Friday, 8 March 2013

Budget 2013 Debate Round-Up

S'pore in 'critical period of transition'
Tharman assures SMEs, workers that Govt will help them through
By Aaron Low, The Straits Times, 8 Mar 2013

ECONOMIC restructuring will be painful but it cannot be put off any longer, said Deputy Prime Minister Tharman Shanmugaratnam yesterday, as he presented the choice confronting Singapore.

Noting that Singapore is at a critical period of transition, or an "inflection point in our history", he said the push for an economic metamorphosis is not just an economic issue but also a "key social pillar". Raising productivity would benefit both firms and workers, through higher incomes.

"If we do not achieve momentum in the next three years, there's a real risk that three years from now, we will be in exactly the same position.

"Both workers and businesses will be worse off. There is no choice," he said in Parliament.

At the heart of the efforts are the local small and medium-sized enterprises (SMEs), he added, because without their success, Singapore cannot achieve the quality growth it is aiming for.

SMEs were important not just because they contributed about half of Singapore's gross domestic product. "We also want them to succeed because they are part of the lifeblood of our society."

But SMEs will not journey alone. Mr Tharman assured them the Government is supporting them in the difficult path ahead. The sector will receive - through rebates and subsidies - more than twice the amount of higher foreign worker levies it is expected to pay for the next three years.

At the same time, SMEs will get more than two-thirds of the $5.3 billion package created to support companies to move up the productivity ladder during the three-year transition, he said.

Mr Tharman, who is also Finance Minister, also spelt out the measures the Government would take to help the elderly, the low-income and the middle class.

The philosophy behind the Government's social policies was not redistribution for its own sake, he said. Rather the test was whether policies would help both the lower and middle-income live a better life.

The Government is looking out for the middle-income group by not levying a large tax bill on them and ensuring they continue to see higher wages.

For the lower-income, he said the Government is supporting as much as 40 per cent of the wages of older workers through Workfare and wage subsidies.

And for the younger lower wage earners, the Government is sparing no expense in giving them opportunities to move up the ladder through training as well as subsidising the purchase of a home

Wrapping up the Budget debate, he addressed some of the key concerns highlighted by MPs. Most of the 59 MPs who spoke focused on economic restructuring and questioned whether the help package for companies was aiding big firms more than SMEs. Many also said the Budget was a progressive one, noting the shift towards further redistribution of wealth through taxation.

Tackling these issues in turn, Mr Tharman spent an hour elaborating on the Budget's two priorities: economic restructuring and keeping society inclusive.

So far, productivity growth has been weak and last year's 2.6 per cent decline was "miserable".

But productivity takes time to grow. In the next few years, the drive should gain more traction with more companies jumping on the bandwagon, he said.

Rounding off, he sounded an optimistic note, saying that Singapore was "not starting out from a position of despair, but we want to do better".

Success would depend on government, employers and people doing their part. "It's not about incentives, grants and subsidies, it's about responsibilities and values. And that will determine whether we will transform Singapore by the end of this decade."

$5.9b growth package benefits SMEs most
Tharman urges companies to take full advantage of govt payouts
By Yasmine Yahya, The Straits Times, 8 Mar 2013

SMALL and medium-sized enterprises (SMEs) stand to gain in government payouts twice what they will pay in increased foreign worker levies over the next three years, Finance Minister Tharman Shanmugaratnam said.

Mr Tharman, who is also Deputy Prime Minister, shared this data in Parliament yesterday to show that the Government is stepping up support for SMEs even as it intensifies the pace of Singapore's economic restructuring.

In fact, SMEs will be the biggest beneficiaries of the $5.9 billion that the Government is spending on the three-year Quality Growth Programme unveiled during the Budget, he said.

Take the Wage Credit Scheme, under which the Government will subsidise salary increments paid over the next three years to Singaporeans earning $4,000 or less.

Two-thirds of such employees are employed by SMEs, Mr Tharman noted, and so SMEs will have their "full share" of the scheme.

An SME looking for the right approach to sustain wage increases beyond the three-year duration of the programme should take full advantage of all the schemes on the table.

"Take full advantage of them. We are making them accessible, we are making them easy to apply for. We are even putting some of them in front of firms," he said.

SMEs will also receive about 90 per cent of the corporate tax rebate. "The 30 per cent corporate tax rebate is higher than we've done before and we decided to do that but to impose a cap at $30,000 because the higher the percentage rebate, the more the SMEs benefit; the higher the dollar cap, the more the large companies benefit," he said.

SMEs will receive about 95 per cent of the Productivity and Innovation Credit (PIC) bonus. Firms are given a dollar-for-dollar matching cash bonus when they spend at least $5,000 a year to raise productivity, capped at $15,000 over three years.

"Frankly the $5,000 per year or $15,000 over three years is not a large sum for the large companies, but for the SMEs, including micro-SMEs, it is very meaningful," Mr Tharman said.

The $500 million worth of enhancements made this year to other existing schemes were also designed for SMEs, he added.

Mr Tharman said the Government was continuing with economic adjustments, such as the tightening of foreign worker policies, in full knowledge of the difficulties that businesses will face.

"If we do not achieve momentum in the next three years, there's real risk that three years from now, we will be in exactly the same position and both workers and businesses will be worse off."

Govt to study MPs' work scheme ideas
By Yasmine Yahya, The Straits Times, 8 Mar 2013

THE Government has a number of programmes in place to get housewives and the elderly back to work, but will consider the ideas raised by Members of Parliament over the past three days, Deputy Prime Minister Tharman Shanmugaratnam said.

The Ministry of Manpower will announce enhancements to "a whole range of schemes" during the upcoming committee of supply debates, he said, to help small and medium-sized enterprises attract and retain talent.

Still, he added, the Government will study the useful suggestions raised by MPs.

These include those given by Ms Foo Mee Har (West Coast GRC) and Nominated MP Mary Liew, who proposed a back-to-work credit to help employers hire women who are returning to the workforce.

Non-Constituency MP Gerald Giam raised a similar hiring credit scheme, while Ms Jessica Tan (East Coast GRC) suggested training subsidies for professionals, managers and executives (PMEs).

Mr Liang Eng Hwa (Holland-Bukit Timah GRC), meanwhile, proposed helping companies pay for the salaries of re-skilled PMEs.

Mr Tharman noted that the Government already has schemes with similar objectives, such as the Special Employment Credit, a wage subsidy given to employers who hire older and disabled workers, and the Part-Time Pool programme by SPRING Singapore, which has built up a group of part-time workers that food and beverage firms can tap on.

He also pointed to schemes run by the Singapore Workforce Development Agency (WDA), such as the Place and Train programme, which subsidises companies that send their new hires for WDA courses, and the Advantage scheme that helps companies redesign jobs for older workers.

