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.”
The complete record
Every one of 1,730 lines we hold for Heng Swee Keat, in date order, each linked to its source. Free to read, in full, without an account. Page 4 of 35.
“I thank Mr Darryl David for the question. When the issue of raising the salaries of our nurses and healthcare-related workers was raised as part of this Budget approval process, I did speak to Minister Gan Kim Yong. I asked exactly the same question. Minister Gan has given me a very good reply and I am satisfied with that. The MOH Committee of Supply debate is coming up and I will leave it to my Minister for Health to outline more fully. But let me say that personally, I support what you have said about how we can improve the working conditions of our nurses. I myself am a big beneficiary of the care of our nurses. I would like to see improvements, certainly, and career progression for our nurses and related healthcare workers.”
“Mr Chua made the points in a very indirect way, to say that, "Well, the Government is doing it indirectly." I am glad that you are taking it back to say that you are not making that statement. So, I thank you for that clarification. But let me repeat that the Government has no incentive to sell land for the purpose of generating revenue. Our Reserves Protection Framework has safeguarded all the assets that we have. You are just converting one asset to another form of asset and these are guarded.”
“Because I think it will demoralise the many good officers that we have in our planning departments, in URA and the Ministry of National Development, who have over the years, allowed for so much development in so compact a land. And by the way, one of the areas that I am hoping that we can do more in our research plan, is precisely on urban solutions and sustainability, something which Senior Minister Teo started when he was the Chairman of the National Research Foundation (NRF) and which we are continuing. Because that is a constraint for Singapore and if we can overcome this constraint, we can do better. It is not for us to sell land in order to do that. So, I would like you to take back your allegations that the Government has an incentive to sell land for that purpose.”
“On the technical question that Mr Louis Chua asked about, what constitute the other big part, well, one bit which, as the Member has pointed out, is the land sales; and the other part, a big chunk of it, is the NIRC. The NIRC is already being used. [Please refer to "Clarification by Deputy Prime Minister and Minister for Finance", Official Report, 26 February 2021, Vol 95, Issue No 21, Correction by Written Statement section.] On the second point about land sales, and that there is an incentive for the Government to use land sales because the revenues are already done indirectly, that is wrong. I said very clearly that when we do land sales, it is to meet the needs for our people, for our economy. You cannot plan land sales on the basis that we need the revenue, and therefore, I would have to do that. The land sale proceeds, they go into the past reserves. I totally reject your allegation that the Government has an incentive to sell more land in order to generate revenue. If the Government had an incentive, I would not have pointed out the problems in many countries. I have studied this in many countries where unfortunately, where the government, especially the local government, is so reliant on land sales that they have a vested interest to keep land prices high because they need the revenue, and, in turn, that creates a lot of hardship for the people. So, our system cannot incentivise it. URA has long-term plans – 50-year plans, 20-year plans. The land use planning has been a great strength of Singapore. I think you should seriously look at what the agencies have been doing and do not make allegations like these.”
“Mr Singh himself, admitted that he has different names, different nomenclature. So, I do want to prolong this debate but we have the Committee of Supply coming up on the Ministry of Finance and we can debate that. But let me just ask for the Workers' Party to be clear about what is it that you are proposing; and second, I am asking you a very simple question. Have you or any of your Workers' Party Members scrutinised that interim report and have questions for us? But instead, in talking about outcome, what you have asked us just now, you raised the issue about, what about the Capability Transfer Programme which MOM is going to do in 2024? This is going to be debated at the Committee of Supply for MOM. You can ask those detailed questions. Then, you asked what about the private hire car drivers and so on, and would it be extended? Those are details of the scheme. This Budget debate is a serious debate about whether our broad direction is correct. Do you have suggestions on how we can do it better? I am open to your ideas. But I have to say, unfortunately, so far, I have heard none.”
“Because I sat through the debate, I read your transcripts, but no one no, one mentioned about outcome, no one raised a question about, "Could this have been done better, could that have been done better". So, what is the purpose of setting up an office when, with information that is publicly available is there for you to ask?”
“Mr Speaker, Sir, now that Mr Pritam Singh says that it is the same thing, I am totally confused. Because they are very different entities. But before I answer his specific questions, let me repeat what I said right at the beginning of this debate. I said over the last few days, passionate debate went along a few threads. Some Members elevated the debate to help Singaporeans appreciate the changing landscape and the need to change. Some Members highlighted importance of our reserves – the bold and decisive response mounted and what it achieved. Unfortunately, some argue selectively without acknowledging the broader context, broader impact of COVID-19 and the outcomes of the Government's decisive interventions. So, Mr Singh said earlier that we should set up such an office because it is important to examine outcomes. He had an encounter with a Ministry of Finance official who say that, "I am not smarter than my boss". Your arguments are totally convoluted. One does not lead to the other. If you are focused on the outcome, may I ask if Mr Singh and the Workers' Party Members have read the interim report which I have put out in the Ministry of Finance website, widely reported in the papers, on what the measures have achieved? There is a reason why I put out the interim report, even though the full effects have not been done. Because I am conscious we have used a big part of last year's Budget, we have used the past reserves and that I have a responsibility to account for those outcomes. And I put those outcomes. So, the Member talked about assessing outcomes. That is our biggest spending. Does the Workers' Party have any comment on that?”
“Mr Singh, I got it from your Member who mentioned it. It is in the record.”
“Now, as a Board member of MAS, I want to ensure that MAS is able to continue effectively using Singapore's exchange rate to deliver price stability. A very volatile Singapore dollar exchange rate, subject to market fads and bubbles, would not ensure low and stable prices for Singaporeans. In normal times, our nation’s reserves also underpin our triple A sovereign credit rating, thus underpinning confidence in our unique exchange rate monetary policy system. So, as a practitioner at the frontline, who tries my best to understand the intricacies of the system, I must caution Assoc Prof Jamus Lim – let us not play with fire. This is about the lives of our people, not theoretical musings. And I urge all Members of this House to focus the debate on the merits of the policies and programmes and how we can improve the lives of Singaporeans. Instead of repeatedly focusing their attention on the size of reserves or other erroneous claims. We have inherited a strategic asset for the long-term survival and success of Singapore. Protect it, nurture it and never squander it. Let me now turn to the global outlook, and our next steps. I said in my Budget Statement that we expect to fund the expenditure for the remainder of this term of Government without a further draw on Past Reserves. But the global outlook is highly uncertain, and we need to think ahead of how we can respond.”
“MAS kept the Singapore dollar nominal exchange rate stable during this period backed by the full power of our reserves, giving banks and businesses certainty to make decisions under very trying circumstances. I personally saw this during the Asian Financial Crisis, when I was Principal Private Secretary (PPS) to Mr Lee Kuan Yew. Mr Lee was invited by several countries in the region to share his views, as Singapore was relatively unscathed. I sat in all his meetings. It was very painful to see how speculation and the currency volatilities that these countries face was destroying businesses, big and small, and the lives of men and women in these places. The exchange rate is far more important for a small open economy like ours compared to our neighbouring countries. And if our neighbouring countries are so badly affected during the Asian Financial Crisis, you can imagine the impact on us. The Singapore dollar is one of the most actively traded currencies in the world relative to our GDP with daily turnover estimated at US$37 billion globally or annual turnover of US$9.5 trillion. Our nominal GDP is just US$350 billion. So, you are comparing trillions and billions. Let me share that I was Managing Director of MAS when the Global Financial Crisis hit the world. Singapore is unique in operating in an exchange-rate centred monetary policy. My team and I had to not just be alert to the domino effect of the failures of banks globally, but also the flights of capital and the risks of speculation on the Singapore dollar. If we had been attacked, the businesses in Singapore, big or small, and the lives of our workers, would have been severely disrupted.”
