Heng Chee How
Singapore
“And in the case of overseas training, then there will be specific link-ups into the systems of our overseas partners, for example, if there is a need to further send the injured NSman to the local hospitals for more specialised treatment, that, too, was all planned in as well in terms of the protocols.”
“In addition to conducting regular exchanges with their professional counterparts, SAF personnel in our overseas training detachments participate actively in local community life and contribute back to the local communities, thus contributing to the strengthening of bilateral ties.”
“Mr Chairman, I thank Mr Giam for his question. The NS allowance, the nature of it, it is in a form of honorarium and for that, CPF is not payable. However, I just wanted to emphasise two points. One, within the NS journey, they are actually eligible for NS HOME Awards, which are paid out in the course of the NSmen's journey.”
“Mr Chairman, as we look forward, MINDEF/SAF’s commitment to NS and to our NSmen remains steadfast. We will continue to enhance the NS experience, maximise the contributions of our NSmen, and strengthen recognition for their service.”
“Mr Speaker, we have shown care for our older workers as a Government, as tripartite partners, not only in words but in deeds. As a result, we have made very substantial progress for our older workers, often bucking global trends. The environment we must deal with will be increasingly challenging.”
“Ultimately, fighting age discrimination is not only a legal matter nor is it just a moral imperative. It is also an economic necessity that will help sustain long-term prosperity for all.”
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“I am therefore most encouraged that the Government is re-energising the GEMS programme with a $100 million injection. This is an example for many other industries. Madam, at last year's Budget debate, I called attention to the importance of getting our community organisations ready for a more complex landscape brought about by a more diverse population profile. At work and in the community, as Singapore gets more cosmopolitan, these interfaces get more sensitive. For example, Singaporeans always thought that the foreigners who work here as talent or as buffer or as supplementary manpower – to do things locals cannot do, would not do or not have enough people to do. The recent cases of abandoned workers or large numbers of workers left stranded without work and pay for months – opens up many questions in the minds of locals. Why are these people still here for months when there is no work for them? Fairness for these workers is one key question. Then, related questions of how they would be making ends meet, if they are allowed to find work, staying here longer than they should, then they would be competing with locals beyond what the system was designed to do. I understand such comparisons are also taking place now not only among lower skills workers, but increasingly across the ranks, including PMETs who see themselves competing with those on "S" passes and on Employment passes. We have to make sure that we tackle these issues correctly, focusing on building in our local workforce competitive skill sets, strong confidence and adaptability, rather than to shield ourselves away from competition. At the same time, we must focus our efforts and machinery to help retrenched Singaporeans at all levels regain work as quickly as possible.”
“Yes, we must expect that it will be harder to get attention for these subjects in an economic crisis, but if we lose our focus, we will pay that price and suffer the consequences not very far in the future. We must not lose focus. Secondly, productivity improvement makes for better living standards. Again, this will also not change. There have been instances, for example, the dotcom boom, and the financial wizardry and mesmerising marketing more recently which led many to forget, with painful consequences, that at the end of the day, it is fundamentals that count. The NWC has noted in its more recent sittings that productivity has not risen as fast as it should. While this was rightly explained by a very strong employment growth during the boom, it still begs the important question of how businesses increase the value and productivity of their operations. This is more critical than just using productivity figures as an indicator for wage bargaining. Without productivity gains, our exports will not be internationally competitive. For social cohesion reasons, we do not want to achieve high productivity by lowering employment. We also do not want to see a slide in overall living standards through a growing pool of low-value, low-pay jobs. So if we do not want those things, then how do you get your productivity up? It is job value creation. And the Budget has specific items aimed at encouraging innovation. This is good. The challenge is not just to leave it to the companies to respond or just aim for a few peaks. I think we must systematically enrol companies of all sizes and in all industries into a mindset and a practice of productivity improvement. If we succeed, the outcome for the economy and our job market will be amazing.”
“These will directly help households, particularly the lower income households, cope better with the cost of living. The labour movement has also announced our plans to step up our assistance to members. But at the same time, and I agree with several Members who spoke before me, households and individuals must also do their part. In a previous speech before this House, I spoke of the advantages of simple living. We must be prepared to adjust our expenditure patterns and live within our means. I am not saying that those who can afford to spend should also not stop spending. But I am also very concerned, just as the Member, Mr Zainudin Nordin, that there would be many who would continue to spend beyond their means and get into serious difficulties. That we must watch out. Madam, the concluding paragraph of many recent speeches, mine included, tended to say that after we get through this storm, we will be stronger for it. It is important to not just make these statements our hope and aim, but to also carefully consider how we can make it happen. Many things are uncertain at present. Yet, there are also truths and trends that are certain to outlast this crisis, and we must not blindsided by surprises or complacency on those known fronts. And here, I would like to highlight four areas. Firstly, the ageing of population is recession-proof. Thus, all the preparation for that reality – making working longer desirable and possible even in these times, healthy and active ageing, retirement funding, housing for the elderly, disability care, and so on. It is important to continue to prod along these areas and not to slow down just because there is a recession.”
“Every country is hungry for investments, for exports and every country will do everything to get them. In this process, we must also expect that more countries may turn protectionist in an attempt to help their own. While Singapore will not go the protectionist way, our ability to source for a sacred cow and defend demand is an essential part of tiding through this difficult period. For example, when banks consider loan applications from businesses, they will look at demand for those goods and services in assessing the risks. We must examine what we can do to maximise our effectiveness in securing demand. We must examine the roles of the agencies, the chambers and the companies. How can we best coordinate and energise these efforts, and leave as little to luck as possible? How can we exemplify our vaunted Singapore Inc. approach in this time of real need? For example, I understand that within the MICE sector, the conventions part continue to present opportunities that Singapore can tap on, leveraging on our advantages of safety, service quality, connectivity and even favourable weather. What it means is that we must not sit tight – there is still business and demand and we have to go out of there to grab it. Madam, the sharp drop in global aggregate demand has caused inflation to moderate. The good news is that the projected inflation rate for 2009 is somewhere between flat to being slightly negative. Transport companies are bringing down fares and housing prices and rentals have moderated. Despite this, we must not let down our guard, because retrenchments and unemployment will rise and pay fall in this year. The Government has stepped up help in this Budget – more GST Credits, higher Workfare payouts and various rebates.”
“Hence, it will be encouraging its member companies to tap SPUR and also to work with WDA to consider accrediting its training institute's industry-recognised courses under SPUR. Together with Tripartite partners, we will do out utmost to help upturn the downturn – in spirit and in practical action. Madam, a key point raised in the debate yesterday and today is that measures like Jobs Credit, SPUR and SRSS are supply side measures. They are enablers and they help companies last longer and to be more competitive. When these measures are complemented with demand, then the effectiveness is maximised. Singapore is a small, open economy. The bad news is that we cannot escape being hit. Furthermore, our openness means that an expansionary budget has a larger leakage factor than less open economies. Our small domestic market also means stimulating consumption would not give the same bang for buck as in some other places. That said, the better news is that our smallness means that the demand we need to bounce back is not as big as that needed by huge economies. I am heartened by the measures in this Budget to reinforce Singapore's attraction as a business hub in all aspect, ie, to allow us to attract demand. But I am not very clear, listening to the Budget, what proactive measures the Government agencies will be undertaking directly, or indirectly with chambers of commerce, industry bodies and so on, to go out and seek out demand. I hope that there could be reassurance on this, and elaboration on the details of these aspects in the COS of the relevant Ministries. We need active measures and not just passive ones that depend on the outside world to respond to our Budget. With global demand dropping off a cliff, every country is impacted.”
