Monday, 1 March 2021

Budget 2021 debate in Parliament

Singapore must press on with plans for next growth phase, says DPM Heng
It is investing in growth areas, and skills for new jobs, to emerge stronger from the crisis
By Linette Lai, Political Correspondent, The Straits Times, 27 Feb 2021

With a narrow window of opportunity in which to transform its economy, Singapore has to press ahead with planned investments in order to secure its next decade of growth, Deputy Prime Minister and Finance Minister Heng Swee Keat said yesterday.

Doing so would enable the economy to provide jobs in new areas even as it restructures, and enable the country to emerge stronger after the Covid-19 pandemic has passed.

And if it has to draw on the country's reserves to do so, it should do its best to make good on the draw, he told Parliament.

Mr Heng set out what it means for Singapore to emerge stronger together - the theme of this year's $107 billion Budget - and stressed that the Government cannot do this all alone.

"The Government is committed to put in the investments," he said. "To succeed, every Singaporean must come together to build the Singapore that we want."

By creating opportunities for workers to acquire skills needed for the new jobs of the future, the Government would help them stay employable, and also help prevent a "Covid-19 generation" of young people without jobs.

He called on businesses to look beyond hiring just "plug and play" workers and consider taking on those with potential to learn. At the same time, job seekers should keep an open mind, taking the initiative to build new skills and staying receptive to new job roles.

Singaporeans must also look out for one another, he said, adding that the Government will push ahead with plans to develop deeper capabilities in the social sector.

At the same time, Singapore has to consider how to pay for the choices it makes, Mr Heng said, noting that discussions on building a society with better social safety nets are "only one half of the conversation".

"We must be upfront - if we want to spend more, we have to raise the revenue," he said, reiterating that the impending goods and services tax (GST) hike from 7 per cent to 9 per cent, which will take place soon, between next year and 2025, is necessary to fund Singapore's rising spending needs in areas such as healthcare.

"Economic growth alone is not likely to raise enough revenues to fully meet our needs," he added. "The honest, but hard, conclusion is that we will need to raise more tax revenue."

The GST hike will be matched with a $6 billion Assurance Package that effectively delays its effect for at least five years for most Singaporean households, he said.

Mr Heng acknowledged that it is natural for everyone to look out for what is new in each year's Budget. But Singaporeans should also appreciate what is already there, and look at the nation's spending in totality over the years, he said.

Over the past decade, Singapore has been gradually tilting its system of taxes and financial transfers in favour of lower-and middle-income groups, he noted.

This year, a member of a lower-income citizen household can expect benefits of $6,500 after taxes on average, and a member of a middle-income household gets $3,500. In contrast, a member of a household in the highest income group pays around $9,500 in taxes, after accounting for benefits, he said.

Mr Heng also addressed concerns MPs raised that this year's Budget appears to have little short-term support for middle-income households. This is not so, he said, noting the $42 billion set aside for social spending and transfers on top of security spending and economic investments, all of which benefit Singaporeans.

"We should not look at each Budget in terms of 'goodies for me', but whether the totality of the spending creates more opportunities for us and our children."

He also cited Nominated MP Hoon Hian Teck, who on Wednesday articulated Singapore's need to balance stabilising the economy to avoid a sharp downturn, and investing in structural policies for transformation.

Mr Heng also noted how Mr Shawn Huang (Jurong GRC) put it aptly when he said that for Singapore to survive, it had to pivot and develop an edge to seize opportunities of the future. "If we get this right, we can set our economy on the path of growth for the next five to 10 years," said the DPM.

GST has to be increased to fund rising recurring costs, says DPM Heng
GST hike needed for rising health, social safety spending
By Hariz Baharudin, The Straits Times, 27 Feb 2021

The goods and services tax (GST) has to be increased to fund rising recurrent spending in key areas such as healthcare and to provide for more social safety nets, Deputy Prime Minister Heng Swee Keat said yesterday.

A $6 billion Assurance Package set aside in last year's Budget will ensure that lower-income households will pay less than those who are well-off when the GST goes up, said Mr Heng, who set out in detail in his Budget round-up speech why the upcoming tax hike cannot be delayed or dropped.

Raising the GST is the responsible thing to do, given how there have been structural increases in Singapore's recurrent spending, stressed Mr Heng.

For instance, annual healthcare spending has nearly tripled from $3.9 billion in fiscal year 2011, to $11.3 billion in 2019.

"If we want to spend more, we have to raise the revenue... do not make irresponsible promises which burden future generations," he asked of MPs. "If these are recurrent needs - which have to be financed year after year - we must find recurrent revenues which we can collect year after year."

Singapore is not the only country that is planning ahead, and Mr Heng pointed out that even Saudi Arabia, a country blessed with huge oil reserves, recently introduced a 5 per cent value-added tax from 2018, which it increased to 15 per cent from last July.

The GST is set to go up from 7 per cent to 9 per cent between next year and 2025, and sooner rather than later.


Spending on healthcare is estimated to rise to 3 per cent of Singapore's gross domestic product (GDP) by 2030, said Mr Heng.

By that year, the number of Singaporeans aged 65 and above will go up from one in six to one in four, and healthcare spending will increase as seniors are four times more likely to be hospitalised than younger people and to stay twice as long. "Our demographic trends will mean higher spending, outstripping GDP growth," he said.

Mr Heng noted how in the Budget three years ago, he had mentioned that annual security spending by the Defence and Home Affairs ministries is also likely to rise, by 0.2 percentage point of GDP, to meet rising threats. And social spending, with more funds set aside for pre-school education and lifelong learning, will go up.

Infrastructure spending will also jump, with more resources needed to enhance Singapore's competitiveness, build homes and improve connectivity.

Difficult decisions will need to be made to face these growing spending needs, and Mr Heng noted that since 2007, the Government has increased other taxes to collect more from those who are better off. Wealth-related taxes, for instance, have become more progressive.

These funds are transferred to the lower income through social spending - all while the GST has remained at 7 per cent, he added.

The GST is not going to be raised now, as the economy is still recovering from the Covid-19 pandemic.

But Mr Heng noted the Government has been giving notice of the hike since Budget 2018, and some of the structural rise in spending will hit sooner rather than later.

For instance, public healthcare capacity is being ramped up, and a new integrated hospital will be built in Bedok North to be ready by 2030 that will serve the growing population in the east.

Mr Heng said: "If we defer this spending, we risk being unable to adequately care for our people when the need comes."


Mr Heng assured Singaporeans that the $6 billion Assurance Package will help cushion the impact of the GST hike, with more help directed at lower-income households. This package will effectively delay the GST rate increase for most Singaporean households by at least five years, and lower-income Singaporeans will receive higher offsets of about 10 years' worth of additional GST expenses.

This is on top of existing benefits and transfers such as the permanent GST Voucher scheme, said Mr Heng. "These keep our overall taxes and transfers system fair and progressive," he said.

Last year, the top fifth of all Singaporean households by income paid 56 per cent of the taxes and received 11 per cent of the benefits, whereas the bottom quintile paid 9 per cent of the taxes and received 27 per cent of the benefits.

The Government is concerned for households in between, which paid 35 per cent of taxes and got 62 per cent of the benefits, he said.