“Under Article 22F of the Constitution, in the exercise of her functions under the Constitution, the President is entitled to any information regarding the reserves. In addition, on the MOF website, it is already mentioned that the President has full information about the size of the reserves. Ms Hazel Poa also asked about the size of our reserves. Again, it is not in our national interest to disclose the size of the reserves. As Mr Saktiandi Supaat explained very well yesterday, Singapore is vulnerable to currency speculation and large capital outflows. Revealing the size of the reserves is akin to laying bare our defence plan and will diminish the value of our reserves as a strategic defence. No responsible leader would do so. So, I was very alarmed when I heard Assoc Prof Jamus Lim citing theoretical literature that speculation could be stabilising. I would also point out that there are other academics who recognise that currency markets can be marked by massive instability. It is, in fact, well acknowledged by most economists today that market-driven short-term flows are and will continue to be fickle and extremely volatile. The episode in 1992 when hedge fund manager George Soros took on the Bank of England by betting against the Sterling pound and dramatically destroyed the UK monetary system is one stark example. To put it simply, foreign exchange speculations have been and will continue to be a threat to economies, especially small, open ones like ours. As an international financial centre, portfolio and banking-related flows in Singapore amounted to S$294 billion last year, or 63% of our GDP. Just last year, we saw extreme capital flow volatility in global financial markets due to the uncertainties and risk sentiments associated with the pandemic.”
“Our reserves give us the confidence to forge forward, knowing that we have the wherewithal to deal with any crisis that might come our way. We have drawn on our past reserves to deal with two crises so far – $4 billion in 2009 to deal with the Global Financial Crisis; and up to $53.7 billion in 2020 and 2021 to respond decisively to the COVID-19 crisis. Some commentators have questioned if we are dipping into the Past Reserves too readily. And yet, there are others who downplay the use of reserves, saying that these are small amounts and we can afford to use more of our reserves by spending more through the NIRC. Let me reiterate that the Government does not take any decision on the use of reserves lightly. Our reserves serve three important roles. First, they serve as an endowment fund, providing a key stream of revenue to supplement our annual Budget through the NIRC. Second, they provide a buffer against shocks and attacks on our financial system. Third, they serve as our bulwark against crises of an extraordinary nature. Due to the strategic importance of our reserves, we have a two-key approach to managing and safeguarding reserves. The Elected President serves as the custodian of our reserves. The Constitution vests in the President discretionary powers to withhold her assent to budgets and expenditures proposed by the Government that may lead to a draw on Past Reserves. On this note, I would like to address a question repeated by Ms Hazel Poa on whether the President knows the size of the reserves. I have just addressed this in June last year when I rounded up the debate for the Fortitude Budget. I shall repeat my answer here. It is public information that, under our Constitution, the President has access to information about the size of reserves.”
“Any increase of this limit will require legislative amendments which is subjected to Parliamentary approval. We will also put in place other safeguards, such as a limit on the interest costs, so that the debt servicing cost will not over-burden future generations. This will address Ms Foo's concern about rising interest rates. More will be elaborated later when the Bill is presented in Parliament later this year. Since the announcement of SINGA, credit rating agencies have also published articles affirming Singapore's strong credit standing, attributing it to Singapore's prudent and sustainable fiscal policy. Mr Liang Eng Hwa also asked if we would consider one-off, special purpose borrowing for the economic investments under our emerging stronger strategies to help Singapore to emerge stronger. I thank Mr Liang for his suggestion. As I have explained earlier, borrowing does not give us revenue. Instead, if the economic and fiscal outlook turn out worse than expected and we have to draw on Past Reserves for economic investments, borrowing would allow us to keep our reserves invested long term and earn good returns. Borrowing from the market also means that we will have to have the discipline to repay amounts used for these economic investments. The key here is to use debt equitably and sustainably. We will borrow under the SINGA to spread out lumpy costs equitably across current and future generations. The Government will study Mr Liang's suggestion of a one-off, special purpose borrowing to help us emerge stronger from this long drawn out crisis. Staying true to our core values of prudence and stewardship, we have built up significant reserves that are now our strategic assets.”
“So, the original intentions were good but it creeps. So, when used to fund increases to Government subsidies or social transfers, it is really more recurrent spending. Borrowing continuously for them will just lead to ever higher debts which have to be repaid by future generations. When borrowing is not used productively, the result has often been high debt, low growth, rather than high growth, low debt. As debt level grows, interest payments can also increase, as Assoc Prof Jamus Lim himself pointed out. This can lead to an unsustainable fiscal position and spiralling debt, affecting investor confidence, raising the costs of funding for businesses and ultimately, our long-term growth. In addition, interest rates are low, in fact, ultra low for now, but this may change quickly. When it changes, existing debts would have to be refinanced and a higher rate could spiral the fiscal situation downward quickly. This usually happens in a crisis, when we can least afford it. Borrowing is not a form of revenue. Borrowing gives us cash for liquidity planning but it does not create free monies for spending. Today's debt is paid for by tomorrow's growth and tomorrow's generation. As I have explained earlier, our fiscal principle is that every Government must spend within its means and raise the revenue required to fund its initiatives. Members, such as Ms Foo Mee Har and Dr Lim Wee Kiak have noted, we must borrow prudently and sustainably. So, let me now also briefly address their queries on the safeguards and how borrowing under SINGA might impact our credit rating. We will set $90 billion as a borrowing limit and this is sized based on the expected expenditure of major, long-term infrastructure projects over the next 15 years.”
“I was happy to hear that Assoc Prof Jamus Lim was "happy as a clam" when he heard that our fiscal strategy reflected a number of elements that he had previously outlined. But I announced that we were studying borrowing in 2019, even before he entered Parliament. But I am glad he shares our views. So, perhaps if he reads more of our past Budget Statements, he would be even happier. Nevertheless, I must caution against the additional modifications that he has suggested to what is essentially a prudent and restrained use of borrowing. The Government's approach to borrowing is a carefully calibrated one. As Ms Foo Mee Har said, there is good debt and there is bad debt. While we do borrow, the key difference is what we do with the debt proceeds. The Government is currently already borrowing, under the Government Securities Act and the Local Treasury Bills Act. But instead of spending the proceeds, we invest them for long-term returns, which is used to repay our debt. The rest go back into the reserves. The Government is going to borrow for major, long-term infrastructure. These investments will benefit and generate value over generations, but the upfront costs are hefty. Borrowing is a fair and efficient approach to spread out the lumpy costs, to ensure that we better match the timing of the benefits with the timing of spending. If we do not, I will have to raise taxes significantly to fund these major expenditures. And Assoc Prof Jamus Lim has asked if we can borrow more to fund "soft capital" like education. Let me sound a word of caution. We have to refrain from the temptation to borrow for what are essentially recurrent expenditures. In many countries, there is a tendency to expand the scope of what constitutes "soft capital" beyond the original intentions.”
“The current approach of spending the land sales proceeds through the NIRC avoids these pitfalls and allows the Government to make land sale decisions based on what is best for the country’s development, and not because it needs to balance the Budget. Next, on NIRC. The NIRC framework smooths the volatility arising from sharp fluctuations in the asset base due to market cycles. This avoids a boom-bust pattern in Government spending, driven by the volatilities of the market. However, some variation is still to be expected for the NIRC as we update the net asset base and investment income figures over the course of the year. The global financial market remains volatile and uncertain. How the post-COVID structural changes will affect long-term returns is still being played out. The fact is, NIRC is already the largest single source of our revenue, larger than Corporate Income Tax, Personal Income Tax or GST. This did not happen by chance or merely because of good fortune. It is the result of years of fiscal discipline and prudence of our founding generations. If they had succumbed to the temptation to spend more, we would not have built up our reserves. And without reserves, we would not have been able to generate this stable and recurrent source of revenue today. Mr Leong Mun Wai's suggestion of using 100% of NIRC is akin to treating our reserves as a gold mountain. If we adopt his suggestion, one day, even this mountain will be eaten up completely, like the saying in Chinese "坐吃山空". We have a responsibility to future generations. Next, let me talk about the use of debt in our fiscal strategy. Many Members have expressed support for borrowing for long-term infrastructure, as part of our fiscal strategy.”
