Heng Swee Keat
Singapore
“In a world heading towards greater contest and fragmentation, amid rapid advances in science, technology and innovation, Singaporeans can play a valuable part as bridge-builders and connectors, and Singapore can be a trusted and neutral Global-Asia node of technology, innovation and enterprise.”
“The National Quantum Office has identified specific goals under the National Quantum Strategy (NQS), with resources and efforts directed towards specific quantum areas and technologies accordingly.”
“Mr Speaker, Sir, I would like to thank Member Ms Denise Phua for her comments because her comments reminded me of the tagline that I always said when I was in MOE – that you can learn from anyone, anytime, anywhere. In fact, peer learning is a very important aspect of that learning.”
“But I have laid out the strong basis for my optimism that a small and open economy like Singapore can continue to thrive and secure our next bound of growth. By serving as a trusted node and connector, we can create value by facilitating connections and building new linkages in today's fractured global landscape.”
“Secondly, one other very important thing the Member must bear in mind is that AI is a very rapidly developing field and it is something which our researchers are working hard on, to look at the different techniques of AI – it is not just GenAI, but the whole range of different AI systems that are being used – and how that can be used in c…”
“Assoc Prof Jamus Lim, you do not need an invitation. You are free to provide your suggestion. After all, are you not from WP? And by the way, let me make it clear that I have heard MPs on both aisles speaking about workers, and we have a very strong presence of our union MPs here and they will be speaking even more on this.”
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“The respective Ministers will speak more on these efforts and, in fact, Senior Minister Teo Chee Hean will speak on this in the COS. I hope their explanations will give Mr Dennis Tan a fuller picture of all that we are doing to tackle this serious challenge. He and Mr Yee Chia Hsing, Mr Ang Wei Neng and Mr Murali Pillai gave their perspectives on the adoption of Electric Vehicles (EVs). The Government is playing our part. We already have the Vehicular Emissions Scheme and in this Budget, I announced the EV Early Adoption Incentive. This will help to close the cost premiums between EVs and internal combustion engine vehicles. Over time, as technology improves, we expect the cost differential to close further. However, while we want to encourage drivers to replace their internal combustion engine vehicles with EVs, we should bear in mind that the cleanest and most efficient mode of transport remains public transport. A car-lite vision that Mr Khaw Boon Wan has articulated, continues to be the main focus of our transport policy. And MOT will provide further comments later. This is a whole-of-society, multi-generational effort and its success will depend on all Singaporeans taking action. I am very happy that many young Singaporeans are passionate about this cause and want to be part of the solution. We are in for the long haul and our journey to tackle climate change will span 50, even 100 years. It is, as one commentator pointed out, a big audacious goal. But if we do not have the courage and determination to tackle challenges that threaten our very existence, what is our ambition for? Such long-term investments, together with our reserves, represent our commitment to future generations of Singaporeans.”
“But Singapore has always risen to the challenge in the face of adversity. We have never accepted our fate or our starting circumstances meekly – instead, we adapt, innovate, mitigate and overcome. We turn constraints into opportunities and strengths. Dealing with our water and land constraints has made us leaders in water technology and urban planning. Our manpower constraints constantly push us to automate, digitalise and be more productive. Now, we have a plan to address our carbon and energy constraints. We are meeting the challenge head-on, with an ambitious plan to tackle climate change. We are not only securing our coasts but also transforming our sources of food and water and remaking our entire economy and city for a green and sustainable future. Several agencies are working in concert to execute this, coordinated by the National Climate Change Secretariat. This year, we will update our commitment to the Paris Agreement and submit our Long-Term Low Emissions Development Strategy to contribute efforts to mitigate climate change. MTI and MEWR will prepare our economy and society for the low-carbon transition by working with various stakeholders and partners to reduce our greenhouse gas emissions and seize opportunities in the circular economy. Just as it had done with water, MEWR is embarking on ambitious plans to develop our own food production capabilities, with its "30 by 30" target. MOT is working on our vision to phase out internal combustion engine vehicles and have all vehicles run on cleaner energy by 2040. MND is making efforts to make our towns greener and more sustainable, and transform Singapore into a City in Nature. These are ambitious plans and we are bringing our R&D investments in urban solutions and sustainability to bear to realise this vision.”
“We can decide not to raise GST to pay for our own spending, but to tap on our reserves and its investment returns instead. But by doing so, we will soon deprive future generations of the benefits that we enjoy today. What would that, then, say about us? During a Parliamentary hearing in 2001 on the Bill to allow the Government to use part of the returns of investment from our reserves, our founding Prime Minister Mr Lee Kuan Yew said, “What is the deepest obligation of any government? It is not to the present, and certainly not the past, but to the future.” Let me repeat that: "What is the deepest obligation of any government? It is not to the present, and certainly not the past, but to the future". We have a duty not just to those who make their views known today, but also to the young and the future Singaporeans. They are not here today to represent their interests – because they are not born yet! But we have a responsibility to them, and to take decisions which are difficult for us but which will safeguard their interests. Let us continue to keep the discipline and keep the faith and promise to future generations of Singaporeans, by stewarding our reserves well in our time. [Applause.] Climate change is another area where we may not live to reap the benefits of our decisions but our children will. In this Budget, I have set aside $5 billion for a Coastal and Flood Protection Fund. I could have chosen instead to spend it on more "hong baos" or red packets, to make myself more popular. But by making the commitment today, these resources will go towards pumps, tidal gates and infrastructure that will keep our children and their children, safe from rising sea levels in decades to come. Climate change threatens our very existence, as a small, low-lying island state.”
“During the Global Financial Crisis more than a decade ago, with global financial markets in turmoil and governments around the world scrambling to protect bank deposits, then-President S R Nathan approved the provision of $150 billion from our past reserves to guarantee bank deposits in Singapore, from October 2008 to December 2010. That calmed our depositors. I was the Managing Director of MAS at that point. And I can tell you that our officers in MAS worked day and night to safeguard the stability of the banking system, and totally conscious that we were using our past reserves as a guarantee, but we were also confident that the guarantee will be put to good use because it is to stabilise the confidence of depositors. So, throughout that period, we had a very difficult time but towards the end of it, we did not have a single bank run. And the $150 billion remained untouched. It went back to our past reserves. Singaporeans’ money was safe. In 2009, then-President Nathan approved a draw of $4.9 billion from our past reserves to fund the Resilience Package to help us overcome the Global Financial Crisis. A year later, after the economy rebounded sharply, the Government decided to return the money used to our past reserves. It did not have to, but did so, to maintain the discipline that has allowed this unusual move in the first place. This year, we have not had to tap our past reserves. But it was the same spirit of prudence that allowed us to have enough surplus this term to provide the fiscal support for our economy and our people. But if the situation deteriorates significantly and calls for us to tap on our past reserves, I will make a case to the President to seek her approval to do so. We can do the easy thing and avoid the pain for ourselves today.”
“Thanks to the foresight and policies of our founding generation of leaders and people. You can work out the sums simply. Today, NIRC at $17 billion is more than personal income tax at $12 billion and GST collections at $11 billion. So if we did not have the NIRC, even doubling personal income tax, or doubling the GST rate to 14%, would still not be enough. Tell me – in which other country are citizens able to reap the benefits of past savings in this way? So, let us never forget that what we have inherited is very unusual and very precious. Let us be responsible and steward this properly for our future generations. Mr Leon Perera asked if we can slow the rate of growth of our reserves and release more funds to invest in our people and companies. I am sure he is aware that in 2008, we introduced the Net Investment Returns framework, and in 2015, we passed a constitutional amendment to add Temasek in the framework. This has resulted in a significant increase in NIRC that has gone towards various spending, including investments in our capabilities to generate future growth. Put it in another way, today at $17 billion, the NIRC is able to cover almost the combined budget of MOE and MTI. More importantly, our reserves give us the confidence – as a small country with no natural resources of any kind – to deal with the ups and downs in the world. This is why we have a robust set of rules to safeguard and manage the use of reserves. The President plays a critical role in guarding against profligate spending and to ensure proper use of our past reserves to safeguard Singapore’s interest when needed.”
