The Singapore way of calculating budget balances

Instead of one operating balance sheet, Singapore's prudent approach breaks the Budget into three chunks: the primary balance, the basic balance and the overall balance.
By Chia Ngee Choon, Published The Straits Times, 3 Mar 2018

Budget 2018 is consistent with the "Singapore way", namely being sustainable, pro-active and forward looking.

The "Singapore way" to ensure fiscal sustainability is to monitor our finances over both the near term and long term. This departs from conventional budgetary accounting laid out in the International Monetary Fund's (IMF) Government Finance Statistics, a point picked up by some on social media.

In the IMF's accounting standards, emphasis is placed on a single headline fiscal indicator - "gross operating surplus". This surplus is obtained by taking total revenue minus total expenditure and reflects the total change in government net worth in a year.

The total revenue includes all government receipts, tax and non-tax revenue and capital receipts. In Singapore's context, the latter would have included sales of land and the returns and earnings of investments from Singapore's reserves.

Under Singapore's Constitution, the Singapore Budget Statement shows only revenues that the Government is allowed to spend. Land sales revenue is thus excluded in the Budget Statement. Land sales revenues that are invested together with other returns and earnings from reserves are reflected in the Budget Statement as Net Investment Returns Contribution.

Instead of the IMF standard of calculating surplus, Singapore uses three different measures of fiscal balances: the primary budget balance, basic budget balance and overall budget balance. This is a uniquely Singapore way to track fiscal positions to meet its near-term and long-term needs.

Singapore's defence spending: A case of too much or not enough?

By Graham Ong-Webb, Published The Straits Times, 3 Mar 2018

Singapore's public spending is under increasing pressure as its population and infrastructure age. An ageing society means higher health and social spending, while infrastructure needs require the nation to set aside vast sums to maintain and upgrade old systems and build new ones.

Naturally, other sectors of the national Budget will come under increasing scrutiny. One such sector is defence.

In some quarters, there is a nascent perception that Singapore's defence spending - in the current absence of external military aggression - has not only ballooned, but is also excessive. The rising query has become, "Are we spending too much on our defence?"

Interestingly, as a proportion of total government expenditure, defence spending is going down, not up. At its height around the mid-to late 2000s, spending by the Ministry of Defence accounted for nearly a third of total government expenditure.

With the modernisation of the Singapore Armed Forces (SAF), defence spending as a proportion of government spending has fallen to around 19 per cent from 2015 to last year.

At the same time, social spending increased from 35 per cent of total government expenditure in 2006 to 40 per cent in 2016.

Questioning if too much is spent on defence is not unique to Singapore. European countries belonging to Nato caved in to public pressure to slash defence spending in the 1990s, after the demise of the Soviet Union that threatened them with military aggression. It is only very recently that European countries such as Germany, facing rising threats including an increasingly belligerent Russia, are increasing spending to meet their defence and security requirements.

The evolving threat landscape also requires countries to devote more to defence. Traditionally, countries have militaries to protect their countries' sovereignty and territorial integrity. Today, militaries are increasingly called upon to deal with "non-traditional" threats such as terrorism, cyber security, counter-proliferation, biological pandemics and natural disasters. Taking on more of these additional missions raises operational costs for the military, but their contributions to security are significant.

For example, the SAF Army boosts the coverage of the Home Team's ground patrols by deploying soldiers alongside our police officers. More costs are incurred to train soldiers to respond to terror threats, and to procure equipment to deal specifically with terrorism incidents (rather than conventional warfare).



In addition to terrorism, the SAF must deter and respond to cyber threats that may be posed against it. The SAF depends on computer networks to perform its operations, without which it is unable to defend Singapore. Protecting these networks requires additional resources and skills that will cost more money.

As threats evolve, defence spending has to keep up with needs. In any case, spending on national defence is essential to create a stable social and economic environment for economic development.

Singapore's tiny geographic size means that deterrence is its best defence. The most credible deterrence requires strong military capabilities. Ironically, the outcome of credible deterrence is that a country will have a military force that is very unlikely to be deployed in traditional hostile action.

