Mr Low Thia Khiang (Hougang): Sir, a clarification in Mandarin.

      (In Mandarin):  Mr Yeo Guat Kwang said that we must teach people how to fish rather than give them the fish. I would like to ask him what would happen if there is no fish in the water.  Even if there is fish, the weather is not always certain. What would happen if the weather is bad, there is lightning and they could not go out to fish?  If the people persisted in braving the wind and storm and end up being struck by lightning and losing their lives in the sea, who is going to look after his family?

     Mr Yeo Guat Kwang (In Mandarin):  That is precisely the point. We must make sure our economy strive and prosper, so that there is fish in our water for our people to catch. However, the people must be prepared to take the challenge, otherwise even when there are so many fish in their catch, they will complain that the heavy load may capsize their boat.

2.03 pm

     Dr Ong Seh Hong (Marine Parade) (In Mandarin):  [For vernacular speech, please refer to Appendix A *. ]  Mr Speaker, Sir, I support the motion to thank the President for his Address.  My parliamentary colleagues have already touched on most of the important points, so I would just like to tell a story.

     There is a report in a magazine called the Vaidurya.  It tells the story of a woman by the name of Zhao Min and her son, Xu Jianguo. Zhao Min was a single mother in Shenyang. She was deserted by her husband, leaving her with her only son. She worked very hard to support herself and her son. She started off with a small furniture stall and eventually developed into a furniture factory.  By 2002, she was already a rich woman with assets worth more than a million dollars.  But her 18-year-old son, Xu Jianguo, failed to be admitted to the university. To the son, when the mother was so rich, there should be  no problem with his future.  But the mother thought otherwise. Zhao Min told him, "I have worked so hard to build up this business empire, why should I just hand it over to you? You should go out and venture for yourself. Don't come back within one year and don't ask me for money!"

      The son left home with $1,000 given by his merciless mother and that was on 22nd September. Xu Jianguo went about wandering on his own. One month later, he was in Dalian and all his money had been spent. He had no choice but to work in a hotel as a junior staff earning just $300 a month with no off-days. He had to work very hard from day to night. Life was extremely hard for him.

     In the Chinese New Year of 2003, he mustered enough courage to call his mother, but the phone number was no longer in use. He went home and found that the house was occupied by a stranger. He went to the factory and found that it had changed hands.  Xu Jianguo had no choice but to return to Dalian.

     On his return to Dalian, he was taken ill. There was a person by the name of Big Brother Zhang who took him to the hospital. He was hospitalised for five days, and the hospital bill came up to more than $2,000.  Xu Jianguo thought that he had met a good Samaritan.  But then, Big Brother Zhang told him, "This money is not given to you for free.  You have to pay me this amount plus interest amounting to $3,000 within half a year."  Xu Jianguo had to take on one more job.  After the Chinese New Year period, he found a job at a construction site with a monthly salary of $1,500. On one occasion, he was so tired that he had to take a rest.  For that, he was penalised with half a month's salary and an additional load of 30 more sacks of cement. Three months later, he managed to raise $3,000, and he became rugged and stronger.

     One day, he came to learn about the difference between the cost of emulsion paint and the cost of painting jobs for the walls. He boldly asked the paint manufacturer to sell him some of the paint at the wholesale price, and successfully tendered for a painting job by offering a price of one dollar less than the others.  He then went to the labour market to recruit some workers to work for him, and earned his first $10,000.  Banking on his success, he formed his own contractor’s team to undertake painting jobs for others.  By August 2003, he had earned as much as $200,000.

     On 22nd September 2003, Big Brother Zhang suddenly appeared and said, "After one year, don't you want to go home and visit your mother?"  When he heard that, he was choked with emotion.  All the joy and sorrow of the past one year filled his mind. Big Brother Zhang looked at him silently for a moment, gave him a letter, saying, "This is a letter from your mother. Read it well!" 

     What happened was that Zhao Min actually knew that she was suffering from cancer. She made the arrangement in order to train up Jianguo so that he could fend for himself. On that day when his son left home, the mother was actually following him from behind. In order to prevent any accident from happening, she hired three persons to trail his son.  This Big Brother Zhang was one of them. On 27th June 2003, Zhao Min passed away.

    In her letter, she said, "I am most concerned with your survival.  As your mother, of course, I love you, my son.  But if I were to prepare everything for you and allow you to live in a situation where there is no pressure at all, I will be doing you a disservice. The marketplace is merciless. Today, you may be a millionaire but tomorrow, you can become a bankrupt.  If you do not have this relentless determination and the training to make you strong and fit, it will be very dangerous for you and you will be eliminated sooner or later."
    

    Sir, thank you for allowing me to finish this story.  Although it is a bit long, it is very thought-provoking.  The story makes us think of the situation of our country and our worries.  Over the past 40-odd years, Singapore started from zero. Our forefathers worked very hard to bring us the Singapore of today. We have created this economic miracle and build up a prosperous city state. We have enviable rich reserves and we have a harmonious society, one that we are proud of. Since independence, our people have the opportunity to receive better education.

     So, on the surface, our new generation of Singaporeans seem to be in a better position to deal with our future challenges.  However, is it really so?  Our young people are certainly better educated, but can they, with their mentality and character, rise to deal with the challenges that globalisation brings about.  Do they have the ability to deal with both regional and international competitions?  Our forefathers and the first and second generation leaders had suffered. They had gone through the sufferings of war, the conflicts and confrontation with the colonial masters and the confrontation days with the communists and the Indonesians. They gone through the hard days but they had never gave up.

     But now, our younger generation of Singaporeans, do they have the excellent mental quality and sound spiritual cultivation?  While enjoying a good life in a good environment, do they think of the dangers while living in peace and harmony and making preparation for the rainy days?  Will they be on their toes all the time and be self-disciplined?  Will they keep on upgrading themselves?  Will they be passionate and sympathise with those who are less fortunate in our society?

     Likewise, when they are facing difficulties and adverse situations, are they able to take the stress? Are they able to break through the heavy surroundings and bounce back? Can they actively and pragmatically deal with the matters in an optimistic manner or will they just hide themselves under the sand?

     Mencius said, "In times of abundant harvest, the people tend to be complacent and lazy.  In times of calamity, people tend to be felonious and ran amuck.  People are not evil by nature.  It is the external factors that spoil them."  So our people are not born evil. It is the external factors that cause them to behave the way they do.  In history, there are many examples.

     In the 17th century, the Manchurians conquered China. With three million people, they were able to rule over 80 million Han people.  At that time, the Manchurians were all mighty warriors. They could ride the horses and  shoot the arrows with ease.  But after the good life in China, they forgot how to ride the horse or to shoot their arrows. They could only keep the birds, fight the crickets and smoke opium.  Why?  I believe this was because the Qing government was over protecting the Manchurians. Let me give you two examples.

     First, the Manchurian government insisted that the Manchurian native land, that is, the north-eastern part of China, was the exclusive land of the Manchurians and the Han people were not allowed to venture over there.

     Secondly, every male baby born to the Manchurians was entitled to draw a military salary so that he could concentrate on receiving military training.  But it worked the other way! The Manchurians had got it too easy.  They did not have to work for their living.  Although they were drawing the military salary, they did not train themselves to be warriors. They privately employed the Han people to do the farming for them. As a result, they headed for destruction.

     Our children were all over-protected by our parents.  Let me tell you another story that I heard.  A young child at the kindergarten had knocked over a glass of water. The water started dripping, and his pants were soaked. He made no attempt to stop the water from dripping.  The teacher asked him why.  He said, "Teacher, I am waiting for you to clean it up."  He had a maid at home, so he did not know what to do.  There was always someone to do the work for him.  Our young people have grown up in this age where they do not lift a finger to do any household chores or anything for the family.  Some of them even have their maids to carry their bags for them when they go to school.  At home, a lot of parents do not want their children to do household chores.  They only want their children to  concentrate on their studies. For the children to study and do well in school, the father and the mother or the maid will be doing all the work for them.  Nowadays, the schools do not practise the system of rostering the students to clean the blackboard or to sweep the floor. When the young boys go for national service, they do not have to do the cooking because cooking is being outsourced. When they go home, the mother or the maid will wash the army uniform for them. 

     One very senior TV artiste, Mr Huang Wenyong once said, "Our young people nowadays do not even know how to act the part of cutting an apple."  The reason is very simple - because he has never cut an apple himself before.

    Sir, if our generation goes on like that, we are in trouble.  In the past three days, many Members have been telling us how to perfect our social safety  net and they have made some very good suggestions.  In fact, we want to narrow the income gap among our people. We also have to face this problem of an ageing population.  There are in fact some less fortunate or the weaker people in society that need our concern.  It is good for MPs to be concerned with people and it is also good and proper that we ask the Government to do more.  A Straits Times reporter by the name of Peh Shing Huei remarked that  good is not good enough.  It must be perfect.  So just being good is not enough.

     Sir, I hope I am not being misunderstood. Although I do not agree with a welfare state scheme, I am fully supportive in looking after the weaker people in our society.  But I must remind everybody:  while we are strengthening our social safety net, we must have reasonable and careful planning so that it will not make our people over-dependent on the Government.  In fact, we should encourage our people, particularly our younger people, to be both soft and hard at the same time. They must be able to resist the temptation of falling into their comfort zones. They have to be able to equip themselves so that they can adapt to the changing environment.  At the same time, they must also have a compassionate heart for others, so that they would look after those who need help in our society.  In order to attain this objective, if it is just the hardware and software, it is not enough.  We have always said that we should not give them the fish but rather, we should  teach  them how to fish.  I think teaching them to fish is only a technical instruction.  We must ensure that our people will be able to fish either in calm waters or in choppy waters. It is said that if you endure the sufferings, you will become the man of men.  So, we must train our younger generation so that they know how to  endure sufferings, just like Zhao Min had trained up her son in the story I told earlier. 

     I stress that teaching should start from home.  We  must adjust the mentality of our children so that they will be prepared to take some sufferings.  At home, we must make our children more self-reliant and look after themselves.

    Just now, Mr Yeo has said that we have now 600,000 foreign maids.  Foreign maids are here to reduce the burden of our working parents and to look after the young babies.  Apart from that, we must encourage our people not to be over dependent on foreign maids.  So we do not want to call them a remote MM, not Minister Mentor, but mother and maid.  We know that, nowadays, there are a lot of children with a remote control in their hand to control and change the TV channel.  At the same time, they will shout to their mother or their maid to do this and do that for them.  So this is another way of remote controlling.  If our children are like that, we must realise that we have trained them to be over dependent on us.

     In school, I am very pleased that we are already moving away from the concentration on examination results.  We should enhance our emphasis on moral education and physical education.  We want to train and cultivate our children to be physically and mentally fit, and we have to start from our everyday living.  We make every student do some work in the school, like cleaning the floor, cleaning the blackboard.  This is a very good opportunity to train our students.  Perhaps the school should consider reintroducing the duty officer scheme for our students.  I hope that, apart from military training, we could also have other opportunities to train our young people so that they may be more disciplined and  more self-reliant.

    We know that it is very difficult to build up our spiritual health.  But we must try our best to make our people participate and to have the endurance to live through all difficulties.

     Finally, let me end with another story.  This was a story in Lianhe Zaobao last Friday by an author by the name of Tan Tee Seng.  His story was entitled, "The Broken Arm".  This boy had just completed the PSLE and was playing on the playground when he fell down and dislocated his elbow.  But this child carried on playing as though nothing had happened.  After that, he even went to the video arcade to play games.  It was until at one point that his arm was giving him so much pain that he called his father and said, "I think my arm is broken."  This boy went home with his broken arm, and his father took him to hospital.  At that time, his elder sister had just come home.  When she saw that, she took off her tie and made a sling for her brother.  So this boy was enduring the pain.  He did not shed tears and the sister was very calm and she knew what to do.  Because 10 years ago, this little sister had also broken her arm in school, and she was healed only after having gone through a lot of sufferings, and she had learnt from her experience.  She knew how to relieve the pain of her brother and knew what to do in such a situation.
 

     When I was preparing this script and thinking of what I was going to speak about, I was rather heavy hearted, because I was quite worried about our future.  However, after reading this article, I became more enlightened and I began to see the light.  If we could all behave like these two children, we have a very bright future.  We would like to be this boy.   Although he had suffered, he did not shed tears, and we would like to learn from this little sister who borrowed from her experience and knew how to deal with difficulties when it was required.

     I forgot to tell you that the story I told earlier about Zhao Min had a title, which is known as "Gold hill or silver hill  is not a hill that you can depend on".  We have to be self-reliant.  I would like to encourage our people to work together.  Together, let us build  a more confident Singapore.

2.24 pm

     Mr Ong Ah Heng (Nee Soon Central) (In Mandarin): [For vernacular speech, please refer to Appendix A *.]  Mr Speaker, Sir, thank you for this opportunity to participate in the debate.

     As Members of Parliament, we have the duty to do our best to take practical action to look after the less fortunate and weaker residents in our constituencies. This is something we need to do.

     When debating on how to build a better social safety net for Singaporeans, I hope that all of us would know the major principle in the human social development history that remains unchanged throughout the ages.

     The path Singapore has taken all along is like what is described in an old Chinese saying, 天行健,君子当自强不息 (tian xing jian, junzi dang zi qiang bu xi) meaning, 'In this ever changing world, one must make unremitting efforts to improve oneself'. 天行健 (tian xing jian ) tells us that the world is changing everyday.  As we face the trend of globalisation today, the employability of our people and the income they are earning are subject to greater and greater pressure arising from competition.  The development trend of this fact will not change just because of our personal preferences.  Many people are at a loss, not knowing which way to go.  As mentioned by the Secretary-General of NTUC, Mr Lim Boon Heng, when faced with global competition, wages of the low-skilled workers have not risen over the years, and many, in fact, suffered lower income when they are converted to contract workers.  I would like to thank Mr Low Thia Khiang for reminding us.
 
     Many Singaporeans are concerned that the foreign workers are snatching away their rice bowls and cause their wages to be lowered.  However, even without the low-skilled foreign workers, wages of our local workers might not have gone up, because in order to save cost, the foreign investors would relocate their factories to the other countries in this region.  In the end, our local workers will have to face the competition from the workforce of the other countries.

      Mr Low Thia Khiang said that the feedback from the people was that the economy was good for the Government but no good for the people. As a grassroots MP, I can understand that such a statement could be very appealing to the residents.  However, Mr Low did not propose any specific solution to this House on how to make the economy good for the Government and good for the people as well.

      Over the years, the Government and the NTUC have been encouraging the workers to go for training to enhance their employability.  We have successfully created many higher income jobs. NTUC and the Government will continue to do so.  I hope that Mr Low Thia Khiang would also encourage the lower skilled workers in his constituency to go for training in order to enhance their employability and earn better income.

      In my opinion, the present Government has already built up many safety nets for the less fortunate and weaker people in Singapore. From utilities bills and service and conservancy charges rebates, economic recession financial grants, unemployment and training subsidies, job placements, to Edusave bursaries and ComCare fund, etc, these are the many helping hands extended to the people of Singapore when they need them most.

     From what I know, the Government has some 36 different assistance schemes for the less fortunate and weaker people. However, we have neglected one thing, ie, among the weaker people in our society, many are old folks and less educated people.  They are totally ignorant of such schemes.  I fully agree with Ms Ellen Lee that the Government should plan and coordinate the various assistance schemes of the various Government departments, and review the application procedure and regulations in order to minimise red tape and bureaucracy.

     I would also suggest that MCYS and MOM engage the services of public relations professionals to design some systematic, simple and user-friendly ways to advise the residents through the media and various networks of the grassroots organisations on how and where to seek assistance.  We should make it easier for our residents to know how and where to get assistance.  We should also make full use of the limited resources we have to do more for our people.  If MCYS does not understand this, they should learn from Mr Tan Kin Lian, the CEO of NTUC Income.  Mr Tan Kin Lian often appears on advertisements to encourage people to buy insurance policies from NTUC Income.  I think MCYS should try and engage some professionals to help them advertise and publicise their financial assistance schemes.

      The strength of the State is limited, but the strength of the people is unlimited.  We need to rally the strengths of the various civic organisations, particularly the community and non-profit organisations, to help more people. When we need more welfare, we must also consider how we are going to sustain such schemes. We may not be able to turn a weak economy around quickly on each and every occasion. Should it come a time when, like some of the economies of the developed countries, Singapore also needs 5 to 10 years to recover from an economic downturn, we will then face the cruel reality of not being able to realise the enormous welfare schemes.