“For instance, Mr Louis Chua cited the Government’s total estimated receipts and claimed that the Government has far more surpluses than we do for spending. He must know that includes our capital receipts from land sales. So, he is really saying that we should spend our land sales proceeds directly. Mr Louis Chua also cited the increase in NIRC in 2021 as one of the reasons we should not be, and I quote, "overzealous in strengthening our revenue position"; and Mr Leong Mun Wai suggested that we spend 100% of the NIRC instead of 50%. Let me address them one by one. First on using land sales proceeds directly in the Budget. We should treat our land as a scarce and finite asset. Selling land does not give the Government more resources and should not directly support our expenditure. Instead, we sell the land that we need to sell for urban development and invest the proceeds. This approach generates a sustainable stream of income over the long term, and has served us well. If we had decided in the past to spend the proceeds from these land sales, we would not have built up our reserves today and would surely be worse off by now. Relying directly on land sales for fiscal revenue also has two risks. First, land prices can be volatile. You do not want Government revenues to fluctuate wildly with property cycles because it creates too much uncertainty for the Government to plan long term. Second, even more serious, once a Government gets used to relying on land sales to fund spending, the Government has a vested interest to keep land prices high, or to sell more land. Both options are terrible. We can see the distortionary effects on the welfare of people, in places where local governments rely on land sales for revenue.”
“Second, I want to correct a misconception. The ABSD is a property market measure, not a revenue-raising one. We calibrate the ABSD carefully to maintain a stable and sustainable property market in Singapore. But I agree that there is a role for property-related taxes. The Government will continue to review this to ensure that it remains progressive. Indeed, we made property tax and stamp duty more progressive in Budget 2010, Budget 2013 and Budget 2018. I trust that Mr Perera will give his strong support if and when we make such new moves. We have also considered other options, including estate duty. We abolished estate duty in 2008, because the middle and upper income groups were affected disproportionately compared to the wealthy, who were better able to avoid the estate duty through tax planning. Let me reiterate. We do tax wealth and we have been raising wealth taxes over the years. This is not the question. Rather, the practical question has always been how to design wealth taxes moves to ensure that they are effective. First, we must ensure that the tax cannot be easily avoided, especially by those with more means. Otherwise, it will not achieve the social equity and fairness that we want. Second, we must balance between progressivity and staying competitive to grow our economy. Singapore must remain attractive to those who work hard and those who invest to create good jobs, because growing the economy is the most sustainable way to generate revenue and raise our standards of living. Third, the move should add to our revenue resilience and adequacy. The Government will continue to study wealth tax options and I look forward to your support. Several Members have also said that we could rely on other sources of revenue, other than taxes.”
“In 2020, the top 20% of Singaporean households by income paid 56% of the taxes and received 11% of the benefits whereas the bottom 20% paid 9% of the taxes and received 27% of the benefits. And we are concerned for the broad middle income. The middle 60% of households paid 35% of taxes, while receiving 62% of the benefits, even for the broad middle. Several Members have asked that we consider other forms of taxes. As I have said at my Round-up Speech at Budget 2018, we continually consider all options, so let me go through them again but it is a long list. Some Members asked if we can do more on wealth taxes. Wealth taxes are not new in Singapore and we have in fact enhanced the progressivity of wealth-related taxes over the years. I agree there is scope to further review our wealth taxes. But first, let me address the elephant in the room. Wealth taxes will not replace the need for the GST rate increase. Already, the GST rate increase alone will not yield sufficient revenue to meet our growing healthcare and social spending needs. I will share briefly our considerations for the suggestions raised. Ms Foo Mee Har suggested a one-off wealth tax. Argentina did this to fund higher spending for COVID-19 measures. Singapore entered COVID-19 with a strong fiscal position, and is fortunate to be able to tap on our Past Reserves. The impact of the crisis has been uneven. I believe Ms Foo’s intent is for those who came out on top of the crisis to do more for our community, and I share her sentiment. We will indeed continue to review our wealth taxes. Mr Leon Perera suggested raising Buyer’s Stamp Duty and Additional Buyer’s Stamp Duty, or ABSD, for more expensive properties. First, I am glad that he recognised that this move will not fully cover our higher resourcing needs.”
“Unfortunately, instead of elbow room, COVID-19 has given governments around the world a very sharp elbow. Ouch – it hurts, and will continue to hurt for some time. I also do not know how Mr Leong Mun Wai could say with such confidence, and I quote, "for the foreseeable future, we do not see any shortage of fiscal revenues", unquote. If Mr Leong could give me the basis of his projection, I will study it carefully. But if it is his hunch, I hope that as a responsible Member of Parliament, he would agree that we cannot be advocating national policy on the basis of personal hunches. My caution to all is this: it will be foolhardy to underestimate the risks and uncertainties we are facing. Let us be honest, focus on the hard work that needs to be done and do not take the easy way out. That is the way to enable our people to make progress. Several Members have expressed worries about the impact of the GST rate increase on Singaporeans. I share your concern – as I said before, as Finance Minister, I do not have any joy in raising taxes. I do it because I care for our future. Let me assure Members and all Singaporeans that we are committed to helping our people manage the impact. We have set aside $6 billion for an Assurance Package, which will in effect delay at least five years of the GST rate increase for the majority of Singaporean households. Lower income Singaporeans will receive higher offsets of about 10 years’ worth of additional GST expenses incurred. The Assurance Package is on top of existing benefits and transfers such as the GST Voucher scheme. These keep our overall taxes and transfers system fair and progressive.”
“Since 2007, we have already increased various taxes to collect more from those with more means, which are then transferred to our lower income. All this while, over the 14 years, the GST rate has remained unchanged at 7%. We would be in a budget deficit if not for the contribution from reserves, in the form of Net Investment Returns Contribution or NIRC. Economic growth alone is not likely to raise enough revenues to meet our needs. The honest, but hard, conclusion is that we will need to raise more tax revenue. We are not raising the GST rate now, as the economy is in the nascent stages of recovery. But we have been giving notice, since Budget 2018. The fact is that some of the structural increase in expenditures will hit us sooner rather than later. MOH is already ramping up our public healthcare capacity. Just two months ago, the Minister for Health announced that we will build a new integrated hospital in Bedok North by 2030, to serve the growing population in the east. If we defer this spending, we risk being unable to adequately care for our people when the need comes. Some may ask if the projections are accurate, whether we really need to raise additional revenue within this timeline. No projection is perfect. We live in a complex world, filled with uncertainties. So, we must work with the information available. For example, we could not have projected the biggest disruption of our generation, or that we would have to draw on our Past Reserves for two years in a row. This is a far cry from what Mr Pritam Singh said in February 2020, and I quote, "the current Government has had the privilege of far more budgetary elbow room, both political and fiscal, than any previous Government in Singapore's history." Unquote.”
