholders as possible, to minimise the magnitude of "unknown of unknowns", so that we are not unnecessarily blindsided.

The next step is to come up with solutions. We can learn from what it takes to be a good doctor and the axiom which is taught to all medical students is, "To cure sometimes, to relieve often, to comfort always".

A good doctor knows that there is a limit to the illnesses he can cure. Indeed, even with modern medicine, complete and permanent cures are rare. But he can often provide relief and, with empathy and compassion, he can always comfort his patients.

Likewise, there are few problems that politicians and governments can fix permanently with policies and programmes. Let us not kid ourselves on this. There are few equivalents to smallpox in public policy-making, where an effective vaccination programme has eradicated smallpox from this planet.

But policies and programmes do provide substantial relief. Examples of these in this year's Budget include enhanced GST Vouchers, additional CDC Vouchers, an Assurance Package that addresses rising cost-of-living and aims to support, amongst others, students and seniors, help for families with young children.

Finally, we must also acknowledge the pain and provide comfort at the emotional level. A listening ear, a gentle pat, a nod, all these are small things we can do to provide emotional comfort. And sometimes, I feel that we focus too much on finding solutions to the pain that we may well fall short on empathy. We can improve ourselves.

Sir, the record of the People's Action Party (PAP) speaks for itself over the past 64 years. Through our policies and programmes, we strive to improve the lives of the less fortunate. The social mobility of Singaporeans over this period demonstrates this. But sometimes, we do come across as a bit lacking in empathy. And empathy goes a long way when it comes to providing comfort. But as I have said, we can improve.

Finally, there is another part to providing relief and comfort that is beyond focusing on our present-day problems. It is like looking at whether a glass is half-full or half-empty. We need to also focus on the half-full glass and ask ourselves where do the possibilities lie, what is the potential to make the glass of water fuller than what it is now? Or do we believe that the glass will get emptier and emptier as time goes by? Is the best behind us or is yet to be?

I might add, Sir, that it is also the aim of any Opposition who aspires to be the Government one day to convince the people that the glass is getting emptier and emptier and also to get them to focus on the pain points, to persuade the people that these pain points are unremitting, intractable and, in fact, getting worse and worse to the point of being life-threatening. They want you to change your doctor. But we have to ask ourselves: will this so-called new doctor have better solutions and cures or worse? Are they like the proverbial "koyok-seller" of yesteryear, trying to sell you miracle cures?

Mr Speaker, Sir, as we transition from 3G to 4G, it must be the responsibility of the incoming 4G leadership to inspire Singaporeans to greater heights, to convince a new generation that the glass is going to be bigger and fuller at the same time, while acknowledging that pain points exist and to provide adequate and effective pain relief here and now, while working towards viable and sustainable long-term solutions.

So, there are at least three broad responses to pain. One is to go for complete analgesia, which as I have said before, can be dangerous over a long period of time. Another is to be overly focused on the pain and be paralysed by it. And then, there is the better way, which is to live with it and get on with life, but take pain relief when available and necessary, because life is seldom ever totally pain-free and miracle cures seldom, if ever, really work.

Sir, 10 years ago, when I turned 50, I said in this House that the Government must listen to the people, labour for the people and lead the people. Now, as I turn 60, I believe that these fundamentals remain.

How do we make sure that the glass of water gets fuller and not emptier? If there is one truism in geopolitics, it is that no one owes us a living, especially for a city state that is nothing more than a little red dot on many maps. We have to stay relevant, be nimble and embrace change. Staying relevant means we have to offer the services and products that other countries want and pay a good price for. If we can do that, we will continue to have the things that we want, such as good jobs for everyone and a safe environment and good schools to raise our children in, as well as affordable housing and reliable public transport.

In 2014, Sir, I said in this House that for Singapore to survive and prosper, we need to have the relevant skillsets, right attitude and the moral compass and values. I am optimistic for Singapore because I see these three important ingredients in the 4G leadership and the people. Mr Speaker, Sir, I support the Budget.

Mr Xie Yao Quan.

Sir, today, I would like to discuss cost-of-living. When the GST was first introduced at 3% in 1994, it had minimal impact on prices. Our inflation rate rose marginally from 2% to 3% but fell below 2% after 1994 and stayed there. And we were in a decade of robust economic growth. So, low inflation, high growth – when the GST was first introduced.

Then, in 2002, in then-Deputy Prime Minister Lee Hsien Loong's first Budget as Finance Minister, he announced the increase in GST from 3% to 5%. At that time, our economy was at a different stage. It was facing a series of shocks and setbacks, and the growth outlook was troubled. But inflation was projected to be zero or even negative. And in this benign price environment, then-Deputy Prime Minister Lee said that, "I am confident that the 2-percentage point increase in GST will not significantly raise prices."

Subsequently, when the GST went up from 5% to 7%, the economy was again back to a period of strong growth. So, this time, it is different. GST is going up when our growth outlook is once again troubled, and concurrently, our inflation is high, and expected to be higher for longer.

To be clear, GST is not the main factor driving prices up. Indeed, as I said in my Budget Debate speech last year, we should "refrain from making GST a strawman, or a convenient scapegoat", for high prices. There are many other factors, external factors, driving prices up.

But when GST goes up in this environment, it adds to the overall pressures facing Singaporeans and it exacerbates Singaporeans' overall anxieties on cost-of-living. It is a clear and present concern.

Looking at the external factors driving prices up, take shipping, for example, thankfully, freight rates have come back down, quite significantly, from 2022 highs. Oil prices have come down too. Natural gas prices as well. And we see this in the petrol stations. The unit price is once again starting with the digit "2", rather than "3". But fertiliser prices are still up. And so, grain prices are up. Rice is up. Corn feed, up 50% versus 2019. And consequently, across the chain, price of chicken meat, for example, has stayed up. Eggs have stayed up too, 25 cents at least per egg.

Overall, core inflation in Singapore is expected to ease off in the later half of this year, but only slightly. High inflation appears here to stay.

So, what can we do, what must we do, to help Singaporeans with cost-of-living pressures?

First, our exchange rate policy has really helped. Without a decisively stronger Singapore Dollar, we would be feeling the impact of imported inflation much more sharply. Yet, the central bank would need to be very cautious with any further move, as a stronger Singapore Dollar makes our exports more expensive and the outlook for exports this year is already challenging.

Second, we need decisive fiscal measures to mitigate cost-of-living pressures. And on this, I am cheered by the moves in this Budget. And I wish to highlight, in particular, the permanent GST Voucher – Cash component.

In last year's Budget, Deputy Prime Minister Wong announced that this GSTV – Cash would be raised to $400 in 2022 and $500 in 2023, for eligible Singaporeans living in smaller flats. But this year, the Budget has outdone itself, because before the increase to $500 in cash can be implemented this year, this Budget provides for another increase, to $700, and then, to $850 in 2024, versus just $400 in 2022.

For eligible Singaporeans in larger flats, it is a similar story. Based on last year's Budget, $200 in cash last year, and on plan, to go up to $250 this year. But in this year's Budget, the payout for the year is raised from $250 to $350, and for next year, to $450.

In other words, within the space of two Budgets, two fiscal years, GST Voucher – Cash has been essentially doubled, permanently, for every one in two adult Singaporeans. This will permanently deal with the effects of higher GST on overall cost-of-living pressures.

Indeed, this year's Budget tops up the GST Voucher Fund by $2.4 billion, after a similar top up of $2.4 billion last year. Very decisive and a real commitment to keep this going permanently.

And separately, under the Assurance Package, a 65-year-old retiree who owns no more than one property will receive – on top of the $700 cash under the GST Voucher Scheme, this retiree will receive another $1,300, in cash, this year alone, under the Assurance Package. And his or her child, who may be an upper-middle-income working adult owning one property, will also receive $550 in cash alone.