“Through the Assurance Package, we will effectively delay the increase for almost all Singaporeans by at least five years; and over and above the transitional support, the permanent GST Voucher will further help the lower and middle income. Let me address questions that have been raised over the use of our reserves and suggestions that it should be used to fund our needs instead of GST. The reserves are our nest egg, borne of hard work and discipline. During the earlier years of economic catch-up, Singapore experienced fast growth and had a young working population. Our founding fathers made the decision to save the country’s surpluses and invest it for the long term to build up Singapore’s nest egg. They could have just spent it to gain immediate political advantage. But they were principled and had the long-term interests of our people and our nation at heart. In FY2019, our Net Investment Returns Contribution (NIRC) was $17 billion, or 3.3% of GDP, the largest single contributor to the Budget. This is a highly unusual and a very fortunate position. Most advanced countries, shown in the lower half of this chart, pay about 2% of their GDP in debt servicing of accumulated debt. They collect taxes to pay off the debts of previous generations. As you can see from that graph, the red line is the US and the green line on top is France and Germany, in between at about 2%. In Singapore, as shown in the top half of the chart, it is the opposite. Our reserves generate substantial returns, which help to keep our taxes low. In other words, in most advanced countries, citizens today pay for the spending of the past generations. In Singapore, it is the reverse. citizens today enjoy the benefits of the savings from the past.”
“In contrast, Singaporeans receive offsets to cushion the impact, through both the permanent GST Voucher and the Assurance Package. And as I said, for some households it is equivalent to not having the GST increase for five years, and for some even 10 years. All in, the GST increase, implemented together with the Assurance Package will achieve several different objectives. Most importantly, we delay the impact of the increase on most Singaporeans, by five years or more, and even longer for the lower income. We can start collecting revenue from foreigners residing in Singapore and tourists, and our businesses make the changes to their IT systems only once. The GST is only one part of our fiscal system. When you look at the system of taxes and benefits as a whole, it is a progressive one. Those who are better off, contribute more. The top 10% of taxpayers pay about 80% of our personal income tax revenue. As shown in this chart, lower and middle income households receive proportionately more benefits than the taxes they pay, whereas higher income groups contribute a far higher share of taxes than the share of benefits they receive. So, as you can see, the top 20% pay 55% of the taxes and receive 12% of the benefit. The bottom 20% pay 9% of the taxes and receive 28% of the benefits. So, let me summarise what I have explained in three points. First, we care for fellow Singaporeans and want to support them, especially in healthcare. To fund this spending, we need to raise the GST. Second, we will take collective responsibility to look after one another. Raising the GST, a broad-based tax, to meet a broad-based need is a sustainable approach. Third, we ensure that we are fair when the GST is raised.”
“There have been questions over the logic of raising GST and providing a $6 billion Assurance Package for GST, and whether we can just delay or not even increase the GST rate at all. Delaying the GST increase is not the same as raising the GST and providing offsets. This is because of the design of our system and the resulting incidence of the GST burden. Today, we flow part of the GST revenue back in the form of a GST Voucher that gives more to those who need it most, particularly the lower income and retiree households. This is a permanent part of our system and will be enhanced when the GST hike takes place. The GST Voucher reduces the net GST borne by lower and middle income households. Net GST is the amount of GST borne by each household, after accounting for the GST Voucher they receive. With the GST Voucher, the bottom 40% of resident households are estimated to account for less than 10% of the net GST borne by all households and individuals. On the other hand, a significant part of the net GST is borne by foreigners and higher income households. Mr Liang Eng Hwa asked what proportion of the GST is borne by this group. Foreigners residing in Singapore, tourists and the top 20% of resident households are estimated to account for over 60% of the net GST borne by all households and individuals. This is after taking into account GST refunded under the Tourist Refund Scheme for goods bought here for consumption abroad. This is partly because foreigners do not benefit from the GST Voucher and offsets, which are available only to Singaporean households. When we eventually increase the GST rate to 9%, foreigners pay the higher rate immediately.”
“This chart shows the standard GST or value-added tax rates that other jurisdictions adopt, compared with our future rate of 9%. Among the Nordics, for example, the value-added tax rates are as high as 25%. They also have top personal income tax rates as high as over 50%. They have accepted higher taxes as the price for their higher social spending. Even as we seek to keep the GST rate low, we have to make trade-offs as we increase our spending for our healthcare and other needs. After raising the GST to 9%, it will still be lower than the average rate in Asia and less than half of the average rate in OECD countries today. Many countries in the region and elsewhere have standard GST rates that exceed 9%. Even Saudi Arabia, a country with huge oil reserves, is carefully planning ahead and introduced a 5% value-added tax from 2018. Do we have oil? No. So, let me address concerns raised about the impact of the GST hike on the lower income and the impact on cost of living. In designing our fiscal system, we have always sought to achieve a fair and progressive balance where the better-off contribute more and the lower income receive more support. This overall philosophy is a key consideration in how we design the GST and how we will implement the GST hike. This is why I have announced an Assurance Package to cushion the increase for all Singaporeans when the revised GST rate kicks in by 2025. This provides a bigger and thicker cushion to the lower and middle income, including many seniors. The package effectively delays the impact of the GST increase for the majority of Singaporean households for at least five years. For lower income Singaporeans, the offset will be even higher and hence, there is effectively no increase for them for 10 years.”
“So, we will continue to adjust our income and wealth taxes to raise revenue in a progressive and fair manner. We should keep international tax developments in mind as we review these taxes – both personal income tax as well as corporate income tax. As Mr Cedric Foo and Mr Henry Kwek noted, there are on-going international discussions to revise tax rules under the Base Erosion and Profit Shifting (BEPS) project. Hub economies with small markets like Singapore stand to lose corporate income tax revenue if the new rules are adopted. This is because the new rules allocate taxes to where the customers are rather than where the underlying economic activity is conducted. Businesses are highly mobile in today’s global economy. Companies, especially multinationals, have the flexibility to relocate their businesses out of Singapore to elsewhere. Singaporeans may lose their jobs. So, Mr Pritam Singh asked me earlier about the status of BEPS. Well, in fact, I am glad that MOF officials have been very involved in this international discussion. Some of these discussions are confidential in nature. Some of them have been made public. But I assure Mr Pritam Singh that hub economies will have to bear some negative in this exercise for the reasons I mentioned – where you tax the activity. Is it where the consumers are or where the underlying economic activities are? That change in principle alone, you can work out what the effects will be for us as a hub economy. We therefore need to strike a fine balance between our corporate income tax rate and economic competitiveness. Ultimately, how much we spend depends on how much we collectively have to pay in the form of taxes.”
“Ms Foo Mee Har and some others have asked if we should raise income and wealth taxes instead of GST. In fact, we have been doing so in recent years. In 2010, we made our property tax regime progressive by introducing higher tax rates on owner-occupied residential properties with higher Annual Values. We enhanced the progressivity of our property tax system in 2013, with higher property tax rates for homes and non-owner-occupied residential properties. In 2015, we raised the top marginal personal income tax rate from 20% to 22%. The following year, we introduced a cap on the personal income tax relief to make our regime more progressive. In 2018, we raised the Buyer’s Stamp Duty for residential properties in excess of $1 million in value. In all this time, when we were raising income and wealth taxes to support the country’s growing expenditure, the GST rate remained at 7%. The last time we raised it was in 2007, more than 10 years ago. But we should bear in mind that there is a limit to raising income taxes. If we keep raising income taxes, it will eventually hurt middle-class Singaporeans, who presently pay very light income taxes. It will also risk losing our ability to attract talent and keep our own talents. As Ms Tin Pei Ling said, "Talents beget talents. There is a virtuous cycle to this." It is important to have a critical mass of talent in Singapore to create jobs and economic vibrancy, which will benefit Singaporeans. That said, as important as raising the GST is, it is only one way to meet our revenue needs. An increase of 2%-points in the GST rate will provide us with additional revenue of almost 0.7% of GDP per year. But the increase in annual Government healthcare spending alone that I mentioned already exceeds the amount of additional revenue.”
“The outbreak reminds us why we need to plan ahead to raise revenues. We must ensure that we have enough resources to meet our people’s needs, driven by structural factors. Otherwise, we will find ourselves short and have to raise taxes or cut spending in difficult times, precisely when businesses and people need a boost. Planning ahead entails being honest with ourselves and with citizens, and having the discipline to raise revenues in a timely manner. Yet even among those who agree in principle on the need to raise taxes, some have asked, "Why GST?" As I have explained before, a broad-based tax like GST is an appropriate and responsible way to pay for major societal needs like healthcare spending. Such spending benefits all Singaporeans and so it is fair for everyone to bear some part of the cost. This is about all of us taking shared responsibility to pay for our needs and our society’s needs and sharing in the effort to provide for them. It is at the same time a Singapore-style GST that comes with offsets to ensure that those with lower incomes pay much less than those who are well-off. In fact, at the individual level, many Singaporeans are willing to chip in to meet these needs. In my conversations with my constituents, I have asked if they would be willing to contribute just 20 cents more out of $10 that they spend a day, if this would help to ensure that their healthcare needs and those of their parents were adequately taken care of. Many were willing to accept this small cost for peace of mind. The compact does not change when we project it to the national level. This is ultimately about us collectively chipping in to look after the healthcare needs of our families. Each generation must pay for its own spending.”