Mr Tharman also noted that some of the MPs' proposals were similar to programmes that have been launched in the past. For example, the Government launched a traineeship programme in 2001 to encourage employers to hire older workers, he said.

"We discontinued it after three years because there were very low retention rates of the workers that had been hired on the basis of this initial wage subsidy," he said.

This is a problem that many countries face, he said, but added that the Government will continue to study it.

Productivity drive gaining traction
By Aaron Low, The Straits Times, 8 Mar 2013

PRODUCTIVITY has been weak since the restructuring drive began in 2010 but Deputy Prime Minister Tharman Shanmugaratnam is confident that it will take off in the next few years.

This is because productivity will take a few years to grow and it is clear that the drive is gaining traction in the industry, he said.

Responding to MPs who had raised concerns over whether Singapore can achieve the productivity targets set, Mr Tharman admitted that gains have been weak in recent years.

"Productivity has been weak. Last year it was miserable, minus 2.6 per cent, in fact," he said.

The decline in productivity last year was because of the unique economic situation that Singapore was in last year - growth was slow but the labour market was tight, he said.

Productivity is calculated by how much more value, in dollar terms, a worker adds to the economy.

Slow growth combined with good job creation can lower the overall productivity number.

"There is a gestation period before productivity schemes can take off, before firms can customise the schemes that are available to their own needs and can actually think through what is in their business interest," he said.

He is optimistic that after this period, productivity will pick up again, especially since the money set aside for the drive has not been drained yet.

Plans that the Government has developed are being put out alongside the disbursement of the productivity-linked incentives and grants.

Said Mr Tharman: "And in the next few years we're going to see a lot more traction, a lot more take-off because many of the road maps have now been developed and they are ready to roll."

He highlighted the construction sector as a prime example of how things will shape up.

Noting that alongside the foreign worker tightening, the Government has been working with industry and changing policies to aid productivity growth there.

"By the end of this decade, we will see a different construction sector," he said.

We are not starting from a position of despair, but we want to do better.
– Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, on the Government doing more for social spending, such as in education, housing and work support

I grew up and stayed in four different countries before settling down in Singapore. I made Singapore my home, raised my family here and my son has since done his national service like any other Singaporean. I am wholly committed to Singapore and will do the best I can to contribute like any other Singapore citizen.
– Dr Lily Neo (Tanjong Pagar GRC), who was born in Indonesia, urging more people like her to make Singapore their home and cautioning against taking the position that only those born and bred here can form the Singapore Core

'Hard to draw line' between firms for wage credit
By Janice Heng, The Straits Times, 8 Mar 2013

THE Government decided to offer the Wage Credit Scheme to all Singapore companies and not just small and medium-sized enterprises (SMEs) because, in practice, it is very hard to say which firms deserve the help more, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.

"It's not simply small against large; it varies widely according to sector and even for companies of the same size, it varies widely.

"So it's much better to be clean about this," he said yesterday.

Under the scheme, introduced in Budget 2013, the Government will fund 40 per cent of pay rises for workers earning up to $4,000 a month, for the next three years.

During the Budget debate, at least four MPs expressed concern in the past two days that the scheme might benefit larger instead of small companies.

Mr Inderjit Singh (Ang Mo Kio GRC) feared it would subsidise bigger companies which would be raising wages anyway.

"It will have got nothing to do with productivity behaviour and they will be claiming millions of dollars from the Government," he said, suggesting that the scheme be sharpened to avoid this.

Agreeing, Workers' Party Non- Constituency MP Yee Jenn Jong asked Mr Tharman to pinpoint the type of companies most likely to benefit from it. Yesterday, Mr Tharman reassured MPs that SMEs will "have their full share of the Wage Credit Scheme".

Two-thirds of Singaporeans who earn up to $4,000 - that is, those eligible for the scheme - are employed by SMEs, he said. SMEs have also been giving wage increases, he added. In 2011, more than half did so. Of these, more than half raised pay by over $200.

But Mr Tharman acknowledged the worry that larger firms would receive undeserved subsidies.

"In principle, you'd expect larger companies to have the means to improve productivity of their own and to share productivity gains with their workers," he said.

But in practice, it is "very hard to draw the line" - between a company with low headcount but high profits, and a larger enterprise that faces very thin profit margins, for instance. For the latter, the scheme could be very helpful in freeing up resources to invest in productivity and share the gains with workers, he said.

Progressivity 'not for its own sake'
Tharman: Tax system designed to boost economy, better people's lives
By Robin Chan, The Straits Times, 8 Mar 2013

THE true test of Singapore's tax system is not how progressive it looks, but how it actually helps Singaporeans have better lives, said Deputy Prime Minister Tharman Shanmugaratnam.

In outlining the philosophy behind Singapore's fiscal system in Parliament yesterday, he said the Government is not going for progressivity or redistribution for its own sake.

Rather, the whole fiscal system is designed to make sure that Singapore stands the best chance of sustaining its economic dynamism, and building a society that all Singaporeans can benefit from.

"The litmus test is whether it will truly help lower- and middle-income Singaporeans have better lives. And that's not a question with straightforward answers in tax policy, or in spending policy," said Mr Tharman, who is Finance Minister.

While the Budget announced last month increased the progressivity of the tax system by raising taxes on the wealthy on property and cars, the three-day Budget debate saw concerns and suggestions raised from many MPs that it could be made more progressive still. Several wanted more to be done to close the income gap and raise the quality of life of low- and middle-income families.

Acknowledging that the fiscal system is an important issue now as Singapore evolves as a society and economy, Mr Tharman outlined four points that undergird the country's fiscal philosophy.

First, the tax system must be equitable and fair, and sustain economic dynamism. Second, spending must be efficient and targeted at those who need it most.

Third, the Government must work with the community through voluntary welfare and other civic groups to achieve stronger helping hands on the ground. And fourth, policies must be far-sighted, so that they can be sustained over many years, and not just over one or two terms of government.

To that end, he emphasised that the income tax schedule is already highly progressive. More than 55 per cent of Singaporeans already do not pay any income tax.

Also, the marginal income tax schedule does not run from zero to 20 per cent. Rather, with Workfare Income Supplement, which is paid to low-wage workers, it acts like a negative income tax, extending the tax schedule backwards to minus 30 per cent.

"So our true income tax schedule is actually from minus 30 per cent to plus 20 per cent... It's 50 percentage points. Highly progressive," he said.

Mr Tharman also explained a quirk in the statistics: The lowest decile of households receive less in benefits and pay more in taxes than the second decile.

This is because many in this group are not as badly off as their bottom position suggests. They have either stopped work for some reason or are retired.

And some 17 per cent of such households live in private properties, 16 per cent own a car, and 10 per cent have a maid.