“Mr Pritam Singh asked that we increase the scrutiny of expenditures, and to set up an independent parliamentary budget office to enhance such scrutiny. I am glad that Mr Singh agrees with the need to be prudent and accountable in our spending. In fact, it would be very helpful if each time Mr Singh or his colleagues ask the Government to spend more, to give us their estimates of how much it would cost and how they would fund it. Instead, the Workers' Party has called on the Government to spend $20 million to set up an independent parliamentary budget office to do this job for them. Even as they call for more scrutiny on Government expenditure, we invite them to hold themselves to the same scrutiny. As I have outlined, prudence and stewardship are core values of this Government. We hold ourselves to high standards and work hard to ensure that our spending is cost-effective, to deliver the best value for money for taxpayers. We have achieved world-leading outcomes while running one of the leanest governments in the world. We are always looking to achieve better outcomes with less, and we will say more about this during MOF’s COS. In addition to independent audits by the Auditor-General’s Office, we also have Parliamentary scrutiny of our spending through the Estimates and Public Accounts Committees. The Workers’ Party is represented in both of them. Such an office would be a wasteful duplication of these functions. So, let us face the hard facts and be prepared to make difficult choices. The Government is meeting difficult trade-offs arising from our society’s growing spending needs, head on. We have shown that current taxes are insufficient to cover our spending needs.”
“If our healthcare spending grew like those of OECD countries with a similar demographic profile, it would be even higher, 3.5% of GDP by 2030. This would be 50% more than in 2019. Stripping out the effects of COVID-19, the next chart shows projected spending on healthcare if we took the average of the two scenarios. [Please refer to Annex 5.] So, this means that healthcare spending alone would cause Government expenditure to grow by 0.5 percentage points of GDP for the current five-year period, and another 0.3 percentage points for the next five-year period. So, that is the chart that I just mentioned, over five-year periods. To see the impact of healthcare on Government spending, this chart made a simplifying assumption that non-healthcare spending will remain the same as a percentage of GDP. Now, we know this is a simplifying assumption and a very conservative one. First, on security, threats have not diminished but are now coming in different forms – cybersecurity, hybrid, information wars, food security. In Budget 2018, I mentioned that we could expect annual security spending by MINDEF and MHA to rise by 0.2 percentage points of GDP to meet rising threats. Second, other social spending will continue to rise. We are seeing higher spending on pre-school education and lifelong learning. Third, as I explained in my Budget Statements in this year and earlier, we will see a hump in infrastructural spending to enhance economic competitiveness, build our home, and improve connectivity across the island. Even with borrowing under the Significant Infrastructure Government Loan Act, or SINGA, we expect infrastructural spending to remain relatively stable as a percentage of GDP.”
“Second, work out sustainable resourcing. Do not make irresponsible promises which burden future generations. If these are recurrent needs – which have to be financed year after year – we must find recurrent revenues – which we can collect year after year. Let me reiterate why the GST-rate increase is needed. As Mr Xie Yao Quan has rightly pointed out, we have already seen structural increases in our recurrent spending, especially in healthcare. The share of Singaporeans aged 65 and above will increase from one in six, to one in four by 2030. Seniors are four times as likely to be hospitalised compared to younger persons. And each time our seniors are hospitalised, they stay for twice as long. The Government heavily subsidises healthcare at our public healthcare institutions – up to 80%! Even with an efficient healthcare system, we will need to increase healthcare spending by 30% to meet the needs of our population in 2030. These structural trends are clear – we will have to spend more. So, let me share some data and projections with this House. This chart shows our spending, as a percentage of GDP, over the past 15 years. [Please refer to Annex 4.] Our spending has grown by about 1.5 percentage points of GDP in every five-year period. How much is 1.5 percentage points of GDP? About $7 billion per year! This is about two-thirds of the current GST revenue. Half of the increase in spending was for social support. We do not have a crystal ball but let us take a reasonable look at how our spending will change. Let us start with healthcare spending. Our demographic trends will mean higher spending, outstripping GDP growth. We estimate that healthcare spending will reach 3% of GDP by 2030.”
“Instead of finding ways to spend the surpluses and win popularity, they not only accumulated surpluses, but also took the bold step in 1991 to amend the Constitution, to require each term of Government to run a balanced budget. This is to ensure that future Governments do not make unrealistic promises, dip into our savings unnecessarily, and mortgage the future of our children. They knew the temptation of squandering the easy inheritance would be too great for some to bear. Singapore is in a new phase of development. We cannot expect the same kind of buoyant GDP growth as in the past, as our economy now matures. Our expenditure needs will grow as new needs arise, and as our population ages. At the same time, we must continue to invest to build a better Singapore for the future. We are once again confronted with hard choices. We must abide by our core values, and keep Singaporeans, now and generations to be born, at the heart of what we do. Many Members spoke about building a fair and just society where no one is left behind. This is good, and I share this aspiration; but it is only one half of the conversation. Mr Liang Eng Hwa, Mr Alex Yam, and Mr Lim Biow Chuan have reminded this House that just as importantly, we need to consider how to pay for these. We do not have oil gushing out from our ground, and even Saudi Arabia, a country with huge oil reserves, is carefully planning ahead. It introduced a 5% value-added tax from 2018, which it increased to 15% from 1 July 2020. Members of this House must have the will and courage to make the same responsible choices as our forefathers did. We must be upfront – that if we want to spend more, we have to raise the revenue. First, acknowledge that if we want more social safety nets, it comes with costs.”
“Our broad-based rebates will not be able to cater to every unique circumstance. They may also not reach those in more informal work arrangements. We are working with the Labour Movement to see how we can provide further help to self-employed delivery workers and limousine drivers. I thank NTUC Secretary-General Mr Ng Chee Meng, our Labour Members of Parliament and their team for their partnership. Ultimately, protecting our environment must be our commitment to future generations of Singaporeans. This is just one of the many small but necessary steps in our whole-of-society, multi-generational effort to preserve our clean-living environment. Let me now turn to Members' points on our fiscal strategy. Before I address individual issues, it is important that I reiterate this Government's fiscal principles. We abide by the same two core values of our forefathers: prudence and stewardship. First, on prudence. We spend on needs, not wants, and we seek to get the best value out of our spending. We must be prudent because these finite resources are entrusted to us by Singaporeans. Second, on stewardship. In the Unity Budget Round-Up in 2020, I said and I quote, "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 views – because they are not born yet! But we have a responsibility to them, and we have to take decisions which are difficult for us, but which will safeguard their interests." In other words, we must be responsible stewards. During a time of high economic growth in the 1980s, our leaders managed our fiscal surpluses prudently.”
“Dr Lim Wee Kiak and Mr Dennis Tan asked if we are sufficiently prepared for an EV future, and on the cost-effectiveness of electric cars compared to petrol cars. The Ministry of Transport will elaborate on this at the Committee of Supply. There will never be a good time to raise petrol duty. Some Members like Ms Mariam Jaafar and Mr Darryl David have pointed out that the petrol-duty increase would affect those who drive for work more, like our taxi and private hire car drivers, and delivery riders using motorcycles. I understand the pressure that they are facing, especially during this COVID-19 situation. I have cushioned the impact for these drivers and riders. We expect to channel almost all of the increase in duty collections in 2021 back to petrol-vehicle owners as offsets. On top of the road tax rebates, more support will be provided to those who drive for work through additional Petrol Duty Rebates. Taken together, the support will cover the increase in petrol duty for a year for motorcycles and taxis. Taxi operators and Grab Rentals have agreed to pass on the road tax rebates to their drivers. Gojek will also be introducing additional incentive rebates for their drivers. With this, their drivers will receive rebates starting from next month. Motorcycle owners will receive their additional Petrol Duty Rebates from May. Over 50,000 of our taxi and private hire car drivers would have also benefited from COVID-19 relief measures, like the Self-Employed Person Income Relief Scheme, and the COVID-19 Driver Relief Fund, which we have just topped up by $133 million. I hope these measures address Members like Mr Chong Kee Hiong, Ms Yeo Wan Ling and Mr Ang Wei Neng's concerns over the impact on taxi and private hire car drivers.”