“We are able to achieve this only because of a whole-of-society effort. On the Government’s part, we have carefully designed our education and healthcare systems to deliver good services in a cost-effective manner. We have dedicated and passionate educators who believe in developing every child to their fullest potential. We have committed healthcare professionals who believe in delivering the best care to all Singaporeans. There is strong support for Singaporean families from community groups and social service agencies. And Singaporeans themselves play an important role in taking responsibility for their own learning and health. We are always looking for ways to improve outcomes in a cost-effective manner. Minister Lawrence Wong will elaborate on some of these efforts during MOF's Committee of Supply (COS). But efficiency savings will never be enough to fully offset the growth in healthcare spending as the population ages and medical sciences improve. Efficiency savings can only mitigate it. To believe otherwise is wishful thinking. Ms Foo Mee Har shared that some Singaporeans have questioned the need to raise revenues to meet the expenditures I mentioned, pointing at surpluses seen in this term of Government. But our healthcare spending needs are not one-off needs. They are recurrent needs – meaning that these needs will be there year after year. In fact, growing year after year. So, we need to fund them using recurrent revenues, not one-off surpluses seen in this term of Government, which arose from the unexpected rally in global financial markets and the unexpected buoyancy in the property market. We cannot hope to keep on being so pleasantly surprised. Things can very quickly swing in the opposite direction, as we have seen from the COVID-19 outbreak.”
“So, while this is a very good thing that our people are living longer, we must be prepared that we will have to spend more on healthcare. So, we expect public healthcare spending to grow by around 1%-point of GDP over the 15 years from 2015 to 2030. This is, in fact, as I mentioned to you earlier, less than the average increases projected in the OECD countries, partly because of our efforts to keep healthcare costs sustainable and because Singaporeans have increasingly adopted healthier lifestyles. But our healthcare spending may rise by more than this 1%-point if medical costs rise throughout the world and we do not bring problems like obesity and diabetes under control. As Mr Lim Biow Chuan said, Singaporeans must understand that increased spending on healthcare must come from somewhere. Some have wondered if we can spend less or spend more efficiently. Indeed, it is not just about how much we spend but how well we spend. Today, we achieve good outcomes at a lower cost than many other countries. In health, we have the highest life expectancy in the world – almost 85 years – but still spend less of our GDP compared to other countries, as Members can see in this chart, our life expectancy compared against public health expenditure as a percentage of GDP of various countries. In fact, former World Bank President Jim Yong Kim said that it was "stunning" that Singapore had achieved its current outcomes despite relatively low spending. So, I will thank our people and our healthcare workers for taking care of their own health and for doing such a good job. Similarly, for education, our 15-year-olds do well in international indices of educational attainment like the PISA test despite Singapore spending less than other countries.”
“This trend has been played out in Singapore and all the other countries, as shown in this chart. Over the past two decades, our healthcare expenditure has grown rapidly. In 2000, Government spending on healthcare was about 0.7% of our GDP. By 2015, it had tripled to about 2.1% of our GDP. This additional spending has gone towards significant improvements in healthcare accessibility and affordability. We have introduced new schemes such as MediShield Life and expanded CHAS to cover all Singaporeans for many chronic conditions. Since 2010, we have opened or expanded eight hospitals. We have built two new polyclinics and redeveloped three existing ones. Now, do not get me wrong. The spending is not just on the infrastructure. For every hospital that you build, the capital expenditure or capex that we put in, the operating expenditure or opex, is even more. So, it just tells you the trend that we are heading towards. And healthcare spending is not just about treating the sick. It is also about giving our seniors a better quality of life. The number of cataract operations per year on seniors increased from around 10,000 in the year 2000 to almost 30,000 last year. Such procedures were less common in the past because people did not live as long as they do today to need them. And because of advances in medical sciences, previously incurable diseases, like cancer, can be better managed, and patients can continue to live for more years with good quality of life. The number of citizens aged 80 and above has almost doubled, from 63,000 in 2009 to 112,000 in 2019, and will increase further. Going forward, healthcare spending will continue to grow significantly.”
“In fact, I noticed that several Members of Parliament have gone through my Budget Annexes and looked at how much spending has increased for various Ministries. So, let me just take this occasion to cover one important area, an important area because the big shift in public expenditure in the next decade will be in healthcare spending. It will grow significantly as our population ages and as medical technology improves. Now, let me show you a chart that shows Singapore's and other countries' public health expenditure as a percentage of GDP against the share of the total population that is over 65 years old. On the x-axis is the percentage of total population is more than 65 years old; and on the vertical axis is public health expenditure as a percentage of GDP. The triangle shows the year 2000 and the circle the year 2015. So, in other words a period of 15 years. When you look at the green line, South Korea; the purple line, USA; New Zealand, Germany the blue line; and Japan, the yellow line, you can see how they have all gone up sharply as population ages and as technology improves. As a percentage of GDP, the USA is at the highest at almost 14%, Germany at about 9% and Japan at also about 8% or 9%. In Singapore, it has also risen. The dotted line represents the future, projections by the OECD. The OECD had made similar projections for others. So, we did a similar projection to look at what would Singapore's numbers be, if we used MOH's projections. And that is the bottom, the lower dotted line. And then the upper dotted line is if we were to use OECD's methodology or OECD's trends. As the share of seniors increases over time, public health expenditure has simply increased. And as I said, medical technologies will continue to improve.”
“As a Government, our approach is to tax lightly, so that people can keep most of what they earn and so that they can decide how best to spend it for themselves, for their families or to donate it. But there are many critical national needs that are better met by government provision through taxes. These include building up healthcare facilities and services, and providing subsidies to ensure that our healthcare needs are well taken care of. These include important priorities like mental health which Ms Anthea Ong spoke about passionately, and which will be discussed further during the Committee of Supply. I agree with her that good mental health is a foundation for well-being and resilience and we have already started including this as part of our work on human potential that we have added to our national R&D budgets. These include developing good and affordable pre-school services and education to give all children including our children with special needs a good start in life and the best chance for success, regardless of background. These include building up the SAF and Home Team to support our way of life in an era of emerging external, digital and terrorist threats. These are all issues that many of us in this House care deeply about and made eloquent pitches for the Government to spend more on. There must be a role for the Government to redistribute resources in the right way, so that everyone shares in the fruits of progress. Our way to do this is through schemes that enhance the capability of our people – through investments in education, healthcare and the provision of housing, as well as schemes to mitigate inequality like Workfare and Silver Support. Mr Singh asked earlier whether I could provide more details about our expenditure.”
“Which path we choose and how we decide to share the burden of providing public services and building our collective future will define us. Will Singaporean stand together to share the responsibility of providing for our collective future? Or will we pass the cost to our children and grandchildren? In many societies, such tensions have divided communities and created fault lines between millennials and baby boomers. So, it is critical that we make a collective and informed decision to share the efforts and cost fairly, with citizens appreciating the reasons and values behind this decision. Many have been advocating that I give up more sweets, more M&Ms, more and more, be a generous "财神爷" or God of Fortune. It will be easier if I could deliver every Budget with just more good news, more spending on everything, more subsidies, more universal handouts and keep quiet about how we will pay for all of this. But this will be irresponsible. It has never been the Singapore way and I hope will never be. Because Singaporeans deserve better. So, I will spend some time explaining the rationale and the hard choices and trade-offs that we have to make. I hope that you will understand and appreciate the care and concerns behind the careful planning. If we did not care as much for our collective future, we would not have thought so long and hard, and expended so much political capital. Let me speak on two sets of issues in turn. First, I will explain why raising GST remains the responsible way for all of us to meet our society's future needs. Second, I will explain why we should continue to steward our reserves well, to safeguard the interests of future generations of Singaporeans. First, let me reiterate why we need to raise taxes. Nobody likes taxes, not even Ministers for Finance.”
