Debate On Annual Budget 2010

Sir, Budget 2010 is a budget of vision and courage. I commend the Minister for calling a spade, a spade and admit openly that our productivity in service, manufacturing and construction is 38% to 66% lower than the best in the world. Something big has to be done. Singapore is not at the bottom of the pile and you must remember that. But for a small country with a relatively small workforce, it is critical to proactively address the long-term gaps that were identified by the Economic Strategies Committee (ESC).

Sir, I have several observations and suggestions for the Minister's consideration.

Observation one – the vision of the ESC. Sir, the vision of the Economic Strategies Committee forms the bedrock of this year's Budget. But the vision of Singapore as a country must be more than that of an economic committee of highly intellectual and qualified people. We are a country populated by people of mixed abilities, ages and needs. To embrace and to be inspired by the vision, we must try to engage as many Singaporeans as possible for the vision to be a shared one.  From a young age, I have been told that Singapore should be like the Switzerland of the East or a global city like London or Paris. As someone who chose to make Singapore my home and my workplace, I for one do not want Singapore to become a copy of these western benchmarked cities. One month ago, a few of us in the House had a discussion with several professionals, and there were two successful doctors. Both were educated and lived overseas but both chose to return to Singapore to work and live. In their minds, Singapore’s uniqueness is in the "fusion of East and West"; in our multi-racial and multi-cultural profile, our great food, our great schools, the discipline and a great place to raise their children. Add to that, our uniquely Singapore HDB flats, our fantastic festive light-ups at Chinatown, Little India, Geylang Serai, Kampong Glam, and our desires though less-than-perfect.  But our desire to include those who are at risk of being left behind in our country as we grow. And now even a good philanthropy launch pad to serve the needy in Asia. Singapore has a distinctive culture and features of a brand that is appealing. Let us not keep trying to make ourselves the Switzerland, the London or the Paris of the East.

Let us engage more Singaporeans to share a vision beyond economics and get the buy-in from all, if not most, Singaporeans. Let us tell our story better to attract both investments and potential citizens to our very own unique Singapore. 

Observation two – productivity and innovation.  Money alone is not sufficient. Sir, making productivity and innovation second nature in companies and individuals in every sector as the Minister had said, cannot happen with money alone. As the Chinese saying goes, "you can bring the horse to the water but you cannot force it to drink".

After the Budget announcement last week, I garnered the views of SME owners in the textile, food and beverage, carpentry, food wholesale, retail and construction industries. A couple of them whom I spoke to are even winners of past years’ SME awards. I asked them how they may be able to leverage on the new Productivity and Innovation Fund and initiatives announced at the Budget. Their muted responses are indicative of many who are at a loss of where to start and do not have the in-house capability to make this Budget relevant. A  popular SME website wryly commented on its landing page, "most SME owners are too preoccupied with their daily operations to think of anything else".

Singapore SMEs are awash with award schemes such as the Singapore Innovation Class, Singapore Quality Class, People Developer, Singapore Service Class and the like. Different help portals also offer free and useful information, such as the SME ToolKits and grants schemes and so forth.

As early as 2007, Singapore-based SMEs have identified leadership training, team building, marketing and promotion, and business planning as key need areas. To equip SMEs with talented managers, SPRING had invested $60 million in a Business Leaders Initiative (BLI) to create a pipeline of 1,000 trained SME bosses, senior executives, and aspiring executives. Similarly, to encourage innovation and adoption of new technology, SPRING launched in August 2006, a $150 million Technology Innovation Programme (TIP) to co-fund innovation projects by SMEs and even to strengthen what are called Centres of Innovation (COIs).

Sir, Singapore has been generous with supporting the SMEs through programmes. However, even our Prime Minister acknowledged last Sunday that most SMEs are still not operating at high levels of productivity, innovation or margin.

As the gurus would say, insanity is doing the same thing over and expecting different results. What happened? Why were the outcomes less than ideal, despite what we put in? What were the gaps and the root causes of our lack? What are the lessons we can learn and apply from countries who are ahead of us? How, for instance, did Hong Kong, a country whose service quality was famously low two decades ago, steered the way to its current excellent service level? How did Japan stay ahead of the pack for so long in the construction sector? Sir, these questions must form part of the new National Productivity and Continuing Education Council led by Deputy Prime Minister Teo.

In fact, it will be good to know specifically what the new National Productivity Council will do differently from what SPRING and the other agencies have done? I do not think ad hoc testimonies in the NTUC weekly will provide or develop a pervasive culture of innovation and productivity. Will the new National Council simply be old wine in new wine skin? I was told that old wine when stored in new wine skin will lead to the bottle cracking and the wine spilling.

Sir, unless the tools or productivity and innovation are learnt and applied by all levels in all sectors including the public sector, the Council members and the young in the schools, it is unlikely to form part of our country’s DNA. What we want to do and what we emphasise in this Budget may just fade away once the monetary incentive or pressure is lifted.

Observation three – foreign worker levies. Sir, I am glad that the pace and quantum of the much-worried-about foreign worker levy is calibrated and well-paced. I want to add to the chorus of pleas for sectors which genuinely require foreign labour for work that cannot be substituted by technology. I am specifically referring to jobs that are shunned by locals in the nursing homes and day activity centres, especially for the moderate to severely disabled, like those in the MINDS homes and even some autism adult centres in St. Andrew's and the Autism Association.