     Mr Speaker, Sir, each MP has only one pair of eyes and one pair of ears.  He cannot detect all the problems and sufferings of the residents from every nook and corner of his constituency.  But we have the assistance of hundreds of grassroots leaders with a few hundred pairs of eyes and a few hundred pairs of ears, to ensure that our residents who are in need of help will not be desperate, helpless and not knowing which way to go.  Only then can we be focused on our efforts to help our people who are in need to ensure that no Singaporean should be left behind as our country continues to develop.

      Mr Speaker, Sir, over the past two days, I have been thinking over what the Member for Hougang, Mr Low Thia Khiang, has said at this debate to remind the people.  He said, and I quote, "Singapore is now in the hands of our third Prime Minister.  I do not know who will be the next Prime Minister.  However, if the people still hold this mentality of  'with you in charge, I am rest assured' of the Mao Zedong era, there may come a day when the government becomes corrupt and they will rise up to protest and attack the government.  Then, I do not know whether Singapore would be able to withstand such an impact."

      Since our independence 40 years ago, the People's Action Party has been the only government of choice of the people of Singapore.  Minister Mentor passed the responsibility of governing the nation to the Senior Minister, and Senior Minister Goh passed the baton to Prime Minister Lee. At the last general election, 66% of the voters once again affirmed the mandate for the People's Action Party Government.  As such, the notion of  'with you in charge, we are assured' should be changed to "with the PAP Government in charge, we are assured."  The fact is before us. We have done that for the past 41 years.  Mr Low said that he did not know who was going to be the next Prime Minister of Singapore.  I think he does not need to worry about that.  This is something in the future.  At the right time, the right talent will surface.  So long as the people continue to elect the PAP to form the Government, the PAP will surely be able to find an outstanding Prime Minister for Singapore.

      As for his comment that if it comes a day when the Government is corrupt, the people who are living in "deep water and scorching fire" will rise up to protest and attack the Government, I think we should thank Mr Low for the reminder.  The PAP should be vigilant at all times to maintain a just and honest Government at all times.  Then the PAP will never be corrupt.  But this will not be good for Mr Low because then he will never have a chance to take over the Government.

      I support the motion.

*  Cols.  735-738.

2.31 pm

     Miss Penny Low (Pasir Ris-Punggol): Mr Speaker, Sir, I rise in support of the Motion of Thanks to the President's Address.

Vision 2020: The need for a national paradigm shift

     After listening to the many speeches in this House and the media reviews, I also consulted many residents and voices from the ground, and I asked myself, what do Singaporeans really want?  I do not purport to have the answer, but the chorus of voices inside and outside this House is clear:  status quo, or just a little bit more of improvements are simply not good enough. We need big, bold and friendly changes, but changes in what?  It is relatively easy to spot pimples and acnes in policies, it is not difficult to improve policy features and add facelifts with plastic surgery to make a policy look or even feel good, but would it really improve Singaporeans' quality of life or our economic competitiveness in the long term? I doubt so.  As in the case where plastic surgeons tried to take the best features of good-looking people and put them together, it often ends up in a hardly beautiful or even ugly face. I think the recent debates are louder than before, and they are healthy. We are in the midst of an evolution, maybe a revolution, to morph into a new Singapore. If done uncohesively, selfishly, then my sense is that this evolution can turn ugly.  But if done cohesively and through some PPP (people, private and public) partnerships, I think we have a higher chance of getting at least what Singaporeans want.  I think that would make for a happier Singapore.  From this angle, I think we need three paradigm shifts: first paradigm shift - Think Big and Bold; second paradigm shift - Think Action; third paradigm shift - Think Compassion.

     Let me start with the first paradigm shift - Think Big and Bold!

Paradigm Shift 1: Think Big and Bold!

     Every year, we grapple with the dilemma - how can a small nation state of three to four million achieve a lot more than what we already have? Surely the law of large numbers limits our talent pool and it will be hard to compete with the billions in China, India and the USA. I have believed this for a while, but a recent trip to Iceland changed my mind.

     Like Singapore, Iceland is only an island. Unlike Singapore, it is geographically challenged, being vast and far from any continent. It has a challenging environmental climate, which is exacerbated by many volcanoes and long winters. Is it any wonder therefore that they have only a population of about 300,000 people? Yet, Iceland can boast of a Nobel Prize laureate in Halldor Laxness, an internationally-renowned artiste in Bjork, and a literacy rate of close to 100%. In fact, the Icelanders speak about three languages on average, literature is a passion of the people whose per capita publication of books and magazines is the highest in the world. In fact, in the year 2000, with a population of around 280,000, Icelanders enjoyed three daily newspapers and 101 other newspapers and periodicals.

     Iceland also has one of the highest Internet connections in the world, enjoys the fifth highest GDP per capita and is also ranked second on the 2005 United Nations Human Development Index. It has also, in the last 20 years, transformed itself from a coal fuel using nation to a non-coal fuel using country and is now a pioneer and a leader in thermal and hydrogen energy usage.

     How did they do it, and with a population one-tenth the size of Singapore's? It proves to the world that size is not all that matters. Out of curiosity, I emailed my Icelandic friend, Thor Bjolgorsson, who incidentally is a self-made billionaire ranked 350th richest in the world, and he made that billion before age 40.  I asked him: "How does a country with a challenging landscape win, survive and achieve all these?" And his answer was this:

     "There is just some raw and organic originality to it that always tends to amaze me. The harsh nature with its unpredictable and often violent elements has undoubtedly shaped this nation to a very persistent level. The limited resources have definitely curbed it to constantly thinking outside the box.  The isolation and the extreme shifts in supply of daylight has taken the mental capacity to a brutal sanity test. All of this seems to have hardwired a rather charged survival instinct into the DNA of the limited gene pool that the Icelanders derive from.

     Come to think of it, it's like a social study: Isolate a group of people on a barren rock in the North Atlantic for 1,100 years, strip them of resources, heat and daylight and see what comes out of it.

     I hope you forgive me but I have tried to keep all existential acrobatics to myself as I am a relatively young man and far from the first page of my autobiography. I just try to stay close to my values, keep things simple and let my work and actions speak for themselves."

     I figure from what he said that the key to Iceland's astonishing success is the ability to think Big, to think out-of-the-box, to think survival by putting one's own foot forward first; in other words, self-reliance. Limiting mindsets will only limit our own potential and action. Singapore has been a miracle too. Our forefathers have thought big and bold enough to turn this marshland into an economic jewel with sparkling skyscrapers.  This generation of Singaporeans has more assets, knowledge and education than any past generation had.  We can do a lot more. A lot, a lot more - the sky is the limit.  I suggest that we Singaporeans do not shortchange ourselves.  Incidentally, I read in the Straits Times today that the daily flights for space tourism will be a reality in 2008 and that the Singapore Tourism Board is attempting to build the 'world's first integrated commercial spaceport' which could generate $3.6 billion of economic benefits and create 5,000 jobs over 10 years. So, perhaps, the sky is not the limit afterall. But to ensure that we, too, hardwire this sense of hope, dreams and possibility into our Singaporean DNA, it will augur well for us to herald local stories and inspirations, and we need to have a big, bold and ambitious national aspiration for all Singaporeans to look towards.

     I have said this for a while now in this House, that to do more, we need a simple but effective image of a Singapore dream which can be shared by most, if not all Singaporeans. We need thought-leaders and dream-makers. But this dream must not be couched only in statistics.  Imagine what would happen if Martin Luther King, the great revolutionary leader, was to say that, "I have  a dream, and the dream is a GDP of $15,000 and 10,000 jobs."  I think the effect would have been quite different, and I doubt if it will inspire the people.  I think the dream has to be in vivid pictures, which belongs to the people, and people can feel that it is something that they want to move towards.

Paradigm Shift 2: Think Action!

Building a self-reliant society

     The question is:   how do we achieve this? What is the Singapore Dream? Who is responsible for it? Let me repeat: Who is responsible for it?

     In the past, nation-building was inextricably linked to the individual's quest for livelihood. Today, this connection is obscured by the fact that our effective Government has successfully provided the people with relative and sustained comfort and security in the past 40-odd years. But the inevitable side-effect of prolonged peace and prosperity is the gradual but certain erosion of the fighting spirit in Singaporeans. Fortunately or unfortunately, the Government has done a great job - minding everything from education to jobs, to how many children we should have. In short, the narrow path of success is deemed to be defined by the Government and followed by the people and it was a thought that we all embrace directly or indirectly. But my question is: who cultivated this? The Government or the people? Whose responsibility is it?

     President Nathan mentioned the demographic challenge where our ageing population will double in 15 years' time. This will pose a very real challenge as the burden on the future generation is poised to increase dramatically. If left unchecked, the ensuing tax burden may become unbearable for society and render Singapore unattractive to investors. Again, whose responsibility is it to correct the situation?

     In fact, every time there is a challenge, we are quick to point our fingers at "cheng hu" or Government agencies, instead of first asking ourselves what we could do about it to help. Have we not noticed that every time we point our finger at someone, at least three fingers are pointing back at ourselves?  Is it not a good reminder to us where the answers could be found?

     Let me illustrate the irony in our society today by sharing with you a story about four people.  Their names: Everybody, Somebody, Anybody and Nobody. There was an important and simple job to be done and Everybody was sure that Somebody would do it. Anybody could have done it but Nobody did it. Somebody got angry with that, because it was Everybody's job. Everybody thought Anybody could do it but Nobody realised that Everybody wouldn't do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done quite easily.

     Surely we do not want to see this happening in Singapore. For the Government, it is time to engage our people more seriously and cohesively, yet giving space for a thousand flowers to bloom. Support the bottom-up efforts wholeheartedly and devote resources for both economic and social experiments. Our nation is 41 years old, we can trust our people. Let us err on the side of generosity because innovation, which is touted as the key value-add to our economy, needs a new social compact of trust, space and support. 

     For our people, let us not abuse the fruits of our labour and our new social compact. We are all stakeholders and we can do something to move from being net-takers to becoming net contributors. A sociologist, Margaret Mead, once said: "Never doubt that a small group of thoughtful committed citizens can change the world. Indeed, it is the only thing that ever has." 

Empowerment through social entrepreneurship

     Pioneers like Florence Nightingale and recent Nobel Prize winner, Muhammed Yunus, with creativity, determination and an indomitable will to see social change, have all made a difference in the lives of others. These are individuals we need and we would like to see more of such Singaporeans. In times of crises, Singaporeans do rise to the occasion, such as combating SARS and contributing to the relief effort towards the 2004 Boxing Day Tsunami disaster. However, we must move beyond the mentality of crises as a catalyst and

look to causes and vision as motivation. We have benefited from the past sacrifices of others.  Singaporeans need to rise up and live for a social cause that takes them beyond themselves.

     I think we do have many local examples: RSVP, which stands for Retire and Senior Volunteer Programme Singapore, is a non-profit enterprise that was started by a group of seniors. They were premised on the great contribution that senior citizens can make to society and be actively engaged, even at a senior age. With a membership base of seniors with relatively good educational level, RSVP is intending to tap into this core competency and convert it into consultancy services for the VWOs and SMEs in general, and profits generated from these activities would then be passed on to RSVP for serving its social causes which include mentoring latchkey children, IT courses for senior citizens, healthcare for the elders, outreach for the mentally disadvantaged, and so on and so forth. They are making an effort towards building a better Singapore.

     There is another group that has been around for some time. I think we need to show up more such examples, one of which is the Bizlink group. The Bizlink mission, unchanged since the day it was formed, is to provide jobs to people with disabilities, not just physical disabilities but also the hearing and visually-impaired, and so on.  In terms of the enterprises, the employment of people with disabilities (PWDs) is to be found in sheltered workshops and they undertake jobs like printing of name cards for the recent IMF/World Bank event, folding of business cards, birthday cards for NTUC Income, and even some outsourced jobs from Singapore Airlines.  They have been doing pretty good work and doing their part for Singapore.

     There is also an individual whom I think we should really learn from.  He is only 16 years old and his name is Jeremy Lim, and I would encourage all to read his articles in Today. Jeremy was born with a brittle bone condition. I do not think it is possible for him to walk and he needs to be carried about by his parents and of course helpers, but he has never given up.  I saw a documentary where Jeremy's parents talked about not giving up on their child but providing the best education that they can and the best encouragement and environment for Jeremy to grow up in. And today, I understand that Jeremy had been appointed as a MindChamps Youth Fellow in recognition of his champion mindset. In this article itself, Jeremy spoke about the need to step out of the home and not make the home a prison.

     What does he mean?  He was speaking to his fellow people who were born with some unfortunate conditions. And his point was that our society may not accept them and may look at them with a certain social stigma.  The fact is that they, too, disabled or not, can stand up on their own two feet, can step out of their home and whenever they are being stared at or talked about in public, do not shy away but who can also smile, be friendly and open themselves up to the public.  In other words, he is asking for a paradigm shift among the disabled community.  I think this is the sort of people or individuals we need to highlight more whenever we are looking at enabling all segments of the population, not just the very able but also the disabled. Of course, there are many other examples of people, individually or as a group, trying to make social changes.

     One of the newest forms is, of course, via social entrepreneurship.  Social entrepreneurship is really identifying social gaps and plugging them, using market models.  The idea is, of course, that it will be something good for the long-term sustenance of Singapore and not just Singapore, the world even, and that if we do it right, there are a lot of foundation donors and strategic philanthropists who would be eager to invest in such businesses. We are seeing a rise in social entrepreneurship in Singapore. And I think I will talk more about it on another occasion, probably during the Budget debate itself, as I would like to focus on the third paradigm shift.

Paradigm Shift 3: Think Compassion

     The third paradigm shift is to think compassion.  In the past, we have envisioned Singapore to be the Switzerland of the East. Switzerland is a relatively small country but double the population of Singapore. For much of the 20th century, Switzerland was also the wealthiest country in Europe by a considerable margin.

     How much have we achieved since? That was a target, I remember, when I was growing up.At present, I think we are getting there economically. Swissinfo.org states that Singapore, adopting the Swiss model, could possibly even become the financial centre of the world in 15 years' time, replacing Switzerland.  The idea of a global education hub, which once seems remote, is today becoming a reality in Singapore. We have also positioned ourselves to be the financial hub, biomedical hub, ICT hub, logistics hub, and so on and so forth. I think we can get there, if we are determined enough.

     But what about socially? Are we anywhere near the civic consciousness of the Swiss?  Back in 1976, Minister Mentor Lee started the courtesy campaign, in 1994, SM Goh wanted a kinder and gentler society, and, in 2004, PM Lee spoke about a more open and inclusive society where no Singaporeans are left behind. However, after some 40 years of nation-building, we seem to have a lot more to catch up in achieving the civic consciousness of the Swiss. While we no longer spit at will or litter due to the 'fine' policies in place, we still allow our laundry to drip dry while wetting our neighbours'. We still litter and even pee in our HDB lifts (but only in those without CCTVs), and we also allow our pets to poo as they please, adding unwanted fertilisers to the common greens, instead of picking up after them, to help maintain a clean and green estate for all to enjoy. In fact, we expect that residents exercise their emergency braking or skipping skills when we meet with such ugly litter, and of course, the town councils have to keep cleaning these up because we have paid for them. Have we, too, given a caring thought to the poor and humbly-waged town council cleaners, to make their jobs less 'stinky' (literally) and less challenging?

     As a population, we are much more educated than before, richer in financial assets and much more exposed and connected to the rest of the world. If so, can we not do better, in terms of civic consciousness?  Can we not do better, in terms of having compassion for our society?  I think we need to move towards a more compassionate and graceful society.  Why are we still harbouring the scarcity mindset when interacting amongst fellow Singaporeans?

     I think the backbone of building a compassionate society lies in the way that we have planned our city, as well as the way we would be moving forward in the knowledge economy.  Let me touch on the latter, which is ICT infrastructure planning, as a backbone of our economy.  Living in the ICT era means that we have to embrace new technology to keep our economy on the cutting edge. Hence, in MICA's Intelligent Nation 2015 (iN2015), the Infocomm Development Authority (IDA) will "implement a ten-year Intelligent Nation plan which will strengthen Singapore's competitiveness by harnessing IT for key economic sectors."  Through the next generation of infocomm infrastructure, there will be new opportunities in infocomm, media, arts and design.  IT will drive our economic growth and provide good jobs for our citizens.  It will also, like it or not, define the way that we live our life.  So it is my hope that while we are developing our ICT for economic competitiveness, we would also put an equal importance on ICT to build an inclusive and self-reliant society, develop an infrastructure and applications that promote social mobility - not just those on the traditional wrong side of the digital divide, ie, the needy and the less-educated and aged, but also those who are physically challenged.  Technology is neutral and should be seen as enablers. If we are able to build technologies that embrace the society, then I think we would also be able to build the spirit of society and the soul of the society.  Today, there are many technologies developed by both private companies and social entrepreneurs to enable the use of technology to enable challenged people to become self-sufficient, and, in fact, be net contributors. A good example is Prof. Stephen Hawking.  Without technology, and, of course, a steel will, what would he be today?  Would he be seen as an asset or a liability to his family, his community and the world? While not all can be a Stephen Hawking, more can be levelled up with the help of an accessible, affordable ICT infrastructure that is friendly and inclusive.