“If you say that how come the jobs have grown, it is to reflect the kind of effort that is being put in to source for those jobs that are already in the economy, and put them together so as to offer practical help to the displaced workers. We certainly have to step up our efforts to help displaced workers retrain and to be emplaced into new jobs, so as to forestall structural unemployment. Earlier, you heard the Member, Ms Cham Hui Fong's data on shorter work-weeks and retrenchment within the unionised sector. Madam, our unions are working very closely with companies using the Tripartite Guidelines on Managing Excess Manpower as well as the latest NWC wage guidelines to make sure that as many unionised companies as possible stay afloat and the jobs of their workers preserved and prolonged. Every sector can and must do something useful. We hear examples from many sectors under stress, for example, electronics. But even sectors that are not under direct stress, the construction sector, which most of us will agree is so far deemed to be one of the least impacted, is also taking action. I have met with the Singapore Contractors Association (SCAL), and the council of that organisation have agreed to work closely with the construction union in order to aggregate and pass information of jobs at all levels from their member companies through the union to e2i, to work with the e2i to help construction companies take advantage of skilled manpower within the sector that becomes available as one company completes a contract while another is about to begin one, and to help the truly excess local manpower retrain for placement into other sectors. SCAL also sees the current situation as an opportunity to further upgrade the skills and image of the sector.”
“A dollar saved anywhere is a dollar saved. We must monitor that very closely to see if these savings are getting to the targets and whether they are achieving the intended impact and to make the necessary adjustments to ensure they do. We must avoid a situation where money stood by for a purpose remains relatively untapped while the damage occurs on the ground. Madam, for these measures to be effective, the challenge is swift implementation, so that the water gets to the crops. I hear feedback that if there is no visibility of an upturn by mid-year, then shareholders of many SMEs may opt to preserve their capital and cut losses. I also hear talk that acquisition of vulnerable companies by stronger ones may rise significantly in the second half of the year, and if that should happen, triggering more consolidation and rationalisation of manpower. What this all means is that we must move fast to relieve pressure from companies so as to delay and minimise job cuts. Even though this is the Year of the Ox, we must not wait "till the cows come home". The labour movement understands the urgency of the situation. This is why we not only support these measures wholeheartedly, but we are going all out, pulling out all stops within our means and influence to get it flowing as quickly as possible. For example, e2i, in driving SPUR, already has 54 unionised companies who together have committed 7,200 workers to retraining under the SPUR Programme, with another 44 companies in the pipeline. The e2i's job gallery has now 11,000 jobs, up from 5,500 a month ago.”
“The SPUR Programme on its part, increases companies' short-term cashflow if they have excess workers and also improves the companies' competitiveness through upskilling. And PMETs, in particular, get extra $150 million allocation that will bring SPUR funding to $750 million. Madam, the ground feedback about the Jobs Credit has been very good. I have discussed with the management of companies and associations in the following industries: construction, waste management, hotels and food manufacturing. They have confirmed that the Jobs Credit Scheme and the Jobs Credits will be most helpful in lightening their payroll pressure and that this will improve job security in their sectors. For companies that perform better, they say that their workers will certainly receive a fair share of the rewards. If they have KPIs, then through KPI gain-sharing or if not, then through negotiations by the unions. Workers and the labour movement are certainly glad and grateful to the Government for having chosen the Jobs Credit instead of a nine-point CPF cut to reduce cost for companies and to save jobs. In recognising that it is total cost and not only wage costs that companies struggle with at this point, the Government, through HDB, JTC and SLA, are also going to cut by 15% while freezing all fees for the year. Property tax rebates will also help companies if the landlords pass them on to tenants. Energy cost is another big cost item for certain industries, and the feedback I get is that companies that they would greatly appreciate additional help in this area. If the rates are internationally determined and cannot be varied, then they hope some improvement to the current quarterly formula can also be found to improve the ability to budget in a more stable way.”
“Singapore, we make our living through exports and by providing services that facilitate and add value to the flow of commerce and wealth. When these go into difficulties or stall, then we are in serious difficulties, which we are. Looking at the papers, our tourists arrivals have fallen again. The Purchasing Manager's Index is still below 50 and just now, I received an SMS update that Panasonic Japan has just decided to slash another 15,000 jobs worldwide and close 27 companies or factories around the world. This is the kind of situation that we are facing. So, if you ask me, is this the right time to draw on our reserves, one small part of it and use it in a very purposeful way to lead this country forward, I say yes. Of course, we must make sure that it will be money well-spent. Of course, we must make sure that when the economy recovers, we build it back as soon as possible. And I also support the call to explain the process of approval more clearly, in more detail to our people. Madam, for society as a whole, the biggest threat to us all, to Singapore is a fast-growing pool of the unemployed. So saving jobs is paramount. There is consensus in this House, in the whole country about this. As the Chinese saying goes, "留得青山在，不怕没柴烧". To do that, we have to keep companies afloat because they are the receptacles for jobs. They are threatened by loss of demand, by cashflow and credit woes, and by a total lack of visibility as to when the upturn will come. For these companies to hold on longer and for the workers in them to hold on to their jobs longer, then the companies need to reduce cost fast and significantly. Hence, the Jobs Credit and Special Risk-Sharing Schemes are targeted that way.”
“Mdm Deputy Speaker. Thank you for allowing me to join this debate. This year's Government Budget is indeed a very big and expansionary one, 12% over FY2008. It is also earlier than normal and proposes to use the National Reserves for the first time. What does this show us? It shows us how seriously this Government is taking the situation. But more that, it shows this Government cares, cares so much that it would do something that it has always resisted, that is to draw on the reserves in order to help the people in ways that are real, in ways that are practical, helping people to relieve their anxiety, relieve the pain. But most of all, giving people the ability to continue to fish, rather than just to rely on fish given. I think it is important that we always remember this. This Budget is also about leadership. It is about leadership that does not quit, that does not run away in the face of difficulty. It is about leadership that looks the challenge in the eye and will lead this people forward into safety, not a leadership that will only speak with insight, based on hindsight. Mr Chiam See Tong earlier referred to Churchill, who said, never, never surrender. I think in another speech Churchill also said, never, never quit and I think that is the spirit by which we should all tackle this recession. Madam, clearly this Budget is a response to a very bad global situation, with the evaporation of wealth and demand, and a sharp drop in our performance indicators, in tourist arrivals, and so on. One headline on 22nd January summarised the world situation as 'job cuts everywhere' and it was describing a situation of 82,000 jobs slashed by major companies in the world in a single day.”
“Point of clarification, Sir. If the Jobs Credit Scheme serves to increase the flow of revenue into a company and at whatever state of demand that the company is facing but with a better cash position, would it not last longer? And if the company were to last longer, would it not then be able to keep more jobs for more workers longer and avoid the pain for more workers, the very pain that he argued so passionately about saving workers from? My other clarification, Sir, to the Member is that if he believes that the $4.5 billion set aside for the Jobs Credit Scheme for saving jobs, which objective he does not disagree with, is not cost effective, then what other ideas would he have that would be more cost effective and yet save jobs?”
“Clarification, Sir. The Member has said because the Jobs Credit Scheme, in his view, is not going to able to save every job, so it is not worth having. He said that in reply to the clarification from Mrs Josephine Teo. So I would like to ask the Member if companies were to get the credit that they want, is there any guarantee that they will not retrench? There is no guarantee. Therefore, is he also saying to forget about the Risk-Sharing Scheme? Nothing except those that can guarantee you that there will be no retrenchments. Forget about all the other programmes, which we all know are aimed at helping companies survive longer.”