“This unity of purpose across our whole society is what will see us through these challenging times. If we conduct ourselves well in this crisis, we will replenish those reserves and strengthen our resilience and unity for another generation. As Er Dr Lee Bee Wah said said yesterday, in Singapore, "You Will Never Walk Alone". Budget 2020 provides critical support to Singaporeans and businesses in this hour of need. We are able to do so because we have managed our finances prudently and planned ahead to make sure that we always have enough to meet our people's needs. COVID-19 will not be the last challenge that we will face. When this passes, we will continue to face the longer term structural challenges of an ageing population, technological disruption, social inequality and climate change. We will continue to face sudden and unexpected situations, be it new virus outbreaks, threats to our security or financial crisis. A responsible government must ensure that the nation has the resources to meet these challenges and unexpected events, so that present and future generations of Singaporeans have the wherewithal to survive and thrive. As Mr Sitoh Yih Pin put it so well, we must always be ready. We must always provide for our future. Two years ago, I announced that we will need to raise the GST some time from 2021 to 2025. Various parties have questioned this plan. Some have called for the GST rate increase to be delayed or dropped completely after I announced that it would not take effect in 2021 and that we have prepared a $6 billion Assurance Package. In place of the GST rate increases, some have suggested alternatives including raising income and wealth taxes as well as spending our reserves and more of its investment returns.”
“] We will win this war over the virus by fighting as One United People. Our citizens and institutions all play a part. Enterprises and senior management standing with unions and our workers, landlords supporting tenants, neighbours looking out for one another, political leaders working hand-in-hand with Public Service and the people to do everything that will help. They will help us see these problems through together. Singapore has been able to respond strongly and effectively to COVID-19 because there is strong trust between the people and the Government, and the sense that we are all in this together. The Government can make decisions quickly and carry them out effectively because Singaporeans have confidence that those responsible know what they are doing, care about their health and safety and share their worries and concerns. We do not hide bad news. We do not flinch from doing the right thing. We will go the extra mile to help everyone of us come through this together. That is why people comply with stringent quarantine orders, people accept reassurances about masks, people feel safe and carry on with their lives. The fundamental basis for this is trust and solidarity between the Government and the people. The political leadership will do our part. To show solidarity with fellow Singaporeans. All political office holders will take a one-month cut in their salary. All Members of Parliament will also take a one-month cut in their allowance. [Applause.] The President has informed me that she will join in to take a similar one-month pay cut. [Applause.] Senior Public Service officers will take a half-month pay cut. In the weeks and months to come, we will need to draw deeply on Singapore's reserves of resilience, trust and solidarity.”
“Senior Staff Manager, Ziadah Zainudin, has worked more than 12-hour days at Singapore General Hospital's Isolation Ward. Despite missing her birthday celebration with her family, she did not let COVID-19 stop her from doing her job. Dr Melissa Tien responded to NCID's call for volunteers at its 24-hour Screening Centre, even though it meant sleeping in a different room from her husband and forgoing time with their two children. Dr Margaret Soon, the Director of nursing at NCID and a veteran of SARS cancelled the family trip to work at the frontline. But her family understood and supported her, including her daughter whom she was pregnant with during SARS 17 years ago. The selflessness and commitment of our healthcare workers have shone through as they bravely care for those affected and tirelessly work to contain the spread of the virus. They are an inspiration to all of us and their spirit of excellence has been recognised around the world. [Applause.] While we cannot thank them enough, we can show our appreciation and support in a tangible way. The Government will award public officers on the frontline who are directly battling with the COVID-19 disease up to one additional month of special bonus. [Applause.] This will include many healthcare officers in MOH and the restructured hospitals and some officers in other frontline agencies who have been directly involved. Other public officers who have contributed significantly will be recognised in appropriate ways. We will also make a one-off COVID-19 grant to the Public Health Preparedness Clinics to support them in their active role caring for patients with respiratory symptoms. This gesture plus the many words of encouragement and acts of consideration and kindness is our way to express to you we salute you. [Applause.”
“Young leaders from six business families in the Singapore Business Federation, Young Business Leaders Network has set up a $5 million fund called the "Helping our promising enterprises" or SBFYBL and Hope Fund, to provide financing help for local enterprises hit by COVID-19. In another example, Maturity Trust, a charity, is raising $500,000 under the Singapore Strong Fund to fund ground-up projects that help the community stay strong amid the COVID-19 outbreak. Many are also pooling that time. Mr Delane Lim started the initiative Ops Hands-On to provide free masks and hand sanitisers to seniors and vulnerable residents in neighbourhoods across Singapore in collaboration with local residents' committees and community clubs. Even our children are doing their part. Students and staff from Wellington Primary School and several other schools made personalised cards to show support and appreciation for our frontline health workers. Several Members of this House have shared heartwarming stories of how the community has banded together to cheer on our frontline workers as it combats the COVID-19 outbreak. Mr Alex Yam talked about how volunteers in Yew Tee baked cookies for our frontline heroes. Ms Tin Pei Ling talked about Singaporeans who wrote messages and prepared gifts to express their support and cheer them on. Our frontline health workers deserve our fullest support and encouragement. Indeed, our frontline workers, especially healthcare workers in the restructured hospitals have shown outstanding courage and dedication. They are out there making daily sacrifices to fight this war against the unknowns. As Mr Seah Kian Peng put it, they act not because they have no fear but in spite of it.”
“Landlords, including CapitaLand and Frasers Property, have promised to pass on the Property Tax Rebate to affected tenants. The taxi and private hire car companies have taken steps in partnership with NTUC, the National Taxi Association, National Private Hire Vehicles Association and the Government to care for their drivers in their hour of need, even as they face challenges themselves. I thank Mr Ang Hin Kee for playing a key role in facilitating this. Many businesses have also responded to the challenge with resilience and foresight, taking the opportunity to accelerate innovation and invest for the future. This is exemplified by PARKROYAL at Kitchener Road. I visited PARKROYAL this Tuesday. I was impressed by the measures they are taking during this downtime to renovate the hotel, redesign processes, retrain their workers and redesign jobs. They are able to do this because even before the COVID-19 outbreak, they had been making plans to transform their operations to cope with manpower constraints. Now, they are accelerating their transformation efforts, fully utilising the support that we are extending to them. Our Labour Movement has also been hard at work to help workers cope and emerge stronger from this difficult period. I thank Secretary General Ng Chee Meng, Mr Heng Chee How and Dr Koh Poh Koon for NTUC's strong leadership and partnership in this period and all his NTUC colleagues who are here in this House. This is a time for all of us do our part. As Mr Vikram Nair put it, the entire population needs to come together to weather the storm. People from all walks of life have come together to help others, at a time when it is tempting to just look out for oneself. Some are pooling their money.”
“These measures in the package also come on top of the existing support schemes for firms. For example, there will be a WCS payout of more than $600 million to firms next month, based on the parameters announced in Budget 2018. We should also look at the measures in the Stabilisation and Support Package in totality. We are providing a Property Tax Rebate to qualifying commercial properties, for which property owners will receive their revised tax bills in April, and refunds of any excess property tax paid by the end of May. We are also providing rental waivers for Government commercial tenants, the majority of which will apply to March and April rentals. For the Corporate Income Tax Rebate, companies will receive their revised tax bills by the end of March. These will provide not just financial relief but also help with enterprises' shorter-term cash flow needs. Many, including Mr Arasu Duraisamy, Ms Denise Phua, Dr Teo Ho Pin, Mr Chong Kee Hiong and Mr Alex Yam have asked if we can do more for businesses and for a longer period of time. We hope that will not be necessary. But if it does, for example, if the outbreak becomes a worldwide pandemic and the global economic impact is deeper and longer, we have the fiscal resources to do so and the will to act. We have the fiscal resources to do so and the will to act. But, for now, let us go forth and make the fullest use of the support available out there before we review what more needs to be done. As I have said, this is a fluid and fast moving situation. There are many stories of businesses and workers who are not just making full use of the Government's support, but taking it a step further to help each other and share the burden during this time of fear and uncertainty.”