     In fact, what about also building a community interactive web platform that encourages top leaders, subject experts as well as laymen to access and draw the necessary context and understanding around subject matters, allow seamless peer-to-peer collaboration and communication?  In fact, use it to raise awareness of important issues and rally communities around them and facilitate interactions. Perhaps, go one step further, empower them as well into constructive action that is for the common good of Singapore.

    As Singapore positions itself as a competitive economy, we increasingly need to remind ourselves of the need to balance and to temper our fiscal pursuits with compassion.

     Once again, what will Singapore's future be like?  Obviously, it will have to continue to be a land of plenty, in other words, plenty of jobs and opportunities for one to be the best that one can be, where each Singaporean is successful in whichever path or definition of success they use. More than that, it has to have happy people who feel a sense of belonging to a community that sincerely cares for and gives hope to each other.  In short, it has to be a happy, compassionate and self-reliant capitalist society.  Would that not be the best way to bring back overseas Singaporeans, attract and retain talents, and even encourage births, thereby solving our population crisis? 

     In conclusion, if the dreams are the substance of life's great achievements, then let us have a dream for Singaporeans and Singapore.  In the words of Martin Luther King, "I do not think of political power as an end.  Neither do I think of economic power as an end.  They are ingredients in the objective that we seek in life.  And I think that end or that objective is a truly brotherly, and I add, (and sisterly) society, the creation of a beloved community".

    So, again, whose responsibility is it?  There is a Chinese idiom that says, guo jia xing wang, pi fu you ze.  What it means is that the rise and fall of a nation is really the responsibility of all citizens.  So, the creation of this beloved community, I think, is the responsibility of every Singaporean.

     With that three paradigm shifts, Sir, I support the motion.

2.58 pm

     Mr Hri Kumar (Bishan-Toa Payoh): Mr Speaker, Sir, I rise in support of the motion to thank the President.

     After listening to the President's stark provoking address, one issue resonated with me. It is about getting our youths to take an interest and have a stake in our community and in Singapore.  The President gave prominence in his speech to the P65 generation, of which I am a member.  He highlighted that the P65 generation is better educated and more globally exposed than their parents and completely at home in the Internet age.  That is true.  But what does this mean for Singapore?  As the President highlighted at the very start of his speech, it was 41 years ago that Singapore was thrust into independence and an uncertain future.  Those were tumultuous and dangerous times, circumstances which my generation will never fully comprehend and will never hopefully have to live through themselves.

The first generation of leaders showed courage and fortitude in building Singapore to what it is today.  They made personal sacrifices, risked their political futures by implementing unpopular policies in order to benefit Singapore in the long term.  They opened up the markets, as they realised that Singapore could not survive by adopting isolationist or protective policies.  They were not afraid to court foreign investments and foreign talent to supplement the knowledge and skills we needed to bring our industries to the next level.  They stood up to countries bigger and more powerful than us to send a clear message that we would not be pushed around. 

     So, today, we are blessed with good infrastructure, world-class schools, a healthcare system that works, low unemployment, respect from the international community and, most importantly, peace and prosperity.  This is no mean feat, considering that some of our bigger, more resource-rich neighbours are still dealing with conflicts and economic woes.  The older generation has handed Singapore over to the next generation and they can hold their heads high for what they have achieved.  That is a legacy which they have left us.  The next generation of leaders has continued these successes and has taken Singapore to the next level.  We are no longer talking about catching up with first-world countries but of surpassing them. 

     In time, the reins will be handed over to the P65 generation and, one day, my generation too will hand over to those born after us.  As I thought about this maiden speech, I also found myself thinking about what the P65 generation may say in our final speeches.  What legacy will we leave behind?  Will we also be able to move on with our heads held up high?  We will not enjoy the same success unless our generation and the generations which follow feel connected to Singapore and believe that they have a stake in the future.  If we read the forum pages in the newspapers or the Internet, we will see that many have expressed doubts over Singapore's future.  They are unsure whether Singapore will adapt to globalisation and survive the challenges we will face.  They wonder whether our social fabric will be ripped to shreds in the event we suffer big shocks, like a terrorist attack or a sustained economic downturn.  Their views are important.  We may not agree with them, but, at least, they feel enough for Singapore to articulate their concerns.  The common thread running through most of these comments is that they want to see Singapore do better.  But there is a larger group out there who have remained silent.  I worry about them.  What are they thinking about? 

     This House has been referred to the recent Straits Times survey where more than half our teens said that they will consider emigrating.  Less than one in 20 of Singapore youths choose the country's progress as what was most important to them, preferring instead the well-being of their families or their own personal development.  Is this the legacy my and future generations will leave behind, generations which place more emphasis on the individual and less on the community, where the number of marriages is falling but divorces are rising?  Where parents have fewer children and delegate the task of raising them to foreign domestic workers?  Where children abandon their parents or place them in homes because they find them inconvenient?  Generations which oppose the hiring of foreign talent because they fear for their own jobs but not the viability of their companies or their country?  Generations which will cower and apologise when other countries decide that we have offended them?  Generations which will seek greener pastures elsewhere if Singapore takes a turn for the worse?  My greatest fear is not that the P65 and succeeding generations will become anti-Singapore.  I am confident they will not. 

     My fear is that they will become indifferent to Singapore.  Indifference is not like a common cold which passes with time, even without treatment.  It is a cancer which will slowly eat away at the nation's soul.  We ignore it at our peril.  On 12th April 1999, Holocaust survivor and Nobel Laureate, Elie Wiesel, spoke at the White House as part of the Millennium Lecture Series.  He had this to say about indifference and I quote:

     "Indifference can be tempting - more than that, seductive.  It is so much easier to look away from victims.  It is so much easier to avoid such rude interruptions to our work, our dreams, our hopes.  It is, after all, awkward, troublesome, to be involved in another person's pain and despair.  Yet, for the person who is indifferent, his or her neighbour is of no consequence.  And, therefore, their lives are meaningless. Their hidden or even visible anguish is of no interest.  Indifference reduces the other to an abstraction."

     Indifference can exist and is destructive at all levels.  Mr Lim Biow Chuan last week spoke of the inconsiderate behaviour of some Singaporeans and asked why they should refuse to do something as simple as give way in the MRT.  These are not evil or bad people.  They are simply indifferent to their fellow commuters.  This House can debate what is best for Singapore and implement the most far-sighted of policies.  But it will not matter if younger generations are indifferent to the less fortunate in our society, the challenges to our economy and the future of Singapore.  Many older residents I have spoken to have expressed concern about the younger generation and their commitment to Singapore. 

     But can we blame the youths?  They are a product of our own system.  For many years, our main focus has been to build Singapore as an attractive place to work and to do business.  One word best describes us: practical.  We are a nation geared for business and focused on the bottom-line.  Our schools reflected this mindset.  The emphasis has always been on teaching subjects of economic value and of producing tangible results.  Our curriculum focused on the core subjects - languages, Mathematics and Science.  Schools were more like job-training centres, preparing our children for the commercial world.  Principals and teachers were pushed to improve academic results through school rankings.  Our achievements were measured by the grades we received, and our value and self-worth by the money we earned.  I remember, in fact, when I was in school, my teachers, under pressure to complete the curriculum or give remedial lessons, would often encourage us to skip PE lessons, to spend more time revising our lessons with them instead.  Everyone simply assumed PE was unimportant and expendable because it was not examinable. 

     But there is a price to pay for inculcating such a practical mentality.  The world is now different.  Singaporeans are learning skills to make them global citizens.  If Singaporeans believe they will have a better life in another country, the practical response would be to move.  Singaporeans need more than practical reasons to build their lives and raise their families here.  The question, therefore, is how do we make Singaporeans feel that they have a stake in our country? 

     Let us start with the basic premise.  We cannot feel truly connected to something unless we understand it.  The great religions of this world recognise this.  Although religion is about making a connection with God, it is still necessary to study them in order to truly understand them.  If we have questions which are unanswered, doubts will form and the connection will be lost.  I believe that the same goes for making connections with one's country.  Singapore is not a collection of Government institutions, businesses, laws and campaigns.  Singapore, Sir, is a philosophy, a state of mind.  It will not be fully appreciated unless we understand our past, what we are today and where we stand in relation to our neighbours and the world.  The best place to teach these important lessons is the classroom.  Schools must play an active role in developing not just the mind but the soul as well.  I accept we cannot teach values like we would Mathematics and Science, but we can create an environment where they can be understood and absorbed more easily. 

     Parents also have an important role, but let us face the reality.  In my parents' generation, my father was the sole breadwinner and my mother ruled the house and the children.  Nowadays, it is different.  Both parents work and have less time for the children.  The schools should therefore take a more active role.  And this is possible because children spend the bulk of their time in school.  They respect and will listen to their principals and teachers, and we should not miss out on this opportunity. 

     Besides teaching the traditional subjects, we should spend more time teaching our youths about Singapore.  There are many things about Singapore we should know.  For example, many people my age did not know that Mr S Rajaratnam wrote the Pledge until after he had passed away.  That is not surprising, because we never talked about these things in school.  There must be a different approach to teaching such matters.  I was therefore heartened when I heard Mr Lui Tuck Yew, Minister of State for Education, speak of involving parents and the community in teaching values.  I believe this is critical.

     Mr Speaker, Sir, we are in a unique position.  The generation which built Singapore from scratch and lived through those tumultuous times are still with us and can impart real-life stories and lessons of what happened.  Last week, Mr Sam Tan spoke passionately about how he witnessed a racial attack and suffered from inhaling teargas.  But I would venture that Mr Sam Tan is a better person and more rooted to Singapore, having lived through those dangerous times.  Although he rightly says that he does not want his children to live through what he did, I hope he constantly reminds them of his experiences so that they will appreciate what life was like for their father and his generation.  But I fear many of these Singapore stories will become irretrievably lost as generations pass on. 

     I had a few dialogues with students some weeks back.  During one session, I asked some secondary school students if they knew how their parents met or how their father proposed to their mother.  Of the group of about 30, only three raised their hands.  I think that is sad.  Parents and children are not having conversations about personal matters.  Maybe such details are embarrassing and it is not in our Asian make-up to share such personal matters.  But these are vital ingredients in building relationships, developing connections with our families and, ultimately, with Singapore. 

     A lack of connection will lead to another problem, ie, the caring for parents.  Mr Mah Bow Tan spoke last week about the changes we can expect to the rental housing policy.  But the part I remembered most about his speech was his hope that children will not use rental flats to dump their aged parents.  It is an aspect of our MPs' duties that affects me most, ie, elderly Singaporeans telling me that their children are refusing to support them or do not want anything to do with them.  One of the reasons often given is that the elderly need to be constantly looked after, they are expensive to take care of, they take up space, they are temperamental.  Again, practical reasons.  I also find these reasons quite ironic, as children also need to be looked after.  They are also expensive to take care of.  Children also take up space and children are also temperamental.  But we do not see parents abandoning their children in numbers.  What happened to that connection, that unspoken obligation when parent and child grow older?  I believe the lack of personal interaction between them has much to do with this.

     Schools can play an important role in making these conversations happen, and I urge the Government to look into this.  On my part, I am collaborating with my old school to run a programme whereby students will research and permanently record the lives of their grandparents and parents, particularly during the events which shaped our country.  This will encourage them to talk to the older generation and, hopefully, that will be the start of many long and meaningful conversations.

     We must also continue to emphasise the most important pillar of our society and what makes us unique, ie, multiracialism.  Many older Singaporeans have spoken to me about what they perceive to be a lack of interaction between children of different races.  Many in the older generation grew up in kampungs where children of different races often played together.  It was not unusual to hear Chinese kids speaking Malay or Indian children speaking Chinese dialects.  Today, most of our youths live in HDB flats and barely know their neighbours.  Interaction must therefore take place in our schools.  We have to ensure that all our schools at every level are multi-racial.  We cannot truly understand a person of a different race or religion unless we spend time and share life experiences with him.  Making occasional trips to mosques, temples and churches during religious festivals will not be enough to deepen the younger generation's understanding of those who appear different from them. 

     Teaching Singapore should not stop at family or community issues.  It is important that the younger generations understand the philosophy behind our national institutions as well.  Let me give Members a few examples. 

     First, our social assistance philosophy.  Many have portrayed our system as a cold, uncaring one which does not help those in need.  That is a damaging impression, because we cannot realistically expect Singaporeans to feel for their country if they believe that the country will fail them when they are most in need.  Worse still, if the impression is wrong.  We do not have a welfare system like what they have in Europe and there are good reasons for this.  These have been canvassed before, so I will not repeat them.  But I would however like to relate one incident.

     Just after my university examinations, a couple of friends and I backpacked through Malaysia and Thailand for about a month.  We scrimped and saved, so Malaysia and Thailand were about all that we could afford.  In Thailand, we met a French girl about our age.  She was on a two- or three-month Asian tour.  We asked how long it took her to save for her trip.  She said she did not have to save at all.  The French government was paying for her holiday.  She had quit her job and was receiving unemployment benefits and was using the money for the trip.  As a young man, this was sweet music to my ears - money for nothing and trips for free!  I thought France sounded like a paradise, and this French girl left a seductive thought in my head!  Unfortunately, the seduction stopped there!  Now, 15 years on, the music has stopped and the next generation in France and other European countries have been left holding a welfare bomb which they are unsure how to defuse. 

     Our approach is self-reliance, family or community help and then Government assistance.  This philosophy is clearly less seductive than a system that apparently promises an unconditional needs-based permanent safety net.  That is why we need to explain it better.  At the same time, Singaporeans must also be informed that there are many schemes in place to help those in need so that they will feel that their country would not let them down when they are in need.  It is fair to say that many Singaporeans, even grassroots leaders, do not know what schemes currently exist, and I am pleased to hear that the Government intends to do more.  But equally important is the need to make these schemes known to everyone.  Unless this happens, it will only add weight to the perception and to further arguments in this House that the Government does not do enough for those in need.  So, let us talk about these matters in schools as well.

     Another example is our healthcare system.  We keep talking about the 3Ms.  But through my conversations with residents, it is clear that most do not

understand the difference between Medisave, MediShield and Medifund.  They do not know what treatments are subsidised and covered and what are not, and more importantly, cannot appreciate why distinctions are made.  Most just hope and pray that they or their loved ones do not get sick.  But everyone does, sooner or later.  When they end up with a large bill, they blame the Government for not providing affordable healthcare and ask why we cannot be like other countries where medical help is free. Worse, as Mr Inderjit Singh pointed out, they see death as a more viable option. 

     But if you speak to doctors in the private and public sectors, who have seen what goes on in the hospitals in other countries, they will tell you that we have one of the best healthcare systems in the world, ie, a system that works. They are perplexed as to why Singaporeans feel otherwise. The problem is a lack of education and exposure. 

     More importantly, if Singaporeans do not know the limits of our medical system, and there will be limits to any system, how can they make informed decisions about what they should do to better protect themselves and their loved ones?  In an ideal world, everyone should make the effort to educate themselves on such matters. The reality is that most will not and will only ask when it is too late.  And they will feel that the country has let them down when they needed help.

     Likewise, we should demystify other institutions like the CPF. On 10th October this year, the Straits Times published a story on the findings on a worldwide survey carried out by an international insurance group. The findings were revealing.  90% of Singaporeans surveyed think that they are saving enough by contributing to the CPF.  Almost half thought their CPF would give them a monthly income equal to their last drawn pay.  Mr Richard Shermon, Chief Executive of AXA Life Insurance, Singapore, said that the findings showed a worrying disconnect with reality.  He said:

      "There is a huge retirement funding gap in Singapore.  People dream of an early and comfortable retirement, but they are not financially prepared (for it)." 

      This is a serious situation.  Our CPF began primarily as a retirement fund, but over time, has morphed into an instrument to purchase our homes and make investments, sometimes without fully appreciating the risks or understanding the relevant regulations. So along the way, we tinker with the rules, increasing the Minimum Sum, and so on. But one size does not fit all.  A person suffering from, or at risk of, serious illnesses will need to set aside much more than just the Minimum Sum. 