The importance of getting the fiscal system right was further emphasised by Mr Tharman with the examples of the United States and Europe where, among other things, pensions have become underfunded. Retirees end up better off than current workers who are paying the price of these problems through the cutting of wages and jobs, he said.

"It is an example of what looked progressive but actually was bad, not just from a financial sustainability point of view but just unfair," he added.

But while there is a need to do more, and the Government is committed to more social spending, he reminded the House that Singapore continues to do well internationally in important areas like health care and education.

"We're not starting from a position of despair but we want to do better. We've set out our priorities and we want to do better," he said.

Best aid strategy for middle-income is rising incomes: DPM
By Leonard Lim, The Straits Times, 8 Mar 2013

THE key strategy in meeting middle-income Singaporeans' aspirations is to raise incomes through quality growth, Deputy Prime Minister Tharman Shanmugaratnam said yesterday, as he outlined four ways in which they will get help.

Singapore has been more successful than South Korea, Hong Kong and Taiwan in growing real median incomes in the last five years, he said.

The Government's push for quality growth in this year's Budget is thus the first plank of help for the middle-income group. It is not just an economic strategy but a key social pillar as well, he said.

The Wage Credit Scheme, in particular, was designed deliberately to include this broad swathe of society.

The centrepiece of last week's Budget, it involves the state co-funding 40 per cent of pay rises for those earning a gross monthly salary of $4,000 or less.

The second way to help the middle-income group is to keep their tax burden low. Their disposable incomes can then rise.

He outlined how their current tax burden - which may include levies for cars and foreign domestic workers on top of income tax - is low by international standards.

Two years ago, the Government moved to significantly reduce the amount of income tax the middle-income group pays, even as the top tiers were unchanged.

Mr Tharman underscored the significance of that move yesterday, as he pointed out that no country has been able to deliver significant benefits to the middle-income group without significant taxes for them.

Median tax rates are very high in Europe, for instance, while their equivalents of the Goods and Services Tax are also in double figures, compared with Singapore's 7 per cent, he said.

The third way to help the middle-income group is to ensure they have a level playing field when it comes to job opportunities and progression.

On Singaporeans entering the middle and upper levels of the workforce who feel squeezed out by foreigners, Mr Tharman noted that criteria for the lower end of Employment Passes and S-Passes have been tightened.

The Ministry of Manpower is studying proposals for labour market tests to require employers to show that they tried first to hire a Singaporean, but that is not "something that we want to rush", Mr Tharman said.

"We want to put in place a system that's fair, sustainable and allows the companies to stay competitive," he added.

The fourth and final way to help the middle-income group is through actual benefits to them, and this year's Budget contains a significant amount of such transfers, he said.

For example, a couple in their 40s who earn a combined income of about $6,300, live in a four-room Housing Board flat, have two children - with one in primary school and the other in secondary school - and a maid, would save $730 from tax rebates and $530 through special transfers and other changes, such as a reduction in the maid levy.

The total of about $1,500 happens to be about the same as the increase in their household expenditure if that were measured using the Consumer Price Index, though the Government did not design the measures to fully offset this cost-of-living rise, he said.

Other changes announced in recent years, such as childcare subsidies and an expansion of university bursaries, also benefit the middle class.

They will also be a major beneficiary of the ongoing health-care financing review.

The Government is also studying greater flexibility in Medisave use and capping co-payments, he said in response to suggestions by several MPs, including Ms Tin Pei Ling (Marine Parade GRC).

Ms Lee Li Lian (Punggol East) and Mr Christopher De Souza (Holland-Bukit Timah GRC) had highlighted the importance of caregivers.

Health Minister Gan Kim Yong will speak on the matter during the debate on his ministry's budget next week.

80% of low-income families own homes
By Leonard Lim, The Straits Times, 8 Mar 2013

IN SINGAPORE, eight out of 10 low-income households own the roof over their heads and "there's no other country that comes close to it", Deputy Prime Minister Tharman Shanmugaratnam said yesterday.

This group are the bottom 10 per cent of earners, with monthly household incomes of about $1,650, or $1,800 if Central Provident Fund contributions are included.

And home ownership is a key pillar of Singapore's social support for these people, he said.

There are, however, two distinct groups among them: those age 55 or above and those below 35. And the Government's solutions have to be tailored to their needs, said Mr Tharman.

Many of the older folk, who make up slightly over half of the group, have seen little improvement in their pay in the last five to 10 years, especially after taking into account inflation.

Six in 10 of the breadwinners have no more than primary-level education.

But Mr Tharman, who is also Finance Minister, pointed out that 83 per cent of those 55 and older in the bottom decile are home owners.

"Helping them to monetise the home, unlock the value so they can have better retirement years, is extremely important," he said.

These older citizens also get a boost in wages through Workfare.

The income ceiling for this was raised in the Budget from $1,700 a month to $1,900.

The younger group, Mr Tharman said, has benefited from an improved education system and almost all have at least secondary education.

The Government will put in place avenues for them to advance, like boosting spending on the pre-school sector and upgrading opportunities for those working. In short, "provide every leg-up rather than a handout".

For housing, they enjoy grants tailored to their needs, with even those earning $1,000 or less getting two-room flats through such measures, he said.

Low-income Singapore families receive an Additional Housing Grant of up to $40,000. A further Special Housing Grant of up to $20,000 was introduced in 2011.

The latter has been given to about 1,100 low-income households.

Helping low-income Singaporeans through such grants results in them having more cash in hand as the mortgage of their two-room flat is paid fully, or almost fully, from their CPF savings.

"It's about having an asset that will appreciate with inflation and appreciate with progress.

"They don't get left out and they too will retire with a significant asset for their retirement years," Mr Tharman added.

'Age discrimination leaves older workers vulnerable'
By Janice Heng, The Straits Times, 8 Mar 2013

OLDER workers in Singapore face "an element of age discrimination", Deputy Prime Minister Tharman Shanmugaratnam acknowledged yesterday.

It affects both older professionals, managers and executives (PMEs), and older low-wage workers, he said.

Younger PMEs can find jobs quite easily, Mr Tharman noted, adding that Singapore's youth unemployment rates are "the lowest around, lower even than (in) South Korea and Taiwan".

In contrast, older PMEs are not just vulnerable to competition from foreigners, he said.

"For our older PMEs, (those who are) middle-aged especially, once they lose their jobs, some of them find it tough to get back in.

"And I believe there's an element of age discrimination that we have to tackle," he added.

He made the point when speaking on the importance of ensuring a level playing field for middle-income Singaporeans vis-a-vis foreigners. Similarly, low-income older workers are more vulnerable than their younger counterparts, he said later.