And so, the Budget last year provided for $1.1 billion in such cost-of-living special payments and this year, another $1.3 billion has been set aside. Taken together, these fiscal measures will go quite some way towards relieving cost-of-living pressures brought about by both higher GST and more saliently, larger inflationary drivers.

In fact, when speaking to residents about the Budget, some have turned around and asked me, is the Government giving too much? How is the Government going to sustain this, because we need to stay prudent?

I certainly agree, but I think the Government must also do what it can to address a clear and present concern of Singaporeans. And so, on this note, I strongly support the Government's fiscal measures in the GST Voucher Scheme and Assurance Package.

But third, beyond fiscal measures, I believe we can do more to keep in check the rental rates of Government-owned and managed commercial properties, especially for coffeeshops in our heartlands.

To be fair, rental is not the largest cost component of cooked food and served meals in the heartlands, nor should we expect that lower or steady rental would bring down the overall prices of meals, as there are other cost drivers at play. But I do believe that lower or steady rental would at least help to keep everyday meal prices steady and relieve the pressure on businesses to keep increasing prices to cover their costs.

Fourth and most importantly, to sustainably mitigate cost-of-living concerns, real wages and spending power of Singaporeans must go up. Wages and spending power must grow faster than inflation. Certainly, for the broad middle, but also, and especially for the lowest-wage workers amongst us, because consumption takes out a disproportionate part of income for low-wage workers, and so higher prices hit low-wage workers disproportionately hard.

To help low-wage workers, the Government has announced decisive moves, especially in the Progressive Wage Model. Many of these moves will start taking effect this year, to give wages at the bottom a sharp uplift over the next few years.

For a cook in a full-service F&B outlet, monthly gross wage will be at least $2,050 starting from this March, going up to at least $2,380 in March 2025. For a conservancy cleaner, at least $1,795 from this July, going up to $2,835 by July 2028. For a cashier, at least $1,850 already from last September, going up to at least $2,175 by next September.

So, significant wage moves. And paradoxically, these wage moves under the Progressive Wage Model would likely push prices up. We may all have to pay more for meals, for Town Council conservancy, and so on.

But the important points are these.

One, the Progressive Wage Model should grow wages at the bottom faster than prices rise, so that our low-wage workers will get higher real wages eventually. And as importantly, all of us will be sharing in the burden of these higher prices brought about by progressive wages. It is spread out across all of us, in order to support higher wages for a segment at the bottom.

So, we can, and should all do our part, and pay a little bit more, in order to help those who are impacted the most, more than the rest of us, by higher costs of living. This must be a key part of our social compact.

And the Government is doing its part too. In this Budget, topping up $2.4 billion to the Progressive Wage Credit Scheme Fund after a top up of $2.8 billion last year. More than $5 billion in total over two years to share the heavier labour cost burden with employers in the next few years. And on top of this, the Government is also giving directly to low-wage workers another $150 to $350 every month to further top up their wages through enhanced Workfare, announced last year and kicking in this year.

But ultimately, besides Government and consumers, employers of low-wage workers and buyers of their services – if these services are outsourced – must also play their part to uplift our low-wage workers. Because the Progressive Wage Model provides for a whole ladder of job grades and sets wage levels not only at the starting grade but at higher, more senior grades. Employers, service providers and buyers of outsourced services must do all they can to keep to the spirit of Progressive Wages, preserve the ladder, keep the ladder intact and preserve an appropriate mix of junior and senior job grades in their workforce and keep alive for low-wage workers the hope and prospects of promotion and career advancement up the ladder.

Service providers and service buyers must do their part to prevent the collapse of the ladder and the regression of the mix of job grades in their workforce towards the starting rung, whereby the starting rung in the ladder effectively becomes the final rung. We must avoid this.

And I would urge relevant regulatory agencies in the Progressive Wage Model to also regularly review if there is a need to possibly update their strategies from time to time to enhance alignment of the market with licensing frameworks.

As for growing real wages and spending power in the broad middle, much has been said about productivity, upskilling and economic transformation to keep creating good jobs. I wish to focus today on a sub-segment within the broad middle, a particular "sandwiched" group, comprising working adults in the 30s to 50s, with a school-going child or children between seven and 16 on one hand, and parents in their 60s and above on the other. This is not a big sub-segment, probably around 200,000 households or 20% of total households, but they face particular, "sandwiching" pressures in cost-of-living.

Now I believe as parents, all of them will want to do their best for their children and what is "best" can be very personal and varies from individual to individual. But if we look at the Household Expenditure Survey in 2018, a household spends $112 per month on average, on private tuition and other educational courses. This is the average across all households.

But if we suppose that in fact, private tuition expenditure is concentrated within this sub-segment of "sandwiched" young parents, then the average amount that each of these households spends on tuition is probably closer to $600 per month. And they spend on this because they want the best for their children.

My point is this: we have been analysing household expenditure primarily by income bands, I think it would be useful to also study household expenditure by household archetypes and for an archetype such as this "sandwiched" sub-segment, we may uncover or confirm particular spending needs on tuition, for example. And in turn, we can form a better, more nuanced understanding, of drivers of cost-of-living pressures for this particular sub-segment and work towards addressing these where possible.

Now I think this "sandwiched" group should get more support from the Government.

First, beyond the Edusave account and Government top-ups thereto, I think parents should get a "Child Development Bonus", in cash, for each child seven to 16, each year. Think of this as an extension of Government support, in the child's life, beyond the Baby Bonus Cash Gift which has been enhanced and beyond contributions to the Child Development Account for preschool years, which has also been enhanced.

Second, especially for the elderly parents of this "sandwiched" sub-segment and for seniors across the board, we should have more healthcare subsidies, especially in intermediate and long-term care such as nursing homes and in increasingly prevalent services in the hospitals such as MRI scans.

Sir, let me conclude. I started with a reference to the 2002 Budget, the first by then-Deputy Prime Minister Lee. It actually makes for a fascinating read. Back then, total operating and developmental expenditure was $28 billion or 17% of Gross Domestic Product (GDP).

Fast forward two decades, in this year's Budget, it is $104 billion – four times – but we have managed to keep this at 16% of GDP. In other words, the Government has been spending more and more, and doing better and better for Singaporeans, year after year, and it has been doing so sustainably and responsibly.

How has the Government done this? First, and most obviously, by ensuring our economy grows. So, between 2002 and 2023, our economy has grown by four times in nominal terms too, keeping pace with spending. The Government has grown the pie, so that it can do more for Singaporeans, sustainably. That is the first order of business.

But second, in these years, the Government has also found new, important ways to maintain our fiscal sustainability. It transited from a Net Investment Income (NII) framework to a Net Investment Return (NIR) framework, to leverage more on the strength of our reserves to fund current needs. NII contribution in 2002 was $2.4 billion, 1% of GDP. Today, NIR contribution is $24 billion or 4% of GDP.

On the other hand, in 2002, taxes and fees amounted to 17% of GDP. Today, it is 15%, lower than in 2002, although our spending needs have gone up – shot up dramatically.

And the Government has done this while keeping personal and corporate income tax regimes highly competitive. That is why we need GST, which taxes consumption rather than income, as another part of our fiscal base, and that is why GST has gone up. Yet, with our unique system of permanent offsets, we make sure the bulk of higher GST is net-net raised from foreigners, tourists and higher-income Singaporeans, but channelled towards benefiting all Singaporeans.

In our revenue base today, taxes and fees are already at 15% of GDP, how much lower do we want to go? NIR, on the other hand, is already at 4%, how much higher do we want to go? How much more do we want to leverage on our reserves? As a society, we will have to make our own judgement based on our shared values.