Mr Heng rejected as baseless Non-Constituency MP Leong Mun Wai's observation that his Progress Singapore Party does not see Singapore facing any shortage of fiscal revenues in the foreseeable future.

Mr Heng stressed that MPs cannot be advocating national policy "on the basis of personal hunches". "It will be foolhardy to underestimate the risks and uncertainties we are facing," he added.

Singapore must protect reserves, not in national interest to reveal its size, says DPM Heng
Reserves play key role in stabilising economy
They are a bulwark against crises, a buffer against financial shocks and provide revenue
By Justin Ong, Political Correspondent, The Straits Times, 27 Feb 2021

Singapore's reserves play a critical role in stabilising the economy during crises and shocks and in providing a steady steam of revenue, and any decision on the use of the strategic assets is not taken lightly, Deputy Prime Minister Heng Swee Keat said yesterday.

"We have inherited a strategic asset for the long-term survival and success of Singapore. Protect it, nurture it and never squander it."

Rounding up the debate on the Budget, he said that by staying true to values of prudence and stewardship, Singapore had built up significant reserves - and the confidence to deal with any crisis in its path.

Past reserves have been drawn on to deal with two crises so far - $4 billion in 2009 to deal with the global financial crisis, and up to $53.7 billion last year and this year to respond to the Covid-19 pandemic.

The funds serve as a bulwark against extraordinary crises, Mr Heng said as he outlined three key roles of the reserves.

The other two roles are: As an endowment fund, providing a key stream of revenue to supplement the annual Budget through the Net Investment Returns Contribution (NIRC) framework; and to provide a buffer against shocks and attacks on Singapore's financial system.

Mr Heng said that under Singapore's "two-key" system, the President has discretionary powers to withhold assent to proposed expenditure that may lead to a draw on past reserves. "It is public information that, under our Constitution, the President has access to information about the size of reserves."

Over three days, MPs such as Mr Alex Yam (Marsiling-Yew Tee GRC) and Mr Liang Eng Hwa (Bukit Panjang) cautioned against dipping too readily into the reserves, while Non-Constituency MP (NCMP) Leong Mun Wai suggested tapping more through the NIRC.

Mr Leong's fellow Progress Singapore Party NCMP Hazel Poa asked the Government to reveal the size of the reserves.

Mr Heng said this was akin to laying bare Singapore's defence plan - and would diminish the reserves' value as a strategic defence. "No responsible leader would do so."

Citing the explanation of Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) on Thursday about Singapore's vulnerability to currency speculation and large capital outflows, Mr Heng reiterated that it would not be in Singapore's interest to disclose the figure.

He also said he was "very alarmed" by Associate Professor Jamus Lim's (Sengkang GRC) immediate response to Mr Saktiandi.

Noting that the Workers' Party MP had cited "theoretical" literature that speculation could be stabilising, Mr Heng said: "I would also point out that there are other academics who recognise that currency markets can be marked by massive instability."

He said most economists today acknowledge that market-driven short-term flows are fickle and volatile. The episode involving hedge fund manager George Soros taking on the Bank of England in 1992, by betting against the pound sterling and "dramatically" destroying the United Kingdom's monetary system, is a stark example.

"To put it simply, foreign exchange speculations have been and continue to be a threat to economies, especially small, open ones like ours," said Mr Heng.

Singapore, being a financial hub, had portfolio and banking-related flows that amounted to $294 billion last year, amid volatility in the global financial markets sparked by the pandemic, he noted. This represented 63 per cent of gross domestic product (GDP).

"MAS (Monetary Authority of Singapore) kept the Singapore dollar nominal exchange rate stable during this period, backed by the full power of our reserves, giving banks and businesses certainty to make decisions under very trying circumstances."

Mr Heng related his experience during the Asian financial crisis in the late 1990s, when he was principal private secretary to founding prime minister Lee Kuan Yew.

Mr Lee had been invited by several countries in the region to share his views, as the Singapore dollar, backed by the reserves, was relatively unscathed by the currency devaluation crisis.

"It was very painful to see how speculation and the currency volatilities that those countries faced were destroying businesses, big and small, and the lives of the men and women in these places," said Mr Heng.

He noted that the Singapore dollar is one of the most actively traded currencies in the world relative to the country's GDP. The currency's daily turnover is estimated at US$37 billion (S$49 billion) globally, or an annual turnover of US$9.5 trillion, far exceeding Singapore's nominal GDP of US$350 billion.

Compared with other countries, the exchange rate is far more important for Singapore, which is unique in its operation of an exchange rate-centred monetary policy, said Mr Heng.

As managing director of MAS during the global financial crisis that started in 2008, Mr Heng said, his team had to guard not just against the failures of banks, but also flights of capital and risks of speculation on the Singapore dollar.

As a board member of MAS now, he added, he wants to ensure that the authority can continue to effectively use Singapore's exchange rate to deliver price stability.

"As a practitioner at the front line, who tries my best to understand the intricacies of the system, I must caution Associate Professor Jamus Lim - let us not play with fire," said Mr Heng.

"This is about the lives of our people, not theoretical musings.

"And I urge all members of this House to focus the debate on the merits of the policies and programmes and how we can improve the lives of Singaporeans, instead of repeatedly focusing their attention on the size of the reserves."

Govt should make good on amount if need to draw on reserves arises, says DPM Heng
By Justin Ong, The Straits Times, 27 Feb 2021

Should there be a need for Singapore to use its past reserves to fund economic investments, the Government would have to do its best to make good on the amount drawn, Deputy Prime Minister Heng Swee Keat said yesterday.

He told the House that he expects to fund government expenditures for the remainder of this term without a further draw on past reserves.

Even then, given the highly uncertain global outlook, there is a need to think ahead and plan how Singapore can respond if the situation evolves, he said, as he explained the circumstances under which Singapore might have to tap past savings.

Nominated MP Hoon Hian Teck had spoken during the Budget debate about the difficult balance Singapore will have to strike: Stabilising the economy to avoid a sharp downturn, but also investing in structural policies for transformation.

Referring to this, Mr Heng said the uncertainty over how quickly the global economy will recover makes the balancing act even more complicated. "If we face a prolonged slump, it will be even more necessary for us to transform, but it will also be more challenging to find the required fiscal resources to both stabilise and restructure the economy."

He said it was important to press on with economic investments and secure the next decade of growth, warning that holding back would mean missing out on restructuring and new opportunities.

"If we fail to change, and our economic recovery is sluggish, it would have a long tail effect on our jobs and economic vibrancy, and affect Singaporeans adversely. It will also further worsen our fiscal situation," he stressed.

"After considering the various options, if the public health and economic situations deteriorate sharply and our fiscal situation turns out to be worse than expected, the Government may again have to seek the President's approval for the use of past reserves to continue such economic investments."

He added that President Halimah Yacob had expressed her understanding towards the Government's approach, and will consider specific proposals should there be a need to draw on past reserves.

"These investments are expected to yield returns for the economy, which can give a boost to our tight fiscal situation and allow us to make good the amount drawn," he said.

Meanwhile, he also said that the expected draw of up to $53.7 billion in 2020 and 2021 to respond to Covid-19 was equi-valent to about 20 years of fiscal surpluses.