     I believe there is a serious disconnect between perception and reality because Singaporeans simply do not appreciate, or appreciate fully, how the CPF works and what their real financial needs are.  This disconnect was driven home in the Straits Times' report just last Saturday, two days ago.  A survey done by the Life Insurance Association (LIA) found that more than a third of Singaporeans surveyed "had no clue about what constituted a sufficient level of cover."  The report also stated that Singaporeans do not buy policies which best fit their needs, and that one of the reasons for this is that agents sell them policies which earn the highest commissions. This only happens because of our ignorance in such matters. 

     It is vital that Singaporeans are taught at an early age the necessary tools to work out what they need for their own health, financial planning and retirement plans.  These are important matters which should be addressed before Singaporeans start their careers.  It will be too late when they are ready to retire. We need to help Singaporeans to help themselves.

    Sir, in concluding, I know what I am suggesting will put greaten burdens on our schools.  Mr Christopher de Souza had already spoken of the enormous pressures teachers are under.  I know this as three of my sisters are in the teaching profession, and family dinners will be distinctly uncomfortable if I advocate them having more work.  I therefore share Dr Fatimah Lateef's call for time to be taken from the traditional subjects.  Reduce the examinable workload.  I do not believe that this will in any way cause an erosion of our student's abilities or work ethic.

    In summary, let me say this. Students take their cue from their teachers, and teachers take their cue from the Government.  So long as subjects such as National Education, Moral Education, PE, no matter what you call it, are treated less seriously than the traditional examinable subjects, they will be taken less seriously.  So long as issues affecting Singaporeans, our community and our country are not dealt with in school, our youths will be indifferent to them.

     We should devote more time to teaching young Singaporeans about Singapore and to prepare them for life.  We should teach it as if our lives depend on it, because it does.

    With that, I support the motion.

3.20 pm

     Mr Wee Siew Kim (Ang Mo Kio): Mr Speaker, Sir, thank you for allowing me to join in the debate.

    Many hon. Members have spoken of the inclusive society.  Many have spoken of the widening income gap and many have spoken of the need for the Government to do more.  I would like to take a step back.  In one discussion, I do recall that the MOS of MCYS, Mdm Yu-Foo, with many years of parliamentary experience, elaborates on how the social safety net has evolved and strengthened and how quickly the Government has done more and more.

     Twenty years ago, there was no CDC and the flexibility of disbursing of assistance at the local level is a rather recent devolution.  None of the 36 social assistance programmes existed in coverage and form that we know of them today.  Minister Vivian on Friday mentioned that over the period of 2001-2005, the spending by MCYS on social programmes has grown by a staggering 300%.  Yes, in prosperity, we can afford more. All of us appreciate everything that the Government is doing to correct household income disparity.  But public assistance is not and cannot be unconditional. We subscribe to the guiding principles of self-reliance, of families being the first line of support and of the many-helping-hands as the delivery approach.  We appreciate that no one would be left behind and that aid would be provided in a manner that we do not breed dependency.  There is one area which I believe strongly should be relooked and emphasised. This is with regard to the dominant social unit, the family unit, that collectively describes the health of our social landscape. 

      I urge the Government to examine the responsibility between parents and child. With an ageing population and modern society pressures, our isolated nuclear family system is likely to become fragile and weaker.  If allowed to, globalisation can make lone rangers of the old folks.  I detect that through the course of this debate, several Members do support this to some extent.  I fully agree with Mayor Zainudin when he said that nothing defines our human compassion more than the way we treat our aged.  And I extend it likewise to our own parents.

     Last week, this House heard from Member, Ms Grace Fu, that even walruses adopt and nurture; wild wolves hunt for the sick and aged in their pack.  On the subject of parents and child, Confucius too has a saying, "without feelings of respect, what is there to distinguish man from beast?"  There was the lament that two parents can support four children but four children cannot support two parents.  And in the course of our interactions with residents, we see so many examples of these. 

     In Sengkang, there is this elderly woman who spends her days at the void deck. She does not get along with her daughter-in-law and is prohibited from going home during the day.  Her friends tell me that her son is caught in the middle between mother and wife. Why her friends, you may wonder, because the affected woman does not complain but instead grits her teeth and spends her days, if she is lucky with some friends, if not, alone at the void deck.  Her friends brought forth her plight. 

    I have often seen couples, typically elderly, walking hand-in-hand to see me at MPS.  Now visualise this - a picture of warmth and companionship but one which quickly evaporates when one sees how their faces instantly betray their feelings of abandonment and helplessness, feelings of nowhere and no one to turn to.  They have either been booted out or living with their children is no longer bearable.  They have no one but themselves and invariably seek a rental flat.  Of course, certain complexities can be injected.  One variation - no assistance can be rendered. They have been time barred. Why time barred?  Sold a flat a while back and had cash proceeds.  But the pocket is empty as the money has been spent on their children - debt repayment, renovation for the children's flat - with a goodly intention of all staying happily together.  Some hopes did not pan out.

      These examples bring me to the topic of the Maintenance of Parents Act. This Act has been with us for some 10 plus years now.  I am told that the situation has stabilised and about 100 cases go to the Tribunal a year.  But by 2030, one in five of us will be 65 years and older, will the situation of abandoned parents get worse? 

     I have followed the debates in the Hansard when the Bill was debated in the House in 1994.  Views then were divided and the voting was split - 50 ayes, 11 nays and 2 abstentions.  Twelve years have elapsed. Singapore has got through two recessions.  Through the Tribunal, thousands of parents have sought relief from uncaring children.  Looking forward, will it get better or will it get worse? Who knows?  But what I do know is that there is a real practical problem to be solved.  Throughout this week's debate, there have been calls for the Government to do more.  I join the chorus and too ask the Government to do more in this area. 

      With a displaced parent, time is always not on his or her side.  There is always an urgency and immediacy that community disbursed ComCare fund has recognised, but in this instance, ComCare is not the answer. Whenever I bring up the possibility of catering to the immediate needs of such displaced parents, there is often the warning that we should not make it too easy an alternative for incorrigible children.  If it is too easy, there will always be another and yet another. 

     What I am putting forward is exactly contrary to this line of reasoning.  Let us take care of the immediate needs of the displaced parents expediently first.  Then, the corrective behaviour of the children can be dealt with in due time but only after the aged parents have been taken care of.  I do not, for a moment, imagine that this consideration will make it too easy for children to shirk their responsibilities.  I ask:

     One, for the Government to step in, house and provide for the parents first and then go after the children on behalf of the parents for the full cost.

     Two, for the Government to implement a fast track to accommodate such cases of displaced and abandoned parents so that agencies can allocate housing and deliver assistance packages.  In short, arm our social agencies to be able to turn on a dime, give them the tools to do the job.

     Three, for the irresponsible children, it follows that we have to be harsh, file for the full cost, even to the extent of laying claims on the children's assets especially for the children of means.

     Four, have CASE officers attend to the total needs of both the parents and child so that with guidance, perspective therapy and counselling, maybe some accommodation can be achieved and some semblance of family life can re-emerge.

     I do appreciate that every family has a difficult scripture to recite. The Chinese saying, "jia jia you ben nan nian de jing ".  I do agree that once the full force of the law is applied, both sides, parents and children, may in turn be unhappy with the Government.  Hence, when such drastic measures are set in motion, they can only be with the consent of parents, just as today, one cannot bring a case to the Tribunal unless the parent or his care-giver initiates the proceedings. When provided with this option, many may balk at taking action. That is life and that is their right of choice.  But at least, they have the powers to take action and seek assistance, much like what the vaunted Israeli or Taiwanese parents protection legislation served to achieve despite hardly ever getting invoked.  And of course, the contention remains that if the numbers are going to be so small anyway, why bother? 

      I believe we must act now, whether the numbers are big or small is not an issue.  It is a statement of what our society stands for.  It sends a clear signal that we stand by our Asian values, that we will not condone those in our midst, regardless of how few they may be, who shirk from such parental care responsibilities.  It also sends a strong message to Singaporeans that the family is the first line of defence. We have done a lot on the soft aspects.  Just look at the different brochures and many pamphlets that MCYS produces.  But in the end, we must continue to press on with the soft approach that what we do to our parents, our children will do to us.  This reminded me of an ancient story. It goes like this.  A father asks the son to carry an old and invalid grandmother in a cage and discard her in the forest.  Without opposing, the young son obliged. After disposing of the grandmother, he came back with the cage.  On seeing this, the father asked, "Why did you waste your effort to bring back the cage?"  And the young man said, "I can use this to carry you to the forest when your time comes."

     It is time to give bite to the process so as to inform the minority of errant Singaporeans that the solution lies within themselves,

that they cannot shirk and enjoy a certain standard of living at the expense of their parents.  Responsibility is owed to their parents.  It is an expected decorum.  Yes, much lies within ourselves.  And the emphatic message to note, parental care is not the sole responsibility of the Government.  Will it build an over reliance of parents on their children in the future?  In an environment that costs are rising and some incomes may not keep pace, the pressures are definitely going to mount.  But do remember that this is not the only remedy. Our 3Ms and the CPF Minimum Sum underpin the national belief of self reliance.  What I am advocating is an additional safety net.

     Why do I devote my speech to this one topic of making sure that we give more bite and the necessary tools to social workers, Government agencies and the Tribunal to take action against recalcitrant children and, at the same time, empower them to be responsive to displaced parents?  It is because every time I see a set of parents in this predicament, my heart bleeds for them.  At the same time, my sense of right and wrong is terribly disturbed - disturbed by a sense of injustice.  This is an injustice because I see that the bond between parent and child is unconditional.  As MP Fatimah has said, "Children must look after their parents.  That is duty."  Parents are not to be discarded in the quest for comfort, maintaining their lifestyle or to avoid the burden and inconvenience of looking after them.  On this, I do not coordinate with Member Hri Kumar who just spoke before me.  It comes across as a selfish act.  Is it too difficult to ask to stay with your parents no matter what hardships you will encounter?  So, my reaction is, help first, throw out a life line and then take corrective actions.  Errant children must know that this life line comes at a cost, and it is full cost.  How else can we bring a small number of irresponsible people to task?  And this is not to say that money alone solves everything.  It is but one aspect.  Nothing replaces family.  Nothing is better than love, respect and gratitude given freely.  But when it has to be compelled, the familial fabric has probably already been torn asunder.

     A Chinese proverb says that respect for one's parents is the highest duty of civil life, and I do not for one moment believe that filial piety is dead in Singapore.  In fact, it is thriving.  We can see it all around.  The calls I get from children to accelerate lift upgrading or for marketing and recreational facilities to be within reach, or even for their parents' cars to be given a surface car park lot priority, signal that there are many children who would stand by their parents through thick and thin. I have visited homes where multi-generations live harmoniously, sometimes clearly on a very tight budget at that, but they stay together tightly knitted.

     We want our society to be competitive and yet compassionate.  We must now put a premium on achieving this unconditional bond between parent and child which defines our civilised expectations and our Asian ancestry.  Let us now send a strong message  - do not dump your parents, treasure them.

     Mr Speaker, Sir, I support the motion.

3.35 pm

     The Minister of State for Trade and Industry (Mr S Iswaran): Mr Speaker, Sir, I am much obliged that you allow me to join in the debate at this juncture.  Allow me to rise in support of the Motion standing in the name of Member Halimah Yacob.

     Sir, the President's Address had two key thrusts to it - one was on the competitive economy and the other was on an inclusive society.  In my opinion, these are really two sides of a coin.  One pertains to the creation of wealth and the other is on how best we distribute it in our economy to maintain our social cohesion.

     Many speakers, over the last few days, have talked a great deal about how we should and must help those who have not been able to benefit from globalisation.  And I add to that chorus because I believe it is an essential part of maintaining the fabric of our society.  Having said that, I want to make two quick points in rising to speak today.  The first is to highlight the challenges we face by giving specific examples of the kind of competition that faces us in the region and beyond, and I thought the best way to do that is talk in terms of a corporate analogy.

     Sir,  we have exhorted our companies to go into the region.  We have told them to go beyond our shores, spread their wings, find new markets for their products and services.  But the crux of it really is: what does it mean when you say go abroad?  What does it mean to our companies?  The opportunities clearly lie in our part of the world, whether you look at macro economic growth where we have got some of the fastest growing economies in the world in Asia.  Whether you look at the growth of the middle class and therefore the demand for consumer products, and so on, that too is in a strong growth phase in India, China and other parts of this part of the world - ASEAN, Vietnam.

     Also, when you look at enterprise creation, new enterprises are coming in and driving, again, you find that, for example, in Singapore, more than 2,000 enterprises from India, more than 1,000 from China that have been created in Singapore in order to use Singapore as a base for the region.  Clearly, Sir, the opportunities are immense and inviting.  But on the flip side of that coin are the attendant risks that our companies face.  For when we say "regionalise" or "globalise", it means venturing into unfamiliar territory or territory you might be familiar with but you still need to take some care in exploring.

     We call them emerging markets for a reason, because they are emerging, they are getting accustomed to new rules, global standards, business practices and best standards.  But, at the same time, they are also in a hurry to grow and investors are keen to go in to participate in their growth.

     Let me elaborate how intensive the competition can be.  It is not just that our companies face competition in the markets  from their domestic players such as in India or China. But they also face competition from international companies or Indian and Chinese companies that are internationalising.  One example would be the Tata Group from India, who have gone on to acquire the trucking business of Daewo Motors in Korea.  Their steel business has come in to buy NatSteel and they have done some larger transactions.  And we read about these all the time.  In China, we have seen the Lenovo Group acquire IBM.  The point is that we can think of China and India as emerging markets, but their corporates do not think themselves as emerging markets.  They think of themselves as global players ready to take on the world at large through acquisitions and beyond.

     It is also true in the world of private equity - the world that I am familiar with given my previous vocation.  Just to give you a sense, in 2006, US$159 billion was raised by the private equity business.  That is a staggering amount because, when you think about it, private equity can use that money and leverage it beyond just equity to really significantly expand their muscle.  If you use a simple two-thirds gearing kind of ratio, it means that they have the capacity to undertake up to US$500 billion worth of transactions.  These are ruthless companies.  They go in for the bottom dollar and they are very focused on what they want out of any transaction.  These are the kind of companies that our companies have to deal with.  They have to go head to head, because it is no longer the case that when an asset is on offer, it is just an operating company that goes in to buy it.  It is also financial companies.  In fact, private financial equity houses tend to be the largest most significant competitors against operating companies these days, and they are prepared to pay the dollar because they have the financial smarts to make these assets work harder for them.

     So, what can our companies do?  Well, they still have to go abroad.  They have to take the risks.  They may need to get in earlier.  They may need to find unique ways to generate opportunities for themselves.  But the reason I raise all these, Sir, is, essentially, to highlight two points.  The first is that our companies, as they go abroad, need a fairly supportive group of shareholders and partners.  20-20 hindsight is in abundant supply and, unfortunately, clairvoyance is scarce.  So, the point then is that we need to make sure that our companies, when they go forward and take risks, are supported by shareholders who understand that, yes, we have to take calculated risks from time to time.  Sometimes, they may turn, sometimes they work for you but, overall, we look at the outcome and we see whether that is the outcome that we want.  I think our shareholders need to wisen up to that and be more mature in the way we go forward.

     The second reason I bring this up is because at the end of the day, we have been asking for much largesse from the Government, in terms of support, for those who are left behind, and I think these are legitimate requests.  But I urge that we also just have a cautionary thought that we calibrate our expectations, bearing in mind that there are the vicissitudes of markets, of operations and economies, and those in turn would constrain the way we operate.

     Sir, for the next part of my speech, I would like to speak in Tamil.

     (In Tamil):  [For vernacular speech, please refer to Appendix A*. ]   Mr Speaker, over the last 40 years, Singapore has progressed well.  As a result of economic progress, we have been able to raise the standard of living of Singaporeans.  One fundamental reason for this can be attributed to our social cohesion.  In Singapore, everybody has a place and opportunity.  This is the main thrust of our Government's policy.  Though we are a multi-racial and multi-religious society, we as one united people strive for our country's progress.

     The President's Address talked about globalisation.  How will it affect Singapore?  I believe that globalisation will provide a big opportunity for us.  It will help us to connect with the markets of the world.  Singapore is a small country.  It has a small market.  Globalisation provides us with an excellent opportunity to be connected with other countries.  It also creates new opportunities for our people and companies.  I would say that globalisation is the reason for talents and investors to continuously come to Singapore.  However, globalisation has also created new challenges.  We can see that there is an income gap and that is something which all of us know.  Many MPs have spoken about it today.  Many Singaporeans also worry about their jobs as well as overseas competition.  At the same time, the elderly people as well as low-income families have been worrying about their daily problems.

     I would say that an important work of the Government is to assist these people to overcome their problems and give them the confidence that we will succeed. The elderly worry about ageing problems and in particular about their medical expenses.  We should help them to overcome these problems. The Government should also implement various programmes to correct the widening gap in our society. We should also help them to overcome their problems, such as helping the less privileged to cope with their daily expenses and to manage their children's school fees.  While we are doing this, we should ensure that these programmes will provide them the encouragement and will not in any way slacken confidence and efforts.