"They have the least education and it is very easy for employers to discriminate against older workers if they want to, even upon what appears to be the basis of merit."

This is why the labour movement's progressive wage model is important, he added. Such a model "minimises the downside" for workers, that is, the risk of them losing their jobs, he said, borrowing a phrase labour chief Lim Swee Say had used on Wednesday.

Mr Tharman listed other ways in which the Government is helping older workers stay employable. These range from the Special Employment Credit, a wage subsidy given to bosses for hiring them, to the Workfare Training Support Scheme which subsidises programmes for workers aged 35 and older who earn up to $1,900 a month.

So far, one in five of all workers aged above 50 have taken part in training.

The Government wants to raise that proportion, and the Manpower Ministry will elaborate on it during the debate on its budget, said Mr Tharman.

Tharman reassures retirees about property tax
By Robin Chan, The Straits Times, 8 Mar 2013

MOST retirees will not face higher property taxes even if they are living in high-end landed homes, assured Deputy Prime Minister Tharman Shanmugaratnam yesterday.

He explained that the Government even took pains to study geographically where older Singaporeans are living, to make sure that those areas "were properly taken care of".

"We looked at Serangoon Gardens, we looked at Opera Estate, we looked at Teachers Estate," he said as he rounded up three days of debate on the Budget.

"And I can tell you that at least 90 per cent of even the semi-detached properties in these older estates will not face higher property tax rates as a result of this move."

Workers' Party chairman Sylvia Lim (Aljunied GRC) had asked for more clarity on how the higher taxes would not affect most retirees.

The revised property tax schedule in the Budget - intended as a wealth tax - will see a higher property tax for the top 1 per cent of owner-occupied homes, or about 12,000 homes with an annual value above $59,000.

The remaining 99 per cent, or 950,000 owner-occupied homes, will pay less property tax.

The $59,000 annual value mark, in fact, covers 96 per cent of terrace houses and 85 per cent of semi-detached properties, Mr Tharman said.

So while a high-end property, such as a landed home in the central area with an annual value of $150,000, will see an increase in property tax of $5,120 a year, a home of $70,000 annual value will see an increase of only $120 in property tax.

While that may still be a meaningful sum for a retiree, he said that retirees in high-value homes typically have other forms of passive income including interest, dividends and rental. He argued it was right to tax the wealthy more, even if they were retirees.

"Fundamentally, this is a matter of equity. It is the right principle that a wealthy retiree should pay more tax than someone who is less well-off," he said.

"Particularly since we're raising tax rates for investment properties, it will be inequitable not to tax the wealthiest or those who live in owner-occupied homes."

He also said that Ms Lim's suggestion to tax based on the total value of properties owned, rather than on a per property basis, was not a bad idea in principle, but would be difficult to implement.

This is because properties might be held under the names of different family members or relatives, and it would also be difficult to administer when properties are jointly owned by multiple owners, he said.

57,000 investment homes face higher taxes
By Esther Teo, The Straits Times, 8 Mar 2013

ABOUT a third of Singapore's 169,000 investment homes will face higher property levies once the Budget's new tax structure takes full effect in 2015.

Owners of such units with an annual value of more than $30,000 - or about 57,000 homes - will pay higher taxes, the Ministry of Finance (MOF) told The Straits Times yesterday. The progressive tax rates range from 12 per cent to 20 per cent of a property's annual value.

The other investment homes - about 112,000 properties - have annual values of $30,000 and below, so the existing property tax rate of 10 per cent will continue to apply.

The annual value is the estimated annual rent the property may fetch. An annual value of $30,000, for instance, could apply to a suburban condominium.

Singapore has around 962,000 owner-occupied properties and 169,000 investment homes.

Investment homes - about 15 per cent of the total housing stock - include vacant units, an MOF spokesman said.

Experts say the changes will affect mostly high-end homes, especially with the removal of the property tax refund concession for vacant properties next year.

Savills Singapore research head Alan Cheong said vacant units are likely to be high-end homes as more expatriates are coming in on local packages and have moved into the mid- and mass-market segments over the past few years instead.

Without the tax concession, there might be more high-end homes coming on stream, some held by developers, and that could further dampen rents.

Rents for homes in the prime districts of 9, 10 and 11 have already fallen 7.4 per cent in the three months to Dec 31 compared with the same period a year ago, Mr Cheong noted.

Properties that are vacant despite reasonable efforts by owners to find a tenant, for instance, can get a full property tax refund for the duration of the vacancy. But from the start of next year, they will be taxed at prevailing property tax rates.

Investor Anthony Ong, 48, said he expects his property taxes to increase by a "few hundred dollars" under the new tax regime. "It's not a very big impact as we don't own a very luxurious type of condo but after paying the taxes and the instalments, it will definitely have an impact on our rental yields," he added.

As far as owner-occupied homes go, 97.8 per cent of owners will enjoy lower property taxes, 1 per cent will continue paying no tax while the remaining 1.2 per cent will face higher taxes, the MOF spokesman noted.

Owners of homes with an annual value of $6,000 and less - there are about 9,600 owner- occupied homes in this category - will continue to pay no property tax under both tax structures. These homes include one- and two-room Housing Board flats.

Car loan curbs not permanent but necessary for now: Tharman
By Goh Chin Lian, The Straits Times, 8 Mar 2013

THE new curbs on car loans are necessary for now to keep a lid on inflationary pressures and rein in borrowing, Mr Tharman Shanmugaratnam said yesterday.

But they are not permanent, and depending on market developments, will be reviewed later, he added.

The Deputy Prime Minister gave this assurance as he explained the surprise move to cap car loans at up to 60 per cent of purchase price.

Car prices, he said, made up one-fifth to half of Singapore's total inflation in the past three years, and they alone accounted for an increase of one percentage point in inflation last year, when prices overall rose 4.6 per cent over the year before.

Dampening demand for motor vehicles will relieve inflationary pressures "to the benefit of most Singaporeans", he said.

In his Budget round-up speech, Mr Tharman, who is also Finance Minister, acceded to MPs' calls to ease the loan restrictions for two groups.

Used-car dealers will get a year, up from nine months now, to find buyers for their cars. MAS is also studying ways to factor in depreciation when deciding if it should apply a 50 or 60 per cent cap on loans for used cars.

But he stopped short of giving concessions to families with young children or elderly parents.

It was not possible "to liberalise further at this point, without undermining one of the important reasons for the new loan rules, which is to cool demand and COE prices", he said.

The changes come 10 days after MAS restricted car loans to 50 or 60 per cent of purchase price, to be repaid within five years. Previously, loans were up to 100 per cent of purchase price and could be serviced over 10 years.

Yesterday, Mr Tharman set out the Government's reasons for the change in policy after a decade of deregulation.