"It will be a challenge to also make good this amount drawn, given the magnitude of the crisis," he added. "Nonetheless, we should strive to remain fiscally prudent to build back our reserves gradually."


Mr Heng also warned that the reserves should not be treated like a "gold mountain", in responding to Non-Constituency MP Leong Mun Wai's suggestion to use 100 per cent of the returns from investing the reserves.

Currently, the Government can spend up to 50 per cent of long-term expected real returns, including capital gains, on its relevant assets, through the Net Investment Returns Contribution (NIRC) framework.

For the Government to use all of the returns is akin to treating the reserves as a "gold mountain", said Mr Heng.

"If we adopt (Mr Leong's) suggestion, one day even this mountain will be eaten up completely… We have a responsibility to future generations."

He explained that the NIRC framework smooths the volatility arising from sharp fluctuations in the asset base due to market cycles, and avoids a boom-bust pattern in government spending.

He added: "However, some variation is still to be expected for the NIRC as we update the net asset base and investment income figures over the course of the year… How post-Covid-19 structural changes will affect long-term returns is still being played out."

He noted that NIRC was already the largest single source of government revenue - above corporate income tax, personal income tax or the goods and services tax - and that this was the result of years of fiscal discipline and did not happen by chance or good fortune.

"If we had succumbed to the temptation to spend more, we would not have built up our reserves. And without reserves, we would not have been able to generate this stable and recurrent source of revenue today," he said.

DPM Heng, Pritam spar on need for independent parliamentary budget office
By Fabian Koh, The Straits Times, 27 Feb 2021

The creation of an independent body to monitor the Government's expenditure was at the centre of a sustained exchange between Deputy Prime Minister Heng Swee Keat and Leader of the Opposition Pritam Singh in Parliament yesterday, during the debate on the national Budget.

The Workers' Party (WP) secretary-general had called for the creation of such an office in Parliament to enhance scrutiny of government expenditure.

In his round-up speech, DPM Heng said there are already independent audits by the Auditor-General's Office, as well as parliamentary scrutiny through the Estimates and Public Accounts Committees.

With the WP already represented on both these parliamentary bodies, Mr Heng said a new office would be "a wasteful duplication of these functions".

Mr Singh responded that a parliament Budget office is "not an unusual institution in many parliamentary democracies" and that it is not just to help the opposition, but all MPs.

He recounted that as a member of the Estimates Committee some years back, a senior civil servant had remarked then that she could not be smarter than her boss, the Finance Minister.

A parliamentary Budget office would hence be able to provide independent analysis to confirm the efficacy of the Budget and that state programmes are delivering the desired outcomes, said Mr Singh.

Mr Heng rebutted Mr Singh's arguments and the anecdote about the senior civil servant as "totally convoluted (as) one does not lead to the other".

He noted that the Ministry of Finance (MOF) had released its interim assessment on the impact of Covid-19 Budget measures earlier this month, ahead of the Budget speech, so as to be accountable about the outcome of various support measures.

"There is a reason why I put out the interim report, even though the full effects have not been (felt), because I am conscious that we have used a big part of last year's Budget, we have used the past reserves, and that I have a responsibility to account for those outcomes," said Mr Heng.

He asked if Mr Singh or any of the WP MPs had read the report, and questioned the purpose of setting up a new office when information on the impact of programmes in last year's Budget was readily available to be scrutinised.

Mr Singh replied that the proposed parliamentary Budget office will balance out the MOF and its political office-holders' agendas by providing a perspective that is "completely independent of what Government is saying about the outcomes".

Mr Heng said the details of different schemes get discussed in the debates over the various ministries' budgets.

"This Budget debate is a serious debate about whether our broad direction is correct and do you have suggestions on how we can do it better? I'm open to your ideas, but I have to say, unfortunately, so far I have heard none," he said.

During the debate on MOF's budget later, Associate Professor Jamus Lim (Sengkang GRC) also suggested setting up an independent fiscal council to evaluate the budgetary implications of major policy proposals by the Government and opposition, at a proposed initial cost of $20 million.

In her reply, Second Minister for Finance Indranee Rajah said that similar entities were created in countries such as Australia, Britain and the United States in the aftermath of the 2008 global financial crisis.

"In these cases, fiscal rules had proved insufficient to ensure prudent management of the public finances before the crisis," she said. "The context in Singapore is very different. The ills which led to the need for IFIs (independent fiscal institutions) in other systems are not present in our system and we continue to keep a very strict eye on our fiscal prudence."

As the Government and People's Action Party MPs would have a grasp of the costs of their proposals, Prof Lim was effectively asking for a new office to serve the opposition MPs, she said.

Noting that members of an independent fiscal council are not elected representatives, Ms Indranee said difficult decisions cannot be outsourced.

"Robust, intellectually honest analysis is important to foster more informed parliamentary debate. But ultimately, there is no substitute for having the political courage to make difficult budgetary choices," she said.

Measures helped to avert a 'COVID generation' of workers, students
By Sue-Ann Tan, The Straits Times, 27 Feb 2021

The suite of measures introduced last year helped to avert a "Covid generation" of workers and students by enhancing their employability and preserving human capital, said Deputy Prime Minister Heng Swee Keat.

Going forward, he urged employers to look beyond hiring just "plug and play" workers.

Instead, they should look for the potential within job seekers to learn and grow with the company.

"At the same time, job seekers should keep an open mind, be receptive to new and different job roles, and take the initiative to build new skills," Mr Heng said.

In rounding up the debate on the Budget, he noted that the latest overall employment rates for fresh graduates from institutes of higher learning were similar to those of past years, although full-time permanent employment fell by about 10 percentage points compared with the 2019 cohort.

Some 94 per cent of autonomous university graduates found jobs or traineeships within six months of graduation last year, compared with 91 per cent in 2019.

"The SGUnited Traineeships Programme has contributed significantly to this outcome. It has placed close to 5,400 recent graduates into traineeships, to help them gain useful skills and industry experience, and prepare them for the recovery. Some have already landed full-time jobs," said Mr Heng.

The Budget also saw the Jobs Growth Incentive being extended to September, which Mr Heng said he hopes will encourage more companies to convert trainees to employees in a timely manner.

"Overall, we have managed to mitigate the impact of Covid-19 on our young. While the unemployment rate amongst our young increased by 2 percentage points from September 2019 to September 2020, it remained well below that in European Union countries," he said, adding that it remains a priority to safeguard the future of Singapore's youth.

The impact of the pandemic extends to the wider labour market. Nearly 76,000 local job seekers were placed in jobs and skills opportunities through the SGUnited Jobs and Skills Package between April and December last year.

Almost 80 per cent of them were placed in jobs; of these, six in 10 were long-term roles.

Most of the placements were in growth sectors such as infocomm technology, healthcare and manufacturing, said Mr Heng.

Many job seekers also joined industries with a promising growth outlook through the Jobs Growth Incentive, and drew the same or higher wages than before, he said.

Mature workers aged 40 and above made up about half of the first 110,000 workers supported by the Jobs Growth Incentive, based on preliminary estimates.

They also made up about half of the 76,000 local workers placed in SGUnited Jobs and Skills work and training opportunities.

Mr Heng said: "We tilted support towards mature job seekers, recognising the higher hurdles they faced with career transitions."