     Mr Speaker, Sir, Singapore today is in a stronger position.  There are many things which are advantageous for us.  If we continue to be united and work hard, we can expect a bright future.  As a result of the success of our nation, many will benefit.  We will be able to help the needy in our society.

3.45 pm

     Mdm Ho Geok Choo (West Coast): Mr Speaker, Sir, I join other Members of the House in thanking the President for his Speech at the Opening of Parliament. He has provided an excellent overview of the challenges facing us in the next five years. Certainly, from his speech, we all have our work cut out for us.

    Sir, many Members before me have spoken impassionately on widening the social net, and I agree wholeheartedly with them.  But I would also argue that we need that social net to be of a finer mesh, so that we do not exclude some groups that would otherwise fall through the net.

     I am glad that the Minister for Community Development, Youth and Sports has acknowledged that there are problems with implementation, gaps and duplication. As the Minister reviews and fine-tunes the whole slew of assistance programmes we now have, I hope he will also remember that there are groups of people who, under the current structure, may find the existing assistance programmes inadequate.

     Allow me to identify some of these groups.

One is a group of single elderly people who live by themselves.  Some passed away without people knowing it - until it is too late.

     Another group is what I would call the 'permanent poor'. My experience in the last six years in low and lower middle income Boon Lay has led me to conclude that there is an inevitable poor group who needs help most of the time. During my MPS, I see repeat requests every week for NTUC food vouchers.  They come from people like the poor 87-year-old-man whose son is in prison; the single mother with her brood of children and the temporary orphaned children whose parents are in prison.

     Sir, for these groups, their plight gets worse and not better.  For these groups, can we have professional dedicated help and a more permanent line of financial help?

     Sir, I also welcome the Minister's plan to set up a ComCare database as an early warning system of failing families. I would like to know if this database can also catch warning signs of needy families getting worse in their condition.  Perhaps this is a good time to study the feasibility of linking the ComCare database with other Government and utility databases.  We have a high degree of connectivity of databases among Government organisations.  Is there any way this advanced e-Government infrastructure can be deployed to identify cases of people needing help?  For example, can this new ComCare system also highlight when a household fails to pay its utility bills, phone bills and other bills? Matched to the ComCare database, it can alert social workers to potential problems facing those families already in their case files.

A finer mesh for HDB rentals

     Sir, the finer mesh that I am advocating applies also to public housing. I want to thank the Minister for National Development for hearing and understanding the plight of residents who are in financial straits and see selling off their flats as a way out.  The provision of more 1- and 2-room flats in Boon Lay where more than 80% of household incomes are less than $3,000 is indeed timely.

     The Minister has informed this House that for tenants whose household incomes have grown over the years, their rental rate will be adjusted to take into account their higher pay.  I must point out that the increase in household income may not be a good benchmark.  In poor households, a modest increase in income is often offset by the number of growing dependent children and sick elderly parents. Such an increase does not automatically signal an improvement in affordability, but may in fact leave these families at the status quo.

     The Minister has also informed the House that new tenants, who have previously sold their subsidised flats and downgraded, will pay higher rates as they have benefited from an earlier subsidy.  Sir, unlike HDB residents who downgrade to buy a smaller unit, those who downgrade by selling off their flats to rent one may be forced to do so by their dire circumstances. Many cannot afford to service their housing loans; others may have had their flats repossessed by the banks.  Should these people be deprived of a bigger subsidy in their rental flat just because they happen to start off better in life than those who start off with flat rental? By the same argument, does it mean that those who benefited from the subsidy on their first rental flat will likewise be given less subsidy when they could afford to upgrade and purchase a flat?

     Sir, this is what I mean about having a finer mesh. While we do not want to reward the guilty, we should not also punish the innocent. In helping those in need, we should not open one door and close another that was there.

Many helping hands

     Sir, I support the Minister for Community Development, Youth and Sports (MCYS) in his commitment to maintain the "many helping hands" approach.  I understand that social workers in agencies work with stretched resources and to ease their heavy workload, more helping hands will go a long way. We need to strengthen and sustain those many hands. It is not about many more right or wrong hands; it is really about attracting and retaining volunteers, especially from the pool of able-bodied retirees.  Would the Minister consider a token allowance for meals and transport for retirees who volunteer?  I understand that in Taiwan, retirees who volunteer as pedestrian wardens are given a token allowance to keep them going.

     Sir, while I agree that volunteerism is about commitment, passion and dedication, we need to encourage more to step forward. Many volunteers today are those with time to spare, but little else.  Without an income, they are themselves financially at the margin. We must ensure that their selfless efforts do not work against them.

The pride of the poor

     Sir, as the Minister for MCYS refines and streamlines the social assistance programmes, we must also critically ask if these programmes have effectively reached out to those most in need. With more than 36 assistance programmes today, are the poor beating a path to our door?

     To be truly effective, we must be sensitive to the feelings of the needy. Poor people have pride, even in the face of adversity. Just last week, a Malay TV programme, Detik, showed an elderly lady saying that if she had to make her skin as thick as a wall to receive assistance, she would, because she had to. And she said it on the verge of tears!

Building a new mindset

     Sir, I am cheered by the good news that employment is at its highest in many years. The Minister for Manpower should be applauded for his Ministry's untiring efforts to create new employment opportunities for the people.  From my personal perspective as a HR professional for many years, I fully appreciate the need for continuous learning and skills upgrading to create a globally competitive workforce.  But also in this context, I wish to echo the President’s sentiments when he said: "Our basic approach must be to stay open to the world and pursue growth and competitiveness, while doing more to assist Singaporeans who are adversely affected."

     The MOM has done much to retrain and retool displaced workers for a new-generation workplace. Many jobs have been redesigned so that lower-skilled workers can be more productive and earn reasonable wages.  But there are still many workers out there who were displaced in the last recession who could not find jobs befitting their education and experience. We cannot be sanguine with what we have achieved so far in job reform, as the constant change in the workplace can cause them and others to be displaced in future.

     The President also said: "Education is the best way to level up our society", and I fully agree. Hence, the wide range of training and retraining programmes. But I would also argue that another set of skills may be required of our workers.  In this context, the Minister for Manpower has indicated and I quote: "The Ministry aims to set  up the employability skills training …, continue to reinforce a strong work ethics that has been the foundation of Singapore's  success …, develop a stronger service culture is also on the cards to prepare workers for the jobs in the growing services sector …, workplace safety …, raise safety and health standards through effective regulation."

     Sir, these statements point to a greater need for a different type of training of our workers.  The Minister may wish to redefine what constitutes employability skills training.  How can the Singapore workforce reinforce sound work ethics, develop a stronger service culture, raise the safety and health standards and compete with foreign talents and workers if the fundamental mindset of our Singaporean workers is not addressed.

     For this, I call on MOM and WDA to look into the mindset training which will touch on the work attitudes of the Singaporean workforce.  There must be a fundamental training to shift the mindset of  "I have to do it" which stems from an obligation or a compulsion to "I want to do it" which stems from an internal desire.  It is no use just to have visible skills of smiles, greetings and fixing when we do not touch on the more fundamental intangible skills which have got to do with the attitude and the mindset.  The training should also help our workers to manage change more effectively, both in good times as well as in bad times.  This will include a willingness to retrain and retool, but should be holistic enough to help them manage constant change and possible displacement.

    In this context, Sir, I am also moved by the statement by Minister of State for Education, RAdm Lui Tuck Yew, who called for our education system to move beyond honing abilities to nurturing values like team spirit and ruggedness. I would argue that our young generation needs more than that. They need a set of human relations skills that prepares them for working life. One of my grassroots leaders remembered how, 30 years ago, he first read Dale Carnegie's "How to Win Friends and Influence People", and asked why he was not taught those human relations skills in school.

     Sir, I believe this kind of training is long overdue. Indeed, I would like to ask the Prime Minister to consider instituting a mindset training programme for the whole nation.  It is synonymous with the way we bring up our children in the family by developing their core values and attitudes towards life and challenges.  I remember Minister Mentor Lee Kuan Yew's National Day Rally speeches in the 1960s, when Singapore was in its industrialisation phase. Year after year, he exhorted Singaporeans to work hard and warned of the consequences if we did not. As a result, Singapore grew and prospered throughout those formative years after Independence.

    Sir, I believe we need to revive that sense of urgency in our people, and build a national resilience to come to terms with a globalised flat world. Only then can Singapore rise up to the opportunities and cope with the challenges.

SMEs and bridging the income divide

     Sir, the Member for Ang Mo Kio and GPC Chairman for Ministry of Trade and Industry, Mr Inderjit Singh, was in his element when he spoke about helping our small and medium enterprises to grow so they can become the MNCs of tomorrow.  I fully support his call, but I would like to draw attention to the development of SMEs in general, as well as to see this in the larger context of closing the income gap.  I would like to raise two issues.  One is on funding. The latest SME Development Survey 2006 found that 40% of SMEs still resort to overdrafts as their primary source of funding, which is expensive. This indicates that a large number of SMEs still have problems securing bank loans. I would ask the Minister for Trade and Industry to study this further, and study the feasibility of setting up an SME Bank.

     The second point that I would like to raise has got to do with entrepreneurship and micro-enterprises.  In this context, Sir, I would like to call on the Minister for Trade and Industry to see how we can encourage the development of micro-enterprises as one way to close the income gap.  I see the two main drivers to this: (i) the nature of work is fast moving away from full-time employment to a contract-based and flexi-time model. This means more of our workers in future will have more time between jobs or projects that they can fill by doing small-scale businesses; and (ii) displaced workers can be encouraged to look for alternative sources of income. This is especially applicable to PMETs (Professionals, Managers, Executives and Technicians) who were displaced during the last recession and who are finding it difficult to be re-employed. Many of these have many years of experience which they can leverage on consultants.

     Sir, micro-enterprises can also help us develop a culture of entrepreneurship that enabled our forefathers to make Singapore what it is today.

    Sir, I have raised a number of issues, many of them will require a multi-agency or multi-Ministry approach to solve. But it is the reality before us today - that is, in this flat globalised world, we no longer have the luxury of viewing things in comfortable compartments and solve them in discrete silos. We need a holistic approach, both in viewing problems as well as in solving them.

     I support the motion.

     Mr Speaker: Order.  I propose to take the break now.  I suspend the Sitting and will take the Chair again at 4.20 pm.

Sitting accordingly suspended

at 3.59 pm until 4.20 pm.

Sitting resumed at 4.20 pm

[Mr Speaker in the Chair]

     Debate resumed.

     Mr Arthur Fong (West Coast): Mr Speaker, Sir, thank you for allowing me to join in the debate and the motion to thank the President.

     Sir, for the past three days of the debate, I felt like I was standing on quick sand.  Being slated to be the 52nd speaker, the topics that I had intended to touch on had been nicely covered by many of my esteemed colleagues.  I wish my fellow West Coast GRC colleague, Mr Cedric Foo, well, being the last speaker.

      Sir, I am concerned, like many colleagues in this House, about the persistent yawning income gap and the implication for "An Inclusive Society", that the people-Government partnership are collectively working on. 

      Over the last five years, I have seen first hand the paradox of lowering income and a rising cost of living.  I have also seen at my MPS the helplessness of a mother in making sure that her children are able to concentrate and compete in school with the other children, added on by the frustration in her daily life by her husband's low income.  Let me share a telling example and hopefully another look into the situation.

     Sir, Mdm Wong, homemaker, and her husband, a taxi driver, in his late 40s have three children, all in secondary school.  I met her on one of my Saturday morning "lone ranger" walkabouts in Clementi.  She asked for zhu xue jin or education financial assistance.  As there were others around, I told her to come over to my MPS.  She promptly showed up at my MPS two nights later.  I asked for some more information in order that I could help her better.  I asked if she had applied to the MOE for the assistance on her fees as well as textbooks, and she said, "Yes."  I then asked her, if she is receiving any school based assistance for meals, etc, she said, "Yes, the School Advisory Board is processing her application."  Then I asked what other education financial assistance could come in to help her three children.  She repeated her plea for an education financial assistance and that her husband takes home only $1,000 per month.

     I took a moment to take in what she said.  Sir, more telling is what she is not saying.  She is not saying that her children are already adequately helped by the schemes available but her livelihood is not sustainable from $1,000 of take-home income.  The household income used to be double. I asked if she would be agreeable to me seeking a job assistance for her.  I added, "At least a part-time job to improve your household income."  She immediately said "no" and that she had to look after the three children when they come back from school.

     Sir, the case I mentioned lends colour to my concerns.  Firstly, this family is an example of the group whose income has shrunk over the last five years.  Secondly, there is adequate assistance for her children to go to school but she is still asking for education financial assistance.  Thirdly, she could be part of the solution in asking for a job match rather than for the funds that goes towards supplementing her family's livelihood.  Sir, my concern here is:  Is Mdm Wong really expecting the various help schemes to supplement her household income?  If so, I am concerned that while the slew of schemes is helpful to many, we are also seeing a growing group where the schemes help improve their welfare of sorts.

      While the facts of shrinking household incomes shine through in this case, it also shows a growing concern that there is a sizeable group wanting assistance without wanting to consider some self-help on their part.  I think the call for self-reliance by the Minister for MCYS and the kind of resilience building, which Ms Indranee Rajah spoke of, on the part of our people is timely.  These calls are made with a promise of assistance from the Government and in no less than the 36 schemes available.

     Sir, on the assistance programmes, callers to this morning's talkback programme were in agreement that there are in fact enough schemes and funds available to help the needy.  Some even made it clear that there is no need for another national fund.  I would like to caution that it is a slippery road to consider more help funds without first satisfying ourselves that the existing available help is availed to those who need it most.  Guided by the "Help first, ask question later", I am confident that we will reach those in need of help better.

     Mr Speaker, many in this House had also touched on the cost of living.  Sir, if judging by CPI reports, then the cost of living in Singapore had not increased much, if at all.  However, left and right, we continue to hear of rising cost of living.  And up till recently, the oil prices around the world had increased by about 40%.  Oil increases have a significant and broad based impact on our cost of living.

     For starters, oil price increases have led to a significant increase in utility bill of every Singaporean household.  It has led to transport companies applying for an increase in fare and getting our Public Transport Council's approval.  Both increases have a significant impact on the cost of living of the average Singaporean.  Yet, the CPI which captures inflation in Singapore is passively mild.  We need a different set of indexes that could perhaps show us the relevance to the cost of living in Singapore.  Sir, this has added some cynicism to some families affected by the huge rise in utilities and the interim assistance availed to them quickly runs out.  I hope that the Government will look at going beyond the existing utilities assistance schemes for such families, especially those with children, during the examination period.

     Sir, some three years ago, during the debate on CPF, I had alluded to the quadruple whammies, or what I call "si mian mai fu", that may present itself in years to come.  Sir, that has happened.  I pointed out that there will be a situation when the reduced CPF contribution from employers, along with the increase in interest rates for housing mortgages in addition to the reduced contribution from CPF account holders as they move into another age group, would pose a cash crunch for these people. If this group of families are also in the bottom 20% of people who had their household incomes reduced over the last five years, we are talking about quite a bit of hardship, perhaps "wu mian mai fu ".

     I appeal to the Government to take a look at this group of people and see where help can be availed to them.  For instance, they may be forced to ask for a third HDB loan as they may default in their commercial loans due to the reasons I mentioned earlier.  I hope the Minister for National Development can address the concerns of this group of Singaporeans which is a sizeable group in our public housing.

     Sir, I would like to end by quoting President Franklin D Rooservelt.  During the Great Depression, on one of his visits to the American Mid West, he was quoted as saying, "The measure of our progress is not how much we can add to those who have but how much we can give to those who have little."

     Mr Speaker, Sir, for a little red dot like ours, we must continue to enable those who can contribute most and to give those who need help the opportunities and the hope so that they too can contribute in their own way.  Sir, we have the social nets and we need to avail the net to all who need help but guard any dependencies that our people can develop.  We need to strive to imbue our young folks with more resilience and self-reliance.

     Sir, I support the motion to thank the President.

      (In English):  I wish to thank all the MPs who have contributed their views and their suggestions on the President's Address and on the Addenda.

     We have a new Parliament with many new MPs, representing Singaporeans of all races and age groups.  I welcome them to the House.  I appreciate their contributions to the debate. Their maiden speeches showed that these MPs may be new, but they found their feet and they found their voices. As one PAP MP said to me, her daughter told her, "Wah, ma ma, ni bi fan dui dang yi yuan hai yao xiong."  I think that is quite a compliment to the PAP MPs.