Higher GST, in a high-inflation era, creates anxieties for Singaporeans. But it is the right thing for all of us to do, for ourselves and for future generations. While raising GST, this Government has rolled out decisive moves to put cash in Singaporeans' hands, to uplift real wages, especially at the bottom and to provide immediate assurance. It shows a remarkable political will to do right by Singaporeans in the long-term and to take care of Singaporeans' needs in the short-term.

In management studies, there is a concept by Jim Collins about eschewing the "Tyranny of the Or" and exercising the "Genius of the And".

In the context of governing a country, I would refrain from using the word "Genius", but "Gumption", perhaps, or "Steel". The Government has, over the decades, steadfastly eschewed false choices, avoided the "Tyranny of the Or", and held on to a "Gumption and Steel of the And", and it shows in how it has raised GST responsibly while taking care of cost-of-living concerns compassionately.

There is something else to be gleaned from the 2002 Budget Statement. Then-Deputy Prime Minister Lee introduced an offset package while announcing the increase in GST from 3% to 5% and he said this, in 2002, "the offset package will cover at least five years' worth of additional tax payable for all flat sizes. In fact, those living in one- or two-room HDB flats will be covered for the next 10 years". Sounds very familiar.

In 2007, then-Minister Tharman rolled out an offset package along essentially, similar lines. Twenty years on, today, the Government carries on the tradition and remains consistent in its commitment to take care of Singaporeans. It is remarkable.

Sir, the 2002 Budget was billed "A Budget for A Different World". Singapore was coming out of its worst recession at that time, since Independence. Then-Deputy Prime Minister Lee said, "we are entering a very different world. Conditions are uncertain and volatile, competition is intense, change is faster than ever… we cannot prevent the changes from happening. Instead, we must act decisively…"

Today, we are debating a Budget that is titled "Moving Forward in a New Era", indeed another different world and the words uttered in 2002 ring as true today.

But I am confident that if we stay open as a country and embrace the world, stay nimble as a tribe and seize opportunities to make hay when the sun shines, and stay united as a people and take care of each another, we will have another brilliant 20 years ahead of us, towards SG75 and towards SG100. Sir, I support the Budget.

Mr Speaker, after more than three years of battling COVID-19, it appears we have finally seen the light at the end of the tunnel. However, while the acute phase of the COVID-19 pandemic is now over and we can all wave goodbye to the wearing of face masks, there remain many other challenges facing Singaporeans in the horizon. The one thing that is top of mind for many of my residents during our house visits, is the mounting cost of living pressure they face. Inflation, unfortunately, is not a phenomenon that Singaporeans can wave goodbye to in 2023.

The Monetary Authority of Singapore (MAS) expects inflation to stay high in 2023, with the Consumer Price Index for All Items (CPI-All Items) inflation projected to come in at between 5.5% and 6.5%, and even core inflation is expected to average 3.5% to 4.5%, both of which includes the effect of the 1% increase in GST rates this year and likely next year as well.

While the Government still expects economic growth in 2023, amid recessionary concerns globally, I believe the risks to the economic outlook remain to the downside. The MOM too has observed a recent uptick in retrenchments in Singapore and unemployment rates could trend higher. Just over the last weekend, even Google is reported to have retrenched 6% of their Singapore workforce.

Against this backdrop of continuing household vulnerabilities, my speech today will cover three broad areas. First, my observations on the Government's fiscal position; second, suggestions on growing our recurrent revenue sources from those better able to contribute; and third, recommendations on truly strengthening our social compact.

Thankfully, it is not all doom and gloom when it comes to the Government's finances. Over the past year, I shared in Parliament my observations on what appears to be the better-than-expected fiscal outturn in Financial Year 2021 (FY 2021) and FY 2022. It appears that against the spectre of COVID, operating revenues and the primary deficit in the last two years, have indeed, been much better than expected.

In FY 2021, actual operating revenues were about $5.9 billion higher, while the primary deficit was $13.4 billion smaller than initially estimated in Budget 2021. This meant that instead of a S$11 billion overall deficit that was expected, the Government's fiscal position in FY2021 turned out to be a surplus of $1.9 billion instead!

Similarly, in FY 2022, operating revenues are now expected to be $8.5 billion higher than what was initially estimated in Budget 2022. Despite higher expenditure and special transfers, the overall fiscal position is still expected to improve by $1 billion. Had it not been for higher special transfers, the Budget would have similarly turned in a surplus instead of an estimated $3 billion deficit instead. But, do not get me wrong, it is not that I am against the idea of these transfers in 2022, as I recognise that the top-up to the GST Voucher Fund following the enhancement of the Assurance Package announced in November 2022, was a key source of the increase in special transfers from $6.2 billion as initially estimated to $9.2 billion, thus contributing to the deficit for the year. After all, even without raising the GST rate to 8%, GST collections rose $1.8 billion in 2022.

Looking into FY 2023, I note that the Government expects a modest deficit of $0.4 billion. Despite slowing growth, operating revenues are expected to see strong growth in the year, up S$6.4 billion compared to 2022. Corporate income tax, personal income tax and GST are expected to reach new record highs for the third consecutive year. Meanwhile, $185 billion is set to be transferred from the MAS to Government of Singapore Investment Corporation (GIC) in phases to reach the optimal reserves amount. With the deployment of these funds into a higher return seeking portfolio compared to that of the MAS, this would naturally mean higher potential returns to the Government and hence, higher NIRC contributions over time.

I thus hope that the Government will not hesitate to support the livelihoods of our fellow Singaporeans, should inflation pressures persist and not slow "more discernibly in the second half" as is expected by the Ministry of Trade and Industry (MTI) and if labour market conditions continue to deteriorate.

I do wonder though, what is the cumulative budget deficit from the start of the Government's term to FY 2023, and would the need to maintain a balanced budget constrain the ability of the Government to activate the "drawer plans" that Deputy Prime Minister Lawrence Wong spoke about, should the need arise?

Moving into the second segment of my speech on suggestions on how best to grow our recurrent revenue sources and raise contributions from those segments that are better able to contribute. I agree with what Deputy Prime Minister Lawrence Wong shared about keeping “our overall system of taxes and benefits fair and progressive” and that “those who are better off contribute more”. However, I believe there is significant scope for us to do more to better achieve these stated objectives, such that the drive to have everyone contribute something does not risk morphing into common suffering for the man on the street.

In my Budget debate speech last year, I spoke extensively about BEPS 2.

0. Not only has corporate income taxes been consistently the largest contributor to the Government’s operating revenues, in FY2023, it is now the single largest contributor to the Budget, higher than that of the NIRC. This is not surprising at all if we look at some of the largest companies here in Singapore, with DBS full-year net profit up 20% to a record $8.2 billion, while Sembcorp Industries’ net profit was up three times, supported by higher power prices and margins in Singapore and the UK.

BEPS 2.0 is one of the most significant reforms to international tax rules to ensure that Multinational Enterprises (MNEs) pay a fair share of tax wherever they operate. Their fair share of tax.

I note that in the Ministry of Finance (MOF)’s Occasional Paper on medium-term fiscal projections, the impact to our single largest contributor to the Budget from BEPS 2.0 is not taken into account, which makes the published medium-term revenue and fiscal projections a lot less meaningful. I recognise that there are uncertainties and the Government needs more time to study these issues thoroughly and will announce changes in the corporate tax system when ready. However, while BEPS 2.0 may have been delayed, the OECD has on 2 February released technical guidance to assist governments in implementing the global minimum tax. If all goes according to plan, this could happen in less than a year’s time, in the beginning of 2024.