Thus, observers who ask why Singapore acquires significant numbers of advanced tanks, ships and aircraft - when there are no wars to fight - are missing the plot. In a deterrence context, an adequate acquisition of arms is actually inversely proportional to their use.

Budget 2018 debate in Parliament

Singapore Budget 2018 approved by Parliament, with Workers' Party MPs voting against it

GST hike responsible way to fund spending needs: Finance Minister Heng Swee Keat
WP votes against Budget, the first time in three decades, following heated debate
By Yasmine Yahya, Senior Political Correspondent, The Straits Times, 2 Mar 2018

Windfalls and one-off gains - like the ones that led to the unexpected Budget surplus of $9.6 billion in the last financial year - cannot form the basis of prudent fiscal policy, Finance Minister Heng Swee Keat said yesterday.

That is why the goods and services tax (GST), a broad-based tax, has to be raised - to fund expenses in healthcare, education and security long into the future, he said. Given Singapore's ageing population and the need to counter the terror threat, this spending is likely to recur year after year.



"The responsible way for us to fund such spending is to raise taxes. As Dr Lee Bee Wah pithily reminded us, you don't fund recurrent spending needs by hoping to strike 4D," said Mr Heng.

But the GST issue provided unexpected drama, with the Workers' Party (WP) saying it could not support a future hike without more information. For the first time in three decades, it cast its votes against the national Budget.

This came after WP chairman Sylvia Lim (Aljunied GRC) initially said the party intended to support the Budget when the vote was called, but not the announcement of a GST hike to take place some time between 2021 and 2025.

But Mr Heng made it clear that the Budget presented the Government's overall financial policy - both spending and financing options, including the GST increase.



He called on the WP to "square" its position. Mr Heng said: "Do you support all those increased spending? Or are you contradicting all your MPs' position yesterday where everyone spoke about doing more? Where is the money going to come from, and would a 2 percentage point increase help us in some ways?"

Ms Lim responded tersely: "To make it clear, we are unable to support the announcement on the GST hike."

The eight WP MPs present yesterday proceeded to vote "no" when a division - a formal recording of votes - was called.

To MPs who questioned the need for a GST hike despite the large Budget surplus, Mr Heng said it was largely due to one-off, exceptional factors. "We cannot fund our plans to secure Singapore's future on the basis of episodic windfalls," he said.

Instead, the only sustainable way to finance this was to raise taxes, he said. And a broad-based tax like the GST was deemed the most suitable.

Mr Heng reiterated that this hike would not cover expenditure needs, but would only make the fiscal gap more manageable.

On other financing options, he said the wealthy are already being taxed more, as are buyers of more expensive property.

Drawing on the reserves would not be responsible, he said, as these are needed to help Singapore weather economic storms. That left borrowing as a viable option for long-term infrastructure projects, and GST to meet recurrent needs.

Things began heating up in the House when Ms Lim voiced her suspicion that the GST hike might have been among this year's measures if the public had not reacted so negatively when the idea was floated.

"And I rather suspect myself that the Government is stuck with that announcement. Otherwise, perhaps we would be debating a GST hike today," she said.



This triggered a rebuttal from Law and Home Affairs Minister K. Shanmugam, who said Ms Lim was "basically making an accusation that the Government is behaving willy-nilly, dishonestly".

Ms Lim said she did not make any such accusation and was merely raising an "honest suspicion".

To this, Mr Shanmugam said: "Does Ms Lim agree it doesn't accord with the standards of a First World Parliament and honest debate for someone to come here and start talking about (how) 'this is my suspicion. I cannot back it back'?"

Mr Heng stepped back into the debate, noting he and Ms Lim were both former police officers. "Now, I want to present myself as your witness because I have been working on this ever since I became Finance Minister," he said, adding that the GST hike was based on an honest assessment of Singapore's fiscal position.



In a Facebook post last night, Prime Minister Lee Hsien Loong said that with the passing of the Budget, the Government has laid out its mid-to long-term plans clearly.