More than 8,000 mature job seekers were placed last year in career conversion programmes, which help trainees to reskill for jobs with growth prospects.

Seven in 10 of the programme's participants have earned higher wages after starting their new jobs.

Mr Heng also responded to a comment by labour MP Melvin Yong (Radin Mas) that every job is at risk.

Mr Heng said: "I am heartened by the labour movement's forward-looking approach on bringing firms and workers together to ride the waves of change and emerge stronger. Technological advancements promise new possibilities as well as challenges."

Raising productivity the only way to keep improving jobs and lives, says DPM Heng
$24 billion to transform businesses and workers also seeks to give them edge in global market
By Choo Yun Ting, The Straits Times, 27 Feb 2021

Raising productivity is the only way to continually improve the jobs and lives of Singaporeans, which is the ultimate goal of the country's economic growth, Deputy Prime Minister Heng Swee Keat said yesterday.

Responding to MPs' comments on the Budget statement, Mr Heng noted that the $24 billion set aside for business and worker transformation over the next three years is about pursuing Singapore's medium-to longer-term economic priorities, even as the country tackles its immediate challenge.

The move also seeks to give Singapore's workers and companies a distinct advantage in the global marketplace, he added.

Acknowledging that several MPs, including Dr Koh Poh Koon (Tampines GRC), had highlighted the synergies between companies and workers, he said: "The fortunes of businesses and workers are inextricably linked, more so today than ever."

As Ms Jessica Tan (East Coast GRC) and others had pointed out, building a stronger Singapore core is at the heart of the Government's approach, Mr Heng added.

Highlighting points made by labour MPs about how the way forward for Singapore is as much about being stronger together as it is about emerging stronger, he said: "It is the strength of our collective capabilities and connectedness as an economy and as a society that will determine how far we will go."

While uncertainties and risks in the global economy remain given the Covid-19 pandemic and the emergence of new virus strains, the virus situation within Singapore remains under control.

Singapore's economic recovery is expected to be gradual and uneven across sectors.

The gross domestic product (GDP) growth forecast for this year is estimated at 4 per cent to 6 per cent, said Mr Heng, who is also Finance Minister.

"Now is the time to chart our course, position ourselves to catch the winds of opportunity and sail boldly in the reshaped world," he said, adding this is the focus of this year's Emerging Stronger Budget.


In his speech, Mr Heng outlined the efforts last year to support companies and businesses - a total of $27.4 billion in grants was committed to preserve jobs and help firms pivot to new growth areas.

This was more than 18 times the amount disbursed in 2019, he said.

The decisive response helped contain the economic impact of the Covid-19 pandemic to avoid deep scarring, which was also pointed out by Mr Liang Eng Hwa (Bukit Panjang) and Mr Desmond Choo (Tampines GRC).

These efforts are estimated to have prevented a further 6.6 percentage points of GDP contraction last year and mitigated the rise in resident unemployment rates by 2 percentage points.

Singapore's economy contracted 5.4 per cent last year - its worst recession since independence - and its resident unemployment rate was 4.1 per cent. The calibrated strategy Singapore has taken through the combined Budgets from last year and this year has also had positive outcomes for firms and workers, said Mr Heng.

Some of the hardest-hit sectors are starting to see light at the end of the tunnel, he said, citing how consumer-facing sectors such as retail and food services saw a gradual recovery by the fourth quarter last year.


Responding to questions from MPs, including Mr Zhulkarnain Abdul Rahim (Chua Chu Kang GRC), about what the post Covid-19 world means for Singapore's economy, Mr Heng outlined three areas Singapore must work on to pave the way for its next lap of growth.

First, the country must remake itself as a global Asian node of technology, innovation and enterprise.

This requires enhancing the country's connectivity and positioning its firms and workers at the intersection of key global chains growing out of Asia.

Second, as Mr Gan Thiam Poh (Ang Mo Kio GRC) had highlighted, the Republic must shift to a technologically advanced and innovation-driven economy where firms and workers are able to harness technology and intangible assets as a key differentiator.

Third, Singapore must invest in economic resilience and sustainability as a source of competitive advantage, Mr Heng said, noting how Mr Shawn Huang (Jurong GRC) had summarised it aptly - that is, for Singapore to survive, pivot and develop an edge to seize opportunities of the future.

"If we get this right, we can set our economy on the path of growth for the next five to 10 years."

Replying to Workers' Party MP Leon Perera's (Aljunied GRC) point about incentivising collaboration between multinational corporations and small-and medium-sized enterprises, Mr Heng said that the synergy of firms working together applies to companies of all sizes and sectors.

The Ministry of Trade and Industry will elaborate on initiatives for knowledge transfer and skills training at the debate on its budget, he added.

Singapore takes an ecosystem approach to economic development, sustaining an ecosystem of innovative and competitive firms to support a vibrant economy, Mr Heng stressed.

"All these efforts serve to create opportunities for our people."

Multiple layers of support to help Singaporeans cope with impact of COVID-19, says DPM Heng
He urges people to look at opportunities created by each Budget, not just handouts
By Yuen Sin Political Correspondent, The Straits Times, 27 Feb 2021

From vulnerable segments of the population to the middle class and women, different groups of Singaporeans have been affected in different ways by the pandemic, and the Government has taken a customised approach to help them, Deputy Prime Minister Heng Swee Keat said yesterday.

There are the broad-based, permanent schemes that provide a safety net for all Singaporeans.

On top of these are temporary assistance schemes - such as the Solidarity Payments, Temporary Relief Fund and Covid-19 Support Grant - to provide additional support, especially for vulnerable groups.

Addressing MPs' concerns about those hit hard by the pandemic-fuelled downturn, Mr Heng, who is also Finance Minister, said: "We cushioned the vulnerable against the worst of the crisis and mitigated social inequality."

He noted that the multiple layers of support helped bring down Singapore's Gini coefficient to a record low. The Gini coefficient - a measure of income inequality from 0 to 1, with 0 being most equal - went from 0.452 to 0.375 last year, after taxes and transfers.

During the debate on the Budget, MPs from both sides of the aisle acknowledged the efforts in this area, while suggesting ways for the Government to do even more.

Leader of the Opposition and Workers' Party (WP) chief Pritam Singh highlighted the plight of lower-income families, noting that there was a divergence between the data on inequality and their lived experiences.

In response, Mr Heng said the Government was fully aware that some families had been more badly hit. "This is exactly why we have tilted our support significantly towards the lower-income and vulnerable groups, and Government has partnered the community to reach out to those groups."

Mr Singh had noted that there was "not insignificant" support, Mr Heng said.

Mr Heng also stressed that conclusions about the support given should not be drawn based on one sample alone, but rather the totality of Singapore's policy measures.

A number of MPs, including Mr Gerald Giam (Aljunied GRC) from the WP and Ms Jessica Tan (East Coast GRC), had lamented that the middle-income group may have missed out on support measures.

Mr Heng said the bulk of every Budget goes towards uplifting all members of society, including the broad swathe of Singapore's middle class. He said $42 billion was set aside in this Budget for social spending and transfers, 35 per cent more than in the 2019 financial year.

Pointing to the different support schemes, he said there are some which target those with less means, and others, like the upcoming $100 Community Development Council vouchers, that will be given to all Singaporean households.