While precise numbers may not be feasible, does the MOF have a range of blue sky and grey sky projections as to the impact of the implementation of a Domestic Top-up Tax? Is the MOF sufficiently prepared to implement this landmark tax reform from 2025 as what Deputy Prime Minister Lawrence Wong shared?

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. If a global MNE is already operating in Singapore, what incentive would it have to incur additional relocation costs when the minimum corporate tax rates of 15% would be normalised globally? I hope it is not the case that over the past years, global MNEs’ decision to invest in Singapore boils down to mere tax incentives as the deal-breaker.

The Organisation for Economic Co-operation and Development (OECD) has shared with the Pillar Two solution, all economies will benefit from extra tax revenues. All economies. I hope the additional tax revenues from BEPS 2.0 will not simply be in substance returned to MNEs through other forms.

Next on wealth taxes, particularly, those relating to property which is the Government’s preferred way to tax wealth. As I have shared last year, while the increase in headline marginal property tax rates appears high, the actual impact on the households involved are unlikely to be material. I further shared about how, based on my analysis, high-end condos in Cairnhill and Nassim Road need only raise rents by 2% to 7% to offset the higher property taxes. As it turns out, private residential rents rose by 30% in 2022. So, while I agree with Deputy Prime Minister that $380 million more per year in property tax revenues is not an insignificant sum of money, I still believe that it may not be that significant to those who are impacted.

But I do recognise that the Government is doing more on the property front, with the higher marginal Buyers’ Stamp Duty (BSD) rates for higher-value residential and non-residential properties. In itself, again I do not believe the impact of the higher BSD rates to be that significant. To illustrate, for residential properties priced between $1.5 million and $5 million, the impact of the BSD rate increase only amounts to 0% to 1.1% of the purchase price of the property. Again, in the context of the near 9% rise in private property prices in 2022, the higher BSD may simply be an afterthought. I wonder though if more can be done for our property-related wealth taxes to be more targeted and progressive?

Despite hefty ABSD rates for foreigners, that did not stop an entire luxury condo project, EDEN, from being sold to a single family for $293 million, for a single buyer to purchase 20 units in Canninghill Piers for $87.6 million or for a single penthouse unit at Les Maison Nassim to be sold for $75 million last year.

In Budget 2009, Senior Minister Tharman as then Finance Minister removed the tax on Net Annual Value with effect from YA2010, for those who own higher-value homes or secondary residences. I hope the Government can consider re-introducing this tax, in which the AV threshold can be set at a high bar, for it to be effective as a wealth tax targeting on those who can afford the likes of our Good Class Bungalows (GCBs) and especially for those private residential properties that are not let out, given the situation we have today where private residential vacancies are near historical lows.

To give credit where it is due, I welcome the Government’s recognition that there is scope to make our vehicle taxes more progressive. Last year, I highlighted that the Government’s move to introduce a new Additional Registration Fee (ARF) tier for cars is not meaningful in the grand scheme of things. So, I do welcome the Government’s move to further adjust the ARF and cap the Preferential ARF (PARF) rebates at $60,000. With the move, not only would a Ferrari Roma cost about 23% more as a result of the higher ARF, the capped PARF rebates would mean about 22% of the selling price would be lost as well, resulting in a more meaningful contribution of high-end vehicle-related taxes to Government revenues.

I hope the Government will continue to consider various options to tax wealth effectively and other forms of progressive taxes to raise revenues more equitably rather than via regressive taxes such as the GST.

Finally, on recommendations to truly strengthen our social compact, Mr Speaker, you would know that since I was elected as a Member of Parliament for Sengkang in 2020, strengthening our social compact and in particular fostering greater support for families is a topic which is very close to my heart.

Parenting is definitely a struggle, especially if one wants to be an involved parent. Hard choices and sacrifices must be made. But my wife and I have not and will not regret our decision to bring our two boys into this world, who are now about three-and-a-half and one-and-a-half years old today. As Parliamentarians and leaders of this country, how then can we continuously strive to make it easier for Singaporeans to start a family? How can we make the sacrifices and trade-offs less stark and make parents and would-be-parents feel that balancing family, work and life is not a zero-sum game?

I will be elaborating further on Flexible Work Arrangements (FWAs) and parental leave during the subsequent Committee of Supply debates, topics which I have been speaking on for the last two years. On FWAs in particular, I am increasingly anxious that whatever gains we have made as a country when it comes to workplace flexibility during COVID-19 are now rapidly being eroded and my worst fears of a return to pre-COVID-19 workplace norms are starting to come true.

Residents, family members and friends are increasingly sharing that they are pretty much back to working from the office and working from home is now a distant memory. One friend quipped that his boss said, and I paraphrase, “If you are not in the office, how do I know that you are actually working?” Work from home is just one form of flexible work arrangement, but I fear that if we do not put in place legislation on this matter soon, the hard-earned gains from FWAs in the last few years will soon be permanently lost.

On parental leave, I note that while unpaid infant care leave will be raised, there are no changes to maternity leave which was last changed 15 years ago in 2008. That said, the move to raise Government-Paid Paternity Leave from two weeks to four weeks is no doubt welcome, but I note that this is purely on a voluntary basis on the part of employers.

As it is, even though Paternity Leave is a mere two weeks, only more than half of our fathers take paternity leave. Will would-be fathers be in a position to take their full entitlement of the expanded paternity leave and feel comfortable doing so? So, I do wonder if Deputy Prime Minister’s message that "we want paternal involvement to be the norm in our society” could in practice turn out as being construed as "paternal involvement is voluntary"?

One of the most puzzling moves to me is the decision to worsen the Working Mother’s Child Relief (WMCR). While there could be a group of lower-income working mothers who would benefit from this change, the majority of would-be working mothers will be made worse off with the change in methodology. In the context of "building a Singapore Made for Families", I find this move highly ironic and self-contradictory.

I did some calculations for WMCR for one child, assuming a working mother gets two months' worth of bonuses which is the average in Singapore, while benefiting from other standard reliefs such as earned income relief, CPF, NSMan (Wife) relief and shares the qualifying child relief with her husband. Essentially, for mothers who earn less than $2,610 a month, they would not be better off as they would not have paid taxes at all even under the prior methodology, while mothers earning more than $3,810 a month and above will be worse off. The only group of mothers who would be better off are those earning between $2,610 and $3,810 a month, and the extent of their tax savings range from a grand $0 to $40 in total tax savings a year.

Based on my estimates of working mothers' income within married couples in resident households, roughly 20% of mothers will benefit from the WMCR change to the tune of up to $40, while the remaining 80% of mothers will either be unaffected or worse off. I wonder if the WMCR truly seeks to reward families with children and encourage married women to remain in the workforce after having children, or does it have the unintended opposite effect?

If the aim is to benefit lower- to middle-income working mothers, why not just give a motherhood tax rebate to working mothers earning below a certain income? And I do not mean this as a motherhood statement as such a move can ensure that even a larger proportion of mothers will benefit as opposed to the design of the new WMCR. To further support lower-income working mothers, if the tax rebates granted exceed the tax payable, tax credits can be paid out in cash to ensure the reliefs are not lost.

Moreover, unwed single mothers are ineligible for this relief. Single mothers already face significant challenges in singlehandedly raising their children and more often than not are working mothers. Even if we cannot raise their children on their behalf, the least we can do is to ensure that our tax policies do not discriminate against them. I strongly urge the Government to reconsider the changes to the WMCR.

Finally, I welcome the move to raise the CPF salary ceiling from $6,000 a month to $8,000 a month. From those within this monthly income band, the lower monthly take-home salary could be a challenge given the pressures of being in a sandwiched class, with high monthly household expenses and relatively lower grants and support compared to the lower income. However, I do recognise that the benefits from a higher employers’ CPF contribution over time can contribute meaningfully to retirement savings.