“One clarification, Sir. I would like to ask the Member, when he says that the Jobs Credit Scheme is of doubtful effect, does he not also agree that when companies are facing difficulties and they have to cut pay and so on. Pay is, in fact, recognised as an important component of costs and that when the Jobs Credit comes forward to subsidise the payroll, it actually releases the pressure on the company and, therefore, reduces the risk of retrenchments and increases the security of jobs for workers.”
“I also believe that what gets measured gets done, and what is rewarded is repeated. Hence, I would like to know if there are plans to further strengthen community outreach along the lines that I have described. If so, I would like to know whether training and development would be offered in this area in order to enhance the ground capability. I would like to know if performance indicators would then be adjusted to reflect, recognise and reward progress.”
“Sir, our population profile is changing. There are more older people. Incomes have become more stretched out. There are more foreigners working and living here, and new citizens are joining us. Families are getting smaller, and some have become dysfunctional. Neighbours do not always know one another and sometimes they are not friendly to one another. So, the community as a whole is becoming more diverse and complex, and we will have to contend with more non-connection, more disconnection and more fraying of relationships. A strong community depends on both material as well as non-material well-being, in other words, money is important but money is not the only thing. Non-monetary things, such as a shared sense of purpose and hope, good health, strong family and social relationships are equally important. Therefore, it is not a selfish, lonely or ostentatious pursuit. A happy community should be one where people bother and care. On the ground, the grassroots organisations have been a positive force for organising activities for residents and for targeting help at their local needy. Going forward, I believe that the role of grassroots organisations and their constituency officers to support them has to evolve and adapt further. Engagement means outreach. It also means encouraging people to rally around innate interests and to strengthen the sense of neighbourliness. As Minister of State Yu-Foo Yee Shoon mentioned just now, hao ren hao shi, cong zhou bian zhuo qi. Community partnerships that bring more people as well as more groups closer together for mutual interest, care and support will therefore strengthen the social glue. There is know-how for doing this well so that it does not become a numbers game.”
“Every worker deserves to go to a place of work that is safe and to be able to go back safely to their family every day. The Government has put emphasis on workplace safety and health. With the enhanced occupational safety and health framework and the Workplace Safety and Health Act as well as the participation from tripartite partners and industry, the goal is to further improve safety outcomes and reduce fatalities, injuries and accidents in all workplaces. I believe that there has been improvement between 2005 and 2006, and the data for 2007 has yet to be released. But since the beginning of this year, there have already been three worksite incidents with fatalities. There have also been road accidents involving the conveying of workers in open vans and trucks from time to time. It is important to assess whether the overall intention and efforts are on track or whether there has been a slackening on the part of the industry. The Lianhe Zaobao editorial of Saturday, 1st March 2008, expresses the same sentiment. I would like the MOM to give an update on whether the overall incidence of workplace accidents of all degrees of severity has shown declines; whether safety should now be further tightened for the conveying of workers to and from workplaces; and whether cost competition and time pressure in tender bids have a negative effect on the willingness of companies to fully look after the safety of their workers. Foreign Worker Issues”
“I hope that MOM can take these suggestions into account as we enhance and refine our efforts to support the employment and re-employment of older workers. Retirement Age”
“Under the scheme, and subject to fulfilling conditions, a company can receive grants of up to $400,000, and I commend MOM and WDA for initiating the ADVANTAGE! Scheme to give incentive for progress. Clearly, the more attractive the terms and user-friendly the scheme becomes to companies of different sizes and in different industry settings, the faster the take-up. That means that more mature workers across more sectors will benefit earlier in terms of prospects for employment, retention and re-employment. On the ground, there has been some feedback on how the scheme could be further refined to accelerate progress. First, is to introduce more flexibility. Some companies may need pilots in order to gain the confidence to do more. Such companies would hope that the grants can be structured in such a way as to support the conducting of pilots. Second, smaller companies find it harder to fulfill the conditions on headcount employment, compared to bigger companies. Yet, as a group, SMEs employ the majority of workers and would have to re-employ them in time to come. Is there a scope to focus on terms that would suit SMEs better? Is it possible for the ADVANTAGE! Scheme's terms to be adapted for SMEs? If not, could there be a small ADVANTAGE! Scheme, for example? Third, some companies are running ahead of others in terms of ideas, and so they put in their grant applications. But the application does not amount to $400,000 in the first instance. But there is a current limitation in the sense that a company is allowed to apply once. So, they hope that the company grant cap can be maintained while allowance be made for them to apply more than once.”
“Sir, the re-employment of older workers is an imperative for the economy and society because of the manpower shortage and rising longevity. The coming of the re-employment law in 2012 adds further urgency to companies and organisations to make the necessary arrangements. Within the union movement, we have already reached out to some 35% of unionised companies last year, and we are on our way to reaching out to 60% this year. Within those companies that have committed themselves, work also is being done to restructure the hiring and deployment plans so that the employability of these older workers would not be a one-year phenomenon at age 62 or be overly dependent on an ultra-tight labour market. I am not sure what progress there has been in the non-unionised sector. In view of the less certain economic outlook and the possible lack of urgency on the part of some employers as they focus on immediate-term firefighting, ie, they do not see doing this work to ensure re-employment practices are well managed as a 2008 priority but, perhaps, as something that they can tackle in the year 2011, if they think, then there is a risk that the momentum in this subject will flag. If that is so, then there will be big difficulties later on. I would like MOM to give an update of the status of the progress so far and urge the Government to continue to devote attention and resources to highlight the importance of getting it going and to nudge all employers to work with their unions and employees to put in place sustainable arrangements for different industries and job types as soon as possible. ADVANTAGE! Scheme As part of the Government's efforts to promote employment, retention and re-employment of mature workers, MOM and WDA have initiated the ADVANTAGE! Scheme.”
“On the $88 million, I would just like to say that $55 million out of the $88 million is actually earmarked for developing community themes as well as manpower development for use in this area. I do not have the detailed breakdown in terms of whether or not it goes into those organisations that she has mentioned, but certainly this $55 million is targeted in that direction.”
“However, in exceptional situations, we have the ability to tap the assistance of overseas Skin Banks for additional grafts. As we intensify our public awareness efforts on organ donation over the next few years, we hope that more members of the public will consider pledging their skin as well as other organs. Dr Lam Pin Min was concerned about the impact of medical tourism on healthcare for Singaporeans. My Ministry will ensure that Singaporeans have access to good and affordable healthcare. My Minister has earlier explained how we will be investing to further improve the quality of our healthcare for our citizens. Indeed, it is the high quality of our healthcare that attracts foreign patients to our shores. Although foreign patients can choose to go to our restructured hospitals as unsubsidised patients, they make up less than 2% of admissions in our restructured hospitals currently. That said, MOH understands the concern that Dr Lam has described, and will ensure that Singaporeans are never disadvantaged even as foreign demand for healthcare services here grows. And to do so, we will build more restructured hospitals as well as add more beds, and this has been explained also by my Minister. Next, we are facilitating the private sector's building up of medical infrastructure to meet increased foreign demand. Third, we are strengthening our healthcare manpower pipeline – both local and foreign. Together, these measures will increase our capacity to meet the anticipated healthcare needs in Singapore.”