    I am particularly happy that many have spoken in two languages. It is a reflection of the new generation.  We have bilingual MPs, we have more English-speaking voters. Previously, backbenchers were only allowed to speak in one language. They had to choose and were forced to choose.  Many who could speak in their mother tongues would choose to speak in English because that is the way the debate is moving, that is the way to reach out to a big audience outside.  But it would have been a loss not to have these MPs be able to speak also in their mother tongues and present themselves directly to connect with their voters and to be able to reflect the multi-cultural and multi-lingual reality of Singapore society.   So I suggested, and I am glad that Members agreed, to lift the Standing Order which imposed this restriction and this allowed MPs to speak more effectively and to reach out to their constituents much more closely.  It also helps to create a climate where our mother tongues are spoken in Singapore, not just in coffee-shops, not just at home but in Parliament where national matters of the highest importance are discussed.  But remember, English remains our common working language.  That has not changed and that will not change even as we make the effort to promote the use of our mother tongues in Singapore.

   Our future looks bright. The policies we have pursued are showing results. The economy is growing steadily, doing very well this year.  Many jobs have been created. Just in the first three quarters, we had 123,000 jobs.  If we just calculate, we have 36,000 babies born a year and with 123,000 jobs after three quarters, we have already overbooked our babies three-and-a-half times. But it shows how strong the economy is.  Unemployment is down and the whole city is bustling with activities.

    So this is a backdrop against which we meet to discuss and chart our direction for the next five years.  I would like to discuss four of the strategies which we are pursuing.  Firstly, investing in our future. Secondly, preparing for our ageing population. Thirdly, tackling income disparity. And finally, preparing for our future needs, in other words, paying the bills.

Invest in our future

      Our first priority is to invest in the future of Singapore because this is the way to sustain economic growth, to create jobs and opportunities and to generate the resources that we need.  But that is the utilitarian reason.  The real reason why we have to invest in Singapore is because we believe in this place.  We know it has a future, we want it to have a future, we are going to put our resources and effort into this country to make sure that it will have a future. It is an act of faith. We will save and invest today, to assure Singaporeans of a better tomorrow.

     How will we do this?  The most important investment is in our people,  human capital, which means education.  It is a top priority for the Government. We spend a lot of money on education - about 4% of the GDP every year.  And we will do more to provide a top-quality education in all our schools, in our ITEs, polytechnics and universities, not just at the top but across the board, in all the schools and in all the streams.  So whether you are a top or an average student, whether you work with your mind and write, and whether you work with your hands, you are given the best preparation. It does not matter which path you take.  We will equip every child with the skills to succeed in a fast-changing world.

     Secondly, we will invest in research and development (R&D) - to develop our intellectual capital and take our economy to the next level because we are not just making things based on other people's prescriptions and recipes and designs, but coming up with our own ideas with which you can create new things, new possibilities and new wealth.  This requires long-term commitment and sustained funding.  It cannot be turned on or turned off, spend when you have money and cut back when you do not have funding. Scientists need certainty and predictability - many years to work consistently at projects before the germ of an idea is proven, realised and developed and becomes something useful.

    A*STAR has done a very important and outstanding job promoting R&D in Singapore. Mr Lim Chuan Poh is taking over from Mr Philip Yeo as Chairman of A*STAR next year in April.  But there will be no change in our approach or emphasis or the resources we will be devoting to R&D.  This remains a priority.

    Thirdly, we will invest in infrastructure, keep it up-to-date and relevant to industry needs because what businesses need will change year by year. The quality of the infrastructure - the power supply, the Internet access, the air links, the sea links, the whole environment which enables them to be productive without wasting their time struggling with red tape or battling with Government departments - we will keep that up-to-date and first-class.

     And we also will provide for our own population which grows, we hope year by year, because as we put more people into Singapore, we must make sure that they have the facilities, and land transport is one important area - new expressways and possibly new MRT lines.  These are things that we are presently studying.

     Singapore is small, we are not just talking about above the ground, we are even talking about underground. We are planning and we will be building Jurong Rock Cavern, an underground storage facility in Jurong Island. We will excavate the rock, make caverns for storage for oil and petrochemical, and boost our position as an oil and petrochemical production and trading hub.

    We will also invest in our city to make it more vibrant and compelling.  You have seen the plans which I presented two National Day Rallies ago.  We are transforming Marina Bay.  We are rejuvenating Orchard Road. And we are going to be not just a green city but a green and blue city because we will have water in the city. In MEWR, Dr Yaacob has a plan, which is the ABC Plan - "Active, Beautiful and Clean" waters.  The idea is to have the water bodies cleaned up, beautified, linked up with our parks and green spaces so that they become new community spaces for lifestyle and recreation activities.

    And, of course, we are renewing our HDB estates as well progressively - all kinds of upgrading programmes which you know about. The purpose is to create a quality living environment for every level of Singapore society, including the lower income groups. So whether you live in a rental flat, three-room flat or a private property, this will be a first-class living environment. It is good for us to live in, and it is also good because it enhances the values of the homes of Singaporeans.  So every corner of Singapore is going to be something special - beautiful, unique and a place that all of us enjoy and feel we own.  And I think people know this. I met one leader of a neighbouring country recently. He told me, "Every time I go Singapore, I look at the place, I admire it."He comes back and tells his own people, "Why can't we do the same? Singapore is beautiful - improve, match them." That is the result of our investments.

      But the last investment which I want to talk about which makes all the other previous ones possible is building a first-class public service. This, like R&D, is a long-term investment in the future. It takes many years to build up.  You have to have that quality of people, that ethos of service, the system, the efficiency and the performance. And you have to have the whole system work so that whether you are promoting meritocracy, whether you are talking about religious harmony, whether you are keeping Singapore corruption-free or anticipating change or creating an environment for growth, if you press the right buttons and give the right instructions and work with this first-class instrument, it can deliver what Singapore needs. This is what Mr Lim Swee Say calls "big software". "Small software", you are just working individual departments and solutions, doing computerisation, streamlining more efficient operations.  But the "big software" is how the whole thing puts together into a first-class system, where all the pieces work. It is like a precision Swiss watch - every component is top quality, and every component fits precisely into every other component.

     That is our most sustainable competitive advantage in Singapore. Other things people can copy.  They see us plant green along the roads - you go to China, many cities now plant green along the roads. They see us clean up Singapore River, some Chinese cities are trying to clean up Chinese rivers - harder, but at least in principle they can do it. But to see the public service work the way it works in Singapore and to transplant that into another country and make it work there, many countries have asked us to help them to do it.  But we tell them, "We can give you advice on how we have done it in Singapore. It is not so easy to do it in a different environment. You have to find out how to adapt this to your circumstances, and do it yourself." But for us, it is an enduring  competitive advantage.

     And that is one of the reasons why we have been so successful in attracting investments here.  If you have been reading the newspapers, you will have noticed some very major investments which have come in over the last few months.  Just recently, Intel and Micron decided to build a $4.7 billion water-fab plant here.  It is going to create many jobs and spin-offs for local suppliers.  It is a project which we have been pursuing patiently for a long time with Intel.

EDB has been working hard at it. I think many generations of case officers must have gone through this, but finally we have landed the big fish.

     ExxonMobil is another company close to deciding on a multi-billion dollar petrochemical cracker on Jurong Island.  It is going to be one of their biggest projects.  I met their Chairman and CEO recently, Rex Tillerson. I had met him in the US, and Minister Mentor had also recently met him in the US.  He came and he met us here again.  I said, "We will do our best to help you. Not everything is under our control. Steel prices are global, but what is within our control, we will manage. We are not necessarily the cheapest. We are not necessarily the quickest and dirtiest. But we will offer you a stable and predictable environment in Singapore." And the Chairman said to me, "That counts for something."

     So, good government is why Singapore workers are able to get jobs and command a premium.  That is why we do not have to be as cheap as workers in China or workers in India or workers in Vietnam.  It is because of the quality of the Government, the quality of the system our people belong to. You are able to be productive, and people are prepared to reward you to work well.

     To maintain the quality of this Government, the political leadership and the civil service, we have to continue to get good men and women, attract them to join and stay in the Government, and offer them fulfilling and competitive careers.  That is why the President talked about this in one paragraph of his Address, and this is something which we will have to continue to focus on in the next five years.

     Besides investing in our future, we must address social problems that will grow with time.  One of these issues is our ageing population. You can see it happening before your eyes.  The older MPs will remember 15-20 years ago when they went on house to house visits, the profile of the residents they met, and when they go house-to-house today, how the profile has changed. Many more are elderly, many more are old couples living by themselves, sometimes just one person because the partner has passed away, if they are lucky, with children elsewhere in Singapore or nearby who will visit them, if not, living alone, hopefully, with neighbours keeping an eye on them.

     I have circulated some charts which show how this has changed. I have chosen three snapshots - 1980, which is 26 years ago; 2005, last year; and the next snapshot is 2020, 14 years from now.

  
     In 1980, we were a young population.  You look at the bulge, the fat part of the pyramid - it is people in their 20s and 30s.  Very few were old.  Elderly 65 and above - the red tip of the pyramid - 112,000. Working people were many, older ones were few.  For every elderly person, there were 14 working-age persons, and the median age of the population was only 24 years old.

    In 2005, which is approximately today, the pyramid shape is completely different. The bulge is now not around 24.  The bulge is now around 50. The number of elderly has gone up to 291,000. There is one elderly person to only 9 working-age persons. The median age has gone from 24 to 36.

     If you project fast forward another 15 years,  2020, the elderly will now be 575,000 - more women than men, because women live longer.  Each elderly person has only 5 working-age persons to support him. The median age will have gone up to 40 years old.  If you look at the shape of the pyramid, the bulge is now around 60 and the narrow part is down where the younger population is. If you project this forward another 10-15 years, that bulge is going to become red, and the working population is going to be where the purple ones are - a small waist supporting a heavy elderly population.

     Let's look at it another way.  Look at the next chart to get the numbers into something which we can understand.  In 1980, there were 112,000 old people, about one Toa Payoh today - one Toa Payoh of old people if you put them all together, which we would not do. In 2005, there were 2.5 Toa Payohs. By 2020, there will be 5 Toa Payohs of old people.

     So, this is a tidal wave which is coming towards us.  In fact, we are the tidal wave ourselves, because the 2020 people will be this generation, many of these MPs who will be standing there and expecting to be supported by the younger generation.  And I know that there are many problems which people who are old and people who can see this coming worry about - housing, financial security. What happens if they have not enough CPF, or their CPF runs out or they live longer than expected; working longer, retiring later - how to be able to work longer; healthcare, which is why healthcare is such a hot subject in Singapore.

     We know this.  We started tackling various aspects of this piecemeal - the lift upgrading programme, the barrier-free access - these are really about old folks. Twenty years ago there would have been no market for lift upgrading. You are young, you walk up one flight of stairs, what is that? But when you are old and your knees are not so good, or when your parents are wheelchair-bound, that is a big thing.  And when we are wheelchair-bound, that is a bigger thing.

     So, we have the Maintenance of Parents Act, to keep families together so that children help to look after their parents, and do not just dump them on the State, as Dr Maliki pointed out in his speech last week, it sometimes happens in Singapore.  We had a Tripartite Committee on Employability of Older Workers, which Gan Kim Yong chaired to see how we can get employers to keep older workers working longer, not just to 62 but beyond 62, not the same job but adapted to a different job, and not the same pay but pay appropriate to the new job which they are able to do.

    We had another Committee on Ageing Issues which Dr Balaji Sadasivan and Dr Maliki Osman chaired, to look into the social aspects on how we can try to adapt to this.  But although this work is all valuable, I think we need to go beyond that. We need to take a holistic approach, and I know who is a good person to ask to do this job - Mr Lim Boon Heng.  Because Mr Lim has had a close interest in this subject for a very long time. He has given us many suggestions and shared with us many of his insights as to what the problems are likely to be, what we can do about them.  And I have asked Mr Lim Boon Heng, because he expects to hand over NTUC to Mr Lim Swee Say at the end of this year, after he has handed over NTUC, not to retire because he has a new responsibility - continue as Minister in the Prime Minister's Office to oversee this matter of ageing issues on my behalf, and bring together all the efforts of the different Ministries so that we are able to get a whole-of-Government response to this whole-of-Singapore problem.

     On financial security of older folks, I ought to say something a bit more today.  We have not neglected this.  We have provided for the financial security of older Singaporeans, and the most important way we have done this is through the CPF.  We have built up the CPF.  We have put aside substantial savings. We have allowed Singaporeans to invest these savings in housing, and property values have appreciated for many Singaporeans. Not all, because some bought on the open market at the peak and their prices have come down.  But if you take the overall picture, the vast majority of Singaporeans - well over 90% - who bought houses have seen their assets appreciate, and they now have a substantial nest-egg put aside in the CPF and in their house as they grow old.

     It is not just wealthy people who have done this.  In fact, even the lowest income groups have been provided for. And even the bottom 20% of the population - I showed this data some time ago in the previous Parliament - have in their homes a significant asset.  First of all, most of them own their houses which they live in.  Secondly, if you may ask what value do they have in their house?  How much is the house worth, after subtracting the amount of the loan which they have not paid back?  On average, this bottom 20% by income has $138,000 worth of equity in the home.  So they are not poor in terms of assets for the future. They have to service their loan, they have to pay the rest of the mortgage, but we have helped them to have a very substantial asset. I think we can take credit for that. I think we can take comfort in that because that means our problem is much more manageable.

     The issue for people like this who have a house worth a lot of money is how can we help them to unlock the value of that house as they grow older, so that they still have a home to live in - maybe a smaller one, maybe a shorter lease - but unlock some of this value and convert it into a stream of income which will support them and see them into their old age. We have several ideas. Mr Mah Bow Tan is working on this and he explained some of the things which we are doing when he spoke in Parliament on Friday.

     Overall, in terms of financial adequacy of our old folks, we have a good system based on individual savings and home ownership.  It ensures that most Singaporeans have put aside enough savings for their old age.  There will be a few who will not have enough, because they have not been in regular work, because they have been ill, because some misfortune has befallen them which is beyond their control, because they do not have a family. The Government will do more to help them and will help them to do more to help themselves, as we have been doing.  For example, when we had the Progress Package, I paid special attention to the elderly. This is the way forward and when we have future packages, this is what we are going to continue to do.

     But looking after the elderly who are needy through no fault of their own is a much more manageable problem than saying that the State has to provide for the elderly, whether rich or poor.  That is a different proposition altogether.

     We need a sustainable approach.  You saw the numbers. You see how quickly the number of old people and the proportion of old people is growing in Singapore. Some MPs, and some other commentators outside writing in the newspapers, have suggested old-age pensions, which they argue every Singaporean should have as of right, because I am born here, I carry a pink IC, I should have an old-age pension. But if every old person, whether rich or poor, is entitled to an old-age pension, it is going to impose a very heavy financial burden on the State, which means a very heavy financial burden on young Singaporeans, because they are the ones who are going to be working and paying the taxes, which is where the State will get the money.

     What will happen?  Can you say, "You work, I am entitled to this"?  In Singapore, what do you think will happen?  Some will work.  Others will say, "Sorry, the burden is too heavy, I am off overseas.  I can look for alternatives elsewhere. I am mobile. I can go to Hong Kong. I can go to China, seek my fortune. I can go to America, Australia, Europe - the world is my oyster."

     Other countries have this problem, because they went on a system of tax and pay for their old folks. And if you look at the European Union or the US, their social security problems are looming, are predictable. You can see the train crash coming but you cannot prevent the train from crashing, because if you want to change it, the old folks say, understandably so, "I have already paid for the generation before me. It is now my turn,

and you are telling me no more, the music stops here?"  The music is not going to stop here. It is going to carry on another generation. And this is going to cause them a lot of problems and we must not go that way. Better for each of us to save for our own future needs. Then we can all enjoy peace of mind and fulfilling lives in our golden years.

     The other major social issue which I want to talk about is the stretching out of incomes - the income gap. Many MPs have talked about this.  We have known about this trend for some time. If you look back, the turning point was 1997 - the Asian financial crisis. Before that, wages went up across the board. After that, the pattern was quite different. I circulated two charts to show how it changed. From 1990 to 1997, if you look at how income increases from the bottom 20% to the top 20%, all in between, everybody got good income increases. The bottom income got 7.2% per year, while the top got 8.8% per year. There is a gap, but not a big gap. Even the bottom got 7.2% which is a very rapid rate of increase of incomes. It means that within 15 years, you double your income. After 1997, the picture changed. The top incomes grew more slowly than before, 4% per year. But the bottom incomes grew a lot more slowly, only 0.3% per year. It is a completely different pattern.