Mr Heng also urged people to look at each Budget in terms of whether the spending creates more opportunities for them and their children, and not just what handouts they will receive.

For instance, expenditure on security makes Singapore safe and allows property and asset prices to rise over time, in line with the country's economic fundamentals.

Investments in the economy also ensure that people have access to good jobs, he said. And through providing well-built affordable housing, as well as support for young families and seniors, people can achieve their aspirations for a better future.

Singapore has also been investing in good and affordable healthcare for its people, especially the elderly, said Mr Heng.

The overall system of taxes and transfers has also been gradually tilted in favour of lower-and middle-income groups over the past decade.

On average, lower-income Singaporean households can expect to receive benefits of $6,500 per person this year, after accounting for taxes. The figure is $3,500 for those from middle-income households.

Meanwhile, the highest-income households pay about $9,500 in taxes per person, after accounting for benefits, Mr Heng said.


Mr Patrick Tay (Pioneer), Nominated MP Hoon Hian Teck and the WP's Louis Chua (Sengkang GRC) had suggested that Singapore study the viability of unemployment insurance for workers.

Mr Heng said that while unemployment insurance appears attractive, it would not be sustainable without longer-term structures in place to help workers bounce back.

In countries like Germany, Sweden and South Korea, unemployment insurance schemes are linked to active labour market policy measures that aim to get an affected worker back into a job quickly and avoid skills atrophy, he said.

"It is more sustainable to ensure that workers maintain a source of income, and to upskill and re-skill our workers."

At the same time, the nature of jobs and skills will be changing faster as the global economy goes through an even faster pace of change, said Mr Heng.

"We will partner our business leaders, (the) labour movement and academics to study how to support employability and help those who falter, through measures that suit our context."

Petrol duty hike not meant to get drivers to switch to electric vehicles immediately: DPM Heng
Petrol duty hike intended to set price signals
By Yuen Sin Political Correspondent, The Straits Times, 27 Feb 2021

The recent petrol duty hike is meant to set price signals and change behaviour rather than get drivers to switch to electric vehicles immediately, Deputy Prime Minister Heng Swee Keat said yesterday.

He was responding to MPs, including Dr Lim Wee Kiak (Sembawang GRC) and the Workers' Party's Mr Dennis Tan (Hougang), who asked why the duty was raised before the infrastructure for electric vehicles is fully ready.

"Just like how we have made deliberate decisions to protect our environment, we want people to make conscious choices about how to drive, how much to drive and whether to even drive at all," said Mr Heng, who was rounding up the debate on the Budget statement.

Electric vehicles are also not the only alternatives, he said. Hybrid vehicles are another option, and are already widely available today.

Public transport, too, is being kept affordable and accessible through rail and bus subsidies as well as investments in infrastructure, he added.

Mr Heng also stressed the need for Singapore to protect its environment, noting that climate change and environmental sustainability were not issues that had become priorities overnight.

They date back decades, and efforts to tackle the issues include improving sanitation systems and cleaning up the Singapore River in the 1960s to 1980s, and encouraging the adoption of cleaner vehicle alternatives as far back as 2001.

"Ultimately, protecting our environment must be our commitment to future generations of Singaporeans. This is just one of the many small but necessary steps in our whole-of-society, multi-generational efforts to preserve our clean living environment," said Mr Heng.

While the recent petrol duty hike will have a bigger impact on those who drive for work, such as taxi and private-hire car drivers, measures have been put in place to mitigate the impact, the Deputy Prime Minister said.

"I understand the pressure that you are facing, especially during this (Covid-19) situation," he said, addressing the concerns raised by MPs such as Ms Mariam Jaafar (Sembawang GRC) and Mr Darryl David (Ang Mo Kio GRC). "There will never be a good time to raise petrol duty."

To cushion the impact of the increase, which raised the duty for 98-octane petrol by 23 per cent and that for 92-octane and 95-octane petrol by 18 per cent, the Government expects to channel almost all of the increase in duty collections this year back to petrol vehicle owners as offsets, said Mr Heng, who is also Finance Minister.

Those who depend on driving for their livelihoods will also be receiving additional petrol duty rebates on top of the road tax rebates that were announced earlier, he said.

Taxi drivers will receive 15 per cent in road tax rebates in the form of rental reductions between the middle of next month and April. They, along with private-hire drivers, will also each receive $360 of additional petrol duty rebates between May and August, the Land Transport Authority announced earlier.

The taxi operators and GrabRentals have agreed to pass on the road tax rebates to their drivers, said Mr Heng.

Ride-hailing company Gojek will also introduce additional incentive rebates for its drivers from next month. Motorcycle owners will receive their additional petrol duty rebates from May.

At the same time, such broad-based rebates will not be able to cater to every unique circumstance, or reach those in more informal work arrangements, Mr Heng acknowledged.

"We are working with the labour movement to see how we can provide further help to self-employed delivery workers and limousine drivers," he said.

Singapore has to refrain from borrowing for recurrent expenditure, says DPM Heng
By Choo Yun Ting, The Straits Times, 27 Feb 2021

While Singapore will look to borrow for long-term infrastructure, it has to resist doing so for recurrent expenditure.

If not used productively, borrowing can often lead to high debt and low growth, which would affect investor confidence, businesses' cost of funding and the country's long-term growth, Deputy Prime Minister Heng Swee Keat said yesterday.

Responding to MPs' support for borrowing for long-term infrastructure, he stressed that the Government's approach to borrowing is a carefully calibrated one.

There is good debt and bad debt, which Ms Foo Mee Har (West Coast GRC) had noted, but the key difference is what is done with the debt proceeds, said Mr Heng.

The Government is currently already borrowing, under the Government Securities Act and the Local Treasury Bills Act, he added. "But instead of spending the proceeds, we invest them for long-term returns, which is used to repay our debt. The rest goes back into the reserves."

In response to a question by Associate Professor Jamus Lim (Sengkang GRC) on whether Singapore could borrow more to fund soft capital like education, Mr Heng said that the country had to refrain from doing so for such recurrent expenditures.

In many countries, there is a tendency to expand the scope of what constitutes soft capital beyond the original intentions, he noted.

"When used to fund increases to government subsidies or social transfers, it is really more recurrent spending. Borrowing continuously for them will just lead to ever higher debts, which have to be repaid by future generations."

Interest rates are low for now, but this can change quickly, and when they change, existing debts have to be refinanced and a higher interest rate could quickly worsen the fiscal situation, said Mr Heng.

Prof Lim had said that he was "happy as a clam" that the Budget's fiscal strategy included elements which he had raised previously, but Mr Heng pointed out that he had announced that the Government was studying borrowing in 2019, before Prof Lim entered Parliament.

"But I am glad he shares our views. So, perhaps if he reads more of our past Budget statements, he would be even happier."

He added: "Borrowing is not a form of revenue. Borrowing gives us cash for liquidity planning, but it does not create free monies for spending. Today's debt is paid for by tomorrow's growth and tomorrow's generation."

Replying to Ms Foo and Dr Lim Wee Kiak (Sembawang GRC) on the safeguards for borrowing and how borrowing under the new Significant Infrastructure Government Loan Act (Singa) bonds may impact Singapore's credit rating, Mr Heng said that Singapore will set $90 billion as a borrowing limit.