Travellers using Changi Airport to pay higher fees and charges from 1 July 2018 to help fund major expansion plans

Higher fees for airport users to fund Changi's expansion
New rates kick in on July 1; funds collected to help pay for growth, which includes Terminal 5
By Karamjit Kaur, Senior Aviation Correspondent, The Straits Times, 1 Mar 2018

Passengers and airlines using Changi Airport will have to partly fund its major expansion plans by paying higher fees from July 1.

The Government sees the massive investment in the airport as key to cementing Singapore's status as an aviation hub. However, industry players such as the International Air Transport Association (IATA) yesterday again opposed the model of getting users to pre-fund facilities before they utilise them.

From July 1, passengers who now pay $34 to fly out of Changi will have to fork out an extra $13.30.

Transit passengers will have to pay $3 more for each flight, with all hikes to be included in their fares.

Airlines will also have to pay more in aircraft parking and landing fees, the Ministry of Transport, Civil Aviation Authority of Singapore (CAAS) and Changi Airport Group (CAG) said yesterday.

The fees will rise each year until 2024, the authorities said. By April 1, 2024, the total departure fee for passengers departing from Changi Airport will climb to $62.30.

The total bill for the Changi East development, which includes Terminal 5, is expected to run into tens of billions, the Government said. Even the possibility of borrowing from the capital markets for such projects has been flagged. So far, the Government has committed more than $9 billion to the project, and CAG another $3.6 billion.

The extra fees to be collected from airlines and passengers from July are expected to yield more than $4 billion.

One flute, three kids - Who do you give it to?: Singapore Budget 2018

The moral choices behind our Budget allocation speak volumes about who we are as a society
By Adrian W.J. Kuah, Published The Straits Times, 28 Feb 2018

Much of the commentary on Budget 2018 has focused on measures such as the impending hike in Goods and Services Tax, raising the top marginal Buyer's Stamp Duty and, of course, the one-off SG Bonus arising from the $9.6 billion budget surplus.

But Budget 2018 has also been notable for its silence on several issues. Commentators have lamented that more could be done to address inequality and poverty, as well as to support families having to care for the elderly.

One line of argument came from Associate Professor Donald Low, associate dean of the Lee Kuan Yew School of Public Policy, in his commentary ("To justify GST hike, emphasise universal benefits"; Feb 21). He wrote: "Perhaps most significantly, the Budget speech did not articulate a social policy vision, or a new social compact, that would persuade the majority of Singaporeans to accept a tax increase."

Well, yes and no.

Prof Low is right to say that no new social compact was articulated. But, through the various continuities and the reinforcement of key fiscal principles, one can clearly see a social policy vision - albeit one that has remained largely unchanged for a long time.



How best to understand "social policy vision"? Perhaps a thought experiment by economist and philosopher Amartya Sen, in his book The Idea of Justice, can help us flesh out this abstract concept.

This is the scenario:

You are the authority figure and you come across three children - A, B and C - fighting over a flute. They cannot decide who gets the flute and so they want you to decide for them. One by one, they make their respective cases to you.

Child A says: "I should get the flute. I'm the only one here who can play it. And after all, the point of the flute is to make music. The other two can't play, so why should they get it?"

Then, Child B says: " I made the flute. I provided the materials for it. I spent time and effort making it. It is the fruit of my labour. How could you possibly take this from me and give it to someone else?"

Finally, Child C says: "Of the three of us, I am the poorest. I have nothing in this world. Even though I don't play the flute and I didn't make it, you should give me the flute. Because, then, you would have improved my lot in life immeasurably."

Which child you give the flute to, and the reasons and qualifications behind your decision, says a lot about how you define social justice and fairness.

(It goes without saying that you can assign the flute only to a single child. Sharing the flute is not an option, nor is selling it and splitting the proceeds.)

Impact of Progressive Wage Model

Ask: NUS Economists
By Kenneth Ler and Ivan Png, Published The Straits Times, 28 Feb 2018

Q What has been the effect of the Progressive Wage Model?

A Income inequality and wage stagnation are serious concerns among low-income workers throughout the world. Singapore is no exception. Various politicians and scholars have advocated a national minimum wage to tackle the problem. However, the Government in Singapore has roundly rejected a minimum wage in favour of the Progressive Wage Model (PWM).