Yet, where I think the move falls short is in keeping the annual salary ceiling intact at $102,000. Can the Government raise the CPF annual salary ceiling in tandem with the monthly salary ceiling move to benefit this expanded group of workers?

I did some calculations for a worker who earns $7,000 a month with a three-month bonus. When fully implemented in 2026, he or she could benefit from $1,530 worth of additional employers’ CPF contributions with the raised monthly salary ceiling. However, should the annual salary ceiling be raised in tandem, this would rise to $2,040 implying that the same worker will benefit from an increased CPF contribution of $510 a year.

In the case of a worker who earns $8,000 a month and has a four-month bonus, whether through his or her exceptional work performance or otherwise, the worker would not benefit from the raised monthly salary ceiling at all. Yet, if the annual salary ceiling was raised in tandem, his or her CPF balances will be higher by $4,420 a year.

When the Government says that it will review the annual salary ceiling periodically, what is the Government looking out for before deciding to make the move or rather what is stopping the Government from doing so immediately as it has done in the past? In Budget 2015, it was said that the higher salary ceiling will cover wages up to the 80th percentile of resident incomes. What is the coverage of the current CPF salary ceiling moves and what could it be if the annual salary ceiling was raised correspondingly today?

Already, the higher monthly salary ceiling will be increased in four steps all the way to 2026 to allow employers and employees to adjust to the changes. I am sure everyone in this Chamber agrees that businesses value certainty and visibility on when exactly the annual salary ceiling move is going to take place, and this will be much appreciated by employers and employees alike.

Before I conclude, Mr Speaker, let me just say a few words in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Looking into FY2023, I note that the Government expects a modest deficit of S$0.4 billion. Despite slowing growth, operating revenues are expected to see strong growth in the year, up S$6.4 billion compared to 2022. Corporate income tax, personal income tax and GST are expected to reach new record highs for the third consecutive year.

I thus hope that the Government will not hesitate to support the livelihoods of our fellow Singaporeans if the need arises. This is crucial, because inflation pressures will persist and are unlikely to slow down discernibly and labour market conditions might continue to deteriorate.

One of the most puzzling moves to me is the change to the Working Mother’s Child Relief (WMCR). While there could be a group of lower income working mothers who would benefit from this change, the majority of would-be working mothers will be worse off with the change. In the context of "Building a Singapore Made for Families", I find this move self-contradictory.

Based on my estimates of working mothers' income within married couples, roughly 20% of mothers will benefit from the WMCR change while the remaining 80% of mothers will either be unaffected or worse off. I wonder if the WMCR truly seeks to encourage married women to remain in the workforce after having children, or does it have the unintended opposite effect? I hope the Government can reconsider the change to WMCR.

(In English): Mr Speaker, to conclude, I would like to share some final thoughts on Budget 2023. Recently, I read about the Cost-of-Thriving Index in America, which suggests that while many economists argue that America’s working families are more prosperous than ever before, families themselves feel that they have come under increasing economic pressure. The report suggests that the families are right.

As the Government strategises on how to move forward in a new era, I hope the future Singapore will not be one where we worry about not being able to attract the rich and famous or the largest and most profitable corporations and hence, have the average Singaporean shoulder a higher tax burden. I hope it will not be one where we have a shrinking middle class owing to income inequalities and I hope it will be one where every Singaporean family can thrive.

Prof Hoon Hian Teck.

Mr Speaker, Sir, the presentation of the Government Budget in Parliament by the Minister for Finance is an expression of hope for the country. The Budget Statement looks at the prospects for the country, taking into account both the current challenges as well as the opportunities. How did things look when the Minister for Finance presented Singapore's first Budget after gaining independence on 9 August 1965? How do things look in 2023? We can get a glimpse of how things look more than half a century ago from the 1970 Budget Statement presented by the then-Minister for Finance, Dr Goh Keng Swee, as he chose in that Budget Statement, to do a review of Singapore's economic performance during the preceding decade.

He said: "On the morning of 9 August 1965, I was in Fullerton Building, brooding over the enormous problems facing the country and the Government. The problems of the future loom in awesome and intimidating proportions." Nevertheless, Dr Goh was able to say in his Budget Statement in December of 1967, that after two years of independent existence, the Republic of Singapore continued not only to survive, but also to flourish, to the surprise of many observers.

Singapore's first Minister for Finance expressed hope when our country was still a newly emerging economy, while the present Minister for Finance expresses hope in presenting Budget 2023 when we are already a mature economy. Yet, in preparing the Government's Budget, I believe that there are enduring lessons from the past that are still applicable today which have to do with the role of economic growth in creating fiscal capacity, the necessity of integrating into the global economy for sustaining economic prosperity and the centrality of job holding in a dynamic economy.

First, the role of economic growth in creating fiscal capacity. Over the years, Singapore's tax revenue has grown in tandem with the expanding Gross Domestic Product (GDP), thus providing adequate resources to finance total Government spending. An analysis of the data shows the share of Singapore Government operating revenue as a share of GDP keeping pace with the Government spending as a share of GDP from 1965 onwards, except during the years of recessionary shocks, when we ran deficits. It is likely that Singapore's economic take-off that caused our economy to grow faster than the world's technology leaders in those years, expanded the size of the economic pie and raised tax revenue at given tax rates to help pay for our national expenditure.

It is inevitable that with Singapore getting closer to the world technology frontier, growth must inevitably fall to a more moderate level that is typical among the advanced industrial economies. The more moderate growth rate is likely to be propelled by productivity growth. In the earlier years, the increase in investment rate, the increase in labour force participation, helped to boost growth. But in this stage of being a more mature economy, that moderate growth rate has to be propelled principally by productivity growth, which in turn will depend on technological diffusion from abroad as well as indigenous innovation.

Indigenous innovation is partly driven by spending on research and development by the private sector as well as the higher education sector and public research institutes. However, indigenous innovation is importantly undertaken also by economic actors at the grassroots, conceiving new products to launch and better processes to churn out existing products. In this regard, the Enterprise Innovation Scheme introduced in Budget 2023 will help businesses press on with innovation.

Established firms, the bigger firms, may be hesitant to launch new and higher quality products for fear that their existing product lines might be displaced as customers shift away their purchases. Small firms and new startups therefore have greater incentive to find new niches because they do not have the same problem as these established firms. They dare to venture into the dark and try something new. However, they are limited by the availability of financing. As new business startups drive innovation in the new economy, a central relationship that comes into focus is that of financiers and entrepreneurs. Angel investors provide financing for startups. As our education system invest in providing our students more and more, with the opportunity to venture into the unknown and increase the supply of entrepreneurs, the match between angel investors and people with good business ideas might improve. So, in this next stage of growth, as our students operate in a more innovative, exploratory, education system while learning all the basics, maybe we will see more of them daring to venture into the unknown, to try it out, being entrepreneurs. This will improve the expected returns to financiers and increase the number of startups that receive financing. More successful early stage business ventures might then stimulate the supply of financing from venture capitalists. Therefore, in Budget 2023, with the augmenting, the SME co-investment fund, that helps to strengthen our enterprise financing ecosystem.

Second, the necessity of integrating into the global economy for sustaining economic prosperity. This is despite the fact that as the Budget Statement presented by the Minister has acknowledged the era of untrammelled globalisation is over and greater contestation and fragmentation of the global economy is likely. Still then, integrating into the global economy remains very important.

Economic integration in the global flow of ideas, goods and services, capital and labour, I believe, remains necessary as this expands our GDP and provides the fiscal resources to strengthen economic inclusion. Integrating into the global economy boosts our GDP through several channels.

As the industry expands through selling into the external market, each firm, even though small, experiences the productivity boost that allows it to expand output. For example, industry level trade missions into the regional economies gather useful information that each firm can take advantage of to expand sales.