“I would like to thank Mr Sam Tan for bringing up this subject to help increase public awareness about skin and organ donations. Currently, the Human Organ Transplant Act (HOTA) only allows for kidney, heart, liver and cornea donations. When the HOTA was enacted in 1987, it only included kidney donation and in 2004, the Act was amended to include liver, heart and cornea donations and was done after extensive public consultations showed that the majority of Singaporeans supported such inclusion. Because organ donation under the HOTA runs on an opt-out system, we have ensured that the inclusion of organs in the Act has public support and address the more urgent transplant needs of Singaporeans. Although skin donation is not covered under the HOTA, Singaporeans can pledge to donate their other organs including the skin through the Medical (Therapy, Education and Research) Act. This does not affect their decisions under HOTA. Skin donations are no less important than kidneys in saving lives. From 1998 to 2007, the National Skin Bank managed to receive over 100,000 square centimetres of skin grafts from 50 donors after their death. This has benefited more than 100 Singaporean patients, mostly suffering from extensive burn injuries. Mr Sam Tan thought that each year, up to 20 burn victims die because there is not enough skin to cover their burns. From our data, for the past five years an average of eight deaths per year come from severe burn injuries. This figure includes both Singaporeans and foreigners. Most of these patients die not because there are not enough skin grafts available, but because of their other very severe injuries. Our Skin Bank maintains a good reserve of skin grafts.”
“This is conducted in workplaces, schools and community venues and provides information and tips on how to broach and discuss sexuality issues with their children. The programme is supported by a toolkit, a helpline and a website. HPB is also working with Family Service Centres and other youth organisations to reach out to youth-at-risk and equip them with the life-skills. As Dr Fatimah has pointed out, in our society, people are generally reluctant to think about or talk about death or issues related to death. My Ministry has thus far adopted a cautious approach in promoting Advanced Medical Directive (AMD). We acknowledge that it is a very personal decision. Sir, although medical technology can sometimes struggle to delay death in the final stages of a terminal illness by very invasive and intrusive methods of treatment, it remains true that death cannot ultimately be avoided. The aggressive methods may also cause the terminal patients to suffer more rather than less. The living will or Advanced Medical Directive gives terminal patients with no prospect of recovery the ability to pass on in peace and dignity. Although my Ministry has undertaken public education about the AMD since its introduction in 1997 to explain its value for both individuals and families, to reassure about the treatment safeguards and to allay fears about the process, to date fewer than 9,000 people have made an AMD. We will increase our education efforts to improve social awareness and understanding of AMD and end-of-life issues, especially when our population is rapidly aging. We will also review and simplify the administrative processes to reduce difficulties for those who choose to make an AMD.”
“HPB has specially targeted education programmes for youths, parents, high-risk heterosexual men, men-who-have-sex-with-men and single women. The programmes are carried out in schools, in higher educational institutions, workplaces, entertainment spots as well as within the community. To support the expanded efforts, we have secured an additional $10 million for HIV education over the next two years. 5.15 pm On teenage abortions, our data showed that teenage abortions have not been on the rise. In fact, the number of abortions has declined from a peak of about 1,700 annually in the year 2000/2001 to about 1,300 in the year 2005/2006. But still it is a significant number, and therefore, we agree with Dr Lam that it is important to educate our youth on safe sex to prevent unwanted pregnancies and sexually transmitted infections, and we will continue to monitor closely the abortion rates among teenagers. HPB works closely with the MOE and MCYS in this effort. Today, all our secondary schools offer sexuality education that teaches the consequences of sex and how to say "no" to sex. Contraception and STI are included in the curriculum. HPB complements this with an STI/AIDS prevention programme called "Breaking Down Barriers". This programme has an interactive, multi-media mass education session that covers topics like abstinence and condom use, and a class-based component that teaches skills like responsible decision-making, assertiveness and negotiation skills on saying no to sex. HPB is also taking the fight beyond the schools. It recently developed the "Love Them. Talk about Sex" Programme, in collaboration with MCYS.”
“Unfortunately, there are some people who choose quick-fix procedures such as liposuction to improve their appearance by removing the excess fat. We do not recommend such an approach. Liposuction carries risks and, if improperly done, can result in life-threatening complications such as bleeding and infection, and, in some cases, even death. Major complications and deaths arising from liposuction have been reported in the US and in Europe. Nearer home, in a neighbouring country, there has been a report of a patient who underwent an eye-bag surgery, a tummy tuck and liposuction. She developed complications, went into coma and remains in coma. Singaporeans should be aware of this. Unfortunately, my Ministry has also begun to receive unconfirmed feedback of liposuction being done in some outpatient clinics that have led to problems. Let me stress that liposuction should be done by properly-trained doctors and in properly-equipped and staffed operating theatre facilities. Doctors have a duty of care to their patients, and they should practise only within their competence. For those customers who insist on undergoing liposuction, they should seek qualified and experienced doctors to do this for them in accredited surgical facilities. Otherwise, they risk their lives. Now on HIV. Mayor Zainudin cited some statistics from a survey to express his concern about the public awareness on HIV/AIDS. The statistics remind us that we need to continue working hard with new strategies to address these misconceptions, improve knowledge and, more importantly, change behaviours so that HIV can be better prevented and diagnosed earlier. Another area that needs to be addressed is the stigma against people living with HIV and AIDS.”
“HPB will continue to work closely with MOE to address this issue through various initiatives such as the counselling and medical referral programme. For adults, we will strengthen current efforts to prevent obesity through promoting regular exercise and healthy diets. We will also create a supportive environment by increasing the availability of reduced-energy and healthier foods in supermarkets and food outlets and making exercise and fitness facilities more easily accessible for all Singaporeans. This year, we will mount a campaign to increase awareness that obesity is a major health risk factor for diabetes, and to encourage Singaporeans to maintain a healthy weight in order to reduce their risk of diabetes. Next year, we will campaign against obesity directly. MOH will be forming an obesity prevention taskforce to explore strategies to address this issue among the young and the adults. We will study how other countries are approaching the problem, learn from them, and adapt to our local setting. Controlling obesity in the population is tough. Campaigns can only do so much, and we need to move beyond healthy eating and regular exercise messages. As with other chronic medical conditions, improvements at the population level will generally be seen only in the medium term. It clearly calls for collaboration amongst various agencies and stakeholders, and the individual must take responsibility for his own health. We will study the scientific evidence to see what more can be done, and also learn from the promising initiatives elsewhere. But the message is quite clear, at the end of it, there is no short cut to keeping slim and the only sustainable way is to control our diet and to exercise regularly.”
“The earlier example of the nurse health educator programme which the Minister mentioned provides individualised health messages on diet and physical activity. In addition, HPB is developing an online health portal that sends specific advice to individuals based on their submitted health details. Now on obesity. We share Dr Lam and Mr Zainudin’s concerns about obesity. The prevalence of obesity among adult Singaporeans is rising. It increased from 5.1% in 1992 to 6.9% in the year 2004. Obese people are more at risk to diseases such as diabetes and heart attacks. Although our rates are still lower than those in many developed countries (and they have reached double digit figures), their experience has shown that obesity rates can increase very quickly, as could be seen from the chart just now. Therefore, we must act early to contain the deterioration. We have been promoting healthy eating and physical activity for many years. Together with MOE, HPB implemented school-based programmes to control obesity, such as the model school tuck-shop programme which provides healthier food choices in school tuck-shops. The other measures were targeted physical activity programmes and also referring children who are severely overweight for medical assessment and management. The total proportion of overweight and obese students (ie, overweight plus obese together) in the primary and secondary schools and junior colleges fell from 11.1% in 1994 to 9.5% in 2007. So, that broad category of overweight plus obese fell. Unfortunately, within that encouraging drop, the percentage of obese students increased from 2.8% in 1994 to 3.6% in 2007.”