The PWM is a productivity-based wage ladder that stipulates wage increments and corresponding training requirements at different levels of skill and responsibility. It is made mandatory for Singapore citizens and permanent resident workers in the cleaning, security and landscaping sectors. The PWM was recommended for the cleaning and security sectors in 2014, and the landscaping sector in the following year.

So, what has the PWM done for these low-income workers?

A recently completed Honours Thesis by one of us (Mr Ler) addresses this question.

The key challenge in this research, as with any evaluation of government policy, is causal inference. A simplistic approach would compare earnings and employment of cleaning, landscape, and security workers before and after the policy. However, such an evaluation might be confounded by other changes that took place at the same time. For instance, the rise in wages could be attributed to macro-economic expansion, recommendations of the National Wages Council, or general changes in government policy.

A more robust approach would be to apply a difference-in-differences analysis. This method compares the earnings of the targeted workers ("treatment group") with the earnings of other low-wage workers ("control group") before and after the PWM came into effect.

The earnings of the control group would account for extraneous factors such as macro-economic expansion and general government policy. The difference in the change in the earnings between the treatment and control groups can then be attributed to the PWM with greater confidence.

Time to wake up to how China is racing ahead

By Danson Cheong, The Sunday Times, 25 Feb 2018

As a transport reporter covering cycling and its growing popularity, I often looked to Europe for examples of what a car-lite Singapore could look like - I wondered if it would end up like Amsterdam or Copenhagen with spacious underground parking and speedy highways for bicycles.

But as things are turning out, there is no need to look that far.

These days where cycling is concerned, Singapore is shaping up to be more like Beijing and other Chinese cities, thanks to dock-less shared bicycles that are now a sight on almost every street corner.

These shared bicycles, which can be rented by using a mobile phone, locked and returned at any location, were first popularised in China and brought here by such Chinese companies as Mobike and ofo.

Now, the ubiquity of these bicycles and their ease of use have meant that more people have turned to cycling to travel short distances. It is an initiative that has given the Government's push to go car-lite a much needed shot in the arm.

But due to my own myopia, I was slow to look to China as a source of good urban solutions.



Many of my peers and I have for too long held on to an image of China as a land of cheap knock-off goods, low-quality products and poorly behaved nationals.

This stereotype is fed by personal encounters with rude and loud tourists and by news stories that shine a spotlight on all things wrong with China - from tainted food scandals to sickening levels of air pollution.

But to view China through such a lens is to miss the bigger picture since the reality of this huge nation of almost 1.4 billion people is far more complex.

A communist state powered by a capitalist economy, China has in the last 40 years performed a miracle of epic proportions by lifting 700 million people out of poverty; and it continues to change and develop at a rapid pace.

Yes, some 40 years ago, when China first embarked on economic reform and opening up, it learnt from countries such as Singapore; but now the roles are starting to be reversed. Foreigners visiting bustling Chinese metropolises like Beijing and Shanghai are surprised by how far they have pushed ahead.

Budget 2018: Together, A Better Future

Singapore Budget 2018

• Singaporeans aged 21 and older will receive 'hongbao' SG Bonus of up to $300 after $9.61 billion budget surplus for the 2017 financial year

• GST to be raised from 7% to 9% some time between 2021 and 2025

• GST on imported digital services from 2020

• Higher Buyer’s Stamp Duty for residential properties valued above $1 million

• Carbon tax of $5 per tonne of greenhouse gas emissions to be levied from 2019

• 10% increase in excise duty for all tobacco products

• Corporate income tax rebate raised to 40%, with higher cap; wage credit extended

• Productivity Solutions Grant among measures to 'foster pervasive innovation'



• Proximity Housing Grant enhanced to give more support to family members who want to live with or near each other

• Higher maid levies for those without caregiving needs

• $200 million per year to increase support for education

• $5 billion rail fund, borrowing by statutory boards to tackle infrastructure investment challenges

•  Singapore's net investment returns contribution (NIRC) stands at $15.9 billion in FY2018, NIRC is now the largest contributor to Singapore's revenues, larger than any single tax, including the goods and services tax, and corporate and personal income taxes

• Budget 2018 debate in Parliament

GST set to rise to 9% as Singapore plans for future spending needs
It will go up between 2021 and 2025; carbon tax from 2019; higher stamp duty from today
By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 20 Feb 2018

A hike in the goods and services tax (GST), the first move to do so in 10 years, was confirmed yesterday in a Budget that laid the ground for challenges ahead, even as a surplus of $9.6 billion was declared that made a "hongbao" cash payout possible.