The size of this limit is based on the expected expenditure of major, long-term infrastructure projects over the next 15 years, and any increase of this limit will require legislative amendments which are subject to parliamentary approval, he added. Other safeguards such as a limit on interest costs will also be put in place, and more details will be provided when the Bill is presented in Parliament later this year, he said.

The key is to use debt equitably and sustainably, Mr Heng said, adding that the Government would study the suggestion by Mr Liang Eng Hwa (Bukit Panjang) of a one-off, special purpose borrowing to help Singapore emerge stronger from the Covid-19 crisis.


Mr Heng and Prof Lim later crossed swords when the Workers' Party MP asked why the minister "remains dismissive of soft capital". "The key, I think, is ultimately that we invest what we end up borrowing... and while I agree that we shouldn't allow recurrent expenditures to be lumped into soft capital, it is easy to allow recurrent expenditures of all forms," Prof Lim noted.

Rather, he added, the crux is that Singapore always evaluates how a given project is defined as soft or hard capital in terms of its ultimate investment and repayment potential.

Mr Heng replied: "Let me say that in parliamentary debates, please do not put words into my mouth. I did not dismiss soft capital. You said I was dismissive of soft capital, I did not. I said that we have to be careful."

He added that Singapore has to be cautious about soft capital precisely because it is soft - it can morph into various shapes and over time, and everything becomes a capital investment.

Mr Sitoh Yih Pin (Potong Pasir) also weighed in, suggesting that one of the reasons why Singapore is quite comfortable to borrow now is because of its fairly large reserves and the confidence that its rate of return from the reserves in the long term is going to exceed its cost of borrowing.

In reply, Mr Heng noted that even if Singapore's fiscal situation is good, it may not even be enough for it to fund the lumpy infrastructure investment required. Borrowing means that the cost is shared with various generations, and at this point, it is efficient to do so because interest rates are ultra low, he added.

Budget 2021 debate: DPM Heng reminds the House of hard truths
By Grace Ho, Senior Political Correspondent, The Straits Times, 27 Feb 2021

"Please do not put words in my mouth."

If there was one thing that stood out in a couple of the exchanges that followed Mr Heng Swee Keat's Budget round-up speech on Friday (Feb 26), it was that the cerebral, soft-spoken Deputy Prime Minister seemed genuinely angered.

The first subject of his ire was the Workers' Party's Jamus Lim (Sengkang GRC), who sought clarification on why Mr Heng was "dismissive of soft capital".

Associate Professor Lim had earlier defined this as human capital, saying that the new bonds which the Government will issue can also be used to fund human capital investments.

Mr Heng had a firm response: "You said I was dismissive of soft capital. I (was) not... I sounded a word of caution about soft capital. Precisely because it is soft, it can morph into various shapes."

In his round-up speech, Mr Heng had explained that in many countries, there is a tendency to expand the scope of what constitutes "soft capital" beyond its original intentions.

When borrowing is used to fund increases to government subsidies or social transfers, this is really more recurrent spending, he said. And borrowing continuously for them will simply lead to growing debt.

He was also quick to set Mr Louis Chua (Sengkang GRC) right on the issue of using land sales proceeds directly in the Budget. Mr Chua had argued that land sales can be a recurring source of revenue, noting that incentives to use land sales revenues "already exist today".

Under the Constitution, state land and land sales revenues form part of Singapore's past reserves which are invested. Land sales revenues are not available for budgetary spending.

"I think you should seriously look at what agencies have been doing. Do not make allegations like this, because I think it will demoralise the many good officers that we have," Mr Heng told him when responding. "Let me repeat that the Government has no incentive to sell land for the purpose of generating revenue."

There was an urgent tone to the DPM's delivery on Friday. Urgent because there is no time for academic debate - only a narrow window of opportunity for Singapore as jobs and firms around the world reconfigure amid the pandemic.

Unlike last year, when emergency relief was front-loaded in the five Budgets, Mr Heng had to drive home the message that firms and workers must transform and pivot.

He also had to simultaneously assure the public that the Government would not leave them to struggle alone, given the petrol duty hike and the likelihood of a goods and services tax (GST) increase in the near future.

The Government has rolled out close to $100 billion in Covid-19 support measures. Yet ask a Singaporean today, and he may still not be able to explain how the money benefits him except for U-Save and GST vouchers.

If he is a taxi or private-hire driver, what he may feel, viscerally, is that the petrol duties will hit his take-home pay.

But the truth, as inconceivable as it may be to some, is that state support during the pandemic has reached into the lives of each and every Singaporean - from broad-based cash handouts to wage and training subsidies.

So even as Mr Heng ran through the standard report card on Friday, he had to reiterate - just as he did for the $6 billion Assurance Package to cushion the impact of a GST hike - that those who drive for livelihoods will receive extra petrol duty rebates on top of road tax rebates.

He also sought to focus people's minds away from short-term goodies, onto three larger themes: an economic strategy to emerge stronger together; a cohesive and liveable Singapore; and a prudent fiscal strategy for the long term.

The key thrusts were these:

First, the fiscal firepower has prevented deep economic scarring and preserved human capital.

At the heart of Singapore's shift to a technologically advanced, innovation-driven economy will be a strong Singaporean core.

Second, every future generation should be better off than the last, and the Government is prepared to invest in this future.

Here, Mr Heng laid down four covenants between the Government and Singaporeans to stand the test of time: They can always have a home to call their own; their children will be nurtured in a world-class education system; seniors will have assurance over their retirement; and families' healthcare needs will always be well taken care of.

Third, a prudent fiscal strategy for the long term. Crises will come and go, but the values of prudence and responsible stewardship are sempiternal.

The draw on past reserves is equivalent to about 20 years of fiscal surpluses. The country must strive to remain fiscally prudent to build back its reserves, he said. "It will be a challenge to also make good this amount drawn, given the magnitude of the Covid-19 crisis."

The stark bottom line is this - if Singapore wants to spend more, the Government has to raise the revenue to do so.

And if these are recurrent needs which have to be financed year after year, then it must find recurrent revenues such as from the GST, which it can collect year after year.

Will the Government look into other ways to generate revenue? The jury is still out, but Mr Heng did not shut the door on wealth or property-related taxes.

The point he made was that neither would replace the need for the GST rate increase - which in itself will not yield enough revenue to meet the Republic's growing healthcare and social spending needs.

"We will continue to review additional options to complement a GST rate increase, but it is not realistic to hope for these to become alternatives to a GST rate increase, or to make the GST rate increase unnecessary," he said.

He clarified that the Government does tax wealth and has been raising wealth taxes over the years, but "the practical question has always been how to design wealth tax moves to ensure that they are effective".

He also said that the Government will study Mr Liang Eng Hwa's (Bukit Panjang) suggestion of a one-off, special purpose borrowing.

It has not been hard for both sides of the House to agree on the need for more holistic support for disadvantaged families, affordable healthcare and to uplift low-wage and older workers.

But it has been far harder to meet halfway on how to do so. Some proposals, such as Non-Constituency MP Leong Mun Wai's suggestion for the Government to fund insurance premiums of the MediShield Life and CareShield schemes for all Singaporeans and permanent residents are fiscally ruinous, given the ageing trajectory of Singapore's population.