“The smoking prevalence rate had also decreased from 15.2% in 1998 to 12.6% in 2004. So, if you look at these figures, more Singaporeans are adopting healthier lifestyles. The proportion of Singaporeans who exercise regularly, for example, had increased from 17% in 1998 to 25% in 2004. The proportion of women aged 40-69 years who had gone for mammography at least once before had increased from 27% in 1998 to 51% in 2004. Much work lies ahead. For example, the percentage of our people who exercise regularly at 25%, I think, is still too low. More people should be exercising. And if you think that one in eight of the population still smoke, then, again, there is more to be done. In 2004, about half of our diabetic population did not know that they had diabetes, and about 40% of hypertensive people did not know they had hypertension. About one in four diabetics had poor blood sugar control and one in two hypertensives had sub-optimal control of blood pressure. So we must press on. In the past, we used mass media messaging and in recent years, we moved to more segmented messaging focus. For example, we partnered community stakeholders to bring across messages about anti-smoking. We also customised programmes for specific target groups. As an example, we targeted young women in our anti-smoking campaign through messages about how smoking causes accelerated ageing. As a further example, “kebayarobics” was an exercise programme developed for Malay women. So moving forward, we hope to individualise these messages. With these examples and the experiences, and the more we can focus and individualise, we believe that we can reach out better and be able to get the message across and affect behaviour more.”
“The mean intakes of energy, protein, carbohydrate, vitamins and minerals of Singaporeans met at least 70% of the Recommended Dietary Allowances levels. Between 1998 and 2004, the proportion of Singaporeans who eat more fruits and vegetables has also increased – in the case of food consumption – from 20% to 28%, and in the case of vegetables, from 15% to 43%. The recent MOH study showed that the main causes of ill-health in Singapore, and as pointed out by Dr Lily Neo, are cancers, heart disease, stroke, diabetes and mental disorders. We believe that prevention is the key to reducing ill-health and disability arising from diseases, and we can do it in three ways: First, by preventing and delaying the onset of illness and disability through a healthy lifestyle like eating well, exercising regularly, not smoking and practising mental wellness and having a good sleep; Second, by detecting illness, especially chronic diseases and cancers early, through regular screening; and Third, by minimising disease complications, through taking medication as prescribed and following up with the doctor promptly. To help get the message across to the people, MOH and HPB have done many media campaigns. Examples include the National Healthy Lifestyle Programme, the National Anti-Smoking Programme. Screening programmes such as Breastscreen and Cervicalscreen (for breast cancer and cervical cancer respectively) have also been introduced to facilitate early detection of these cancers. On the whole, Singaporeans have become healthier. The prevalence of hypertension, diabetes and smoking has fallen. Between 1998 and 2004, the prevalence of hypertension had dropped from 27.3% to 24.9% and that for diabetes came down from 9% to 8.2%.”
“The National Mental Health Evaluation Programme, led by researchers from the Institute of Mental Health, seeks to better define the extent of mental disorders in our population, to identify barriers to mental health care in Singapore, and to study social, cultural and economic factors associated with major mental disorders, and then from there to transfer those research findings into treatment and health options. Now on preventive healthcare. Various Members suggested that we increase the focus on health promotion and preventive healthcare. Mr Zainudin Nordin asked about how we have done in our level of health in the population. Dr Lily Neo is concerned about how we can reduce the time spent in poor health as we live longer. Singaporeans are living longer, and we all want to live long and to live well. Thus, it is right that we pay attention to prolonging our healthy years, and shortening the unhealthy ones. Dr Neo noted from the recent article in the Straits Times that Singaporeans on average suffer eight years of poor health. I do wish to clarify that this does not necessarily mean that we spend eight years of our life hospitalised or severely disabled. The figure of eight years refers to the gap between life expectancy and healthy life expectancy or HALE. HALE is the average number of years of “healthy life” a person can expect to live. But living in less than full health might be due to illness of varying severity and duration. So it is a broad definition. Still, the point remains that we must continue to work at increasing our HALE years, so that we may indeed be hale and hearty for as long and as much as possible. Mr Zainudin Nordin asked about nutrition of Singaporeans. The diet of adult Singaporeans is generally adequate.”
“First, we will strengthen mental health care in the community, with customised approaches for children, youths, adults and the elderly. We are doing this with our partners – VWOs, and community partners in the workplace and schools. For example, the Adult Community Programme will monitor patients with mental illnesses to ensure compliance with medication and provide psychosocial support to the patient and the family. A network of interested GPs is also being identified and trained to care for patients in the community, and to complement the existing Community Wellness Clinics in polyclinics. 5.00 pm Second, we will press on with public education on mental health, and encourage people to seek treatment earlier. This will help deal with the onset of conditions better. The Mind Your Mind programme, a mental wellness programme for school children, will be expanded to cover tertiary institutions. HPB launched the Workplace Mental Health Programme, “Treasure Your Mind” (TYM) in October last year, and 95 organisations have registered under the programme. Last year’s National Healthy Lifestyle Campaign was centred on having a “Healthy Mind, Happy Life.” This year, a media campaign will be conducted, focusing on building positive relationships. Third, we will invest more in manpower development for mental health. We will train more psychiatrists, psychiatric nurses and allied health professionals such as psychologists, medical social workers, and occupational therapists by increasing specialist training places and scholarships. This will translate into better care for the patients. Fourth, we will facilitate more research into mental health so that we are able to plan and care for our patients better.”
“Sir, we agree with Mdm Halimah that helping persons with mental illness should be done holistically. Institutionalised care may be appropriate for some and in some circumstances, but not always. It also comes with big social stigma. Medication can help manage symptoms, but it is also not the full answer. [Mdm Deputy Speaker (Ms Indranee Rajah) in the Chair] To improve the outcomes for persons with mental illness, we must first recognise that it is not only a medical issue. Many factors, such as an individual's home, educational and work environment, his socio-economic status, and the quality of family and community support all influence the likelihood of improvement. Thus, holistic care for mental illness should, besides institutional care facilities and medication, also include access to behavioural therapy, community facilities and social support services. We believe that this will help patients recover and reintegrate into society faster and better. We are, therefore, expanding our efforts to inject new capabilities into the community over the next five years. The inter-Ministry working group on Mental Health, chaired by the Permanent Secretary, Ministry of Health, is overseeing this. Its efforts include wellness promotion, public education, early detection and treatment, and reintegration into society. Employment and social needs are also examined. In strengthening the links between social care and medical support, we hope to reduce the need for hospitalisation and improve the chances for patients to regain their mental health, and to work and live well within the community and enjoy peace of mind. Let me update the House on four specific areas of improvement.”
“And for workers in sectors that have difficulties raising the revenue in the short term, they worry more. As a country, we have to manage this carefully. People have to cope with the inflation and businesses also have to cope with the inflation. I think Members here who know the business sector better have already spoken from that perspective. In doing so, we do have to be careful to avoid creating a cost-price spiral. And I think the Finance Minister has mentioned this. It is important because if you overdo this and it creates a spiral, in the end the economy will suffer - jobs will be lost. But, at the same time, there is that impact. It is real, and so we have to see. The impact of inflation on different industries is also uneven. And I believe that in this period, going forward this year, we should carefully observe and obtain the feedback, a little more detailed down the industry level, and detect the early signs of stress. I am not recommending any specific thing that ought to be done now but I think this is the time for that vigilance because we need that advance warning in order for us to figure out what is it that we need to do. The various help measures and dividends that this Budget has granted to Singaporeans will indeed help to take some of that pressure off. But monitor the situation we must. And we should also continue to push for efficiency in the economy. On the Government's part, I believe that we should continue to signal to Singaporeans in terms of how resolute and how vigilant we are in wanting to tackle, together with the people and businesses, this challenge of inflation for the rest of this year, and going forward.”