GST will rise from 7 per cent to 9 per cent, but it will take effect only some time from 2021 to 2025, depending "on the state of the economy, how much our expenditures grow and how buoyant our existing taxes are", Finance Minister Heng Swee Keat said yesterday.

To cushion the impact on the elderly and those with lower incomes, the permanent GST Voucher scheme will get a $2 billion boost this year. There will also be an offset package to help people adjust to the increase.

Mr Heng said a gap remained even after exploring ways to manage future expenditure, such as through being prudent, saving and borrowing for infrastructure, and the GST hike is vital in closing it.



Other revenue-raising measures announced in Mr Heng's Budget statement in Parliament were a one percentage point increase from today in the top marginal stamp duty on residential property, a 10 per cent rise in tobacco excise duty with effect from yesterday and a carbon tax first announced last year that will kick off at $5 per tonne of greenhouse gas emissions from 2019.

GST will be also charged on imported services, such as video and music streaming over the Internet and consultancy and marketing services, from 2020.



These tax measures come as Mr Heng said the 2017 Budget is ending the year with a revised surplus of nearly $10 billion - a jump from the forecast $1.9 billion.

But he said this was lifted by one-off items, including unexpectedly high statutory board contributions and increased stamp duty takings as the property market picked up.

Of this, $700 million will be shared with Singaporeans through a one-off SG Bonus for all those aged 21 and above. Each person will get $100 to $300, depending on income.

But some of it will be saved to pay for big-ticket items, including $5 billion for a Rail Infrastructure Fund and $2 billion for premium subsidies and other support when the ElderShield review is complete.

He urged caution in depending on such exceptional factors for long-term fiscal planning.

While the "positive near-term outlook shows that the hard work of employers, workers and the Government is paying off" - economic growth and productivity improved, boosting the real median income of Singaporeans by 5.3 per cent - Mr Heng explained that his Budget is a "strategic and integrated plan" to ensure a fiscally sustainable and secure future for Singapore.

There were three major shifts to prepare for: a shift in geopolitical economic weight towards Asia after Brexit, and tax and trade changes by the United States; the emergence of new technologies; and Singapore's ageing population.

All three would interact to affect Singapore profoundly, he added.

To prepare for these shifts, measures announced continued on the work of previous Budgets to position Singapore for the future.

There were schemes to move businesses and workers up the value chain to anchor Singapore as a Global-Asia node of technology, innovation and enterprise; projects to improve the living environment; and increased support for charity to foster a caring, cohesive society.

Undergirding these efforts is the need to keep finances sustainable for the long term, said Mr Heng.

To help meet the inevitable rise in public spending, especially in healthcare, infrastructure, security and education, there was a need to act now rather than later, he said.

Indeed, on the increase in GST, he noted: "I expect that we will need to do so earlier rather than later."

This is expected to add 0.7 per cent of GDP a year to government coffers, which works out to more than $3 billion in today's dollars.

For the upcoming financial year, a slight deficit of $0.6 billion, or 0.1 per cent of GDP, is expected amid a Budget that Mr Heng described as expansionary. Ministries' total spending is forecast to rise 8.3 per cent from the 2017 financial year to $80 billion, for example.



To put future Budgets on a sound footing, the Government is studying plans for statutory boards and government-owned companies to borrow for critical national infrastructure projects, and will consider providing guarantees for some of these borrowings.

This will mean committing part of the reserves to back the loans, and will require the assent of President Halimah Yacob and the Council of Presidential Advisers.

Mr Heng said: "This is another way to use the strength of our reserves to back our infrastructure projects without directly drawing on the reserves."

The move will spread the cost of such investments over more years, and ensure the financial burden is distributed equitably between current and future generations.