“I am glad that Ms Nadia Ahmad Samdin, one of the youngest Members, if not the youngest Member of this House, also spoke in support of the Singapore Green Plan 2030. But we must not take our environment, whether green or blue, for granted – or for the matter, our reserves. What we have today is a testament to the foresight and hard work put in by many to distinguish Singapore as a City in Nature over the years. We made a big effort to improve our sanitation systems and clean up the Singapore River in the 1960s to 1980s. We launched the Clean and Green Week in 1990 to encourage an environmentally conscious lifestyle. To improve our air quality, we started encouraging the adoption of cleaner vehicle alternatives as far back as 2001. Climate change and environmental sustainability did not become a priority overnight. We have been protecting our home. Members like Dr Lim Wee Kiak and Mr Dennis Tan have questioned why the Government is raising the petrol duty expecting many drivers can and will switch to Electric Vehicles, or EV, before the infrastructure is ready. Now, this is not the case. The petrol duty adjustments are to set price signals and change behaviour. Just like how we have made deliberate decisions to protect our environment, we want people to make conscious choices about how to drive, how much to drive, and whether to even drive at all. And EVs are not the only alternatives to driving. Mr Sharael Taha has reminded this House that hybrid vehicles are another alternative that are already widely available today. We are also keeping public transport affordable and accessible through rail and bus subsidies and investing in public transport infrastructure.”
“The Seniors Go Digital programme equips seniors with digital skills. For low-income and vulnerable families with children or PwDs, MCI's NEU PC Plus programme connects them to broadband access, and laptops to support their learning. And who best to be our ambassadors of the digital world than our young people! Under MCCY's and the National Youth Council's YouthTech Programme, youths will be deployed to businesses and organisations in diverse sectors, including the community and social sector organisations to support their digitalisation efforts. We will also need to boost the digital and technological transformation of the social sector. Good ideas have come from the businesses who are partnering SSAs to do good and supplement the human touch with the human "click". For example, Engineering Good, a non-profit organisation is working with community partners to provide digital access through refurbished laptops and Internet connectivity to low-income families, coupled with digital literacy and skills programmes as part of its Building Digitally Inclusive Communities project. This is the spirit of Emerging Stronger Together. Mr Christopher de Souza said we need to embrace our multi-culturalism and diversity, and spoke about what it means to be a Singaporean, regardless of race, language or religion. And indeed, we are stronger together when we look after one another, and build a society that leaves no one behind. At the end of the day, our success is not measured in terms of GDP, but in the society and community we build together. Besides fostering a caring and inclusive community, we must ensure our clean living environment endures for future generations to enjoy. I thank Members like Ms Poh Li San for supporting the Government's sustainability plans.”
“Dr Wan Rizal spoke on the issue of mental health. Ms Joan Pereira, on the support needed for care-givers. Ms Rachel Ong and Ms Nadia Ahmad Samdin spoke on the employment and re-integration of ex-offenders and youth-at-risk, as well as Mr Don Wee on families with children with special needs. Ms Denise Phua and Ms Carrie Tan spoke yesterday on how the CDCs are partnering Social Service Agencies, or SSAs, to multiply their reach for the vulnerable in the community. They have also asked to rally the community to help. BlockBox is good example of partnership. To support seniors with chronic disease management and to address issues of social isolation due to COVID-19, students from NUS and Yale University created a community space and monthly health subscription boxes to track seniors' health and keep them engaged. For the pilot, the team received seed funding from MOH and sponsorship from the private sector. This is the spirit of SG Together. But the Government can only do so much alone. As Ms Carrie Tan said, we must look into the, I quote, "Sharing of Care". I am sure that she will be glad to hear that we will continue to push ahead with our plans to develop deeper capabilities in the social sector. I announced last year that we will partner ToteBoard to jointly commit up to $350 million to support the Community Capability Trust over the next 10 years. This will drive capability- and capacity-building efforts within the social services sector, to enhance SSAs' ability to serve the community. Like Mr Seah Kian Peng and Mr Derrick Goh have said, we must do more to "bridge the digital divide" and "grow our digital muscles", especially during COVID-19. We refreshed our plans to ensure that no one will be left behind in this digital age.”
“As Mr Seah Kian Peng has shared, this is an example of a company which has fully utilised the reservoir of talent in its mature workforce. To build on this momentum for all sectors, we are pushing ahead with our plans to raise the retirement and re-employment ages in 2022, with the Government and the Labour Movement taking the lead by effecting this in 2021. I thank Deputy Secretary-General Mr Heng Chee How for reaffirming the need for this move. NUH is one of the organisations taking the initiative by redesigning jobs, offering flexible working arrangements and training opportunities for their senior workers in collaboration with the Healthcare Services Employees' Union. Senior Staff Nurse Mdm Badthu Manne Doraisamy has been working with NUH for 31 years. She has benefited from NUH’s strong support for senior workers. Mr Agos Salim Sapuan is a security supervisor at NUH. He shared how everything at his job is digitalised now, and he is no longer making manual entries in logbooks! I am sure he has benefited from NUH’s many training opportunities. I hope that the Government’s Senior Worker Support Package will encourage more businesses to retain their mature workers and tap on their wealth of experience. Ms Ng Ling Ling and Mr Eric Chua have asked the Government to do more to encourage the hiring of persons with disabilities, or PwDs. Helping every Singaporean achieve their potential is a key priority for us in building an inclusive society. We agree that more can be done, and there are plans in the pipeline. The MSF will share more about this in the coming months. As Members have highlighted, there are specific groups of Singaporeans who have been deeply affected by COVID-19 and remain so. We have seen this all over the world.”
“But workers in the biomedical sector earn more than twice that of the accommodation and food services sector. So, what will improve the lives of our workers are better wages and better prospects, not the aggregate share. What matters more is that the wage growth of our workers is in line with productivity so that it is sustainable. Several Members, including Mr Raj Joshua Thomas and Mr Mohd Fahmi Aliman, spoke about the need to continue boosting the incomes of lower wage workers, and the Progressive Wage Models. Indeed, there has been some progress. Citizens’ real incomes from 2016 to 2019 at the 20th percentile grew at 4.4% per annum, faster than the median at 3.7% per annum. I thank the Labour Movement for their strong support for the Government’s vision of progressive employment, which is shared by many caring Singaporeans. Ms Foo Mee Har and Mr Desmond Choo have also called for more help for our self-employed. We have been studying for some time how best to boost protections and retirement adequacy for this group. MOM will continue working with the Labour Movement and our industry partners, through the tripartite mechanism, to uplift the incomes of all our lower wage workers and support those in the gig economy. MOM will share more on this at COS. Helping lower wage workers and self-employed persons is a work-in-progress. I hope that, if some of the new measures lead to a modest increase in costs, caring Singaporeans will agree that this is worth doing for solidarity. Some members, like Ms Tin Pei Ling and Mr Yip Hon Weng, have highlighted another group of concern – our older workers. I thank NTUC FairPrice for its efforts to support our older workers who wish to remain active in the workforce.”
“Now, it is also natural for us to look out for "what is new" in every Budget. But it is important for all of us to appreciate what is already there, and to see the Budget in totality, over the years. Individual Budget measures are useful enhancements which sit on top of our already significant social spending. Over the past decade, we have been gradually tilting the tax and transfer system in favour of lower and middle income groups. On average, lower income citizen households can expect to receive benefits, net of taxes, of $6,500 per household member in 2021. Members of middle income households can expect to receive $3,500 in 2021. The highest income households instead pay about $9,500 in taxes, net of benefits, per household member. Members of this House – Mr Darryl David and Mr Faisal Manap – have welcomed the salary increase for healthcare workers and have asked for salaries for other frontline workers and sectors to be enhanced. As I have said in the Budget Statement, there are good, meaningful jobs in healthcare for our locals, and it is important to pay them the salary that they deserve – commensurate with the work that they do. This is how we are able to attract and retain locals in the long-term, even as other markets compete for our Singaporean talents. As Mr Saktiandi Supaat pointed out, Ms Hazel Poa’s conclusion that our workers are worse off due to lower wage share of GDP is wrong. A capital-intensive economy open to investment and trade can have lower wage shares than labour-intensive economies. For example, in the biomedical sector, the wage share of the sector’s output is less than 6% compared to over 60% in the accommodation and food services sectors.”