     The working out of that over the last eight years, since 1997, is what has generated the income gap and the feeling on the ground that cost of living is high, that life is not getting better the way it used to get better.  It is not just the numbers.  It is also the human stories, some of which MPs have shared in this House - how lower-skilled workers have been displaced from their jobs and unable to get back into the workforce, or if they get back to the workforce, find new jobs which are less desirable than the old ones, at lower pay. And older workers similarly have a problem. If you are older and also lower income, you have a bigger problem. This is a problem which affects many countries because the root cause of it is not Singapore, it is not our policies, it is globalisation. It is the way countries have gone today in a global economy. China, India and Vietnam and others are now impacting the world’s labour markets, with millions and millions of workers at the bottom end, and increasingly not just at the bottom end but also coming up to more skilled jobs.

     So America and Europe have seen this happen. In America, the median income (the 50th percent) of the average American, or near the middle, has hardly moved even though the economy has grown and top incomes have grown a lot.  Even China and India, where they are highly competitive and forcing change in the rest of the world, have not been spared too because their top incomes are rising rapidly and their bottom incomes, particularly in the rural areas, are still stuck at the bottom.  So their income gaps are widening, causing the Chinese to have to talk about harmonious development and taking care of the lower income groups.  So it is a global problem.

     The question is: how do we respond?  The IMF World Bank meetings were held in September recently and this was a major topic in all the forums, debates and sessions. And I discussed this with Larry Summers at one of these sessions. Larry Summers was President of Harvard - he is now a professor there. And he put it provocatively - why many people oppose globalisation, why it hurts. I quote him:

     "Here's how it looks to many people out there … China and India are vast - they have a nearly infinite supply of labour that is competent to do a wide range of things … and since it comes off the farm, it comes at a very low price…That's good if you are a consumer [because you buy their things they make], good if you are a commodity producer [because  you sell them oil, steel, gas], good if you are a superstar who can combine with that labour to be more productive than anybody else. But if you are an American or a European without a fancy college degree, if you are a Latin American, if you are an Eastern European, if you are an African [he is too polite to say if you are a Singaporean], if you are in the vast middle who don't want to compete on price with Chinese or Indian labour, and aren't smart enough to start the next Microsoft, you are caught in between … And so, what is [globalisation] concretely going to do to create opportunity for [you]?"

     My response to him went something like this. Singapore is a small country, we accept the world as it is.  These changes around us - in China and India - are going to happen whether we like it or not.  Can we stop it?  No.  Are they going to continue to grow?  Yes.  Do we have the power to wish them away?  We have no such magic.  So the question is, given that this is the situation, let us sit down, accept it, and ask what is the best strategy for us to respond to this situation.

     Supposing we took the approach of protectionism and we said, shut out the competition, don't let them in, try to go it alone, postpone change, I think the results will be worse for us.  As it is even for Europe, which is a continental-scale economy, is trying to keep out and slow down the change. In particular, countries like France, and to some extent Germany and Italy, are paying a high price for resisting globalisation - stagnation, high unemployment, lack of vitality and verve, in contrast particularly to America. What more Singapore?

     So we cannot keep it out.  Supposing we squabble among ourselves, supposing we now decided that we will argue over how to divide what we have, instead of going out and working together to increase the pie for everybody, I think all will suffer too.  Because the investments will stop coming, the cohesion will not be there, the steps forward to deal with our next problem over the horizon are not going to be taken and we are going to fall back and become just like all the other countries which are seeing the world pass them by.

      So what we have to do in this situation, with globalisation happening, is to stay united, work together as a team, get our people to understand, first of all, that the world has changed and that we must change with it.  Then, we all understand that we must work together and do our best to upgrade the economy, restructure the economy, retrain our workers, reskill them, adapt ourselves for this new situation.

     But I think we can take comfort because so long as we, as one country, come out ahead, then, as Singapore, we can generate the wealth and we can ensure that all the citizens will benefit from the country's success.  If the whole of Singapore were going to be hit negatively and as a result, it is going to lose 10%-20% of GDP, I will still have to lump it, but I think that will be a very, very different situation.  But if the result of globalisation is that I can grow, and there is going to be wealth which can be distributed, then I think I can solve this problem.

     So the question is, for Singapore as a whole, is globalisation good or bad? I believe that globalisation is a big plus. Because of globalisation, we have grown and prospered.  Because of globalisation, we are the busiest port in the world, we are a big financial centre, wealth management centre, fund management centre.  Because of globalisation, we are a major tourist destination, attracting talents and attracting investments from all over the world, linking up with our neighbourhood but not constrained to our neighbourhood, and so we are able to reach beyond them, connect up with China, India and the world, and stand out as a first world country in Asia, in terms of job opportunities for our people, and quality of life for Singaporeans.

     China and India coming along - that also benefits Singapore. Because our people in our businesses are pursuing many opportunities in China, all over Asia, in fact.  I met many of them in China recently, some of them were in Chengdu. I asked them: how is it? They said, "Well, my people were at first reluctant to come. Now they are here, they are very happy.  Some of them do not want to go back." But we have people all over - in the Middle East, Russia, and Eastern Europe. We are taking advantage of opportunities overseas.  We are creating opportunities in Singapore.  To put it quite candidly, if China and India were not up, I do not think investors would be competing with one another to build integrated resorts, whether in Marina South or in Sentosa.  It is because of the region that we are able to do this.

     But, of course, globalisation is going to create new problems, and one of the most difficult to deal with will be the income gap. It is now affecting low income workers, but the Chinese and Indian skill levels are moving up, and their aspiration is to move up, and the competition will increasingly be not just with the low level unskilled workers but also increasingly with the middle level skilled workers, and even professionals. For example, our hospitals are outsourcing the reading of x-ray films to India. You take the x-ray (it is digital) and it is zapped to India on the Internet, an American-board qualified Indian doctor in India reads the film, writes a report, sends it back all within half an hour, which is more than we are able to do with Singapore doctors in Singapore, because they have the people and the resources. So globalisation is going to put pressure not just at the bottom end but increasingly also at the middle and going up. And we have to see how this affects us, watch this and manage the situation as it unfolds.

    But the picture is not all gloomy because what we are doing to restructure and to upgrade is showing results.  The economy has bounced back in these last two years, things are getting better for most Singaporeans, including at the lower end. If you look at the companies which have restructured, the workers down the line have benefited.  You can see this in SIA, you can see this in PSA. Grace Fu, who has first-hand knowledge of this, explained to Members last week how in PSA, they turned it around and now it is growing again, which they could not have done had they not bitten the bullet and taken the very unpleasant measure to retrench 600 workers three years ago.

     But now that the economy is up, our collective agreements are reaching good settlements, good from the point of the unions - higher annual increments, better bonuses, low wage workers are enjoying higher increments and higher variable payments. The labour market is tightening and wages are going up.  So, that is one reason why we can be confident that we can tackle this problem.

     The second reason we can take comfort is that I do not see the wage gap widening forever.  Chinese and Indian wages are going up. The Chinese and Indians do not aspire to be poor forever.

They want to be successful too.  They want to be prosperous. They want to be middle-class, to travel. And their wages are going up, year by year.  In Shenzhen, by double digits. There are shortages of workers, companies cannot find enough, they are thinking of going inland. But the conditions inland in China are not the same as the conditions in Shenzhen.  So you cannot pay workers the same as in Shenzhen, and they may be cheap, but they are not as productive.

     And in India too.  Not all 1,000 million Indians can man call centres.  Some can speak English - the well-educated graduates.  But as their economy grows, this supply is tightening. And they will have to work hard to expand the supply, and their wages are going up. So Bangalore wages, some of them are more expensive than wages in Singapore.  So I think that, as this happens, the pressure on Singapore and Singapore workers will ease.  It will not happen overnight.  It may not happen within the next five years.  But in 10, 15 years, over time, I believe that is what is going to happen. And you will have two middle-class economies or more in China and maybe India, and Singapore will have the pressure off us and we would be able to improve our life, provided we work and upgrade ourselves.  But meanwhile, 15 years is a very long time. We have to work and tackle this problem.

     One seductive argument on how to tackle this is that we should go for welfare.  It is not a new argument.  It is not a brainwave which has just struck somebody since the election.  It is an old argument which other countries have had and which we have to know about and deal with.  We have treated welfare as a dirty word.  The Opposition, I think the Workers' Party, has called for a "permanent unconditional needs-based welfare system". I think that is an even dirtier five words.

     Why do we say this?  I think we have reason for it.  Some MPs have suggested that the Scandinavians make it work.  They have welfare. It is successful. Let us follow them.  But our situation is fundamentally different from the Scandinavian situation.  How so?  They are homogenous societies. So their people, their cohesion, is much stronger, top and bottom you stay together, you help one another. They are monolingual, non-English speaking, less likely to emigrate if the pressure is on them. They are rich in natural resources.  Norway has oil, it is 20% of their GDP; Denmark also has oil; Finland has timber, and they have a large and wealthy continent as their hinterland. If they go south, they have the Germans, they have the British, they have the whole of Europe. If we go around us, that is not what our hinterland is like.

      Scandinavians do not depend on multinational investments.  Their model is different.  They go on high taxes - VAT which is equivalent to our GST - at 25%, personal income tax up to 60%.  So every dollar you earn, 60% goes to the state.  For every krona you spend, one quarter of that goes to the state. And the first dollar you earn, maybe 20% goes to the state. And so, high taxes, high government spending accounting for more than half of the GDP.  Even then, the Scandinavian countries are not without problems.

     In the 1990s, they had a long period of decline.  Over the last decade, the average growth had been less than European growth, 2.2%. And it is an economy where one third of the people is employed by the government.  Everybody is a civil servant, of some kind or other.  Even then, high unemployment.  Finland has an unemployment rate of around 8%, compared to ours which is below 3% today. It is a very expensive show to keep going.  Because the basic problem is that high taxes sap the incentive to achieve, to excel, to go and create new wealth.

     We cannot follow the Scandinavian model. We are Singaporeans.  We are in the middle of South East Asia - English-speaking, multi-racial, completely open to the world.  If we try to do that, talent and businesses will leave, no investments will come.  Singaporeans who cannot leave will be stuck because the ones who are able will leave.  The ones who are not able will have no capable persons who are here to lead the country, to take care of them, and we would be in serious trouble.

      So what is our social model?  How do we ensure that our economy can grow and that Singaporeans can benefit from this growth?  I think we have to take three approaches, emphasise three things.  Firstly, enterprise and drive to create wealth, rather than merely redistributing a smaller pie; secondly, self-reliance rather than welfare; and, thirdly, saving for ourselves and spending within our means rather than taxing for others and borrowing from the future.  So in this way, we can get the people to perform to the best of their abilities; we can keep our economy competitive and flexible; and we can attract more investments and more talent, and improve the lives for all Singaporeans.

     These are the principles which are reflected in the key pillars of our social safety net, which are the CPF system, the 3M system for healthcare, and housing, HDB. These social safety nets are self-sustaining based on self-reliance and mutual support within the family; we encourage individuals to make the effort to work, we encourage families to save for their own needs and support one another. There is a Government safety net but it is as a last resort, and we have to look at your situation to decide whether you are meritorious and this net should be extend to you more generously or less generously.

     The Government has not been ungenerous and we have done a fair amount of transfers.  We have helped Singaporeans, both when times are hard and they have needed help.  We have also done some when times have been good, when we have surpluses to share.  So the initials are many.  If I gave you a list, I would need another few pages - Utilities Save, Economic Restructuring Shares, Medisave top-ups, Additional CPF Housing Grant, Progress Package.  Overall, over the last five years, we had spent $10 billion in total. It is a vast sum.  But I think it was spent within the context of this model - with the CPF, with the 3Ms, with the housing - and it is sound.

     Now, in this new environment, what should we do?  I think there are two things we should do, two broad approaches on how we should react to this new environment.  Firstly, to strengthen the safety nets; secondly, to tilt the balance, shift it, in favour of the lower-income groups who do not benefit proportionately from growth.

     To strengthen our safety nets, we should build on the pillars which are there.  The CPF - we have been reforming it and making changes over the last few years.  I think we need to enhance it to help members to earn better long-term returns on their savings.  It is not easy to get the right way to do it.  That is why we have taken some time, but it is something on the agenda, to find ways to help members to earn better returns on their CPF savings.

     We are improving the 3Ms.  Mr Khaw Boon Wan lives and sleeps with this everyday, and he will tell you more about it tomorrow. Medisave - extending this to other chronic illnesses if the current pilot succeeds, which we will have to make it succeed. MediShield - providing more risk sharing for large bills through insurance, which MOH is presently looking at, in other words, giving you more insurance and more protection for very large bills.  Of course, you have to pay higher premiums, but I think the premiums can still be affordable. Then Medifund - to take care of the needy, especially the older Singaporeans who are poor, and who do not have sufficient funds in their Medisave.  We will build this up year by year.  I think we will find ways specifically to look after older, poor Singaporeans who need medical care. Medifund has done a lot of good work. Just last year alone, in FY 2005, it helped nearly 300,000 patient cases, so some patients were probably helped more than once, and it paid out $40 million. But we will build on this and do more.

     Housing - we also have a good scheme.  But what we need to do is to help Singaporeans to realise the value of their homes, as I explained earlier. If we do this, it will help Singaporeans of all income groups.

     But specifically for the lower-income groups, we should do more systematically to tilt the balance in their favour.  Mdm Halimah raised this when she moved the motion and Mr Seng Han Thong talked about it too.  There is a right way to do this and there is a wrong way to do this. The wrong way to do this is to have a legal minimum wage which Mr Chiam See Tong proposed; is to keep out foreign workers and immigrants, which nobody has proposed, but the Workers' Party asked us to think about; is to subsidise individual consumption items, like utilities, electricity, public transport, which is not the way we have gone.  A minimum wage will not work because you will just make it harder for low income people to get work. Because the employer will say, "Why should I hire him?  And I cannot afford to pay him more." You are putting a burden on the employer which he cannot bear. It is a social burden.  Keeping out foreign workers and immigrants will not work because if there are no foreign workers here, the jobs may not come to Singapore. The investments may not come to Singapore.  In fact, they may go elsewhere. And those who are here may leave. Subsidising electricity or public transport is not a good idea because if you do that, firstly, a lot of the subsidies will go to people who are not poor; and secondly, you are encouraging people to use electricity, burn more fuel, more gas.  Actually, what we should do is to directly assist you and give you a U-Save grant if you are poor. Then it is up to you, you want to turn on the light, that is what it costs. You do not want to turn on the light, you save the money and you can take the cash.

     What we should do is to help the poor directly in a long-term way fundamentally.  How can we do that?  First, through education because with education, we can ensure that the next generation has every opportunity to do well and to break out from the trap of poverty and to move up. And education starts early. Dr Lily Neo made a passionate plea for pre-school education. Mr Michael Palmer also raised this. I do not know that we will go as far as they would like us to do immediately. But we have gone some way in this direction and we have schemes like the Kindergarten Financial Assistance Scheme (KiFAS), we have schemes to upgrade the kindergarten teachers, we are putting money into education from kindergarten upwards all the way to primary, secondary and tertiary levels. As some MPs have noted, per child, the Government is spending $100,000 in subsidies by the time you graduate. We have the Edusave Merit Bursary (EMB), which is meant for children from lower-income families.  I know some parents who have higher income complain that their children are deprived of EMB, because they did not meet the income criteria.  But the scheme was set up specifically to help the lower-income children to encourage them, to give them an extra boost so that they will do better.  We have other schemes which are open to everybody.  But the EMB is meant to be for the lower-income children who do well, and I think it achieves that objective, and helps them to level up.

There is one more idea which we can pursue on education. I have discussed it with Mr Tharman Shanmugaratnam and we are looking at it. We created Post-Secondary Education Accounts a few years ago. What this means is that the Baby Bonus, when the child reaches the age of six, if he (or his parents) has not spent it all, we will take that money, put it into a Post-Secondary Education Account so that when the child gets to post-secondary, ie, ITE, polytechnic or university, he can use it to pay for his school or university fees.  It is a good idea. But, so far, the first group of children who will have money in their Post-Secondary Education Account is only five years old. It is going to take them 11 years before they reach 16 and really kicks in. So, what about the 11 years' worth of students who are older than five and below 16 years old?  They are in schools now.  Why not we think of some way to put a bit of money into their Post-Secondary Education Accounts, just like we put into their Edusave Accounts, and when they reach tertiary or polytechnic, then they can use this money which can help pay for their school fees? Mr Shanmugaratnam thinks it is a good idea. I asked him, "Are you speaking as the Minister for Education or Minister for Finance?"; he says, "Both". So, I think it is something which we will pursue.