“This will include enhanced absentee payroll support for workers, an issue that Mr Seah Kian Peng raised. Ministries will announce further details on this. Third, we have extended support to other groups who have felt the ripple effects, including Self-Employed Persons (SEPs). We have provided additional measures to support taxi and private hire car drivers, hawkers, tourist guides and operators of F&B and retail outlets. This additional support totals over $200 million and is over and above the support from broad-based measures, which form the bulk of the support for them. Mr Desmond Choo, Ms Tin Pei Ling and Mr Gan Thiam Poh asked if we could do more to take care of other groups of SEPs and freelancers who are more affected by the outbreak. Mr Pritam Singh raised the issue of bus drivers. The relevant Ministries will announce details for these other groups subsequently. Fourth, we have designed our measures to be able to reach enterprises as quickly as possible. Mr Saktiandi Supaat, Mr Seah Kian Peng and Mr Gan Thiam Poh asked if we could expedite the flow of the JSS payout to businesses. The disbursement of the JSS payout is operationally more complex due to the need to check and validate information on workers, employers and payment mode. Hence, we had initially projected for the JSS payout to reach companies by the end of July. In the last few weeks, the agencies involved have redoubled efforts and are now targeting to bring forward the payment for JSS from end-July to end-May. Employers using bank crediting will get the payout about a week earlier. Enhancements to WCS will be provided in the second half of this year. This way, we can also spread out our support for enterprises in a more sustained way.”
“We must maintain a state of dynamic vigilance and be prepared to adjust course as new information comes in. Let me address whether we are doing enough and in a timely manner. The overall size of our spending in Budget 2020 is appropriate for now. We have calibrated it to put sufficient purchasing power back into the economy, while injecting a boost of confidence. In fact, our Budget is higher than what most economists had expected. This took into account the context of the global slowdown and wider uncertainties. We are applying the support to where it matters most. Our first priority is jobs. The two biggest items in the Stabilisation and Support Package – the Jobs Support Scheme (JSS) and the Wage Credit Scheme (WCS) – are focused on preserving and enhancing jobs. With greater job assurance, workers are in a better frame of mind to go for training. It will also avoid them having to cut down too much on consumption. SMEs, which employ the bulk of local workers and whose concerns were raised by Ms Denise Phua and Mr Ong Teng Koon, are a key focus of these two schemes. As a percentage of revenue, SMEs will receive payouts that are on average five times as much as the average for all enterprises. This is on top of the help they will also receive through the Corporate Income Tax Rebate and other measures. Second, we are giving support to those sectors which are most directly impacted by COVID-19. Our sector-specific measures are calibrated according to the extent to which each sector has been affected. Tourism, accommodation and aviation have been hit hardest and are therefore given additional support. In total, these sectors will receive over $400 million, in addition to the broad-based support that they will get through JSS, WCS and Corporate Income Tax Rebate.”
“With systematic and long-term planning, we have developed new facilities, like the National Centre for Infectious Diseases, deepened research capabilities in health and biomedical sciences, built up our networks of experts and honed our effectiveness in contact tracing and quarantine. Most importantly, we have well-trained and dedicated people. These capabilities are now deployed to good effect to deal with the COVID-19 outbreak. Although we have kept the outbreak contained so far, it has already had a significant impact. In these challenging times, we have acted decisively to protect families and workers through the Care and Support Package and the Stabilisation and Support Package. I have received a wide range of feedback about the support. Many are relieved that we have a strong and decisive Budget, with both broad-based and targeted support. Many Members of this House have asked if we are doing enough, particularly for businesses in the sectors directly affected and those feeling the knock-on effects. On the other hand, some economists have wondered if we are doing too much. We must not fight the current war simply based on the lessons of the last war. Every crisis and downturn is different. So, we should, to the best of our ability, make a sound diagnosis of the current challenges and apply a decisive course of action, or as one says in Chinese, "对症下药", fit the remedy to the case. At the same time, we must bear in mind the caution that Ministers Gan Kim Yong and Lawrence Wong have given – this is a fast-moving, fluid situation. While the evidence is that the impact of the COVID-19 virus is more like H1N1 than SARS, its rapid spread through places like Iran, Italy and South Korea demonstrates the fluidity of the situation.”
“It expresses our conviction that we will emerge from this test, stronger, more resilient and more united than ever before. It expresses the spirit shown by many Singaporeans – of staying united, as one people, through thick and thin. Beyond fighting the COVID-19 outbreak, our unity will be the foundation for Singaporeans to press forward and write the next chapter of the Singapore Story. United, we can overcome the longer term challenges of ageing, technological disruption, social inequality and climate change. United, we will make sure that the Singapore Story endures and goes from strength to strength. We should not take our unity for granted. Around the world and closer to home, we have seen societies torn by forces that foment polarisation, communal conflicts and political turmoil. These have weakened their social cohesion and the sense of togetherness that is so essential for societies to meet the complex challenges of the day. We need, as many thoughtful commentators pointed out, a whole-of-society response. I will round up this Budget debate by addressing Members' contributions along four key themes. First, how we will overcome our immediate challenges and the COVID-19 outbreak together. Second, how we should manage our finances collectively to provide for our future. Third, how we should tackle the long-term challenge of climate change and turn our constraints into strengths. Finally, how we can create opportunities for all and build better lives for Singaporeans in changing times. First, let me speak on our present challenges. Having gone through SARS 17 years ago and other outbreaks like H1N1 since then, we are much better prepared for COVID-19 today.”
“Mr Speaker, Sir, I thank Members of this House for the thoughtful debate over the past two days. In particular, I would like to thank the 54 Members of Parliament, including all nine Nominated Members of Parliament, who rose to offer your perspectives and suggestions. I do not have 57 files; just two. I have also learnt many new terms, including Mr Lim Swee Say's H2P2 or Happy and Healthy, Productive and Purposeful; Prof Lim Sun Sun's 3Ms, which is not massively more money, but "mobility, maturity, mentality"; and Mr Ang Hin Kee's "woon woon jiak beehoon" or steadily, we eat the beehoon. My special thanks to Mr Liang Eng Hwa who opened the debate as Chairman of the Government Parliamentary Committee for Finance and Trade and Industry. Beyond this House, I also appreciate the many helpful, constructive perspectives shared by fellow Singaporeans. They have enriched the national conversation on this Budget and the issues it seeks to address. This year’s Budget takes place under exceptional circumstances. It is a trying moment for businesses, workers and households, having to deal with both the softening of the global economy and the sudden COVID-19 outbreak. How we respond to moments of challenge and crisis is a test of our individual resilience and the strength of our character. Even more, it is a test of our social cohesion and solidarity. It is a test of who we are as a people, as a nation. Do we panic and become self-centred or do we stay calm, band together and look after one another? Since I delivered the Budget statement last week, some have asked why we call it "Our Unity Budget"? My answer is simple. It expresses our confidence that Singaporeans will rally together to meet our challenges head-on.”
“The Stabilisation and Support Package, costing $4 billion, will help viable enterprises and our workers during these uncertain times. Our Transformation and Growth effort, costing $8.3 billion over three years, will support our longer-term plans to position Singapore as a Global-Asia node of technology, innovation and enterprise. The Care and Support Package, costing $1.6 billion, will support our households and alleviate concerns over cost of living. This is on top of the structural social subsidies given to Singaporeans in healthcare, education and housing. We will continue to take steps towards climate change mitigation and adaptation, to ensure that in the decades ahead, our children and children’s children will have a safe and liveable Singapore. I am confident that, together, we can ensure that Singapore remains exceptional. As one Singapore, we will grow our economy and transform our enterprises, creating opportunities for Singaporeans. As one Singapore, we will care for and nurture Singaporeans at every stage of their lives, to build a caring and inclusive society. As one Singapore, we will build a liveable and sustainable Singapore in the face of climate change, secure our sovereignty as an independent nation and ensure our fiscal sustainability. And as one Singapore, we will work together with fellow Singaporeans, to build a nation and a home we will always call our own. Our nation has built up the capital – financial, human, and social – to go the distance. The Singapore spirit is strong and growing. Together, we will advance, as One Singapore. Mr Speaker, Sir, I beg to move. [Applause.]”
“We will enhance our current Silver Support Scheme to help lower-income seniors cope with daily expenses, providing them assurance in their retirement. In addition, we will introduce the Matched Retirement Savings Scheme to help those who do not have very high CPF balances build up their CPF savings. We also encourage our senior citizens to lead active and fulfilling lives after retirement. At present, the global situation is uncertain and many countries face structural changes. Taking a long-term point of view, dealing with this sudden virus outbreak is only one of the challenges that we will encounter as we go forward. We cannot stagnate because of this. Together, we have to march towards our common objective. In the spirit of the Singapore Together movement, as long as we pool our efforts and work hand in hand, we will be able to solve all problems and create an even better Singapore. (In English): I will now conclude in English. Mr Speaker, Sir, there are deep structural shifts taking place in the world today, coupled with near‑term concerns over economic uncertainties and the COVID-19 outbreak. All nations, big or small, will have to devise strategies and mobilise their people to navigate these changes and turbulence. Singaporeans have enjoyed more than half a century of stability and prosperity because we have seized the opportunities from an increasingly open and interconnected world. Every decade or so, when a test comes, we have rallied and passed it together. In this Budget, I have outlined our plans not only to help our people deal with near‑term challenges, but also to better enable Singaporeans of all ages to thrive in the new decade.”