“9 years, with health-adjusted life expectancy of 74.5 years. Globally, Singaporeans are expected to live the longest! Ms Hany Soh will be glad to know that we have put in strong support for young parents. A young couple buying a HDB flat near their parents could benefit from more than $134,000 in support in this year alone. Besides housing grants, the support includes pre-school subsidies to help with the education of their child, healthcare subsidies, and also offsets for expenses through the Household Support Package. Another example is a multi-generational family that already owns their 5-room HDB flat, supporting a Pioneer Generation senior with disabilities. The family could receive over $35,000 in support this year in education and healthcare subsidies, including $1,200 from the Household Support Package. And these are over and above the housing subsidies that the family would have enjoyed when it first bought the flat. Neither family needs to pay their MediShield Life and CareShield Life premium in cash. No one will lose coverage due to inability to pay. So, with the most important items in life well taken care of, I hope Members like Mr Leong Mun Wai will agree that his position that our support is, I quote, "ad hoc, short-term and unpredictable" is wrong. In fact, our support is systematic, well-structured and balanced. Singaporeans can be assured that: they can always have a home to call their own; that they can expect their children are being well-nurtured in a world-class education system, which will prepare them well to take on good jobs and fulfil their potential; that we will provide assurance to our seniors over their retirement; and that the healthcare needs of their family will always be well taken care of.”
“The Silver Support Scheme provides support for our seniors who had low incomes during their working years and need additional support in retirement. Over the next five years, to help more Singaporeans meet the Basic Retirement Sum, we will also be providing an additional boost through the Matched Retirement Savings Scheme. We are also in a fortunate position where most of our seniors have housing assets which they could use to support their retirement, if they choose to. Last but not least, the Government provides good and affordable healthcare to all Singaporeans, especially our seniors. We have been investing in our healthcare system, to meet the needs of an ageing population. We have almost tripled our healthcare spending, from $3.9 billion in 2011 to $11.3 billion in FY2019. This went into expanding healthcare capacity and enhancing healthcare subsidies. We now spend more than twice the amount on patient subsidies than we did 10 years ago and expect to spend more as our population ages. On average, a Singaporean can expect to receive about $200,000 in Government healthcare subsidies throughout their lifetime. As a result, we do well in terms of health outcomes. I thank Dr Tan Yia Swam who has registered her confidence and, I quote: "I am confident that our healthcare system is robust and can provide adequate care for all citizens". Indeed, Singapore ranks amongst the top for the World Bank’s Human Capital Index, which measures the ability of a child to reach his or her full potential if they had full health and complete, high-quality education. We also do well in the Bloomberg Health-Efficiency Index, which measures life expectancy as compared to medical spending. In 2019, our average life expectancy at birth was 84.”
“Over the years, the Government has strengthened support for families with children, to defray the cost of education and childcare, through a combination of broad-based grants, subsidies and tax benefits. Upon the birth of their child, a Singaporean family would receive up to $35,000 in cash and cash-like benefits, through the Baby Bonus and other benefits. This includes a $4,000 MediSave grant which covers the child’s MediShield Life premiums from birth till age 21. Every Singaporean child can also receive over $180,000 in education subsidies by the time he or she turns 16, including pre-school subsidies. Even more support is available for those who come from less-privileged backgrounds. I thank Minister of State Sun Xueling, Parliamentary Secretary Rahayu Mahzam and the other women Members for speaking on the different ways that the Government, businesses and the community can support women to fulfil their aspirations and help them to better support their families. These include job opportunities, support for their jobs and livelihoods, re-designing jobs for more progressive workplaces, encouraging higher technology adoption amongst women, and support for care-giving. These are good points which we can continue to work together. Children also have access to an affordable education, supported by nurturing teachers, which ensures that our children are equipped with important knowledge and skills to perform to the best of their potential. We nurture our students’ aspirations and continue to develop multiple pathways to enable our students to learn, including through industry attachments. Third, I assure Mr Louis Chua that we remain committed to helping all seniors retire with greater peace of mind through the CPF system.”
“And we have different schemes and components in our support packages. Some target those with less means. Others, like the upcoming CDC Vouchers, are provided to all, including our middle class. So, we should not look at each Budget in terms of "goodies for me", but whether the totality of the spending creates more opportunities for us and our children. I fully understand the aspirations of our middle class earners. It is natural that we want to do better for ourselves each passing year. Like Ms Janet Ang has said, the Singapore Dream is a work-in-progress. We wish for every future generation to be better off than the last. So, let me reiterate the measures that the Government has put in place to support these. First, we have quality housing, which is affordable to all Singaporeans. Let me share how we are doing. Even in land-scarce Singapore, you can see in this chart [Please refer to Annex 3.], our housing prices are lower than those of many major international cities, even before accounting for grants. We provide housing subsidies to keep HDB flats affordable. The current income ceiling of $14,000 allows eight in 10 Singaporeans to buy a subsidised HDB flat. As a result of our housing policies, around 80% of new HDB flat buyers have little or no cash outlay on their mortgage payments, meaning they do not have to come up with cash, or little cash, for their mortgage payments; and nine in 10 Singaporean households own their homes. Our homes may not be the largest or the cheapest, but we definitely have well-built, affordable housing options, in a safe, secure and green environment. Next, we have strong support for couples who want to raise a family. Miss Cheng Li Hui and Ms Hany Soh asked for more to be done to support parenthood and first-time parents.”
“This sentiment is echoed in other countries like Germany, Sweden and South Korea, where unemployment insurance schemes are linked to active labour market policy measures which seek to get the affected worker back into a job quickly and avoid skills atrophy. An unemployment insurance would also have its complexities, as Prof Hoon and Mr Tay have pointed out. Instead, as Mr Xie Yao Quan said, a job is the best welfare. It is more sustainable to ensure that workers maintain a source of income, and to up-skill and re-skill our workers so that they can bounce back quickly from job disruptions. But at the same time, I recognise that as the global economy goes through an even faster pace of change, the nature of jobs and skills will be changing faster too. We will partner our business leaders, Labour Movement and academics to study how to support employability and help those who falter, through measures that suit our context. Mr Gerald Giam claimed that our middle income receive little support for their cost of living. Others like Ms Jessica Tan have raised concerns that the middle income may have been missed in the short-term support measures. I would like to remind Members of this House that the bulk of every Budget goes towards uplifting all members of our society, including the broad swathe of our middle class. In this Budget, I have set aside a total of $42 billion for our social spending and transfers, 35% more than FY2019. This is on top of: our security spending, which ensures the safety of our people and allows property and asset prices to rise over time, in line with our economic fundamentals, our investments in the economy which ensure that our people have access to good jobs for many years to come.”
“Finally, for those whose livelihoods were disrupted, we stepped in to provide some bridging support as they picked themselves up, for example, through the COVID-19 Support Grant and Temporary Relief Fund. We cushioned the vulnerable against the worst of the crisis and mitigated social inequality. As a result of these efforts, our Gini coefficient after taxes and transfers is at a record low, as this chart shows. [Please refer to Annex 2.] Mr Pritam Singh pointed out the divergence between the data on inequality, and the lived experience on the ground. He was quoting a particular report. We are fully aware that there are families who have been deeply impacted by the pandemic, and some more than others. This is exactly why we have tilted our support significantly towards the lower income and vulnerable groups, and Government has partnered the community to reach out to those groups during this period. Mr Singh himself noted that there was and I quote, "not-insignificant" support. So, you have to see the support in totality – the full set of support – and not conclude from one sample because these are rigorous study of what his happening throughout Singapore. Members, including Mr Patrick Tay, Prof Hoon Hian Teck and Mr Louis Chua suggested that we study the viability of an unemployment insurance for workers affected by involuntary employment. In the midst of significant disruption, interim, bridging support is needed to tide workers over. The COVID-19 Recovery Grant will support our workers who need more help while they find new jobs or go for training during this period. Longer term, while an unemployment insurance appears attractive, this would not be sustainable without longer-term structures to help our workers bounce back.”