Strong demand and a slower increase in supply had driven certificate of entitlement (COE) prices up by 40 to 60 per cent in the last two years. Low interest rates and easy credit fuelled this spike. The Government received feedback from Singaporeans on curbing loans to cool the market.

Two risks were apparent. One, car buyers will take on more debt to finance car purchases, "sometimes beyond what is financially prudent". Two, as COE prices shape inflationary expectations, a sharp spike feeds into a high inflation rate that affects all Singaporeans and the economy.

For its policy, MAS looked back to 1995, when car loans were capped at 70 per cent of purchase price, to be repaid within seven years.

"It did not have discernible effect on COEs at that time and eventually we lifted the restrictions in 2003," Mr Tharman said.

"This time round, COE prices have risen much more significantly. MAS has unfortunately... bearing in mind the past experience, had to take much tougher measures to make sure that the financial restrictions are effective."

Resilience is when poor kids can beat the odds
Amid rising income inequality and slowing social mobility, they still succeed
By Chua Mui Hoong, The Straits Times, 8 Mar 2013

AFTER listening to 17 hours of speeches from 59 MPs and a few ministers over three days of debate on Budget 2013, one little fact cheered me up like no other.

This was the remark by Finance Minister and Deputy Prime Minister Tharman Shanmugaratnam on how Singapore students fare in international comparisons.

Singapore kids are "resilient students", meaning kids from poor backgrounds do better than expected, he said yesterday, as he wrapped up debate on the Budget.

Singapore's education - and its economy and workforce - does well in global ratings tables. As People's Action Party (PAP) MP Chia Shi-Lu noted yesterday, Singapore was named the sixth best place in which to be born by the Economist Intelligence Unit and cited as healthiest country in the world by Bloomberg.

Mr Tharman didn't elaborate on resilient students. But Straits Times reports in 2011 said Singapore had done well in Programme for International Student Assessment (Pisa) tests, which look at performance in mathematics, science and reading.

Pisa also looked at the proportion of children from the bottom quarter in terms of socio-economic background in their country who performed in the top quarter.

Almost one in two poor students in Singapore was "resilient" by this definition, sixth highest of the 65 countries surveyed.

Singapore's education system is becoming increasingly stratified, with the geographical clustering of brand-name schools around expensive housing areas, its array of programmes exclusively for the academically gifted and its over-reliance on private, costly tuition.

Amid all the anxiety over rising income inequality and slowing social mobility, the fact that Singapore's students are "resilient" gives cause for hope, signalling that the education system - warts and all - remains a social leveller.

Why do I think this is so heartening? Well, as Mr Tharman noted, Singapore has been doing some soul-searching recently over a growth model that has led to rising income inequality.

He said: "This is a critical period of transition for Singapore... Whether we succeed depends not on incentives and grants and subsidies, depends not on the narrative of incentives, but on the narrative of responsibility and values, whether we take responsibility together to strengthen the values that matter most to Singaporeans."

Budget 2013 is notably progressive, with higher taxes on the rich, broad-based income support for low- to middle-income workers and higher social spending, especially on pre-school education.

But Mr Tharman, chief architect of the Budget, found it necessary to reiterate that while the Government can give incentives and subsidies, people and employers too must play a part: employers to raise productivity, to make the workplace inclusive and to value local workers; and people to master their skills.

The Government's responsibility, as Mr Tharman put it: "We will play an active role in enabling Singaporeans to achieve their fullest potential and enabling them to lead fulfilling lives."

In the race of life, the Government is only the enabler, not the participant. It is people who run the race. In such a set-up, both personal and institutional resilience matter.

Singaporeans these days are quick to denounce institutional flaws and to shout "kelong!" and "referee kayu!" at the Government. These are Malay words chanted at football matches to refer to an unfair match and a dumb referee, respectively.

The perception of the Government being unfair is understandable in some areas: Election rules, as Nominated MP Eugene Tan noted yesterday, need to be more transparent.

But I sometimes wish Singaporeans - including MPs - would focus less on zheng hu (Hokkien for government) and a bit more on what "we the citizens of Singapore" can do to create the change we want to see.

A society in transition needs both serious critiques of what is wrong as well as inspiring stories of what is going right. We have to be unflinching in the face of hard truths about our ills, but unapologetic in celebrating our successes.

In this respect, some nuggets from the three days of debate cheered me as examples of how "we the citizens" are stepping up.

Here are three snapshots of resilience I will take away:

- Singaporeans are giving birth to more babies. There were 33,2051 new Singaporean babies last year, raisingthe total fertility rate to 1.292, up from 1.20. Every decimal point increase matters especially when it amounts to 2,259 more babies.

- Pasir Ris-Punggol GRC MP Penny Low's new void deck centre in the two rental blocks in her constituency.

She said her heart ached whenever she saw children of school age unable to count 1-2-3 or read A-B-C.

So the MP, known for championing social enterprises, got together with community leaders to rally government agencies to let them turn the void deck of the block into a pre-school centre.

The aim: to showcase what these students can do and "inspire the rest of the students and parents in our rental blocks to strive for a better tomorrow. The simple message is: There is hope if we work on it together".

- Workfare in action: MP Denise Phua, well known in special education advocacy circles long before she donned PAP whites, was elated when one of her young special-needs staff got $915 in Workfare Income Supplements and happily showed it off.

"Wong hardly speaks and in the past was folding envelopes at a job centre with monthly pay of about $220. My team and I offered him a job and pay that match his ability and potential. He is now an administrative assistant earning $1,020."

Resilience is a state of mind.

We can and must improve the odds against poor kids in today's Singapore. But meanwhile, it's reassuring to know our poor kids can still beat the odds.

Population, economy cannot be separated

NOT too long ago, this House debated the Population White Paper. Many of us vexed over the population strategy and some even asked if the relevance of the GDP growth has been overstated as we debated the Population White Paper. Yet, we sit here in this debate and (express) angst over the cost of living, and how real income growth has not kept pace.

Well, the two are related, and I hope that those who think that our workforce population strategies can be decided on without a real hard look at how it affects our economy will think again.

Another example of how the population strategies are linked. The Honourable Member Lee Li Lian argued yesterday that there must be more "affordable access to foreign domestic workers (FDW)" and for all families with a child or elderly folk to be able to have a FDW. She says domestic help is a necessity. I agree, and I think the Budget recognises that, in making FDW levy concessions to make access to domestic help more affordable.

But what she may have forgotten is that her suggestion alone will increase the number of foreign workers. How then does this square with the Workers' Party's proposal made not so long ago of having zero foreign labour growth? It simply does not - it is inconsistent.

So it tells us that the policies have to be looked at on a macro level. We cannot just go about making politically expedient points without linking them to the larger picture and making sure they work.

