Committee of Supply 2022: on Principles, Cost of Doing Business in Singapore and Resourcing of Charities by Government
Sharing with friends, the first of 7 speeches I am making at Budget/COS 2022.
In this, I touched on PCR, namely PRINCIPLES (of stewarding Singapore's finances); COSTS (of doing business); and RESOURCING (of charities). Finance Minister Lawrence Wong later addressed some of my concerns in his wrap up speech. Thank you!
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1. Speaker Sir, I stand in support of Budget 2022.
2. The delay and staggering of the GST HIKE and the slew of subsidies to soften the blow on most of the population are a relief.
3. I thank Minister for the decision to continue with the CDC VOUCHERS scheme so that every Singaporean household, regardless of abode or income, can tap on them.
I thank the CDCs’ partners such as the Merchants' Association, Heartland Enterprises Singapore, People’s Association, GovTech, ESG and IMDA and others for developing and supporting a scheme that:
a. Allows not only residents but also heartland merchants to benefit from the money injected into the heartland business economy to spur enterprise;
b. Allows participating merchants to be reimbursed in the next day instead of having to wait;
c. Allows for the printing of CDC Vouchers for the elderly who are non-tech-savvy so that they can personally use them.
4. I wish to touch on 3 topics today, namely Principles (of Stewardship), Cost (of Doing Business) and Resourcing (of Charities); or simply PCR.
On PRINCIPLES
5. Budget 2022 is a clear articulation of the Principles of how Singapore stewards its resources. Former US President Dwight Eisenhower once said, “A people that values its Privileges above its Principles soon loses both.”
6. What are the Principles that we value as a People? There are many. I will name 3. One, the Principle of Prudence. Two, the Principle of Preparedness. Three, the Principle of Inclusiveness.
7. PRINCIPLE OF PRUDENCE which explains the conservative and cautious stand by which Government builds up and draws down its reserves. We spend within or below our means. We do not easily borrow nor freely tap on past reserves. We will save for the future; for rainy days such as that during the Lehman Brothers collapse and the COVID-19 pandemic. And when we draw down on reserves, we will return it back promptly when we are able for the use of future generations and for future rainy days.
8. PRINCIPLE OF PREPAREDNESS. We invest highly in the education and training of our people through initiatives such as SkillsFuture and capability building schemes across the private, people and public sectors. We are ready and able to defend ourselves so as not to land in a situation such as the ongoing Ukraine-Russia war.
9. PRINCIPLE OF INCLUSIVENESS. We have no intent to leave anyone behind and intentionally develop measures to uplift the low wage workers, households and the vulnerable amongst us.
10. Principles of Prudence, Preparedness, and Inclusiveness. The extent that we as a People agree on these principles, is the extent of how united we are to forge ahead.
ON COST OF DOING BUSINESS
11. As with all things, Budget 2022 is not perfect, though the undergirding Principles of this Government are clear. Let me touch on one of several areas that is, to me, worth reviewing; that is, on many SMEs' concerns on the cost of doing business.
SME CONCERNS ON COST OF DOING BUSINESS
12. Matters on the cost of living and cost of doing business are not new topics raised in and outside Parliament. But it is still noteworthy to hear out the local enterprises who are struggling despite doing their best, especially in such a time as this.
13. RISE IN ENERGY COST. A case in point is Madam Tan, a resident of mine, whose plight is heard elsewhere too. Madam Tan, a supplier of container packaging to industries ranging from food to paints to solvents told me her struggles arising from not only supply chain disruptions during the pandemic but also high global energy costs.
A loyal Singapore PowerGrid customer, her business was subject to fluctuations in electricity rates since last September from 14 cents to 75 cents per kilowatt. Hope came in the form of MTI’s Temporary Electricity Contracting Support Scheme or TRECS, which offered monthly fixed price plans. Alas, utility supplier after supplier turned down her application citing full subscription and to try in July 2022.
Mdm Tan fears that the cost of doing business for SMEs like hers may further escalate with news like the carbon tax increases. She certainly has no intent to close.
14. I have discussed the matter with Minister Tan See Leng (a very earnest Minister) and know that he too is mulling over this issue.