“As far as the people are concerned, I understand that with your money now buying fewer things, as Mayor Zainudin has given the example, people are saying that somebody ought to either bring down the prices or give them more money so that they could afford the same. I can understand that. But, at the same time, I say this is also an opportunity for all of us because when inflation hits us like that, we actually have a freedom - and that freedom is a freedom to re-look and to choose our spending patterns, and what we spend on. I think that there is actually a place for simpler living. And simpler living is not necessarily the same as downgraded living. It can bring you much financial freedom. It can also bring you a little more peace of mind. But, at the same time, I would want to say that with the inflationary environment, workers are concerned. They are grateful for the help that has been given out but they also hear things in their work places. They also read things in the newspapers: rising office rents, higher energy prices, higher raw material prices, and so on. So they hear these and they hear these repeated by the management of the companies. And they ask: what will be the impact? Yes, there may be the GST offset package that helps me cope with the GST increase and there might be some of these other measures, like the dividends. But what actually concerns them is also what is going to happen to their companies as a result of that environment and from there, what is going to happen to their earnings. They now basically want to find different ways in which to help the companies on the one hand to cope better but on the other hand they are facing the high costs of living themselves.”
“Mr Speaker, Sir, the Minister for Finance has delivered a Budget that, in my view, cares for the lower income and the elderly, is considerate of the needs of the middle income, and which strengthens the future of Singapore. For today, I will keep my speech brief. I will use 3Ps to describe the Budget. The first "P" is that of prices. Others have used "I" for inflation. So, "P" for prices - same thing. We all agree that inflation as experienced in Singapore, last year, was high, and higher than the past many years. And with high inflation, it affects workers, households, businesses, everybody. So the package that has been delivered in this Budget by the Finance Minister, in terms of the sharing of the dividends and the various other measures, including the measures to cope with inflation, has been welcomed by the ground. But, at the same time, they look forward to seeing how the trends develop and whether or not they would actually be able to manage well and obtain the relief for themselves. The Finance Minister gave us five ways to deal with this inflation - exchange rate adjustments, diversifying our food sources, home ownership, targeted help at the needy, and strengthening competitiveness. I completely agree with him. These measures, when you take them together, basically allow our people to earn the money and at the same time allow the dollar to be stretched for value. The labour movement has also been doing its part. For example, NTUC Fairprice has offered that extra 5% discount, taking into account the situation that is being faced by Singaporeans and understanding the need for the entire country to come together, not only the Government but also the businesses and the people, in making the adjustments.”
“This is why the approach that we have taken through all our subsidies is to use subsidies to give Singaporeans the incentive to work and to save on their own. If you work and save, we will help you by topping up your savings. But this approach of helping Singaporeans to save for retirement is quite different from Government taking over and providing for everyone's retirement. In other words, providing an assurance that, regardless of how much you save, Government will be there as a doorstop to make sure you have enough in old age. If we do that, there will be less and less reason for people to save. You do not need to be an economist to appreciate that. It is fairly obvious. If you have the assurance that someone is going to be there as a grand daddy, you lose the urge to save. And that is the way it has happened in many societies. Over time, people save less, knowing that the Government will spend more. That is how they end up with high taxes and unsustainable pension schemes. Conclusion Mdm Deputy Speaker, Sir, the MOF is confident that the CPF changes we are putting into place will be fiscally sustainable. We have also briefed the President and he is satisfied that the CPF changes will not cause a draw on past reserves. Ours is a disciplined and sustainable approach, which will ensure that whatever we do now will last not just for a few years but for generations to come. 5.55 pm”
“Lower income Singaporeans get an additional housing grant. Workfare - another major way - is also a subsidy that helps low income workers save more. A substantial part of a low income worker's CPF balances and housing equity - both of which are critical for him to be able to draw on to meet his retirement and old age needs - is, in fact, attributable to CPF housing grants and Workfare. Both subsidies are reflected on our budget. No World Bank study, cited by Mr Siew Kum Hong, or any other study will be able to find another system that provides as substantial support for workers to build up their savings, and particularly low income workers. This is the way we have done it. When we have surpluses, we spend it on worthwhile investments or services for our citizens, in housing, education, healthcare, or Workfare. Or we return it to the citizens, as we have done before in the form of CPF top-ups and other schemes. But what is absolutely critical in all of this is the culture that underpins this economic strategy. A culture that comprises an ethic of self-reliance, where every Singaporean knows and understands that he has to save for his future needs. He has to work and he has to save for his future needs. And this is what Josephine and Chee How spoke about today. Our economic strategies depend on this culture, not just for growth but also to secure what Mr Low Thia Khiang spoke about earlier - to secure social cohesion. If we do not keep this culture active and alive, not just for the older generation, which had it, but for younger generations that will come, we are going to lose our ability to secure social cohesion in future.”
“It is in the nature of every society, especially as it gets older, and it is precisely these pressures that we anticipated when we decided to put in place the Elected Presidency system. It is a system that makes sure that subsidies are paid for and funded on the budget now, one way or another, not left to future generations to pay. This is the way we must run Government. There is no easy way out. Mr Inderjit spoke about Temasek's past returns and Mr Siew Kum Hong just spoke about the GIC's returns as well. Let me first say that it will be unwise to forecast future returns for either the GIC or Temasek on the basis of past returns. This has to be a disciplined process of assessing the investment environment, looking forward to the next five to 10 years, relooking assumptions every year and projecting what we can realistically expect in investment returns - a disciplined and thorough process. What the GIC expected last year or this year or next year, may not hold three or five years from now. Every year, we have to relook at the environment, talk to the best counterparts internationally, make a reassessment and then the boards will have to tell the Ministry of Finance realistically what they can expect for the next five years. But there is no money that is disappearing here. Nothing being squirreled away, that disappears from Singaporeans. If, indeed, the Government expects to continue to make good returns on its investments - through Temasek, through GIC - this will be reflected in the budget, and we will then decide on the most prudent use of these resources. The Government has been using budgetary resources to help Singaporeans build up savings. The majority of Singaporeans enjoy a substantial housing subsidy through the HDB - funded from the budget.”
“That is our approach – put any subsidies on the Government budget, and make sure that we can afford them. Fiscal strategy The changes to the CPF and to Workfare are part and parcel of the broader fiscal strategy that we discussed in this year’s Budget. We are making preparations now for the challenges of an ageing population, especially in terms of healthcare spending which will go up very considerably, and providing for the needs of older Singaporeans. We are strengthening our social security system through Workfare, to ensure that the lower income group is not left behind. And we are building capabilities for the future through education and R&D, reducing taxes to remain competitive and rejuvenating our housing estates and our city landscape. This is why we raised GST by 2% this year, and why we plan to amend the Constitution to make available more investment income for spending, on the budget. The increase in GST revenues, together with the additional income from our reserves in the future, will give us the resources to enhance our social security system and provide a secure future for Singaporeans, young and old. Mr Inderjit Singh had called for Government to use its reserves to underwrite a national pension plan. He said we can afford it because Temasek had earned an 18% return since inception, which is true. It has earned an 18% return. Mr Low Thia Khiang earlier today asked for Government to pay for longevity insurance through, I believe, a Longevity Fund - pay for it through a Government grant. It will not be wise for Government to do this, or for Singaporeans to want the Government to do this. We know that these pressures will build up over time, for Government to spend more, to grant more, to subsidise more.”