A very tangible and marked emphasis in this Budget is the deliberate stepping up of social policies. It is a deliberate and focused tilt in favour of the low- and middle-income Singaporeans via a combination of progressive taxing and social transfers.

However, much as I do support them, we should be equally careful not to see transfers as a long-term solution to income inequality.

Singapore is not unique in having an acute income inequality nor are we unique in seeking to address it by way of social transfers.

Hong Kong, too, grapples with rising property prices and a widening income gap; and it, too, seeks to bridge this gap with increased social spending.

Hence, in the latest budget, they put almost HK$50 billion (S$8 billion) into a package of measures aimed substantially at alleviating poverty, including outright public housing rental waivers and direct electrical subsidies.

South Korea, which has recently seen a new president come into power, faces the same issues, perhaps on a more aggravated scale.

All of this comes at a cost. It becomes an economic and social burden that the future generation - the younger generation - will have to carry.

But the real lesson in this is that in the last 10 years, the social spending budgets of Hong Kong and South Korea have grown steadily.

Yet the income inequality in those economies remains wide, if not became even more acute.

These experiences tell us that social transfers address only the symptom but not the cause of income inequality. They help alleviate poverty, but (do) little to fix the underlying issue of income stagnation or minimal income growth.

I am not suggesting that social transfers is our only strategy.

But at the same time, we have to be careful not to end up on the slippery slope of welfarism and becoming overly dependent on handouts.

More babies born in 2012, TFR improves slightly over previous year
By S Ramesh, Channel NewsAsia, 7 Mar 2013

Singapore welcomed 33,205 new babies in 2012 and the country's total fertility rate (TFR) is 1.29.

Revealing this in Parliament on Thursday during the Committee of Supply debate for the Prime Minister's Office, Minister in the PMO Grace Fu said the 2012 TFR is a slight improvement from 2011 where there were 30,946 new babies born to Singapore citizens. The TFR in 2011 was 1.20.

While the government is putting in place efforts to boost Singapore's total fertility rate, she said this would take time.

And the shortfall births needs to be addressed in the short term.

She said this is done through a calibrated pace of immigration and granting a select number of citizenships.

Ms Fu also said the government will look into some of the proposals suggested by MPs on how the country should decide who to grant citizenship and permanent residency to.

Replying to several points raised by MPs during the debate, Ms Fu said the government has set aside an annual budget of $2.3 billion for marriage and parenthood measures. 

And as part of it, further improvements are being made to the pre-school sector and the Education and Social and Family Development Ministries will provide further details of these initiatives.

Ms Fu adds that the government also recognises that employers can also play an important role in supporting a pro-family environment by putting in place family-friendly work practices. 

In this regard, the government is enhancing the support given to employers and the Manpower Ministry will provide more details on this.

Turning to the issue of encouraging overseas Singaporeans to return to the country, she explained that the Overseas Singaporean Unit proactively reaches out to Singaporeans overseas. 

The unit has conducted an extensive study involving more than 3,000 Singaporeans abroad and is taking steps to address their needs and facilitate their returning from abroad as much as possible. 

This could involve facilitating contact with various public agencies such as MINDEF for enlistment matters, Contact Singapore for job matching, and the Education Ministry for the placement of returning students.

Ms Fu said: "Singaporeans remain at the heart of our nation and are the central considerations in all our policies. A strong Singaporean core is our key objective. A strong Singaporean core is where Singaporeans have a sense of well-being and belonging. 

"Well-being comes from tangibles like having good and meaningful jobs and a good quality living environment, as well as intangibles like strong, loving and supportive families, values that connect us, and a collective hope for a brighter future. Together, we can build a strong Singaporean core and a brighter future for Singapore."

Govt 'wants to help foreign spouses stay'
More will get to be PRs and citizens as their marriages stabilise: DPM Teo
By Andrea Ong, The Straits Times, 8 Mar 2013

THE Government wants to help citizens and their foreign spouses remain together in Singapore and form stable families, said Deputy Prime Minister Teo Chee Hean yesterday.

He gave the assurance to several MPs who raised the plight of foreign spouses during the debate on the budget for the Prime Minister's Office.

Both Mr Teo and Minister in the Prime Minister's Office Grace Fu acknowledged the growing number of new immigrants who are foreign spouses of citizens.

Last year, there were around 9,000 marriages between a citizen and a foreigner, said Ms Fu. Children born from such marriages make up about 30 per cent of Singaporean babies born every year.

However, MPs such as Dr Lam Pin Min (Sengkang West) and Mr Pritam Singh (Aljunied GRC) said many residents face difficulties in applying for long-term visit passes, permanent residency or citizenship for their foreign spouses.

They called for greater clarity and transparency in the criteria for such applications and reasons for rejection. Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) also asked for more flexibility for foreign children of Singaporeans.

Responding, Mr Teo said foreign spouses would generally be given a long-term visit pass "in the first instance" after considering factors such as the sponsor's ability to support the family and both parties' good conduct.

As of the end of last year, 11,736 foreign spouses of Singapore citizens were on long-term visit passes. Of this group, 4,200 had been granted the enhanced Long Term Visit Pass-Plus (LTVP+) since the scheme was introduced last April.

LTVP+ holders can stay here for three years and get health-care subsidies for inpatient services at restructured hospitals at close to the levels given to permanent residents.

Those on the LTVP can stay for only a year and do not benefit from such subsidies.

Foreign spouses are eligible for the LTVP+ if the married couple has at least one Singaporean child. For those without a Singaporean child, other factors such as the length of marriage will be considered, Mr Teo said.

"But each application will be considered on its own merits," he said. He also assured Mr Nair that the LTVP+ "in no way disadvantages" a foreign spouse's application for PR or citizenship.

Mr Teo said more foreign spouses will qualify to become PRs, and eventually citizens, as their marriages stabilise and they become increasingly integrated.

Over the past five years, 4,100 foreign spouses were granted PR status every year. A further 4,100 took up citizenship each year.

Spelling out the Government's thinking, Mr Teo said: "We want to facilitate such couples to remain together in Singapore and for them to form stable families who would contribute in a positive way to Singapore."

However, Ms Fu also reiterated that building a strong Singaporean core remains at the heart of government policies. She cited preliminary figures for last year, indicating 33,205 new Singaporean babies, while total fertility rate hit 1.29 - a slight improvement from 2011 on both fronts.

Aspiring citizens 'should have S'porean sponsors'
By Andrea Ong, The Straits Times, 8 Mar 2013

ASPIRING citizens should be evaluated and endorsed by Singaporeans who know them well before getting their pink identity cards, suggested four MPs in Parliament yesterday.

This would pick out applicants who are genuinely integrated into the community and give Singaporeans a say in the decision-making process, said the MPs.