Others, like the progressive wage model (PWM) versus minimum wage debate, inhabit a greyer area where some of the disagreement is an issue of political philosophy and semantics. As Senior Minister Tharman Shanmugaratnam had said previously, the PWM is essentially a minimum wage-plus with a sectoral approach.

Yet even proponents of the PWM would admit to how fiendishly difficult it can be to get companies on board; or to drive, let alone quantify, productivity growth which so much of the PWM is premised on.

On stagnating global productivity growth, economist Robert Solow famously remarked that "you can see the computer age everywhere but in the productivity statistics".

And when it comes to taxes, public opinion often weighs not on the side of hard numbers, but the perception of fairness. How can wealth taxes be effective, instead of simply being a state-legislated form of schadenfreude by the poor and middle-class against the rich?

These are issues that cannot be resolved immediately. But as the House began debating ministries' budgets, one looks forward to more details on how effective the existing measures have been, how they will be fine-tuned or enhanced, and why future plans will make a difference in Singaporeans' lives and livelihoods.

Role of the CDCs has evolved, says Denise Phua
She outlines work of five councils in assisting citizens; WP chief questions need for mayors to be full time
By Hariz Baharudin, The Straits Times, 26 Feb 2021

Central Singapore District Mayor Denise Phua yesterday rejected the suggestion by Workers' Party chief Pritam Singh that a voucher scheme in this year's Budget was aimed at making community development councils (CDCs) relevant.

"Mr Singh's accusation that the Government is trying to find some way for the CDCs to be relevant by asking them to manage the CDC voucher scheme is belittling the CDCs and our partners," she said during the debate on the Budget.

"There is nothing to be ashamed about making sure one is always relevant," she added, outlining the work of the five councils in assisting citizens who need help, supporting national initiatives like lifelong learning, and mobilising resources from businesses and the community to help those in need.

Under the latest voucher scheme announced by Deputy Prime Minister Heng Swee Keat in the Budget on Feb 16, all Singaporean households will get $100 worth of CDC vouchers for use in heartland shops and hawker centres. The five CDCs are still working on the details of the $150 million scheme.

Their function in the voucher scheme is clear, said Ms Phua. "We organise the resources, communicate the scheme, and get as many merchants as possible to sign up and make full use of this wellintended help scheme," she said.

In his speech at the start of the Budget debate on Wednesday, Mr Singh, who is Leader of the Opposition, said the CDCs came under the spotlight after last July's general election, with some viewing the salaries of mayors as outrageous.

He said the need for CDCs and full-time mayors continues to be widely questioned, and that their role in the voucher scheme was "potentially superfluous". "It would appear to me as if the Government is trying to find some way to make the CDCs relevant in view of their relative absence in the public mindshare," Mr Singh had said.

In rebutting these points yesterday, Ms Phua cited how Prime Minister Lee Hsien Loong had, after the election, "graciously" created the role of Leader of the Opposition, to Mr Singh's surprise.

She said: "Did Mr Singh not accept the role when asked - and the office and the research assistant and the salary - and try his best to be relevant too? Singaporeans, too, ask what the role of the Leader of the Opposition in our Parliament is."

Ms Phua also thanked Mr Singh for raising the subject of CDCs, adding that perhaps the biggest mistake they made was not to have better publicised their work.

CDCs were mooted by then Prime Minister Goh Chok Tong in 1996 to complement other grassroots groups and help manage programmes to bring people in the community together.

Their roles have evolved, Ms Phua noted, citing how they used to administer national financial assistance schemes, a role now done by Social Service Offices. But given their size, CDCs continue to play a role in national initiatives such as SkillsFuture.

During the Covid-19 pandemic, they brought together resources to help residents find training and jobs. The mayors also helped ensure students who used to get free meals in school continued to get e-vouchers for meals during the circuit breaker, Ms Phua added.

"The value of the CDC structure... is its relative agility and ability to respond and develop programmes in the district faster than a bigger government ministry."

Mr Singh had suggested that citizens' consultative committees (CCCs) in the constituencies could administer the voucher scheme.

To this, Ms Phua said the CCCs do not always have market and shop representatives, whereas the CDCs tap a network that includes volunteers and national bodies such as the Federation of Merchants' Associations, Singapore and its subsidiary, the Heartland Enterprise Centre Singapore.

"Mr Singh's suggestion to have the CCCs or grassroots volunteers run this multi-million help scheme is either ignorant of or insensitive to the reality on the ground," she said.

Ms Phua added: "Would Singapore society be worse or better off without the CDCs? This is a question that is best answered by the beneficiaries of the work done by the CDCs."

Replying yesterday, Mr Singh clarified that he did not harbour any personal vendetta against mayors. He was trying to ask if there is still a need for them to be full time, given how roles they had are now done by others.

Mr Singh cited how when CDCs were first formed in 1997, mayors were part-time until after the general election in 2001. "That is because the trajectory of the government thinking at that time was that government programmes... would go through the CDCs."

He cited the Hansard to illustrate how the councils' budgets were increased, from $19 million in 1997 to $153 million in 2001, and said this evolution of the councils' role was best encapsulated when then Community Development Minister Vivian Balakrishnan said around 2010 that all government schemes go through the CDCs.

"Is that the case today? A lot of roles have devolved," Mr Singh said, adding that as many functions are now not in the CDCs' hands, their budget has been reduced significantly.

"Is it still viable for mayors to be full time?" he asked.

In reply, Ms Phua said she was the only full-time mayor. "That is, I think, because the Prime Minister feels I am running the largest district here - 23 divisions. My fellow mayors are all double-hatting or triple-hatting sometimes," she said. "And so I don't know whether you consider them full-time mayors or not. But I do know that they only get one pay."

South West District Mayor Low Yen Ling is minister of state at two ministries, North East District and South East District mayors Desmond Choo and Fahmi Aliman are with the National Trades Union Congress, and North West District Mayor Alex Yam is executive director of the People's Action Party.

Mr Singh also said the issue Ms Phua made about public mindshare and CDCs has been a problem for the longest time, in his view.

"Nobody is questioning the projects the CDC runs. The question is, is it... possible that these projects could also be carried out with charities, some of whom have a huge footprint?" he added.

On mayors, Mr Singh said: "I have made my point, and it is now really in the Government's hands."

Economic and psychological resilience key to nation emerging stronger
To thrive, Singapore has to change the way it thinks about mental health
By Grace Ho, Senior Political Correspondent, The Straits Times, 26 Feb 2021

"Speaker, let me have my last say."

"No, we're moving on. Thank you."

The terse exchange between Mr Leong Mun Wai and Speaker Tan Chuan-Jin yesterday has become a somewhat regular feature of Parliament debates.

Thanks to his, to put it mildly, left-of-centre proposals, the Progress Singapore Party's Non-Constituency MP sparks protracted debate in the chamber.

He took another stab at the foreign manpower policy issue, saying that there are not enough policies to ensure that Singaporeans have a fair shake at top jobs, including in local banks.

One of his proposals was to level the playing field with an immediate $1,200 monthly levy on all Employment Pass (EP) holders.

It is easy to stereotype opposition politicians as tribunes of the common man, and the incumbent as the party of parsimony and prohibition.