“In overcoming our short-term challenges, we must also pay attention to the long-term structural changes and capture the opportunities brought about by these changes. First, we must continue to encourage enterprises to transform and create more opportunities for Singaporeans. As the saying goes, “there is no end to learning”. Through SkillsFuture, we encourage lifelong learning, which can bring about lifelong benefits. We will introduce the SkillsFuture Mid-Career Support Package to help locals in their 40s and 50s learn new skills and take on new jobs. Second, we will build a caring and inclusive society together. I have just announced that the GST rate will remain at 7% in 2021. However, in order to meet increasing recurrent expenditures, such as in healthcare, the GST increase will still be needed by 2025. When we raise the GST rate, we will continue to help low-income families and provide more support for them. We will provide a $6 billion Assurance Package when the GST rate is raised and enhance the existing permanent GST Voucher scheme. Third, we must continue to develop Singapore, look after Singapore's security and stability, and ensure that we have a sustainable fiscal system. This is our commitment to our future generations. Especially in the area of climate change, I will provide $5 billion to set up a new Coastal and Flood Protection Fund. Fourth, we will work together with Singaporeans to build a nation and home we will always call our own. As the saying goes, "the young will be educated, those in need will receive support, the old will be cared for", we hope that Singapore will not only be a good place for raising children, but also a place where our seniors have dignified and meaningful lives.”
“Mr Speaker, Sir, let me say a few words in Mandarin before I conclude in English. (In Mandarin): [Please refer to Vernacular Speech.] The COVID-19 outbreak has brought about many uncertainties globally. The virus disregards nationalities and the effort to control the disease is a global one. Governments, international organisations, researchers and healthcare workers from many countries are now working closely together. China has taken a series of highly effective measures and an early success of China in fighting COVID-19 will help both China and the world. The current situation has brought about widespread impact to our economy. Some sectors have already been affected, and Singaporeans are worried about their employment prospects. I can understand their concerns. In order to reduce the pressure on businesses and our people, I will introduce a $4 billion Stabilisation and Support Package. In order to help Singaporeans meet their daily expenditures, I will also introduce a $1.6 billion Care and Support Package. Singapore has enough resources to meet present challenges. This is because we have been well-prepared accumulating surpluses from this term of Government, in order to meet unexpected expenditures. Whether we can successfully overcome this challenge will depend on whether Singaporeans can look out for one another and maintain social cohesion. When facing the unknown, it is natural that people feel worried. However, we must not panic. We should pay attention to personal hygiene and be considerate towards people around us. At the same time, we must take concrete actions to help those who are in need. The Budget is a long-term strategic plan to ensure that Singapore develops sustainably and Singaporeans can lead better lives.”
“Under the National Innovation Challenge in Ageing, we sought ideas to combine different technologies to enable ageing in place and deployed these solutions at a precinct level. While we are only in our initial phases, we have learnt useful lessons and seen encouraging results. We will issue more specific challenges to encourage ground-up participation. These include challenges in the social sector, where we have built many community partnerships to better support children from low-income and vulnerable families, and promote youth mental well-being, amongst other things. The respective Ministers will provide more details of the schemes I have mentioned in this section later. I am excited about the prospect of stronger Government-citizen partnerships in overcoming these challenges and look forward to the results that these partnerships will yield. As this Budget has many measures, MOF has prepared a booklet summarising the measures, which I hope colleagues will find useful. With your permission, Mr Speaker, may I ask the Clerks to distribute these to all Members of this House?”
“One example is Progress NEST started by Mr Akram Hanif to support children from low-income families. Through these partnerships, we have been able to do more and do better. And we are committed to making partnerships an integral part of how we will build our future Singapore. I will set aside $250 million to give greater momentum to our partnership efforts. I will top up OSF and extend the Fund beyond 2020 to support more ground-up initiatives that Singaporeans are passionate about, across a wider range of domains. [Please refer to Annex C-5.] The Government is committed to expanding and scaling up successful ground-up projects, such as those supported by OSF. MEWR will also be launching an SG Eco Fund to support partnerships with the community and enterprises in our sustainability efforts. Channelling the energies of our people to key causes requires us to identify the challenges of our time. These challenges are multifaceted and multidimensional, but they are ultimately about how Singapore remains exceptional in an increasingly complex world. The solutions will also come in all shapes and forms, from all levels of society – from Government policies to individual efforts on the ground. We must overcome these challenges and find solutions together. The Government will work with agencies and key stakeholders to identify major societal challenges. This will help us focus our collective efforts on the challenges that matter and allow us to galvanise good ideas and solutions from the public. We have issued several national innovation challenges to date, in the areas of energy, land and liveability, ageing, urban mobility and AI-enabled healthcare. For example, our AI Healthcare Grand Challenge is drawing strong interest here and with partners from France and Germany.”
“We made a concerted effort to involve Singaporeans and stakeholders in our strategic deliberations and budgeting process. Over the course of the Budget 2020 consultations, my colleagues and I met almost 1,000 leaders from different parts of society, including our unions, enterprises, social sector and youths. It was a very enriching experience for everyone and I thank every participant. Some of you will recognise your ideas in the Budget. For example, we enhanced the internationalisation support schemes after receiving feedback from TACs, such as the Singapore Manufacturing Federation and the Association of Banks in Singapore. We provided more resources to support our people to take action to reduce carbon footprint, after several youth leaders I met suggested this. I also thank the talented students from Nanyang Polytechnic for the artistic illustrations in my slides today. Many Singaporeans are coming up with, and acting on, ideas to make Singapore a better place. The youth movement has been particularly strong. In the area of climate change, youths like Ms Cheryl Lee and her team in the Singapore Youth for Climate Action have been organising activities to encourage youths to take action through simple lifestyle choices. Ms Rohini d/o Ravindran is also contributing to the community, by conducting photography and videography sessions for lower-income youths to develop their problem-solving skills and build a good foundation for them to excel. In 2016, we set up the Our Singapore Fund (OSF) to provide funding support for ground-up efforts in the social domain. Since then, OSF has committed nearly $4.3 million to support over 240 ground-up projects in culture, heritage, arts and sports.”
“9 billion or 2.1% of GDP. [Please refer to Annex D-2.] With our fiscal prudence since the beginning of this term of Government, we have sufficient accumulated fiscal surplus to fund the overall deficit in FY2020. There is no draw on Past Reserves. Members have been very patient and this is my third file. It is almost two hours now, so, thank you very much. Before I start on the third file, some good news. My very dedicated staff in MOF who worked day and night with me over the weekends and Chinese New Year, managed to trim and trim the speech and grow and grow the substance. So, the substance has grown, but, the speech is more concise now. We have moved all the details to the Annexes. It is a pity because there were so many inspiring stories that I wanted to share with Members, but I hope that they will find many opportunities to share these stories. Mr Speaker, Sir, let me thank my excellent staff for contributing to a significant improvement in our productivity here. Mr Speaker, Sir, we will face more complex challenges ahead, but we are in this for the long haul. We can succeed only if we work together. Our ongoing fight against the COVID-19 outbreak is a testament to how we can work together. Our healthcare workers and frontline officers are giving their all to keep us safe, and care for those who are unwell. And others, such as our community groups, enterprises and many volunteers, have stepped forward. Everyone has something to offer and every action makes a difference. This is the spirit of the Singapore Together movement which I launched last June – to build a democracy of deeds, mobilise the creative energies and commitment of Singaporeans, find common cause and beat the odds together, to build our future Singapore.”