Dr Fatimah Lateef (Marine Parade GRC) proposed that eligible foreigners who wish to become permanent residents or new citizens should have around five to 10 Singaporean assentors of different ethnicities who know them well from work or the community.

Mr Ang Wei Neng (Jurong GRC), Mr Sitoh Yih Pin (Potong Pasir) and Mr Zainal Sapari (Pasir Ris-Punggol GRC) also raised similar ideas for Singaporean "sponsors" or "assentors" during the debate on the budget for the Prime Minister's Office.

Mr Ang noted that the cantons in Switzerland practised something similar where the community is given a say in naturalisation.

Responding to these suggestions, Deputy Prime Minister Teo Chee Hean said the Government would study these suggestions and would also be open to other ideas.

Workers' Party MPs Sylvia Lim and Pritam Singh (Aljunied GRC) called for greater transparency in immigration policies and data.

But DPM Teo said the Government does not reveal specific criteria for immigration applications because it does not want to encourage people "to tailor their applications to specific criteria to artificially increase their likelihood of approval". Most countries have eligibility criteria but also do not reveal specifics of how these are evaluated, he said.

S'pore not prepared to allow dual citizenship: DPM Teo
Channel NewsAsia, 7 Mar 2013

Deputy Prime Minister Teo Chee Hean said Singapore is not prepared to allow dual citizenship, as it would not strengthen the nation.

He said foreigners are granted Singapore citizenship only if they are committed to making Singapore their home in the long-term.

As such, they should be prepared to give up their foreign nationality.

Nominated MP Assistant Professor Eugene Tan had asked in Parliament if the country should keep an open mind with regards to dual citizenship, given the increase in international marriages.

Mr Teo said: "As Singaporeans, we count on one another to be loyal and if need be, to defend Singapore and fellow Singaporeans in our hour of need. We work together to build a brighter future for Singapore and Singaporeans. Singapore is a small and young nation. It is all the more important that we are clear that our citizens have a long-term commitment to building a future together here. Allowing Singaporeans to retain or acquire a second citizenship is unlikely to enhance that commitment but could dilute it."

Better medical, dental benefits for civil servants
By Andrea Ong, The Straits Times, 8 Mar 2013

CIVIL servants will be able to claim a larger portion of their medical and dental bills from next month, as caps on benefits have been raised to keep up with market practices.

Currently, they can claim up to 85 per cent of their bill at private clinics, with a cap of $10 per visit. The cap will now be raised to $20 per visit, which is comparable with the average amount that the Civil Service subsidises an officer for outpatient treatment at a polyclinic, which is about $18.

Deputy Prime Minister Teo Chee Hean, who is the Minister-in-charge of the civil service, announced the revision in Parliament yesterday during the debate on the budget for the Prime Minister's Office (PMO).

The change comes after a review of civil servants' medical benefits that was announced last year, along with calls by MPs like Mr Yeo Guat Kwang (Ang Mo Kio GRC) over the years to enhance the benefits.

With the revision, civil servants will also get to claim more for outpatient expenses.

Currently, they can claim $350 a year, with any unused balance going into their Medisave accounts at the end of the year. This will now be raised to $500 a year, in recognition that some officers may require more for their medical needs, said DPM Teo.

However, the extra $150 will not be credited into their Medisave accounts if it is not used.

And to encourage civil servants to visit the dentist regularly, the Government will raise the subsidy for dental bills from 50 per cent to 85 per cent. The annual claim limit for dental bills will also go up from $70 to $120.

All these changes will also apply to statutory board employees and re-employed officers.

Yesterday, DPM Teo also urged public servants to plan ahead for their retirement and ensure they have adequate medical insurance.

As of end 2011, 97 per cent of civil servants are covered by either basic MediShield or integrated shield plans.

Mr Teo said that the Public Service Division is reviewing salary guidelines for re-employed officers, a process which will be completed in six to nine months. This was in response to Senior Minister of State (PMO) Heng Chee How, who asked for such a review.

On questions on pro-family practices from Dr Fatimah Lateef (Marine Parade GRC), DPM Teo said 95 per cent of public agencies offer flexible work hours while all agencies offer part-time employment with pro-rated salaries and benefits.

Some 1,700 public officers were working part-time at the end of last year, he said.

Terrorist threat remains: DPM Teo
Arrest of ex-detainee who returned to old ways shows de-radicalisation is not easy
By Francis Chan, The Straits Times, 8 Mar 2013

A LAW graduate turned self-radicalised terrorist, who had spent three years in detention but went back to his old ways, was re-arrested last September.

Revealing his case in Parliament yesterday, Deputy Prime Minister Teo Chee Hean cited it as proof of how difficult it is to de-radicalise someone once he has been drawn to terrorist ideology.

That is why Singapore must keep at investing in the rehabilitation of its terrorist detainees, said DPM Teo during the debate on the budget of the Ministry of Home Affairs (MHA).

Abdul Basheer, who was drawn to terrorism through the Internet - hence the label of self-radicalised or more commonly known as a do-it-yourself terrorist - was detained under the Internal Security Act (ISA) in 2007, after he made plans for militant jihad in Afghanistan.

After his release in February 2010, he made some headway in re-integrating into society. But he was caught again late last year for wanting to revert to undertaking militant jihad abroad.

"He even made inquiries as to how he could leave Singapore, illegally if necessary, to pursue his jihad plans," said DPM Teo, who is Coordinating Minister for National Security and Minister for Home Affairs.

The former polytechnic law lecturer, now 34, was re-arrested by the Internal Security Department and placed under detention in October to prevent him from pursuing his violent agenda.

"The terrorist threat remains a persistent one, both globally and regionally," said Mr Teo in his update on the Home Team's counter-terrorism efforts.

He revealed that regional terror groups such as Jemaah Islamiah (JI) remain resilient and continue to recruit operatives and carry out attacks in neighbouring countries.

"We are also concerned by terrorist elements' growing use of social media to spread propaganda and recruit new radicals," he said.

"With Singapore's high Internet penetration, especially among youth, we need to inoculate our young from coming under the influence of radical ideology."

On the detentions thus far, he said since January 2002, 64 people have been detained under the ISA for their involvement in terrorism-related activities.

Of these, more than two-thirds have been released.

They include three detainees released between last November and last month: Ishak Mohamed Noohu, 52, and Mohamed Hussain Saynudin, 39, who were both placed on Restriction Orders and Maksham Mohd Shah, 31, who was released on Suspension Direction, meaning he may be detained again if he does not meet conditions of his release.

The first two were members of the local JI terrorist network, while Maksham was a self-radicalised individual detained in December 2007.

The MHA said in a statement yesterday that all three were assessed as no longer posing a security threat that required preventive detention.