“Funding the changes Dr Ahmad Magad, Mr Seng Han Thong and Dr Lim Wee Kiak and some others had rightly asked about the sustainability of these changes - how we can afford this - including affording the cost of the Workfare enhancements and the D- and V-Bonuses. First, the changes to the CPF interest rates which will cost $700 million per year. The CPF Board will pay for this through the interest it receives on the bonds it purchases from the Government. Government’s debt servicing cost will therefore increase, and we will have to meet this through returns on investing the CPF monies. This is why we must avoid paying above market rates for CPF interest. Paying market rates will be the only way in which we ensure that the CPF is sustainable not just for the next few years but for the very long term. It keeps the CPF as a self-sustaining savings scheme that does not result in the Government running deficits. It should never become a draw on past reserves. This is also why we should not provide a 4% floor for the SMRA rate indefinitely. To do so would amount to providing members with the upside of a market-based rate but with the Government underwriting the downside. This will be unwise and untenable for the long term. Our whole approach must be to make sure that the scheme can be sustained. This will not be the case if the CPF becomes an interest rate subsidy scheme. What we are subsidising is Workfare. It is a social scheme, an explicit subsidy that we put on our budget, and which we will have to fund from our budget. This is more than $400 million per year. We are also paying for the Deferment and Voluntary Deferment bonuses, as a subsidy. $1.2 billion over 10 years, also on the budget. It is temporary, but we have to fund it on the budget.”
“In the short term, as Dr Ng has explained, the new SMRA formula, together with the 1% extra interest tier, will mean that members with balances of $60,000 or less, which are more than 80% of members, will immediately be earning 5% on all their SMRA monies once the changes are implemented. For larger balances, there is no change in the SMRA rate in the short term. What about the longer term? No one can say for sure what interest rates will be five or 10 years from now. There will be some years when the SMRA interest rate may fall below 4%. But there is no reason to believe that, on average, the new SMRA rate will be inferior to what is provided today, using the current formula which is pegged to short-term interest rates. This is, in fact, what has been the case in the past. The 10YSGS + 1% was 4.5% on average over the last decade. It was also above 4% for 85% of the time. It is also the case if you look at what the pricing in the financial markets says about the future. The financial markets are always looking forward in the swap markets and other markets. If we look at what the markets are expecting for the future, it is for the 10YSGS rate to be above 3% on average over the next five to 10 years and, hence, for the new SMRA rate to be above 4%. Any scheme to provide higher returns must come with higher risk. The new SMRA peg offers the prospect of better returns over time, but with slightly higher interest rate risk. For the majority of members who have smaller SMRA balances, they will get extra 1%, an extra 1% tier which will more than offset this increased interest rate risk. Taken together with the new floor of 3.5% on the first $60,000 of members' balances, this is a fair scheme designed to provide the majority of citizens with good returns at low risk.”
“A 1% spread is, in fact, somewhat larger than what the international markets have been paying for -year bonds. The US and Euro Area markets have seen a spread of 30 to 40 basis points on average over the last decade or more on their 30-year bonds. In Switzerland, the spread has been between 70 and 80 basis points, which means 0.7 and 0.8 of 1%. In Japan, the spread is higher at 80-90 basis points over the last decade. So, they vary. But the 1% spread that we are applying on the 10-year SGS rate is higher than what has been observed historically in the developed markets. This may seem a little generous for now but it gives adequate allowance for future economic and market uncertainties. For example, if inflation picks up globally, we can expect higher spreads over time on long-term bonds. MOF, therefore, believes that the new SMRA rate is fair and reasonable for the long term. The new SMRA rate is a more rational scheme than the old one, which provided an arbitrary fixed premium of 1.5% over a short-term interest rate peg. This was why the ERC had proposed that we peg SMRA rates to long-term bond returns in 2002. By pegging to market based long-term bond rates, the SMRA can offer members better returns over time with slightly higher interest rate risk. By any reasonable assessment, the new rate of 10-year SGS plus 1% offers a very fair long-term return for deposits which have no risk of losing their value - no capital risk and no currency risk. Mr Inderjit Singh and some others had suggested that the new interest rates will leave Singaporeans worse off. This is not the case.”
“CPF interest rate changes are reasonable and justified MOF is satisfied that the repegging of the SMRA rate and the extra 1% on the first $60,000 of CPF balances will result in interest rates which are fair and reasonable for members, and also sustainable for the long term. The changes will provide members with a justified rate of return, based on investments of similar risk profile and duration. They will also ensure that the scheme remains affordable over the long term. Our fundamental principle must be to peg CPF interest rates to those in the financial markets - to instruments of comparable risk and duration. This is because the Government’s ability to pay interest on CPF balances will also depend on financial market conditions. For the CPF scheme to be fiscally sustainable, not just now, but in the decades to come, it should not become an interest rate subsidy scheme. Moving SMRA to 10-year SGS +1% Let me specifically address the issue of the SMRA rate, which several MPs have spoken about. We have studied the appropriate peg for the new SMRA rate thoroughly. As Minister Ng has explained, we ideally want a 30-year SGS bond rate. The question is, in the absence of a 30-year bond, because we do not have one in the SGS market, what is the best proxy for this long-term rate. We decided to use the 10-year SGS bond as a peg, with an additional spread of 1% to approximate the 30-year bond rate. Why the 10-year SGS? It is the most liquid and actively traded part of the SGS bond market. It also matches the most liquid part of the US Treasury market, which is what the banks and fund managers use to manage their SGS exposures. Why a 1% spread on top of the 10-year SGS rate?”
“The CPF member can then use that money when he reaches the age of 55 to help pay for the premium for his longevity insurance. If there is more than enough money in there for that insurance premium, then the rest can flow back into his Ordinary Account. So it is not to lock anything extra. This will help the CPF member to become more aware of the additional help that the Government has given towards paying for the longevity insurance, to ensure that every Singaporean will have the basic provision in very old age. Mdm Deputy Speaker, I support the Statement. 5.38 pm The Second Minister for Finance (Mr Tharman Shanmugaratnam): Mdm Deputy Speaker, the Minister for Manpower, Dr Ng Eng Hen, has provided a comprehensive explanation of the changes to the CPF scheme, including the changes in interest rates, aimed at giving members better security in retirement and old age. MOF’s responsibility is to ensure that the changes made to the CPF scheme are reasonable in relation to market-based returns and hence fiscally sustainable. We also have to satisfy the President that the CPF changes are indeed affordable in the long run and that they will not result in a draw on past reserves. The President has to be satisfied that we are not paying unjustifiably high returns on CPF balance, for that must surely mean a draw on past reserves. Some MPs have asked if Government should pay more on CPF balances. They have asked for Government to pay higher interest rates than what Minister Ng has announced, or to pay a guaranteed floor of 4% on the SMRA accounts indefinitely. Several others have asked for Government to foot part or all of the bill in providing Singaporeans in old age. I will address these issues from the perspective of the Government’s finances.”