“We are being prudent to preserve fiscal buffers, to ensure that we have the wherewithal to stand our ground and bounce back quickly if the tide turns against us. This is how we have been able to respond decisively to fight the COVID-19 outbreak and support Singaporeans and our workers and, at the same time, to be able to set aside an Assurance Package for GST to help Singaporeans in the years ahead. The accumulated surpluses at the end of the term of Government becomes part of our Past Reserves, which are invested. Today, the Net Investment Returns Contribution (NIRC) from our Reserves is the biggest component of our revenue. This is remarkable for a country with no natural resources of any kind. I am making further changes to our tax system to strengthen its resilience while maintaining competitiveness. The details are in the Annex. [Please refer to Annex D-1.] Let me summarise our overall Budget position. For FY2019, we expect an overall budget deficit of $1.7 billion, or 0.3% of GDP. This deficit is $1.8 billion lower than the $3.5 billion deficit forecasted a year ago. This is due mainly to lower-than-expected expenditures arising from unforeseen project delays. When we exclude the Government’s top-ups to funds and NIRC from our Reserves, we expect a basic deficit of $5.1 billion, or 1% of GDP. In the coming year, the Singapore economy faces considerable uncertainty, because of heightened risks in the global economy, and the rapidly evolving COVID-19 outbreak. Hence, for FY2020, our Budget position will be more expansionary, with a larger basic deficit of $12.3 billion. This, together with the Stabilisation and Support Package, will impart a considerable fiscal boost to the economy to address near-term concerns. On the whole, we expect an overall deficit of $10.”
“In this term of Government, we happen to have more, mainly due to exceptional Statutory Board contributions from MAS and increased stamp duty collections. We used some of the unexpected surpluses to save ahead for anticipated needs and shared some of the surpluses with Singaporeans. But we must not count on such revenue surprises to keep happening. We must anticipate long-term spending needs and be disciplined to raise revenues ahead of time, so that we can continue to provide quality public services to all Singaporeans. At the same time, we must be mindful of the uncertainties and downside risks to our revenue. There are ongoing discussions to revise international tax rules under the Base Erosion and Profit Shifting project and we are actively participating in them. Our fiscal strategy must also be equitable. Major long-term infrastructure is lumpy and requires hefty upfront investments. But once built, they benefit many generations of Singaporeans. Borrowing for such developments allows us to distribute the cost equitably across current and future generations, without the need for sharp increases in taxes. However, we must remain disciplined about our use of borrowing. We should continue to pay for recurrent needs, like healthcare expenditure, through recurrent revenues, such as taxes. Our fiscal discipline has helped us to be among a select group of countries with a triple-A credit rating. This, in turn, lowers the borrowing costs of enterprises and households, and promotes a virtuous cycle of economic growth. We must also maintain our fiscal posture and leave enough to deal with unexpected shocks and longer-term challenges. The Constitution requires us to run a balanced budget over each term of Government.”
“We must also be prepared to deal with cyber threats, as digitalisation becomes more pervasive. Our cyber capabilities have been raised significantly, with the setting up of the Cyber Security Agency (CSA) in 2015 and the passing of the Cybersecurity Act in 2018. CSA is preparing measures for the next level of cybersecurity, as we adopt more advanced technologies, such as AI, Cloud and the Internet of Things. All of us, in the Government, enterprises and as individuals, will need to stay vigilant and strengthen our cyber and data security capabilities. Data security is also a vital prerequisite and key enabler of Singapore's Digital Economy. It is key to preserving trust in a digitally-connected world. We enacted the Personal Data Protection Act in 2012 and the Public Service has adopted comprehensive measures to secure and protect citizens’ data. As we embark on initiatives to realise our Smart Nation ambitions, we must continue to enhance our cyber capabilities. I will set aside $1 billion over the next three years to build up the Government's cyber and data security capabilities to safeguard citizens’ data and our critical information infrastructure systems. The respective Ministers will provide more details of the schemes to confront the challenges of climate change and security. As we lay out our plans for our economy, people and environment, we must ensure these plans are fiscally sustainable, so that we have the resources to deal with future needs and challenges. We must continue to plan our finances based on long-term structural drivers. Revenue flows are difficult to project accurately. We can end up having more, or less.”
“To improve our food resilience, the Minister for the Environment and Water Resources will provide more details of our "Grow Local" strategy at the COS to pursue our "30/30" aspirations. Sir, MOE has a "70/70" goal and the Ministry of the Environment and Water Resources (MEWR) has a "30/30" goal. So, together we have 100/100! [Laughter.] In uncertain times, there are many calls on our Budget. However, we cannot take our peace, prosperity and stability for granted. As a small city-state, we are particularly vulnerable to volatilities in our external environment. Securing our home remains a high priority in our Budget and must be funded adequately. It is imperative that we continue to invest in our external, internal, cyber and data security, to keep Singapore and our families safe and secure. Diplomacy and deterrence are the twin pillars of maintaining Singapore's sovereignty. We strive to build good relations with our neighbours and international partners and to promote a rules-based world order. A strong Singapore Armed Forces supports our diplomatic efforts and ensures that other countries take Singapore seriously. We must be ever-ready to defend our interests should negotiations fail. We must continue to draw a credible deterrence, by maintaining our military and technological edge, in a prudent manner that stretches every defence dollar. Back home, we are committed to protecting our safety and our way of life. Our Home Team agencies will continue to enhance the operational readiness of their officers, leverage technology and build partnerships with the community. Singaporeans share a strong conviction to look out for one another and to partner the Home Team to prevent and deal with terror threats and crises, through the SGSecure movement.”
“Residents are contributing through the community garden movement. Today, more than 36,000 gardening enthusiasts are nurturing over 1,500 community gardens island-wide. These gardens keep our shared neighbourhood vibrant and bring people closer together. To make sustainable living a key feature of our HDB estates, we will have a new HDB Green Towns Programme. It will have three key focus areas: reducing energy consumption, recycling rainwater and cooling our HDB towns. I spoke about how we are committing to global efforts, managing our carbon constraints and building a sustainable Singapore, together. We must try hard and we will do our part. But the course of climate change depends on the commitment of all nations. The risk of rising sea levels remains significant. So, our fourth strategic thrust is to prepare our island for rising sea levels. The Minister for the Environment and Water Resources will elaborate on our immediate plans at the COS. The Prime Minister mentioned at the National Day Rally last year that climate change adaptation might cost $100 billion or more over 100 years. This is a major fiscal outlay in the coming years. So, it is right and prudent that we set aside resources for this. I will set up a new Coastal and Flood Protection Fund with an initial injection of $5 billion. I will top it up subsequently whenever our fiscal situation allows. We must have the resolve to deal head-on with the existential threat of rising sea levels. Just as our Pioneers planted the trees for us to enjoy today, we must protect our island for future generations to come. Our food security may also come under threat, as imported supplies come under strain from climate change or geopolitical tensions.”
“But the technology to do this properly on EVs is the Next Generation Electronic Road Pricing (ERP) System, and distance‑based charging using ERP is still several years away. In the interim, we will impose a lump-sum tax that will be built into the road tax schedule for EVs to partly account for the loss in fuel excise duties. This lump-sum tax will be phased in over three years starting from January 2021, with the full quantum implemented by January 2023. [Please refer to Annex D-1.] Total road tax, after the revision in methodology and the new lump-sum tax, will be higher for some EV models. However, EV buyers can expect to enjoy substantial cost savings because of the significant EV Early Adoption Incentive. I spoke about policy measures that the Government will put in place to reduce emissions. But the Government alone cannot address the threat of climate change. Therefore, mobilising all of us in this effort is the third thrust of our climate change strategy. Robert Swan, the first person to have walked to the North and South Poles, once said, "The greatest threat to our planet is the belief that someone else will save it." To deal with climate change, we have to foster a climate of change in our community where everyone, whether as an individual, as a business leader or as a community leader, makes conscious decisions to lower our carbon footprint. One such decision by individuals is our choice of household appliances. To encourage households to purchase energy-efficient household appliances, we will introduce incentives to help lower-income households with the cost of these appliances. Outside our homes, we earlier announced plans to add more greenery to our HDB estates. New housing developments will have around 45% to 60% green cover.”
“Those who purchase fully electric cars and taxis will receive a rebate of up to 45% on the Additional Registration Fee, capped at $20,000. We will also revise the road tax methodology for cars to better reflect the current trends in vehicle efficiency from January 2021. This will lead to an across-the-board reduction in road tax for EVs and some hybrids. [Please refer to Annex D-1.] Second, we will expand the public charging infrastructure for EVs. Today, there are about 1,600 charging points island-wide. We will work with the private sector to step up the deployment of chargers in public car parks. By 2030, we aim to deploy up to 28,000 chargers at our public car parks island-wide. Lastly, the Government will take the lead. We will progressively procure and use cleaner vehicles to do our part for the environment. Here, we are placing a significant bet on EVs and leaning policy in that direction because it is the most promising technology. It also requires a significant increase in demand to justify the infrastructure investment. This is a significant undertaking involving multiple agencies. The transition towards EVs will have a major impact on tax revenues. Fuel excise duties today yield around $1 billion per year and are significant contributors to Government revenues. They are also a form of mileage tax, which discourages excessive driving, especially in private cars, and thus helps to reduce road congestion. But EVs do not pay fuel excise duties. Therefore, we will need to update our vehicular tax structure to preserve these two considerations. Ideally, we would like to implement a usage-based tax on EVs as an alternative to fuel excise duties.”