On the progressive release of such individuals, DPM Teo cited the work of the Religious Rehabilitation Group, which does counselling work for detainees. Their work "is so important and must continue", he added.

The group, made up of Islamic scholars and teachers, will mark its 10th anniversary later this month by organising an international conference on terrorist rehabilitation and community resilience with the S. Rajaratnam School of International Studies. Experts from all over, including the Middle East, Asean, Europe and the United States, will attend the conference.

Community policing plan to be extended
Cops on bicycles, camera network, plainclothes force working well: Iswaran
By Francis Chan, The Straits Times, 8 Mar 2013

A COMMUNITY policing strategy of greater police presence on the ground relying on good old legwork and nifty camera lenses is taking off and will be extended to more areas soon.

By year end, more than half of the 35 Neighbourhood Police Centres (NPC) here will use the Community Policing System (Cops). This follows the encouraging results seen in Bukit Merah East and Tampines since the system was rolled out last May.

Giving MPs an update yesterday, Second Minister for Home Affairs S. Iswaran said that while it was too early to attribute specific crime trends to Cops, results and feedback from residents have been "very encouraging".

"We will build on these initial achievements by progressively rolling out Cops to more NPCs... and we are on schedule for all NPCs to make this transition by the end of 2015," he said during the debate on the Ministry of Home Affairs (MHA) budget.

The idea behind Cops was to get officers more deeply embedded in the neighbourhood so they can take their crime-fighting capabilities closer to the community. It has three prongs: cops on bikes, a plainclothes Crime Strike Force and a network of police cameras that will cover all 10,000 HDB blocks and multi-storey carparks here by 2016.

Besides Bukit Merah East and Tampines NPCs, six other centres have adopted the Cops model since January this year. Mr Iswaran said more NPCs will follow, starting with centres in Ang Mo Kio South, Bedok North, Jurong East, Jurong West, Nanyang and Rochor in June this year, and another six NPCs by the end of 2013.

He added that last year, police cameras were installed in 350 HDB blocks and their coverage will be extended to another 650 HDB blocks across all Town Councils by the end of this year.

While the cameras are deployed primarily to deter and solve crime, including cases of loan-shark harassment, he said police are prepared to share the footage with other agencies such as the Land Transport Authority and National Environment Agency to combat illegal parking and high-rise littering.

"Overall, our Community Policing System has made a promising start," he added.

"As we persevere with its full implementation, and learn from our experiences, I hope that all residents will continue to actively partner the Police in this important effort to keep our neighbourhoods and our communities safe."

Outlining the Home Team's priorities for this year, Deputy Prime Minister Teo Chee Hean said community partnerships and engagements are important because they create a sense of ownership.

"In 2012, our crime rate fell for the seventh consecutive year, to the lowest in nearly three decades. Our recidivism rate is stable. Our fire fatality rate remains very low. The number of immigration offenders has steadily declined. The number of road fatalities has also started to come down," he said.

"However, we are acutely aware that any fatality or serious crime is a tragedy in itself."

He added that while the situation today is relatively good, Singapore still faces difficult security challenges, and must remain vigilant.

The threat of terrorism and cyber attacks at home and in the region persists, said DPM Teo, who is also Coordinating Minister for National Security and Minister for Home Affairs.

"Cyber attacks, whether by criminals, terrorists or state-sponsored groups, have grown in frequency, potency and sophistication," he said.

"We will continue to build up domestic defences against potential attacks. MHA will be setting up a Cyber Security Lab within the Home Team Academy by 2014 to provide a safe and realistic hands-on platform for participants to hone their skills in countering cyber attacks."

He admitted that the Home Team will find it more challenging to recruit good officers and enough of them, which is why starting salaries for junior Home Team officers were raised in addition to offering sign-on bonuses for diploma holders.

"We have seen improvements in retention since implementing these changes," said DPM Teo.

"The overall Home Affairs Uniformed Scheme Junior Officers resignation rate has decreased from 4.6 per cent in 2011 to 3.7 per cent in 2012. I hope that these schemes and others will continue to encourage young people to consider a career in the Home Team, and allow us to retain the talent we have."

Helping ex-convicts avoid return to crime
By Bryna Singh, The Straits Times, 8 Mar 2013

THE Prisons Act will be changed this year in a move to help ex-convicts not return to a life of crime.

Two programmes will be introduced to give them support as they make their way back to society. One is the Conditional Remission System (CRS), which will let prisoners be freed earlier but with conditions. Details of the conditions will be released later.

The other is the Mandatory Aftercare Scheme (MAS), which will require high-risk offenders to go regularly for counselling at a halfway house, among other things.

A new purpose-built halfway house will be developed at Selarang Park Complex in Changi.

The new measures were announced yesterday by Senior Minister of State for Home Affairs Masagos Zulkifli during the debate on the Budget of the Ministry of Home Affairs.

Earlier, Mr Desmond Lee (Jurong GRC) had expressed concern about former convicts trapped in a life of crime.

Mr Masagos said the new measures would give repeat offenders extra support during their post-release period, a time when they are "most vulnerable".

He added: "We must help these repeat offenders break the cycle of re-offending and transit from imprisonment to reintegration within the community."

Under the remission programme, all prisoners freed after serving two-thirds of their sentence will face certain conditions. "Those who breach these conditions will be taken to task," said Mr Masagos.

On the other hand, prisoners viewed as high-risk will come under MAS, a "structured step-down approach" that involves halfway house stints, electronic monitoring, counselling and case management.

The upcoming halfway house will provide a "structured environment to supervise and rehabilitate" them, said Mr Masagos.

It is targeted to be ready by 2018 and will be specially built, unlike current halfway houses which were converted from disused buildings or other facilities.

Mr Masagos also spoke about the drug abuse situation, which continues to be "challenging".

To discourage youths from taking drugs, the Central Narcotics Bureau will start a youth-oriented blog next month. "With the help of young bloggers, we intend to grow a vibrant online anti-drug community with more personal anti-drug messages," he said.

Also, it will soon be compulsory for young drug takers who are new to the addiction and considered low-risk to attend counselling with their families.

Those viewed as moderate risk will be moved out of detention at the Drug Rehabilitation Centre to a Community Rehabilitation Centre. This step-down arrangement is expected to start by year's end.

As community involvement is key to stopping them from going back to their bad, old ways, the Community Outreach Project will be expanded this year. Under the project, volunteers help families of offenders link up with government agencies for social aid and support.

Similarly, the Community Befriending Project, which pairs a volunteer-befriender with an offender to provide peer support, will be expanded.

Mr Masagos said the Government will continue to provide opportunities for ex-offenders to rehabilitate and reintegrate into society. "However, it is ultimately the responsibility of the individual ex-offender not to re-offend."

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