Society should care for the elderly, nurture young: PM Lee Hsien Loong in Chinese New Year Message 2018

He calls on Singaporeans to reflect on these key issues amid Chinese New Year festivities
By Seow Bei Yi, The Straits Times, 15 Feb 2018

Prime Minister Lee Hsien Loong has highlighted two key themes that he wants Singaporeans to reflect on amid the Chinese New Year festivities - and which he indicated would feature in the 2018 Budget to be unveiled on Monday.

First, as the population ages, Singapore will need to create strong social support and community networks for seniors, keep them socially engaged, and build up healthcare systems and services.

Second, it will help the young "uncover their diverse talents", including by spending heavily on education and training.

In his annual Chinese New Year message, PM Lee said that these issues "guide the thinking" behind the Budget, which Finance Minister Heng Swee Keat will be announcing after the holiday weekend.

PM Lee urged Singaporeans to reflect on them in the quieter moments of the festive season.

"The Government too will not stop thinking about what it needs to do to ready our society for these challenges," he said.

As in past Chinese New Year messages, PM Lee underlined the importance of keeping traditions alive.

"We stay up through the night to see the year in for our parents' longevity, and give our children red packets for good fortune," he said, referring to the Chinese belief that staying awake for the night will add years to the lives of one's parents.

"These customs reflect the enduring hopes of every generation, that our ageing parents live well in their silver years, and our children grow up happy and successful, in a peaceful and prosperous world."



These are values and attitudes not limited to individual families; they hold society together as well, he said.

"As a people too, we should look after the elderly, as we are the beneficiaries of their labours, and care for the young, who carry our hopes for the future."

And even as Singaporeans care for their elderly parents, they need to look ahead and provide for their own silver years, he added.

Demographers have calculated that by 2030, one in four Singaporeans would be 65 and older.

PM Lee then called on Singaporeans to make full use of new technologies to get ahead, and with Asia rising, "to seize the many economic opportunities around us".

The Government, meanwhile, will invest heavily in the young through education and training.

"We will help our young to uncover their diverse talents... so that when they grow up, they can strike out on their own, build their own families and careers, and fulfil their aspirations and dreams," he said, returning to the theme of family that often resonates in his Chinese New Year messages.



Efforts will also be in place to build the city and infrastructure "so that the next generation can continue to create new possibilities, prosper and flourish".

In what could be a hint of tax policies to come, PM Lee also called on Singaporeans to uphold the time-tested Asian values of thrift, self-reliance and leaving something more for the children, rather than burdening them with their parents' debts.

"We must always think beyond the immediate and beyond ourselves, to look and plan over the horizon on behalf of future generations," he said.

He added: "As we usher in the Year of the Dog, let us be dogged in our efforts to create a better Singapore and a brighter future for our children."

PM Lee wished Singaporeans a Happy Chinese New Year.

Preparing workers for future economy: Redesigning jobs, retooling mindsets

More than 100 training programmes, a clutch of Cabinet ministers putting their heads together, two major policies, SkillsFuture and Adapt and Grow. No effort is spared in trying to train workers and redesign jobs for the future economy. Insight asks: Will they work?
By Tham Yuen-C, Assistant Political Editor and Joanna Seow, Political Correspondent, The Sunday Times, 11 Feb 2018

It is one of the biggest helping hands to enable workers to retrain, as disruption plays havoc with job security.

SkillsFuture, introduced four years ago, is one of the key components of a new national emphasis on learning as a way of life, regardless of age or education.

Yet, momentous as this strategy shift has been, as is sometimes the way in policymaking, it came about in quite an uneventful way.

In 2014, the Applied Study in Polytechnics and ITE Review Committee was set up to look into improving career prospects for students from these institutions.

Around the same time, a group of public servants was working on the Continuing Education and Training Masterplan 2020, focused on people already in the workforce.

The two reviews came to the same conclusion: There must be a stronger, sustained link between education and employment if workers need to update their skills over and over again to adapt to the wave of changes brought by technology and globalisation.