“In Singapore, many of us have resumed our daily activities. Jobs and opportunities to learn new skills remain available. Our young children are back in schools physically and equipped with digital devices for learning. I thank Mr Louis Ng for showing his appreciation for our teachers in our schools. We are looking forward to the future and are working towards our dreams. Demand for BTO flats remains strong even in these uncertain times. As we heard from Mr Lim Biow Chuan earlier, people are still looking to buy cars "as if there was no recession at all"! While we should count our blessings, let us not forget that we are still in the eye of a raging global storm – there are still challenges ahead and there are still individuals and families who are under stress. Budget 2021 focuses our efforts and resources on emerging stronger. I have shared how we are taking a long-term view and working to support transformation of our economy and workers. But I want to assure Members that the Government has also been putting in place multiple layers of support, which will continue to provide targeted, customised relief to help Singaporeans differently affected by COVID-19 and the uneven, K-shaped recovery. First, we have broad-based, permanent schemes to provide strong social support and safety nets that protects all Singaporeans, especially the vulnerable. When the crisis hit, we layered on temporary assistance on top of some of these permanent schemes to provide additional support to vulnerable groups. We also introduced new measures like the Solidarity Payment and Care and Support – Cash to provide quick relief for Singaporeans' day-to-day expenses, and with the lower income receiving more.”
“It set up an emergency hotline, organised individual outreach sessions to about 400 members, provided legal advice to those in need, and connected businesses to available Government support measures. SMCCI also showcased members who transformed their businesses in the wake of COVID-19 on their specially curated platform, "Discussions @ Dewan", so that others can learn from their successes. The SBF has also been working closely with the National Jobs Council and 31 TACs, to conduct job matching on a business-to-business level, both within and across sectors. Since the start of the pandemic, SBF has assisted more than 600 companies and more than 100 workers have been successfully matched to 77 companies. Through these collaborations, our firms and workers can emerge stronger in a post-COVID world. And as you can see, this is a case where really everyone is putting in their effort and working together. Members like Mr Lim Biow Chuan spoke about how Singapore has come out relatively unscathed from COVID-19, and how we are starting from solid ground. Looking around the world, beyond the economic impact, we also see broader health and social impacts. One year on, some countries have not recovered from the initial wave of the outbreak. Many are still seeing new COVID-19 cases in the thousands each day, and repeated cycles of lockdowns. This has wrought havoc on their communities, disrupting livelihoods and day-to-day activities. People are putting the future on hold to focus on surviving the crisis. In December 2020, UNESCO reported that, globally, classrooms for nearly one in five school children were closed. In some countries, healthcare services are still overwhelmed by COVID-19 cases, leaving little help for those with other needs.”
“Ms Janet Ang and Mr Patrick Tay have spoken about the importance of ensuring fair access to employment opportunities for Singaporeans, while remaining open to global talent to complement local capabilities. I agree. I thank Members for agreeing that harnessing complementarities among our Singaporean Core and the different talent sources is important for us to remain as a vibrant and competitive economy. MOM will elaborate on this at the COS. As Mr Henry Kwek mentioned, our TACs can support firms and workers to emerge stronger, by helping them to transform in a pervasive and sustained way. Over the past year, I am encouraged to see TACs rallying the business community together to fight the crisis. The SG Together Enhancing Enterprise Resilience, or STEER fund, which I enhanced at last year's Resilience Budget, has matched more than $10 million across 10 industry-led funds to help the business community tackle challenges arising from COVID-19. Over 2,700 businesses are expected to benefit from these initiatives. This includes the $1 million Singapore Contractors Association Limited, or SCAL COVID-19 Fund, set up to help construction sector firms cope with the increased operational requirements due to COVID-19. Some 500 member SMEs will stand to benefit from this Fund. Apart from STEER, the Fund also received contributions from BCA, over 50 SCAL members and the SBF Foundation Compassion Fund that Ms Janet Ang spoke about in her speech. The Singapore Malay Chamber of Commerce and Industry, or SMCCI, also formed a COVID-19 taskforce in March last year, to support members affected by the crisis.”
“Environmental services company SembWaste, in partnership with the Building Construction and Timber Industries Employees' Union and the NTUC Training and Transformation, formed the Company Training Committee and embarked on an OTR process to develop a five-year business growth strategy to support Singapore's green targets. And to support these transformation plans, SembWaste is upskilling its workers in areas such as digital technology. It has also adopted the Progressive Wage Model to ensure sustainable wage increases tied to skills and productivity growth. Third, our unions and TACs can reach out to more firms and promote deeper collaboration between firms and workers. For example, the Singapore Business Federation, or SBF, in partnership with Workforce Singapore, leads the Industry 4.0 Human Capital Initiative, to help companies adopt Industry 4.0 through job redesign. To-date, close to 70 companies have come on board, to potentially uplift more than 1,000 jobs and generate more than $52.5 million in cost savings. SBF aims to scale this to benefit up to 300 companies and 1,500 workers by September 2022. I also thank the Labour Movement for their tireless efforts in supporting the lifelong employability of workers, across different segments with different needs. NTUC Job Security Council and Company Training Committees are an important innovation for NTUC to partner companies and the Government, to achieve synergy. By pre-emptively matching at-risk workers to new employers, the Job Security Council helps workers minimise employment downtime and aids businesses to manage fluctuating manpower needs. I am heartened to hear that it has successfully placed more than 28,000 workers in new positions last year.”
“After a 23-year-long career in architecture and project management, he switched to the healthcare sector, so as to better care for his ageing parents. He became a freelance home care-giver last year to provide home-based care-giving for seniors. When the SGUnited Skills programme was launched, Melvin decided to enrol in the Therapy Assistant course at HMI Institute. Using his SkillsFuture Credits, he was fully covered for the subsidised course fee of $500. Melvin is keen to continue his journey in the healthcare industry as a Therapy Assistant when he completes the course this year and I wish him all the best! Second, businesses playing their part, to enable workers to build skills. Our firms have come onboard to make workplace learning a priority. Since 2018, the National Centre of Excellence for Workplace Learning has helped about 180 enterprises per year implement or enhance workplace learning processes. Last year, 3,400 enterprises sent their employees for training in courses supported under the SkillsFuture Enterprise Credit, and about 250 enterprises benefited from partnerships with SkillsFuture anchor companies to enhance their employee skills development and workplace learning capabilities. Deputy Secretary-General Dr Koh Poh Koon highlighted that upskilling and job redesign must come together for pervasive transformation. By redesigning jobs and training workers to take up the new jobs, employers not only help workers stay employed, but also enable the firms to thrive. We will continue to provide strong support to companies on this front. This includes operation and technology roadmapping, or OTR, that integrates upskilling to achieve a long-term growth strategy.”