Another point, more productive firms also self-select into selling in export markets as they are better able to cover the fixed costs of establishing export platforms. You need to incur some fixed cost just to find out how the market looks like in an overseas economy. Export-oriented firms are therefore larger. Larger firms tend to devote more resources to screen workers and improve the quality of their work force. Consequently, larger firms pay observationally equivalent workers more. Empirical evidence suggests that neighbouring countries, after adjusting for country sizes, tend to trade more with each other. So, the regional market provides an opportunity for our domestic firms to gain experience of selling abroad and learn from exporting. The experience gained can later help this firm to achieve international competitiveness to sell beyond regional markets. The Budget Statement notes that our deep relationships with both the US and China as well as the ASEAN economies, make us an increasingly important place for global and regional businesses. Setting aside $1 billion to boost the Singapore Global Enterprises Initiative in Budget 2023 adds further support to our internationalisation efforts.

Demographic trends create headwinds for Singapore even as we move to develop indigenous innovation. As our wages increase from the 1960s, the opportunity cost of having another child has also increased. While higher incomes means that people can afford to have more children, it has been observed that the total fertility rate tends to decline as countries become richer. This suggests that the substitution effect dominates the income effect of higher wages. In other words, if my wages are higher, sure, I can afford to have more children. On the other hand, raising a child is a very time intensive activity and possibly having another child means having less time in the market workplace. And that means forgoing a higher wage. That is the substitution effect and it is quite general across many countries of different cultures. As countries become richer, the total fertility rate steadily declines.

So, people invest more in raising the human capital of their children, even as the family size shrinks. That is how they spend their added income – investing in their children. So, in that regard, increasing the Government-paid paternity leave from Budget 2023 from two weeks to four weeks for eligible working fathers of Singaporean children serves to widen the opportunity for children to benefit from their father's investment time in them.

What poses a challenge for Singapore at this stage of our economic development is that an economy where older age structure appears to generate slower productivity growth. One reason for that, is that the lower labour force participation rate among older workers limits the extent of knowledge transfer from older and more experienced workers to younger workers. Another reason is that the pace of innovation tends to slow down due to a decline in the supply of entrepreneurs as we have more people who are older in the population. So, to generate economic prosperity in the mature phase, Singapore, I believe, will have to adopt a two-pronged approach, both to boost total fertility but at the same time to manage a controlled flow of immigrants to keep the population size from shrinking.

My final point, the centrality of job holding in a dynamic economy. A person's self-esteem tends to be very much tied up with the ability to tackle challenges that the workplace throws up. There is a sense of accomplishment that comes from being able to size up a problem at our workplace and to pull together the available resources to solve the problem.

When one's contribution to solving a problem is acknowledged, even if only tacitly, it boosts our self-confidence and encourages greater initiative. Work also gives structure to one's life. Many goals that we set are work related and these serve to give us a sense of purpose as we begin each new day. When we are absorbed in our work, time flies. On the other hand, there is a certain listlessness that accompanies prolonged joblessness. Many meaningful relationships are also developed at our workplace. This is partly due to the fact that the production process in modern enterprises is a collaborative effort requiring teamwork. As we work along with colleagues to achieve common goals and contribute jointly to problem-solving, we develop a social bond and a sense of belonging that are important for our emotional health. When workers across the whole economy find their work meaningful and are ready to think constantly about how to do their work better in novel ways, the result can be higher job satisfaction and a boost to aggregate productivity growth.

Budget 2023 affirms the centrality of job holding as it introduces measures to uplift the wage earnings of lower-wage workers and also provide support to reskill displaced workers and match them to new jobs.

Mr Speaker, Sir, in conclusion, Dr Goh Keng Swee, ending the narrative of the decade in his 1970 Budget Statement, also said, "Throughout the decade, there was a persistent search for practical solutions – a patient building of institutions and infrastructure, a generous allocation of funds and an accumulated collection of talented staff. In the end, it paid off. It is imperative that we should never either through extravagance or carelessness, fritter away all that we had so laboriously built up. We must build on the foundation of the accumulated experience of the decade and ensure that progress and prosperity will continue to higher levels of consolidation."

I believe that Budget 2023 is consonant with this wise counsel. I stand in support of the Budget.

Mr Christopher de Souza.

Mr Speaker, Sir, this year's Budget is about moving forward in a new era. Deputy Prime Minister Lawrence Wong has said that we cannot simply do the same things as we have in the past and assume success. It involves asking ourselves hard questions where solutions sometimes involve competing interests.

Mr Speaker, today I would like to raise a few hard questions on two issues and consider whether the trade-offs we have made continue to measure up under examination. Instead of just raising questions on these topics, I would like to, humbly and sincerely, offer my own suggestions and solutions for this House to deliberate upon.

The first issue is something deeply concerning to me and many other Singaporeans – that is, the growing number of workplace injuries and fatalities.

Last year, on a Tuesday morning in December, Mr Ely Chow was struck and pinned down by a machine as it was being transferred by a forklift. He was taken unconscious to Ng Teng Fong Hospital and subsequently passed away from his injuries. I was there at his wake in Ghim Moh and it affected me deeply. Ely grew up in Ghim Moh, in Ulu Pandan, the constituency I serve, where his mother and father live. His sister, Ruth, and her husband also live in Ghim Moh. Ely was just 31 years old and was, together with his fiancé, waiting to move into their Built-To-Order (BTO) home in Ghim Moh, a stone's throw away from where he grew up. I felt the family's anguish at the wake. I promised them that I would speak up for Ely in Parliament. I am fulfilling that promise today.

Ely was one of 46 workplace fatalities in 2022 – the highest number since 2016, despite a heightened safety period imposed in September. This year, there have already been five workplace fatalities in less than two months, most recently of which was the harbour pilot from PSA Marine. Additionally, the major injury rate per 100,000 workers has increased in the last few months from 16.8 to 18.7.

In response to this, the Ministry of Manpower (MOM) has implemented a six-month heightened safety period since last September and has extended it till May this year. This is necessary and I am encouraged by it. I also acknowledge that the Government has accepted the eight key recommendations by the International Advisory Panel on improving workplace safety and health.

Notwithstanding all that has been done by MOM and the relevant stakeholders, Mr Speaker, Sir, I believe there is far more we can do and we owe it to the workers to ensure their utmost safety. Let me explain and thereafter offer solutions.

Our Workplace Safety and Health vision is to have workplace fatalities to be below one per 100,000 workers by 2028. I believe this is not only possible, but necessary as we continue to build and develop Singapore. The men and women working in these high-risk sectors, both locals and migrant workers, help to build and maintain our buildings and keep the infrastructure of our nation running.

There are two things and two sub-issues I believe we can continue to strengthen our workplace safety.

Firstly, we need to build a strong safety culture where employees are mindful of their own safety and employers take responsibility of their employees' safety. This involves all stakeholders and goes beyond the physical workplace.

Many of the injuries and fatalities happen within the construction sector where there are high heights as well as the transportation and storage sector where vehicles are involved. A culture prioritising safety is a collective effort. Designers and developers must take into consideration how something can be safely built and maintained. Clear and simplified instructions of how to implement safety regulations can ensure that employees on the ground will be up to date.

We must have a framework of safety to ensure regular maintenance of all equipment and checks by MOM to see that standards are upheld by both large firms as well as SMEs. Particularly for SMEs, where manpower constraints and the difficulty of implementing such safety regulations are more apparent, we need to consider how to make the adoption of industry safety standards as straightforward and sustainable as they can be.