“Vehicles with internal combustion engines (ICEs) also contribute to pollution, adversely affecting our health and quality of life. Many major cities have already set ambitious goals to phase out ICE vehicles and shift to cleaner technologies. Car manufacturers are actively developing cleaner engine technologies, such as hybrids and electric vehicles (EVs), and are exploring new areas, such as hydrogen fuel cells. As a small city-state, we are able and have a strong reason to stay abreast of these major technological changes. For both public health and climate change reasons, we should progressively phase out the use of ICE vehicles towards cleaner alternatives, such as hybrids and EVs. We will set a long-term strategic goal for Singapore to achieve this. Our vision is to phase out ICE vehicles and have all vehicles run on cleaner energy by 2040. To promote this, we will have three measures in this Budget. First, we will enhance incentives to encourage the adoption of cleaner and more environmentally friendly vehicles. In 2018, we introduced the Vehicular Emissions Scheme for cars and taxis. Under the scheme, car buyers and taxi operators who choose cleaner car models can receive an upfront rebate of up to $20,000 and $30,000 respectively. We have seen promising results from the scheme. More car buyers and taxi operators are choosing environmentally friendly engines, such as electric hybrids. Therefore, we will introduce a similar scheme called the Commercial Vehicle Emissions Scheme for light goods vehicles. The Minister for the Environment and Water Resources will announce the details at the Committee of Supply (COS). For cars and taxis, I will provide an additional EV Early Adoption Incentive.”
“This year, we will update our commitment to the Paris Agreement and take a further step to chart our vision for a low-carbon, sustainable future Singapore. The Minister in the Prime Minister’s Office will elaborate on this later. Second, we must manage our transition to a low-carbon, low-emissions economy. We must turn our carbon constraints into a strength, just like how we have turned our water vulnerabilities into an area of strength with radical innovations in NEWater and desalination. Today, Singapore is a global hub of water research and innovation. The circular economy – turning waste into a resource that can be reused in the production cycle – is one way we can reduce our carbon footprint and open up new opportunities. NEA will soon begin a field trial to use NEWSand, made from incineration ash, in road construction along Tanah Merah Coast Road. We will do more to develop new ideas and solutions. We are committing close to $1 billion for research in Urban Solutions and Sustainability. The research will focus on renewable energy, cooling Singapore and carbon capture, among others. As climate change is global, innovative solutions created here can be commercialised, turning our constraints into a strength. More broadly, we have to manage our greenhouse gas emissions, by putting in place the right incentives, tax structures and regulations. We introduced a carbon tax in 2019 and supported enterprises in improving energy efficiency. We introduced and enhanced the Minimum Energy Performance Standards to raise the energy efficiency of energy-intensive household and industrial appliances. The domestic transport sector contributes a significant amount of greenhouse gas emissions.”
“We will also partner the community to build a stronger giving culture so that we can better support those in need. This is our continued effort to improve the lives of our people and our future generations. We must continue to work together to build a society where opportunities are available to every Singaporean, at every stage of life. Let me move on to how we can sustain Singapore’s success for generations to come. Our Pioneers set out to build a high-quality living environment, even when they had to attend to pressing economic and security challenges. They left us a legacy of a clean, green and liveable environment. As the Chinese saying goes, "前人种树，后人乘凉". The generation that planted the seeds does not fully benefit from their toil, but they care to do this for future generations to reap the fruits. In the same spirit, we must plant the seeds to secure a better future for generations to come. By thinking long term, by confronting major challenges and by investing for our future, we have beaten the odds. Three major challenges we must continue to confront are: climate change, security and fiscal sustainability. To build a liveable and sustainable home, we must address climate change. As a low-lying island nation, rising sea levels threaten our very existence. So, what can we do as a small island nation? First, we must continue to support global efforts to combat global problems. Singapore must continue to do our part as a responsible member of the international community. Singapore plays an active role at the United Nations Framework Convention on Climate Change. Besides representing our interests, Team Singapore is regarded as an honest broker, helping to build bridges and consensus.”
“To support the employment of PwDs, the Special Employment Credit (SEC) and the Additional Special Employment Credit (ASEC) schemes provide wage offsets for employers hiring Singaporean PwDs earning below $4,000 a month. At the last Budget, we extended the SEC and ASEC until the end of 2020. We have received good feedback on the schemes in supporting PwD employment. In 2018, more than 5,700 employers hiring over 8,600 Singaporean PwDs benefited from SEC. This Budget, we will introduce the new Enabling Employment Credit (EEC) to provide stronger support for employers of PwDs. The new EEC will replace the current SEC and ASEC schemes for PwD employment. It will be available for five years, from 2021 to 2025, at a cost of about $31 million per year. To ensure that the EEC remains helpful for PwDs to find employment and remain in the workforce, the Government will review the EEC after two years and make adjustments if necessary. This Budget, I will also top up three funds that provide targeted help for the elderly and the lower-income. I will provide top-ups of $750 million to the ElderCare Fund, $500 million to the ComCare Fund and $200 million to MediFund. These funds provide a safety net for the low-income by helping them to meet their daily expenses and healthcare fees. The respective Ministers will provide more details of the schemes I have mentioned in this section later. Mr Speaker, Sir, Budget 2020 supports the Government’s long-term strategy of building a caring and inclusive society. We will continue to support our families through the enhancements to our education and housing schemes, and the Care and Support Package for households. We will enable our seniors by promoting active ageing and providing financial assurance in their retirement years.”
“This year, the Ministry of Social and Family Development (MSF) and the National Council of Social Service (NCSS) will set up the Community Capability Trust to fundraise and support our social service sector partners in enhancing their capabilities and capacities to serve the community. For a start, together with Tote Board, we will provide $200 million to the trust in FY2020 and match up to $150 million in funds raised over the next 10 years. In total, we will commit up to $350 million for the Community Capability Trust. This will provide a pool of funds that our Social Service Agencies (SSAs) can tap on to transform themselves for the future. I hope they will make good use of this to strengthen their organisational capabilities, become more productive and enhance their service infrastructure, in partnership with MSF and NCSS. Just like how our efforts in the ITMs have positioned our enterprises and economy for the future, the Community Capability Trust will equip SSAs to bring the social sector forward. Details are in the Annex. [Please refer to Annex C-5.] There is much value to be gained when a community comes together in support of a cause. I am happy to see the success of movements like The Purple Parade, The Purple Symphony and Runninghour. These are ground-up initiatives that support inclusion and celebrate the abilities of persons with special needs through activities like music and sports. Everyone can play a part to build an inclusive society from their hearts in ways big and small. Many enterprises have also built inclusive workspaces for persons with disabilities (PwDs).”
“They will also complement the other schemes for our seniors, such as the Pioneer Generation Package and Merdeka Generation Package. We will also help seniors stay active and contribute to the community. Many senior volunteers find that volunteering gives them purpose, keeps them socially connected and promotes active ageing. The community also benefits from their wealth of experience and skills. There is Mr Victor Lim, a 70-year-old retiree who spent 40 years in the Medical Imaging and information technology industry and now volunteers at the Infocomm Media Development Authority's Digital Readiness programmes. There is also Mdm Leong Su Yin, one of the oldest members of Retired Senior Volunteer Programme (RSVP), who has been volunteering for over 20 years. Our success in taking care of every Singaporean, from preschool to retirement, is only possible with the support of our community partners. This brings me to the third strategy – Strengthening the Giving Culture. When we harness and rally greater participation and resources from the community, we can better support those in need. The Government will continue to support the community in building a stronger giving culture. Last year, I announced the Bicentennial Community Fund, which provides dollar-for-dollar matching for donations made to Institutions of a Public Character (IPCs). This is on top of the 250% tax deduction provided for donations made to IPCs. One of the potential beneficiaries is the Daughters Of Tomorrow Limited, which helps disadvantaged women gain new skills and find employment. The organisation plans to use the Bicentennial Community Fund to develop staff and volunteers and build their inhouse fundraising capabilities.”