But the irony of Mr Leong's sweeping proposal, which does not take into account the hiring needs of specific industries, is that it could kill off the very local companies - and in turn, local jobs - that both sides of the House seek to protect.

Transport Minister Ong Ye Kung had this to say: "Of course we always wish there's a menu that says 'We get all the jobs, but yet no competition'.

"I'm sorry, there's no such menu. So I'm a little bit disturbed when I hear Mr Leong grandstanding, saying that all of this building up, growing our own timber, localisation (and) building our own talent is not in the Monetary Authority of Singapore's KPIs. I think that is grossly unfair and ignores everything that we have discussed earlier."

Aside from the well-worn issue of labour policies, the employment prospects and mental well-being of younger Singaporeans also came up for discussion.

Noting the difficulty that some graduates from institutes of higher learning face in finding full-time jobs, Workers' Party MP Leon Perera (Aljunied GRC) asked whether economic agencies can work with companies which have no physical presence in Singapore, to take graduates on for traineeships and internships such as the SGUnited Traineeships Programme. The benefits, he said, are twofold. They get to learn new skills and knowledge, and imbibe the culture of cutting-edge firms in disruptive sectors. These companies, too, can decide if they want to physically locate here.

Mr Perera's proposal would certainly be beneficial, although some would argue that there are other ways to expose Singaporeans to these experiences without necessarily tapping the SGUnited Traineeships Programme. He also suggested allowing SkillsFuture credits to be transferred among family members, which could help those still in the workforce to reskill and upskill amid job disruptions.

Nominated MP Shahira Abdullah pointed out that mental wellness initiatives are missing from the Budget - a puzzling lacuna, given the statistics surrounding mental health in Singapore.

Suicide continues to be the leading cause of death for those aged 10 to 29. According to the Samaritans of Singapore, the number of suicides rose 10 per cent last year, with suicides among boys aged 10 to 19 at a record high.

Deloitte's 2020 Global Millennial Survey showed that Brazil and Singapore topped the list of countries with the most stressed-out Gen Zs.

Dr Shahira welcomed the Government's setting up of the Covid-19 Mental Wellness Taskforce, but wanted to know if there are any updates or if a budget has been allocated to take this further. The task force, announced in October last year, was asked to review the psycho-social impact of the Covid-19 pandemic on the population, take stock of existing initiatives and identify gaps.

Dr Wan Rizal Wan Zakariah (Jalan Besar GRC) called for greater mental health and digital literacy in schools. Mental health screening should also be included and normalised as part of physical health screenings, and time-outs introduced at workplaces and in schools to allow those who are under stress to have the option of taking a mental break.

Improving awareness of mental health issues is critical.

Mr Eric Chua, Parliamentary Secretary for Culture, Community and Youth and for Social and Family Development, cited a high achiever whose regret was that no one around her, and not even herself, had recognised she had mental health issues. The lack of awareness and stigma, he said, make it hard for the community to identify such issues, much less to respond. It also makes it much harder for medical professionals to even have a chance to help.

Targeted interactions, such as long-term mentoring, can also turn youth away from bad influences and towards their strengths and passions.

Ms Rachel Ong (West Coast GRC) said that in the midst of unpredictable or painful circumstances, the consistency of a mentor's presence provides a space for youth to process their feelings and thoughts for more productive outcomes in life.

With the pandemic continuing to dampen business and hiring sentiments across the world, it is only natural that economic issues have dominated the Budget debates. But as several MPs pointed out yesterday, the sequestering of people at home has had deleterious mental effects. It has also allowed more to take to online echo chambers, where even the octopine reach of the state is not complete.

For Singapore to thrive post-Covid-19, it will have to emerge stronger not just economically, but also psychologically. As Mr Chua said: "It is not enough for us just to have a conversation. We need to change the way we think about mental health, if we have the well-being of our younger generations at heart. And more importantly, we need to act."

MPs seek more support, protection for workers as economy restructures
They debate expanding wage ladder to more sectors and having anti-discrimination laws
By Yuen Sin,‍ Political Correspondent, The Straits Times, 25 Feb 2021

As Singapore gears up to restructure its economy amid an uncertain global environment, MPs yesterday called for stronger protection and support for local workers to help them navigate shifts taking place in the wake of Covid-19.

The first day of debate on the $107 billion Budget saw 30 MPs speak, including nine from the labour movement who touched on expanding a wage ladder to lift the income of the lowest paid, giving gig workers greater say and having anti-discrimination laws to give workers a fairer playing field, among other things.

Members welcomed the Budget's emphasis on growth being sustainable and inclusive, but sought stronger safety nets for vulnerable groups and older workers.

Workers' Party (WP) chief Pritam Singh was the first to speak in the debate, having been appointed Leader of the Opposition following last July's general election.

He said he supported the Budget, which was unveiled by Deputy Prime Minister and Finance Minister Heng Swee Keat last Tuesday.

But Mr Singh called for more transparency and accountability on Government expenditure and the efficacy of Budget initiatives, given Singapore's tight fiscal environment after having to dip into its reserves for the second year running to battle the Covid-19 crisis.

He called for an independent parliamentary Budget office to be set up to boost accountability in how tax dollars are used. "The scrutiny raises everyone's sense of ownership in Singapore," he said, adding it would be in step with DPM Heng's call for fiscal prudence.

The need to be prudent in spending was echoed by other MPs. Mr Liang Eng Hwa (Bukit Panjang) said Singapore should consider a further draw on its reserves only as a last resort, while Ms Foo Mee Har (West Coast GRC) cautioned against borrowing to fund recurrent spending such as healthcare.

To boost the earnings of low-wage workers, National Trades Union Congress (NTUC) deputy secretary-general Koh Poh Koon spoke on hastening the adoption of the Progressive Wage Model, a wage ladder that sets out minimum pay and training requirements for workers at different skill levels, into six more sectors.

NTUC targets involving the food services and retail sectors in the next two to three years, a move that will benefit some 70,000 workers. It is also working to have the model for the waste management, strata management, pest management and solar technology sectors.

Gig workers should also be given some legal protection under the Employment Act, said labour MP Desmond Choo, who noted many of them support the growing e-commerce sector: "There is a pressing need to review the social protection of these workers if we want this sector to thrive."

Meanwhile, labour MP Patrick Tay urged the Government to consider implementing anti-discrimination legislation to eradicate bias in hiring along the lines of nationality, gender or race, among other things, saying it would send a strong signal to employers.

Amid greater anxiety about local workers being displaced by foreign hires, MPs called for multinational corporations (MNCs) to play a bigger role in grooming local talent and helping local enterprises scale up. Nominated MP Janet Ang said foreign business leaders in Singapore-based MNCs can help groom local business leaders as an earlier generation had, while WP MP Louis Chua (Sengkang GRC) said MNCs can partner local firms seeking to venture abroad.

Partnership was also a theme picked up by MPs who called for firms and others to step up and do more for vulnerable groups affected by the crisis as well as the younger generation, and help them navigate a more challenging future. Ms Ang said: "When business leaders come together and galvanise other business leaders, we can effect change for vulnerable groups.

Another 30 MPs are expected to continue debating the Budget today, before Mr Heng responds to their suggestions tomorrow.

Singapore Budget 2021: Emerging Stronger Together

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