Secondly, getting the appropriate and sufficient training as well as regular refreshers are important to ensure that all equipment are safe to use. This applies to employees as well as more senior management such that this safety culture is inculcated into each firm's core values. Especially with new workers, proper training must be given so that each worker knows how to use the relevant equipment and knows what other safety measures to abide by. Proper training imparts a culture of responsibility and watching out for other workers as well.

Mr Speaker, Sir, there are two other sub-issues I would like to raise in relation to workplace safety.

Firstly, COVID-19 has heightened the difficulties for many industries. There is a crunch in manpower, delays in projects causing upward pressure to work faster and many workers and constructions resuming after a long time-off. A combination of all these, along with supply chain disruption, has increased the risk of hazards. I understand these pressures. But this is a trade-off I am not willing to pay. I am not willing to lose a life on the worksite. I have provided some solutions in my speech already.

Sir, our economic success has been built upon how we value people and how we value life, and we cannot deviate from that.

In relation to that, I believe we need better infrastructure of how we provide information and support for victims and their family members. Losing someone is always painful and particularly so when it is sudden and unexpected, which is the case with all workplace fatalities. There must be a more systematic way to inform family members if any incident has occurred so they can arrive as quickly as possible. In addition, while of course investigations have to take place and run their due course, information can be provided to the victim's families to assist in at least some partial closure in a very painful episode.

Mr Speaker, Sir, by rethinking our safety culture, we can tighten our social compact by lowering workplace fatalities and providing the right care to victim's families.

The second topic I would like to speak on is education. Singapore's education system is one that we can, and should, be proud of. It is world renowned for producing exceptional students across the board who are prepared to tackle the significant issues and challenges our world faces today and who consistently rank highly globally. Some may then ask, why speak about, or fix something, that is not broken.

The answer is because we must focus on the true mission of education: to prepare our young for the world and give them equal opportunities to attain better lives. Rankings do not tell the full picture of our education system. Rankings have a purpose, but to an extent. This is especially so in uncertain times, where we must develop students holistically to achieve the best they can. We must therefore continually evolve and adapt to ensure our system is prepared for the future.

Today, I would like to ask for a rethink of our education system and syllabus, and in relation to that, the PSLE and our heavy reliance on tuition. This issue is not new. In fact, the Ministry of Education has addressed concerns over the years and brought forth many changes in our curriculum to better equip our children, including removing the T-score for the PSLE. Nevertheless, tuition in Singapore remains a billion-dollar industry, possibly a multi-billion-dollar industry, with seven out of every 10 children in Singapore enrolled in tuition, with the PSLE, in particular, providing a great element of stress.

Let me now, Sir, provide some humble suggestions and possible solutions.

Firstly, I would like to propose that perhaps it is time for a rethink of the syllabus in order to right-size it. Reducing a syllabus to an appropriate size cannot be done arbitrarily and the syllabus is crafted according to the changing needs of our nation. I accept that. So, certainly, it would be hard to figure out what should be prioritised because every part of the syllabus is arguably important to prepare students for the future. I also note that there have been many revamps of our curriculum including the introduction of the "Teach Less, Learn More" scheme.

Nevertheless, I take reference from the Finnish education system, an education system that has consistently ranked highly and is similarly well regarded around the world. Not only does Finland perform well on PISA, students face less stress and after-school tutoring is rare. While a direct pari materia importation of Finland's model is certainly not possible because of cultural and structural differences, a page can definitely be taken from their book.

When the Finnish education system was reformed in the 1980s, Finnish educators shifted their focus away from test scores and Math and Science comprehension to building a "happy, harmonious and healthy student and learning environment". This focus was to help "every single child" in a way to combat social inequality.

In Singapore, we already have, yes, the existing programmes to target inequality like the Uplifting Pupils in Life and Inspiring Families Taskforce (UPLIFT). But I believe, as the Finnish did, that we can consider a redefinition of success and the end goal of our education system. Especially in an uncertain world, these transversal skills I have just mentioned – particularly critical thinking skills and learning to learn and research – are what we must focus on.

Having that in mind, we can tailor and reshape the syllabus around these core skills which hopefully would lighten the actual workload on students. Finnish students have little homework and thus do not spend more than half an hour outside of school time to finish homework. This lightened workload then allows for more sleep for students and less need to rely on tutors.

Creating such a culture in Singapore would reduce the need for tuition merely to do school homework but rather focus on tuition merely to boost a child in particular areas in which he or she struggles in, where needed. So, the syllabus needs to be less stressful so that there is small, or little, or no need for tuition.

Secondly, I would suggest having every primary school affiliated with a secondary school so that the student can transition to that affiliated school easily if he or she so wishes to go that school. That would allow nearly every student to be assured secondary school entry in a school familiar to him or her.

I would even suggest perhaps that we need to consider doing away with the PSLE altogether. There are already continuous assessments every year in primary school – and with a proper scheme of affiliation, students can focus on more holistic and long-term learning. That would give them a longer runway till 16 to prepare and allow late bloomers to catch up.

Finally, I would like to suggest that all secondary schools accommodate all streams in their campuses to ensure students of different academic abilities mix together in one school while still going to class according to their respective academic abilities.

We have already introduced Subject-based Banding (SBB) and see the positive effects of it to allow students to learn at their own pace and to remove possible stigma associated with certain labels.

Currently, SBB does not apply to all schools and certain schools only accept express students and IB students. I would like to humbly suggest that while such programmes are good, allowing more porous boundaries will allow groups of students to mix more freely. It is well known that the social environment of a school can positively influence a student's academic behaviour and performance.

This is not a proposal I make lightly, nor is it something that can be simply implemented with the stroke of a pen or the wave of a wand. But its benefits are obvious. We need only look to National Service – an education and training system in its own right – to see how it has helped Singaporeans learn to live and work together, unite and forge a common identity regardless of race, religion or background.

This is something we have done before and I believe we can do it again – this time in our schools.

While it is certainly true that catering to specific segments of students, such as those with high academic ability or strengths in specific areas or those who prefer a more hands-on and technical training can have its advantages, these benefits are not necessarily negated if we start to mix streams within all schools.

Mr Speaker, Sir, as we continue to rethink and redefine our school system, we must consider that there are many roads that lead to a fulfilling life and results cannot be the only marker.

Removing the PSLE would reduce the pressure on students. Students would be geared towards education, not results. Learning to mix with people from all walks of life is invaluable and wholesome and rich, and it carries into the working world.

I humbly submit that, together, all these suggestions, along with the many others that I know MOE is considering, will be able to help Singapore continue its legacy of developing students who can grow into citizens who can tackle the problems of tomorrow.

Mr Speaker, as we deliberate over how to bring our nation forward, we have to make hard decisions on finding a balance between various trade-offs. I believe we owe this to the residents we serve and in that way, we can build stronger solidarity to take Singapore forward.

Mr Shawn Huang.

Mr Speaker, those of my generation would fondly remember visiting the computer lab in school – bulky cathode-ray tube (CRT) monitors and the screeching noise of a dial up modem. Twenty-eight point eight kilobits per second was what we had. Much later, the 56.8 modems were on after-burner.

This was probably difficult to comprehend – why the hype over a computer lab? But back then, this was cutting edge.

Access to computers was a luxury. Much earlier, I remember loading MS-DOS using floppy drives. I remember hardcoding my first html website in 1996 and uploading it onto Angelfire, a free hosting website. Computers back then were the 486 Pentiums and the thought of having dual core and quad core chips were to me, space technology.

February 2023 marks the dawn of generative artificial intelligence (AI). This is becoming the new Internet in the pursuit of new experiences.

We have heard this before. The rate of technological change is accelerating. It is unpredictable and unprecedented. But the pace of change has gained additional momentum with the arrival of tools such as ChatGPT.