A doctor who volunteered at a nursing home shared a real-life story of more than 10 Government-sponsored trainees on a professional conversion training scheme at the home. As the training progressed over the weeks, he told me almost 90% of these trainees dropped out from the training, leaving only one who finally signed up to work at the nursing home. The daily tasks of having to carry, wash, feed and diaper-change adult disabled patients – essentially basic care for the chronic sick – are tasks that most will not find appealing.

At another nursing home, the management staff wrote to me that they are now highly anxious over the impact of the details of the scheme – the new tier system, and the levy increase on the impact of the home’s operational cost, and eventually may be the fees. This home is currently operating with almost 60% foreign staff.

Thirdly, in the special-needs community where I serve, many day activity centres and residential homes serving moderate to severely disabled adults are also worried about the cost impact of this new direction. Some of these homes provide caregiving to physically big adults, mostly males, who at times are difficult to handle.

Anyone who insists that the concerns of these centres and homes can be addressed if only they are more productive and innovative, should spend one week working there on the ground.

Hence, Sir, although I am deeply grateful that the Minister has retained the generous income tax reliefs for donations to charity and made tax concessions for dependants who are disabled, I seek the Minister’s attention to reassure this bigger concern and assure those who are working in the chronic sick and disability sector.  For this category of employers, Sir, I would urge the Minister to consider exempting non-profit organisations from the limit quotas and increases in levy.

Observation four – other pertinent issues. Sir, I urge the Minister not to forget the other pertinent issues that Singapore is facing.

Just as productivity was sidelined in past years, please let us keep on our agenda some key concerns we have identified in the past. These include:

One, the rapidly ageing population we have.  Minister Lim Boon Heng has done a commendable job on the Council for Third Age and the wellness movement with the establishment of wellness centres for the elderly all over Singapore. But what about those who are in the so-called Fourth Age who are beyond the active ageing range and who may be immobile?  Beyond tax relief, there is a need to direct resources to develop the masterplan for the mapping of services for this group. Can there be funds directed to form a Council for the Fourth Age or whatever name that is appropriate?

The second pertinent issue is mental health. Sir, we need to address the worrisome trend that there is a growing population, including the young in the schools, who are afflicted with mental illnesses like depression, inability to stress-manage or cope with the expectations and pressures of our highly urbanised society.

Thirdly, on fertility.  Sir, I am surprised that nothing is mentioned in this year's Budget on babies. Has the Minister given up hope of saving the endangered species of the Singapore Baby, especially the Tiger Baby? And what happens if one decides to heed the Government's call to have babies, and the child turns out to be less than perfect?  The sad thing in Singapore is that those who are born with congenital illnesses are not even covered under the CPF-administered basic MediShield health insurance because they are considered burdens who would raise the premium rates for the rest of Singapore. Sir, if we wish to encourage couples to have babies, and since we cannot guarantee the condition of the babies, we must not deny these children who turn out less-than-perfect the rights to basic health coverage in the name of economics.

And fourth, on financial literacy and planning. Sir, we need to continue to eyeball the findings that most Singaporeans are financially illiterate and are neither keen nor equipped to plan for their retirement. We need, as part of our vision, to take specific care of the young and elderly disabled and especially those from the lower income strata. MCYS and NCSS have done a good job in trying to serve this group with the setting up of the Special Needs Trust. But there are families below the average income level who cannot afford even the initial premium or deposit and who nonetheless need the service. I urge the Minister to use a scalpel and not a parang when considering top-ups for those who need a leg up in Singapore, and to not forget the disabled in the lower income category in Government's annual giving.

Observation five – communication.    Sir, many Singaporeans are either not engaged or disconnected, as one of my colleagues said, or unaware of how this important Budget may be relevant to them. There is definitely a need to communicate the key thrusts more effectively so that the average Singaporean, whether they are in business or work or just individuals, can easily understand, appreciate the "whys", "whats" and "hows" of this significant Budget.

Sir , as a result of the five observations I have made, I seek the Minister's consideration of the following nine recommendations to fine-tune the implementation of the Budget:

(1)  Exempt VWO-run nursing homes and day activity centres which are serving the chronically sick and the disabled from foreign worker levy increases and grant them a generous foreign labour ceiling;

(2)  Appoint and fund Industry Productivity Champions to share, facilitate and account for industry-specific Productivity KPIs;

(3)  Pilot a nation-wide pervasive "Productivity and Innovation Suggestion Scheme" for all Singaporeans with cash incentives for suggestions accepted and applied;

(4)  Extend Post-Secondary Education Account to all pre-retiring Singaporeans attending MOM-approved courses;

(5)  Finance a Council for Fourth Age and deploy resources for a Masterplan to address the needs of the aged sick, those who are not attended to by the mission of the Council for Third Age;

(6)  Finance Mental Wellness Centres in school and community clusters for both the young and the old afflicted by mental health issues;

(7)  Provide Medisave top-ups for younger disabled who are currently not covered under MediShield, our basic healthcare insurance in our nation.  Better still, fund the premium to give them the same rights to basic health insurance coverage;

(8)  Open and deposit into Special Needs Trust Accounts for disabled Singaporeans whose families are in the bottom 20% income level ; and

(9)  Invest in professional services for an effective communication matrix and plan to disseminate the numerous schemes of this Budget to the different target audiences so that they will buy into the vision and they will support our "whats" and "hows" of this Budget and stop asking "why".

Sir, I ask the Minister to consider the above recommendations and I look forward to his response.

With that, I support the Budget and thank the Minister, the Economic Strategies Committee and their support teams for all that they have done for Singapore.