“To equip workers with industry-relevant skills, we are partnering market leaders to conduct quality training at scale. For example, Google, Boston Consulting Group and Siemens are partnering SkillsFuture Singapore to offer SGUnited Mid-Career Pathways programmes in ICT, professional services and advanced manufacturing. These help local jobseekers adapt to the changing technology trends in a shifting labour market. Our company partners have collectively committed more than 6,000 training places and enrolled more than 2,500 trainees. I am confident that these efforts will put our workers in a stronger position to seize new opportunities in the recovering economy. Mr Patrick Tay has highlighted employability and job security as top concerns of workers. These are important and closely interlinked focus areas in our medium-term jobs and skills strategy. The employment landscape is evolving rapidly, with technology being a key driver and enabler. Some jobs are becoming redundant, while new ones are created. Hence, job security is fundamentally about staying employable, rather than staying employed in the same job. We will thus continue to strengthen the skills eco-system, which comprises workers, businesses, unions and trade associations and chambers or TACs, through SkillsFuture. Let me touch on efforts to enhance the employability of every worker. First, the efforts of our workers. I am heartened to see more Singaporeans making good use of our support to take ownership of learning and acquire skills, even in the midst of the pandemic. More than 188,000 Singaporeans used their SkillsFuture Credit in 2020, a 21% increase in participation from 2019. Mr Melvin Tan is one of them.”
“This includes the PACT scheme to support knowledge transfer and co-innovation activities between large enterprises and their local suppliers, and initiatives on knowledge transfer and skills training, such as the SkillsFuture Leadership Development Initiative. The Ministry of Trade and Industry will elaborate on this at the COS. I have covered how we will sustain a virtuous eco-system of innovative and competitive firms that support a vibrant economy. All of these efforts serve to create opportunities for our people. To help workers capture these opportunities and enjoy the fruits of growth, we have moved into helping workers get into growth areas, and equipping them with skills to secure sustainable livelihoods. Our immediate priority is to build upon the skills and experience that workers have accumulated, while breaking down barriers so that they can access new jobs. As Mr Abdul Samad put it, not just to equip workers with skills today, but also to prepare them for jobs of tomorrow. Mr Vikram Nair asked about measures to support employment. We will continue to support our jobseekers’ career growth through the labour market recovery, including through the extension and recalibration of the SGUnited Jobs and Skills Package. Mr Sam Ong was amongst the 7,200 jobseekers who enrolled in the SGUnited Skills programme last year. He was retrenched from an offshore construction company in the oil and gas industry due to the impact of COVID-19 and the industry downturn. Sam recognised the importance of digital skills amid the future job market and enrolled in the Building and Construction Authority’s SGUnited Skills Diploma in Integrated Digital Delivery. He found the course useful and looks forward to securing a role in a company that would allow him to apply his new skills.”
“Budget 2021 builds on a large existing base of measures, to provide significant enhanced support for SMEs to digitalise, innovate, and transform to seize new opportunities. For example, to encourage more local SMEs to embark on transformation efforts and venture abroad, I extended the support levels of the Productivity Solutions Grant, the Enterprise Development Grant and the Market Readiness Assistance grant until March 2022. And as several Members of Parliament and Mr Mark Chay observed, the pandemic has forced many to take an extraordinary digital leap. To help firms confidently take this leap forward, we have also introduced a suite of digitalisation support, including the Chief Technology Officer-as-a-Service initiative and the Digital Leaders Programme. The Ministry of Communications and Information will announce more details at the COS. We have also provided substantial support to SMEs through last year’s Budgets. On a per dollar of value-added basis, smaller firms received three to seven times the amount of support given to larger firms in 2020. As I mentioned earlier, we take an eco-system approach to economic development, to support workers and companies across all sectors to reach their full potential. Mr Leon Perera pointed to the synergy of having MNCs and SMEs work together – let me add that this synergy is not just between MNCs and SMEs, but across all companies and sectors – from Large Local Enterprises to SMEs, and even among SMEs. Our economic agencies actively support companies in their efforts to transfer capabilities to upskill our local workers.”
“Members including Ms Poh Li San have underscored the importance of supporting businesses to emerge stronger. The uneven impact of COVID-19 across industries and enterprises means that each enterprise segment requires different support to recover, grow and thrive. I agree with Mr Edward Chia on the need to adopt a differentiated, life-cycle approach to enterprise development. Our agencies offer a holistic suite of support schemes targeted at the needs of each enterprise segment, by sector and growth stage. And we approach it not just at the company-level, but at the industry-level, to achieve value-chain transformation. I spoke about the Built Environment sector coming together to transform decisively across developers, consultants, contractors and suppliers. We will build on our Alliances for Action to enable more industries to transform together. We will continue to invest in future engines of growth to create new opportunities for our firms and workers. Dr Lim Wee Kiak and Miss Cheryl Chan spoke about the importance of nurturing and harnessing the growth of the green economy. This is an important area. The green economy is a key part of the future economy. Making bold investments now will give us a head-start and create many good jobs for Singaporeans in future. We will work with businesses to meet the rising demand for more sustainable products and services. We committed resources to sustainability efforts under our Research, Innovation and Enterprise or RIE 2020, and will allocate even more for this in the next five years. Helping local SMEs expand their potential remains a focus. Most of our workers are employed in SMEs, so the success of SMEs will enable our workers to have better jobs and better pay.”
“From 2016 to 2019, labour productivity growth, measured in terms of real value-added per actual hour worked, grew by 2.7% per year, up from 2.2% per year in the preceding three-year period. Real median income of Singaporeans increased by 3.7% per year, higher than the 3.2% per year growth in the preceding three-year period. The crisis in 2020 interrupted this progress. Still, real median income of Singaporeans grew 1.5% year-on-year, while unemployment was higher in 2020 than in 2019. Dr Tan Wu Meng spoke about our $19 billion Research, Innovation and Enterprise 2020, or RIE 2020 plan, and its potential returns on investment. RIE is a cornerstone of Singapore’s efforts to develop as an innovation-led economy and society with good jobs for Singaporeans. The payoffs from investments in research take time to manifest. We have nevertheless made good progress and the results are promising. One example is in the biomedical sciences, where Singapore’s RIE investments since 2000 have helped set the foundation for the flourishing sector it is today. Since 2000, the value-added of the biomedical manufacturing sector has grown by more than three times. Today, the biomedical sector makes up almost 4% of GDP, and four of the world’s top 10 drugs by global revenue are made in Singapore. We have also established capabilities to develop innovative solutions to national challenges, including in managing the pandemic. Our researchers have worked with local companies to develop and manufacture diagnostic test kits, such as the Fortitude 2.0 test kit, that are now used both locally and in more than 45 countries worldwide. All of these would not have been possible without our sustained investments to build up our RIE capabilities over many years.”
“This Emerging-Stronger component of the Budget therefore has a strong medium-term orientation through an enduring effect on supporting the level of labour productivity in the economy. Members including Mr Zhulkarnain Abdul Rahim spoke about what the post-COVID-19 world means for Singapore’s economy. To pave the way for our next lap of growth, we must make the following moves. First, we must remake Singapore as a Global-Asia node of technology, innovation and enterprise. This requires enhancing our connectivity, including digital connectivity, and positioning our firms and workers at the intersection of key global chains growing out of Asia and ASEAN nations. Second, as Mr Gan Thiam Poh highlighted, we must shift to a technologically advanced, innovation-driven economy, where firms and workers are equipped with the skills to harness technology and intangible assets as a key differentiator. Third, we must invest in economic resilience and sustainability as a source of competitive advantage. Building on previous Budgets, Budget 2021 invests in our economic toolkit to support these moves – or as Mr Shawn Huang aptly summarised, to "survive, pivot and develop an edge to seize opportunities of the future". If we get this right, we can set our economy on a path of growth for the next five to 10 years. Building a stronger Singapore Core is at the heart of our approach, as several Members including Ms Jessica Tan and Mr Abdul Samad rightly noted. The ultimate goal of economic growth is to improve the jobs and lives of Singaporeans. The only way to sustain such improvements is by raising productivity, where firms transform in ways that bring workers along. We build from a position of strength.”