For a long time, the generic Google Search was much of everything we knew of the Internet. Chatbots are not a new idea. For a decade, we had Siri and Alexa, but the level of performance and adoption in Generative Pre-trained Transformer (GPT) is astounding. What took Facebook four years, Instagram, two, Google, one to achieve 100 million users, ChatGPT took two months.

More recently, Microsoft invested $10 billion into ChatGPT. In response, Google has invested $300 million in its rival, Anthropic. The Massachusetts Institute of Technology (MIT), an educational research institution with an endowment of $24.6 billion, committed $1.1 billion for AI research. A $2 billion investment from IBM, $4.6 billion from Volkswagen, and many more.

Nvidia took the lead as the company positioned its latest Pascal chip architecture as purpose-built for AI, holding 90% of the market for processing chips using training and machine learning today.

From 1959 to 2012, computing power doubled every two years, tracking Moore's law. Today, computational power used to train the largest AI models doubles every 3.4 months. That is a rate seven times faster than before.

If you think that this progress is rapid, this was limited because graphics processing units (GPUs) could only condense computational power over a few hundred cores.

An AI chip maker, Cerebras, recently built the largest chip in the world – 22 inch on each side, 2.6 trillion transistors on a condensed computational power of 850,000 cores, with a 100 trillion parameters. Compared to what I knew of 486 Pentium computers, this was not space technology. This was alien technology.

This progress will keep pace with machine learning and robotics. In 2022, Amazon invested $1 billion into robotics. Amazon hires about 1.6 million workers at the end of 2021 and today, it adds about 1,000 robots a day. The number of robots to workers today is about a third. By 2023, Amazon will have more robots than employees.

With global investments reaching $232 billion by 2025, these capabilities will soon be quickly moved from supply chain to manufacturing. Employment will be disrupted.

Throughout history, there have been a handful of technologies that have truly transformed the world, unleashing new levels of productivity and prosperity. Think of the steam engine, which took 100 years, 25 years for the telephone, 30 years for electricity, and the printing press, which was invented in 1439, only widely adopted 500 years later in the 19th century. These technologies changed the way we live and work.

However, this time, it will be different.

It took a few years for Kodak to slide into bankruptcy. But with AI, the time required for a Kodak moment by pressing the camera button on the latest iPhone, a single AI would have generated more than a billion bits of information – a quantum leap by any measure.

The UK plans to become a global AI superpower. From the codebreaker Alan Turing's early work to London-based powerhouse DeepMind, UK is ranked third in the world for investments to AI companies and a third of all Europe's AI companies – just behind the US and China. More recently, British Telecom quick-paced and established an AI developmental hub, launched an AI accelerator and registered more AIs than any UK entity.

South Korea has similar ambitions and aims to become a powerhouse, with investments of $642 million into companies developing advanced AI chips. As part of the larger vision for South Korea, Seoul has set aside $795 million for AI semiconductors and another $235 million for next-generation platforms.

According to the Global AI Readiness Index, Singapore ranks second behind the US. Looking deeper into the data, Singapore outperformed in government and infrastructure pillars and must strive to do better for the technology pillar – impressive for a small country of a population of 5.5 million.

We must continue to do this good work, to be courageous in investing and building our future capabilities. We have a window of opportunity to become truly an intelligent nation to drive economic growth and improve the quality of life in Singapore.

Quality of life is closely linked to our access to resources.

The world consumes about 92 billion tonnes of resources each year – approximately 1.7 times the amount consumed in 2000. In the last 15 years, the global consumption of commodities increased by 40%. At the same time, investments in new mining projects have fallen to 15-year lows. The discovery of copper is on a gradual decline, with only one major discovery in the last five years. Many more resources follow a similar trend.

We are just at the start of a long run of shortages and higher prices. Even if supply was available, we cannot assume that it is accessible, not least until the producer country has stored ample supplies for domestic consumption. Copper and critical materials are at the leading edge of this global shortage. In due time, the rest will follow.

Who are competing with us for these resources?

In the 1960s, most of the global population were living in poverty. Today, we have 2.5 billion people in the middle class. The uplift of the middle class, coupled with better access to healthcare and education, has increased the number of professionals and global talent.

In 2020, China and India graduated over 90 million students from universities, with 2.7 million of them with degrees from science, engineering or technology. In the US and European Union (EU), 7.5 million students graduated from universities, mostly in business, healthcare, social science and law. This will continue to increase by another 30% by 2050.

This is the global competition for good jobs and quality investments and it will be increasingly difficult.

Mr Speaker, this Budget is well crafted, balanced, sustainable, with a progressive stance for the future. This Budget will help us to build strong foundations for innovation and collaboration, setting the right tone and pace. It sets out the importance to work on the strategy collectively – every stakeholder and entity, every Singaporean, a role to play. It reflects our values to give every citizen opportunities to discover themselves and contribute meaningfully, each contribution appreciated and cherished.

This Budget reflects our vision and ambition to build with courage the Singapore we want for tomorrow. Each year, natural disasters have shocked the world – earthquakes, tsunamis, pandemics. Some deadlier than others. War conflict and failed government policies are disasters we strike upon ourselves. Famine, economic collapse, inflation – we may be powerless in the face of a natural disaster, but we can prepare for them. We may not have the influence over policies of others, but we can prepare for them.

In the movie "World War Z", standing behind the impenetrable fortress and high walls, Mossad Chief, Jurgen Warmbrunn, explained the concept of the 10th person in the council of 10, the person charged with the responsibility, challenging every assumption, no matter how improbable it may seem to safeguard the "what-ifs" for the country. This gave them time to build up defences and face the threat.

In the Six Thinking Hats of De Bono, white, red, blue, yellow, green and black, the black hat is to imagine everything possible that may go wrong and to build capabilities for it.

In Finland, during the World War II, the Finns suffered greatly as a result of being cut off from imports. Today, the Finns would study anything that would possibly go wrong and prepare for it, never again to repeat history. According to one of the Finnish reports, it was this particular work that enabled Finland to stock up face mask as part of the strategic reserves which readied them for COVID-19. Then, many say it was paranoid, excess, a waste of public funds. But for catastrophic event for once in 100 years, I say it is for survival.

Singapore has weathered many crises since Independence. Closest to World War Z was Covid-19. We had the oil crisis of 1970s, the economic crisis, SARS and global economic crisis of 2008. We also had our fair share of destructions throughout the years, some more dire consequences than others. But what's fresh in our minds was the COVID-19 pandemic and the conflict between Ukraine and Russia. It reviewed the vulnerabilities and independence of the global economy.

First, medical supplies and equipment were in short supply. Then, food shortages worldwide, with rising prices of fertiliser, oil and grain, amongst many others. This was a race for resources and for survival. We must remember that, to survive, it is not just the 10th person or the black hat, but the contributions of all five other hats, doing their best to be innovative and creative with balance and poise, emotive and inclusive, building and fighting a strong team for Singapore.

In my maiden speech two years ago, I shared the importance of relevance and how Temasek's 700 years of history had its fair share of turmoil and success. Last year, I spoke on the dramatic rise of China's AI development and holding more AI patterns than any other country.

Today, we observe the emergence of ChatGPT and other tools, reading articles on Google's Survivor and Meta Facebook existential struggles. The pace of innovation, technological change and relevance is constantly shifting, more dramatic, the stakes much higher, opportunities and threats at every turn.

Mr Speaker, existentialism is in our DNA. Singapore has been building his capability since our Independence, a strong banking and financial system, robust and progressive public housing. Robust because HDB has enhanced our public housing for seismic events – earthquakes. For food, with several months of strategic reserves – rice, eggs, poultry, vegetables. Stockpile of antiviral drugs, amongst many essentials. Reserves to rebuild our entire country in disastrous calamity.