     Next, HDB home-ownership. It is still important to build up assets of Singaporeans and build up more for the lower end.  In the past, all families enjoyed the same housing subsidy, regardless of income. It can be a household family income of $8,000 or $1,000, but when they buy the same flat, you pay the same price, you get the same subsidy on the loan. But, actually, we should tilt in favour of the lower end. If you are from the lower-income, poorer but making the effort, we should give you a bigger subsidy when you buy a HDB flat, and we should pay that subsidy into your CPF. If you are well-off or middle-income, you can still buy the flat, but I do not think you need quite as big a subsidy. And that was the idea of the CPF Additional Housing Grant. If you are at the lower end, you can get up to $20,000 more when you buy an HDB flat. That is quite a lot of money, because a 3-room flat can cost up to $110,000 if you buy it from the HDB. $20,000 is nearly an 18% discount on the value of the flat.

     This is an avenue which we will continue to pursue and, over time, we will see how the grant works out and increase the grant so as to continue to do more for lower-income Singaporeans. We want the lower-income to own a property which is valuable, to have something to live in and to retire on, and this is a good way to do it.

     The third thing we will do for the lower-income group is Workfare. We first introduced Workfare in the Progress Package this year. About 330,000 low-income workers benefited from the first payout of Workfare on 1st May this year, and they received $150 million all together. On 1st May next year, there will be a second tranche, and more workers will benefit from that because I think there are more people who are employed this year. It was a once-off measure, but we introduced it having in mind that this is the direction which we would need to go in the long-term.  So we are experimenting and testing it out.

     It is a sound principle. If you are willing to work, jobs are there.  So the minimum you should do, if you want us to help you, is to help yourself by trying to get work. And if you work, then the Government will top-up what you earn through your own efforts.  We will top up something to help you meet your current expenses and costs of living, in cash.  We will top up something to provide for your future, ie, in the CPF, for Medisave, housing and retirement.

     This is how it worked, and I think it fits in quite nicely with the way the CPF scheme works, because for lower-income workers earning below $750, the CPF contribution rate from the employees' side is lower, as we want to make sure that he has enough to live on and we accept that he is not able to put aside quite as much for the future.  But with Workfare, I can help to make good this shortfall in contribution from the employee to his CPF when he is working, so that he will have enough for medical, retirement and his house, and he will have enough because he is taking back in cash more of what his employer pays him, to meet his current needs.

     We will implement more workfare schemes in future.  The precise mechanisms and formulas, we will experiment. We will try out different forms. But the principle will be the same - you help yourself, we will help you.  It is essential for us to tilt the balance in favour of lower-income Singaporeans, because globalisation is going to strain our social compact.  That is why we are doing all this.

     But I would like to caution Members that we should proceed with care. I know a lot of Members have used the words "slippery slope". They will appear all over the Hansard if you search for them.  But it is a really slippery slope. Many social welfare schemes which have ended up in serious trouble have started off with good intentions. The New Zealanders started like this in the 1930s and ended up with a system which they could not afford and have had to unwind. The British started off with such a scheme. As Dr Goh Keng Swee once described it, the conception was immaculate, but the way it worked out was not immaculate at all. The scheme became a heavy burden on British society - national health, social welfare, state pensions. The economy dragged until ex-Prime Minister Margaret Thatcher came along and started to try and put some of these right.

    So we have to be very, very careful - experiment, learn and modify as we go along.  Do not go overboard and end up with excessive welfare for the lower-income, and end up encouraging families to break up and to abandon their old folks.  Do not over-extend subsidies to people who are not poor, because if I grant a lot of benefits for people who are not poor, then what I will have to do is to tax them, take money from them so that I can give them back the services and spend the money on their behalf, which I do not think Singaporeans need my help to do.  Once we have made a mistake, unwinding is impossible, because once people have been given welfare benefits, it becomes an entitlement; it is permanent.  There will be budget deficits, taxes would have to keep on going up and we will be in the Scandinavian situation.  So if we compare the Americans and the Europeans, there is a difference between the Americans with their vibrant competitive economy and the Europeans with their heavy burden of social spending.

     If we do more for the lower-income and the elderly who are needy and also invest more for their future, then Government spending has to go up. There is no other way. We have kept this Government lean and trim.  The Government spends only 14%-15% of the GDP, ie, $1 in $7 approximately. This is lower than virtually any other country in the world.  The Europeans, as I told you, spend more than half their GDP. We are even lower than Hong Kong, which spends 18%-19% of its GDP. So Singaporeans are really having a very cheap Government - high quality but cheap Government.  But we will have to spend more. I think this is inevitable over the next five to 10 years.

     Infrastructure investments are going to cost money. We are spending $5 billion on R&D over the next five years.  For healthcare, as medical technology improves, as our people age and we go into hospitals more often and get more treatments, spending is bound to go up.  It has already gone up over the last five or seven years.  And year by year, it will continue to go up.

     Social spending has been going up.  Dr Vivian Balakrishnan showed the House some numbers last week on how MCYS' welfare spending has been rising, but those are quite small, compared to what we will have to spend if we start to tilt the playing field and start to say, across the board, give people who are in the lower-income group an extra boost and in many years, not just once in a while.  Therefore, it is better for us to start building up our resources now, so that when we need to spend more, we will have the means to do so.

     Therefore, comes the question: how do we finance this?  Mr Inderjit Singh, in his speech last week, asked about our reserves.  I was surprised that nobody else did. But it is a pertinent question.  The reserves are something which we have built up for a rainy day because we are highly dependent on imports. We have no natural resources. That is all we have and we have to husband them carefully and use them only when we really need to. There is an argument, of course, that the present generation accumulated the reserves, so we also should have a claim, especially when we grow old.  I think this is a valid argument.  But we have to balance this argument against the claim of future generations - our children and grandchildren. We want to give them a better life, more security, and to let them start off with something a bit more than we started off. I do not think we want them to say, "Our parents' generation saved a lot of money and they spent it before they left." So we have to balance the claims of the present and future generations.

     In fact, that is what we have been doing. We invest the reserves prudently.  Out of the returns from the investment, out of this kitty, we draw an income stream which will fund Government spending and enable the present generation to have its fair share.  But we keep the nest-egg intact, so that it will grow from year to year and be something which we can pass on to our children.  Under the Constitution, the Government can spend up to 50% of Net Investment Income (NII) on past reserves, and 50% of Net Investment Income has to be kept for the future.  I believe this is the right formula. It is a fair balance between the claims of the present and the future generations, and will protect our reserves, our seed corn, from being depleted. But we can refine the implementation of this 50% rule because, currently, the definition of Net Investment Income only includes dividends and interest.  This is not quite right, because a significant part of the returns on our reserves are capital gains. We should look at total returns on the reserves as the basis for deciding how much it has grown.  Therefore, we intend to change the definition of Net Investment Income to include realised capital gains. This will increase the amount which we can draw on average.  Some years, if the markets are bad, we may end up with less but, on average, we should end up with more. To do this, we need to amend the Constitution. We will amend the Constitution and work out the details with the Elected President.

   But it is not sufficient just to depend on NII to meet our future spending needs. We also have to plan ahead to make sure that we have enough revenues, including from taxes. Direct taxes cannot go up. In fact, we have been bringing down our direct taxes, ie, personal income tax and corporate tax.  We have brought them down to 20% over a long period of time. In fact, we may have to lower them further.  Hong Kong is competition for us. Their corporate tax is 17.5%.  They are thinking about GST. If they do a GST, they may decide to bring their corporate tax rate down and we may have to follow suit. The Central and Eastern European countries are also very competitive. Many countries in the former Soviet bloc, eg, Poland, Hungary, Slovakia and the Czech Republic, have corporate taxes which are below 20%.  Slovakia and Poland are just 19%.  In the Baltics, eg, Latvia and Lithuania, they pay only 15% tax.  They are highly competitive. Many of them have joined the EU so they have an additional advantage over us and increasingly, they are direct competition to us. They will attract investments which may otherwise come to Singapore and we have to watch them. If we have to bring our corporate tax down, every percentage point we bring it down, from 20% to 19%, for example, will cost us $400 million a year. It is big money.

     Therefore, we need to consider raising indirect taxes, in other words, the Goods and Services Tax (GST).  It is now 5%; I think we need to push it up to 7%.  Even 7% will still be lower than nearly all other countries which have GST or VAT.  But if we raise it from 5% to 7%, it will give us precious extra resources to implement social programmes like workfare later on.

     Our aim is to help lower income groups and the elderly, it is not to increase their burdens.  So when we implement the GST increase, it is not just a GST increase; it is a package which will fully offset the impact of the GST for these groups and begin to strengthen the social safety nets and tilt the balance in favour of the lower income Singaporeans.

    We will not just raise the GST, but we will have a comprehensive offset package.  We know how to do this. We have done it twice before - in 1994 when we introduced the GST and then, in 2003, when we raised the GST and implemented the Economic Restructuring Shares (ERS) package.  And we made sure that a large segment of Singaporeans ended up not worse-off. 

     This time again, we will do a comprehensive offset package, but we will weight it more heavily towards the middle- and especially towards the lower-income group and the elderly poor.  I am quite confident that we will be able to do this.

    When should we do this - earlier or later?  I think it is better to do this now when the economy is doing well.  Then we can manage the adjustment. We have the flexibility to adjust our programmes depending on how things turn out because over the next 5-7 years, we do not know what the trend of globalisation will be like.  We do not know what difficulties will come our way.  Better get this done, settled, ammunition prepared, powder dry.  Any troubles, we will be equipped to cope with them.  We are working out the details. We will announce it in Budget 2007 which will be on 15th February 2007.  Mr Tharman Shanmugaratnam will deliver the Budget as the Second Minister for Finance.

      Sir, we worry a lot about the challenges ahead, and especially about the social issues which we have to tackle.  But let us see these issues in perspective.  Let us remember, as Ms Josephine Teo said, "to celebrate what is right about Singapore".  And we have a lot to celebrate. Our prospects have never been brighter.  Our overall environment is positive.  Our economy is vibrant. Our people are well-educated and equipped to excel in a globalised world. 

      I received several visitors from Africa recently, including President Pohamba from Namibia.  He had not visited Singapore before.  He congratulated me effusively.  He said, "As soon as I arrived at the airport, the airport itself, the drive into the city, the streets and buildings, it is like paradise.  I have not been up there.  I do not know anybody who has been up there who has come back to tell me about it.  But from everything which I have read, this is what paradise is like."

      I think we should improve on what we have and not just be satisfied that it is like paradise.  But we are in a strong position.  Let us stay united in purpose.  Let us stand firm in our determination to succeed.  And let us work together to build a competitive economy and an inclusive society.  [Applause.]

6.07 pm

     Mr Low Thia Khiang (Hougang): Sir, I do not quite understand why welfare is a "dirty" word.  What is wrong with providing welfare to the people and looking after them? 

     Sir, the Prime Minister has said that he spent about $10 billion before the last elections for whatever help packages, some of which I understand were only dished out when the elections were coming - the New Singapore Shares, Progress Package - where even people with a million-dollar income would still receive $200.  Was that an equitable way of helping the people, the model that the PAP Government is talking about?  I do not know. 

    Sir, that is why we think that it is better for us to have a needs-based welfare safety net with permanent features, ie, arising from the change in circumstances of globalisation, people are uncertain when they will lose their jobs, and what will happen.  We need to give some confidence to the people that there will be help if they are in need of help. Will the kind of system that the Worker's Party has proposed bankrupt the country?  I do not think so. Sir, we are not talking about a welfare system like the UK where you provide retirement pensions or a weekly allowance. We are talking about helping the needy, which I think is more focused.

     Sir, the Prime Minister also talked about the increase in GST and the offset package, but I am sure he will agree that the offset package is for a period of time. And once you come to the end of the period of the offset package, the people are stuck with the increased GST.  Has the Government considered the impact of another extra 2% increase of GST on the people, not only on the lower-income group, but also on the low-middle and middle-income?  As what the PM has said, we had better do it earlier because the economy is good.  But if the economy is bad, if it turns later on, what are we going to do?  People are going to be stuck with a heavier cost of living.

     I would urge him to consider carefully about the increase in GST, bearing in mind that though you have the offset package, our GST does not exempt anything.  It practically taxes on everything under the sun.  That also means essential things.  How does that part of taxing on everything impact the lower income although you provide an offset package?

     Mr Lee Hsien Loong: Mr Speaker, Sir, the Leader of the Opposition has had ample opportunities to explain what he means by a permanent unconditional needs-based welfare system - in his manifesto before the elections, during the campaign, when he spoke during the debate on the President's Address, and when his Party Chairman spoke during the debate.  He did not.  Dr Vivian challenged him.  He said, nothing wrong with that.  He did not elaborate. 

     I have spelt out what I understand him to mean by a permanent unconditional needs-based welfare system and explained why the Scandinavian model, which he has referred to, does not work.  He said, no old age pensions.  That is very good.  I think we should write that down somewhere. No weekly payments. That is even better.  I will write that down too.  Then what does he want?  We can debate that.

    I have explained at great length what I mean by doing more to tilt the balance, tilt the playing field, help the poor, enable them to help themselves to upgrade and work.  I think that is the right way to do it.  I have also said what are the things which we should not do.  The debate has had ample opportunities to be joined. This is not the moment for another long supplementary discussion. 

    On the GST, I advise the Member to be patient and to wait till the Budget.  15th February is not very long.  He said that the offset package is for five years.  He has not seen my offset package.  It is not just an offset package to deal with the GST.  It is a whole set of measures which we are taking in order to tilt the playing field in favour of the lower-income groups, which is what we have to add up and tally in the balance.  My purpose is to help the lower-income groups and my way of doing it is to say that GST will go up, but I am going to help you. Do not worry, you will be all right.  I can achieve that.

     We have argued over whether you should have the GST on essentials or not, selectively or not, or better to tax everything under the sun.  Those are technical arguments. Whichever way I do it, my purpose is to make sure that the lower-income groups are better off.  And the way we have grown Singapore, the lower-income groups have indeed been better off.  I can consider again whether to raise GST, but he did not ask me to consider again whether to tilt the playing field. There is no item which you can do without having to ask where the resources are in order to meet those goals.  And we are upfront and candid about it that this is what we are going to do and it is going to cost some resources. This is what we believe that we have to ask Singaporeans to bear.

    For the middle-income, they will generally be about okay.  For the higher-income, I think the way we should do it, the higher-income should end up paying more overall than they now do.  It is part of being one society.  I am not going to tax 50% on income tax.  I am not going to tax 20% on GST, or 25% the way the Scandinavians do.  But I have to make an adjustment - 2% - I think this is fair and I think Singaporeans will support it.

     Mr Chiam See Tong (Potong Pasir): I wonder if the Prime Minister would just clarify on the minimum wage. In the West, they have given welfare at such good rates that some workers refuse even to work.  But in Singapore's case, it is just the reverse.  The lowest of the low wages in Singapore are so low that some workers even refuse to work because they say they cannot sustain themselves and their families with that sort of a wage.  So they refuse to work because the pay is so poor.  It is just the reverse of the West.

    I think if we give some kind of minimum wage whereby they can sustain their families and themselves, I think they will work.  And not only they will work, because if you give them a bit of dignity, enough to eat, enough to live on, they will be even more productive.  But if they are forced to accept the low wage, they will not be productive because they just have got no heart to work.  The pay is so low and they do not have dignity and respect as a worker, they just go slow. So the whole country loses out.

    I wonder if he could just comment on that.

     Mr Lee Hsien Loong: Mr Speaker, Sir, I am not sure how Mr Chiam would explain this fact that the countries with minimum wages all have higher unemployment rates than Singapore. Yes, wages are sometimes low and Singaporeans are not willing to work.  I think when we say workfare, in fact, it helps to address this problem because when you work, the employer pays you and the Government will help to top up. So better work, you get something more. 

    What is the difference between workfare and the minimum wage?  The difference is for workfare, I am putting the burden on the whole of society, the Government, which means the State.  With the minimum wage, we are putting the burden on the employer.  You say the wage is too low, the worker refuses to work.  If you impose a higher minimum wage, the employer will say, "It is too high.  I refuse to employ a worker."  In the end, the two still cannot meet. This is an argument which has gone on for a long time in many countries. We have got a formula which has worked for us.  I think we just stick to it.

     Ms Sylvia Lim (Non-Constituency Member): Sir, the Prime Minister has referred us to some handouts or charts on the rapidly ageing population, which also talked about the ratio of elderly persons to working-age persons over three snapshot years.  I wonder if he could clarify whether the Government has an idea of what is the preferred dependency ratio that we should work towards.

     Mr Lee Hsien Loong: I think if it does not get worse from what it is now, we will be doing very well.