“We make sure that everybody gets the necessary medical care, regardless of their ability to pay. And if they are unable to pay, then Medifund will come in. In a similar manner, we have our social safety net. Whether or not our current safety net in terms of the public assistance scheme is adequate, whether there are enough people on it, it is something that we can debate. But I distinctly remember that not so long ago in this House, in another exchange, the Minister for Community Development, Youth and Sports explained that when we look at the way in which this society cares for our needy, we should not look just at the direct payout from the public assistance scheme. Because even before we look at the kinds of moneys that are coming in from the voluntary sector, we already have other kinds of schemes, such as ComCare down at the constituency. So I would say that if we look at it this way, then the confidence that we rightly have in our 3-M system for healthcare affordability in terms of being able to pay for the healthcare, I think the way we are moving towards the longevity annuity will also secure us similar conceptual benefits. Because of this, it hits me that the Government is actually putting in new money. On this additional 1%, both the Prime Minister as well as the Minister for Manpower told us that this will cost the Government $700 million more a year. So what shall we do? Because the way some are arguing is that there is not a cent in there. It is $700 million. Perhaps, in order to help move this conversation forward, the Government could create a separate sub-account in the CPF and then put this 1% additional interest earned into that account.”
“It is not the Government coming in with money to also play its part in this move towards longevity insurance. When I hear this and I look at the Minister's statement again, I am confused. I am confused because I thought that was what exactly the Government has done. Let me explain. I note that Government has decided to increase the CPF interest rate by 1% for the first $60,000 of total CPF savings. This is new money. The additional interest of 1% earned on $60,000 a year is $600. If we accumulate this over 15 years, we get close to $10,000. In other words, if a 40-year-old person today has $60,000 in total in his CPF account, by the time he reaches 55 and has to buy that annuity, then that additional 1% paid as a result of this set of changes announced, would have increased his CPF savings by $10,000, and this should be enough to pay for the annuity. The way I look at it is that we are actually moving from a situation of a CPF system where we just do direct savings and then collect at certain points, subject to the rules, to a system that is more holistic, which in a way mimics our 3-M system for healthcare, where we have Medisave and our CPF savings. But we ask Singaporeans to save enough in their Medisave. In case of hospitalisation, they think that it would be enough most of the time. Or would we rather also have MediShield in order to pool the risk? Most people would say that, actually, it is better to pool the risk, and I see this movement in the annuity as a similar intent. Of course, under the 3-M system, we have the Medifund. What is the Medifund? Medifund is really medical social welfare. We take care of every citizen. We do not deny any citizen necessary medical care on account of lack of means.”
“This is why we can see long queues whenever there are big jackpot prizes for Toto, Big Sweep, choice property launches or even when there are perceived lucky spots around certain trees. They buy life insurance for the same reason so that if sudden death happens, then the family collects. So this longevity insurance or annuity, which hedges against living beyond 85 years old, is counter-intuitive to many, simply because many do not believe that they will live beyond 85. They may be wrong actuarially. In other words, if we ask the insurance companies and look at their tables, we would see that actually most people are too pessimistic about their longevity, but that is how they feel. So, a long life annuity or longevity insurance that seeks to maximise risk pooling and minimises premium - actually it is a good intention - by having no payout for those who die before 85 may inadvertently come across to some as throwing away their hard-earned money, because they do not expect to collect. This is why we see groups arguing why they should be exempted. I agree that the way to address this would be to offer two product-types - one, that is basic, cheaper and that does not pay out if death happens before 85, and then a range of others that pay out in situations of earlier death, just like term life insurance at different premiums. Then people have the choice and they take the option that best suits their own assessments of likelihood and return. Whatever the final design of the longevity insurance, there is one certainty, and that certainty is that one has to pay a premium to buy that insurance product. We hear calls in this House and outside to say, "What is the Government doing?", asking us and some people use the term "forcing us" to buy.”
“Another concern raised by unionists is that offer of re-employment at 62 for a short-period of, say, a few months or up to a year is not the same as having work from 62 to 65. While the availability of flexible, part-time or shorter-time framework are all important components of this effort to realistically prolong the earning capacity of older workers, it is nonetheless important to monitor the overall employment rate for ages 63, 64 and 65 to know that intended results have been sustained beyond 62 years of age. The third point to pay attention to is the importance of monitoring the structural adjustments that are taking place to support the re-employment of retiring workers. The economy is currently booming. Cyclical demand for workers is strong. In a time of labour shortage, even previously less-desired labour pools will be tapped. This, of course, tells us the paramount importance of keeping our economy as strong as possible for as long as possible. Yet, unless the underlying structure is adapted to make good use of such kinds of labour, the stickiness of their employment may be weak. Then, when the economy turns down cyclically, the employment rate among such groups could fall sharply. Hence, we should focus attention, especially during the boom years, not only on the employment rates but also on the implementation of sustainable re-employment arrangements throughout all sectors and industries of the economy. Mdm Deputy Speaker, I move on to talk about the longevity insurance. The practical streak in Singaporeans explains much of our behaviour. Singaporeans like to make money, or win money.”
“And this benefit can be enjoyed by employing new workers aged above 40, by retaining workers aged 55-61, as well as re-employing workers aged 62 and above. My suggestion is that we could look at the retention age range of 55-61 and broaden it to 50-61. I say this because if you look at the graph for the resident employment rates for males, you can see that the decline starts earlier, before 55, round about the 50-year-old mark. I believe that if we can do more to retard that turning of the curve downwards, then it will actually help lift the overall curve and enhance overall employment rates. Aside from financial incentives, companies showing the way should also be recognised through appropriate awards and publicity. Next, we all know that what is measured gets done. So it is important to measure the right thing. Here, I wish to highlight three aspects. From my discussions with unionists, one concern is that companies may try to overcome the legal requirement of offering re-employment to workers reaching 62 by pursuing contract employment, and then not renewing the contracts way before the worker reaches 62, for example, by substituting with foreign workers. And if this happens, then you will find that a high rate of re-employment among those reaching 62 is not the same as a high rate of employment among those reaching 62. Hence, the employment rate in the 10 years prior to 62 has to be carefully monitored. That said, we must also recognise that the decision to hire is driven by the perceived value of the worker to the company. Hence, the importance of self-motivation and of continuous training and skills upgrading to stay relevant and competitive must continue to be emphasised.”
“Over at the Furama City Centre Hotel and the Four Seasons Hotel, it is the same job at the same pay, but with a reduction of annual leave. As for the Furama Riverfront Hotel, it is the same job, the same pay, but with adjustments in medical benefits. At the Raffles Hotel, as the Nominated Member, Ms Cham Hui Fong, mentioned yesterday, it is a case of the same job and the same pay with re-employment contingent upon performance and health. Food manufacturers like Prima, Singapore Food Industries and supermarket chains like NTUC Fairprice and Cold Storage have all been highlighted before for their arrangements in this area. Suntec Singapore, IKEA and Sembwaste are companies unionised by the Building, Construction and Timber Industries Employees Union (BATU). And they too have arrangements in place to re-employ retiring workers. For these companies, workers currently reaching 62 years of age are considered for re-employment based on their performance, health and availability of suitable jobs. Besides setting up a database, I suggest that companies that actively pursue and put in place such arrangements be rewarded and recognised. The Prime Minister said during the National Day Rally that Singaporeans respond to incentives, and that is why he is adopting an education, legislation and incentive approach. I agree with him. And to spur companies to move faster, there must be a difference in outcomes for those who move fast versus those that do not. The current incentives under the ADVANTAGE! scheme are comprehensive and substantial. Participating companies can benefit up to $400,000 each, depending on the projects that they do.”