Would MOF be willing to consider providing an Energy Rebate equivalent to the U-Save Vouchers given to residents, if expanding the TRECS programme is not viable?
15. RISE IN QUALIFYING SALARIES OF FOREIGN WORKFORCE. Another major input heard from SMEs concerns the well-intended increase in qualifying salaries of S-Pass and E-Pass holders.
The policy intent is this - to bring in the right calibre of imported talents and to make it more attractive for companies to employ Singaporeans.
16. The anecdotes I heard caused me to wonder if Government has been too blunt in its approach and if the policy intent, in this instance, has been achieved.
Some employers claim that the increase in qualifying S-Pass and E-Pass salaries have pushed up not only the salaries of the foreign workforce; but also local staff and hence, the cost of business.
There is also this nagging issue that even if firms choose to hire local staff, some candidates are simply difficult to come by. I am referring to candidates for jobs such as pre-school Chinese Language educators, speech and occupational therapists, even cybersecurity and IT professionals who are also in high demand by MNCS setting up firms in Singapore.
17. Would Government direct a think-tank to study the impact of this policy and decide (a) if this S-Pass and E-Pass policy is still effective to deter foreign hires and promote local hires; and (b) two, if ways can be found to increase the local talents in higher demand?
ON RESOURCING OF CHARITIES
18. Finally, I wish to end off with suggestions on how Government can play a more effective role in resourcing Charities to build a more caring and inclusive society - one of the strategic thrusts of Budget 2022.
19. The Singapore Government has long adopted a ‘Many Helping Hands’ approach to deliver a range of social services and assistance programmes; primarily to work with partners who know the ground better.
20. There are more than 2,300 registered charities in Singapore. About 200 of these are large charities with more than $10m in receipts. Larger charities often fill important gaps where the Government and the rest of society have not stepped insufficiently.
There are gaps which are well known and highlighted time and again in this House.
In the world of disability, these include issues such as the ‘cliff effect’ for many special-needs graduates who literally stop learning after the age of 18; the need for a continuum of housing options for disabled adults; the pleas for support by elderly parents too afraid to die for fear of what might happen to the ones they leave behind.
21. Some such as residential homes and day care centres for the disabled are known high-ticket items that cause high operating deficits on charities, in the millions – often insufficiently covered by government grants. These are spaces that only the lion-hearted or the clueless will enter.
22. Government should play an active role in Resourcing Charities that provide Essential Services that Government would otherwise have to undertake.
23. Resourcing can be facilitated in 3 ways:
a. One, by providing Grants, hopefully sufficient, to the partnering Charity;
b. Two, by strengthening the nexus between Top Needs and potential Top Donors. Can local MNCs such as DBS, SingTel be persuaded by Government to take ‘ownership’ or adopt some identified and perhaps Top Needs agreed upon by Government and its Charity Partners?
c. Three, Government can help by simplifying or facilitating fundraising requirements to help Charities help themselves.
One case in point is Government’s partnership in this Budget with the Tote Board to extend its Enhanced Fund-Raising Programme or the EFR to incentivize fundraising.
Because of the way the EFR is currently designed, charities large and small (whose behaviour is shaped by the design) are driven to organize 5 campaigns in a year, up to $100,000 per campaign. They have to organise 5 campaigns a year if they wish to obtain maximum matching.
There ought to be flexibility in the current EFR scheme so that charities can choose to focus on one large successful fundraising campaign, be done with fundraising for the year, and focus their resources on the core business of serving their beneficiaries.
25. Another way that Government can facilitate is to help social enterprises, especially those owned by charities. Proceeds of such enterprises do not go to any private pockets; they go straight back to the charities. If social enterprises owned by charities can be allowed to qualify for fundraising matching,; them being the arms of job creation and service creation; that will help as well.
Hence, I really hope that Government will help to look at the ways by which charities can be resourced so that they can partner Government more effectively.
CONCLUSION
24. In conclusion, Sir, I have brought up the issues of PCR – Principles, Cost of Doing Business in Singapore and Resourcing of Charities by Government.
I seek Minister’s favourable consideration for my suggestions.
Thank you for a well-crafted Budget 2022, which I support.
Denise Phua, 2022
28 Feb 2022