Mr Ng Cher Pong, the man now charged with coordinating the SkillsFuture initiative as chief executive of SkillsFuture Singapore (SSG), tells Insight: "It was more an evolution rather than a certain 'aha' moment, where you say, 'Hey, actually this is what we should do'."

Fast forward to today, and jobs are being created and made redundant so quickly that it has become a difficult task to form major policies for training and retraining workers, and designing jobs for them.

Questions coming thick and fast include: What is the speed and impact of technological change on work? What jobs will be gone in 20 years? What skills do people need to succeed at work?

The answers are not always clear.

Crystal ball-gazing is a fraught process, especially when trying to predict what kinds of jobs will be around in the next five years, let alone 20. With frequent disruptions to the economy, the famed Singapore style of long-term policymaking does not work as before.

Another hurdle is persuading workers that they need to reskill when they are busy working and have not lost their jobs. Companies, too, have been slow to respond to the call for training, fearing that their investments may benefit someone else when workers do not stay long enough in a job.

Unlike, say, infrastructure policies where outcomes are literally concrete, when it comes to getting people ready for the new world of work, the best-laid plans can produce nebulous results.

Still, the Government is betting that major policies such as SkillsFuture and Adapt and Grow will adequately prepare Singaporeans and Singapore for the future economy.

Insight asks: Will they work?

SkillsFuture Credit will expire? Don't be misled by scammers' claims

By Ng Huiwen, The Straits Times, 9 Feb 2018

SkillsFuture Singapore (SSG) said yesterday that it is aware of scammers who have been going door to door asking Singaporeans to sign up for courses using their SkillsFuture Credit.

These individuals claim that the credit will expire and tell residents that they will not be eligible for subsequent top-ups.

In a Facebook post yesterday, SSG said that these claims are false.

The agency clarified that there is no expiry date for the SkillsFuture Credit and it can be used for any course in the training exchange in myskillsfuture.sg.



In addition, all training providers have to follow strict marketing guidelines.

For instance, they are not allowed to use gimmicks, such as lucky draws and freebies, to promote their programmes, or use misleading marketing techniques.

"SSG takes this very seriously and will not hesitate to act against those who contravene our guidelines and terms on the use of SkillsFuture Credit," the post said.

The SkillsFuture initiative was previously hit by a series of scams involving false claims.

Last December, it was reported that SSG was cheated of nearly $40 million - the biggest case of a government agency being defrauded here.

Those who have feedback on suspicious SkillsFuture-related practices can contact SSG on 6785-5785 or at ssg.gov.sg/feedback.

Singapore must maintain social mobility: PM Lee Hsien Loong

PM Lee sounds warning on growing social divide
Singapore will wither if society is rigid and stratified by class
By Ng Jun Sen, Political Correspondent, The Straits Times, 6 Feb 2018

Singapore's politics will turn vicious, its society will fracture and the country will wither if it allows widening income inequalities to create "a rigid and stratified social system", said Prime Minister Lee Hsien Loong.

"The issues of mitigating income inequality, ensuring social mobility and enhancing social integration are critical," he wrote in a reply to a parliamentary question from Mr Gan Thiam Poh (Ang Mo Kio GRC).

"This is why this Government will strive to keep all Singaporeans - regardless of race, language, religion or social background - together."

Mr Gan asked Mr Lee about the current state of income inequality and whether the Government has plans to prevent this income gap from creating divisions along class lines. He also queried if an inter-ministerial committee can be set up to look into better integration of all social classes in Singapore.

To the last, Mr Lee said a specific committee is not necessary as government ministries already seek to tackle these challenges in "a concerted and coordinated effort".

"As globalisation and technological disruption have widened income inequality, the Government has over the years intervened more aggressively to support the less well-off," he said, citing both long-term policies such as education, home ownership and affordable healthcare, as well as targeted, means-tested programmes such as the Workfare Income Supplement scheme.

Mr Gan's questions come after an Institute of Policy Studies report last December, which concluded that Singapore's sharpest divides now are along class lines, rather than race or religion. It found that people were more likely to share ties with others of a similar educational background or housing type - common indicators of socio-economic level here.

"If what the study is saying is true, then it is timely that it is detected and we should (strive) to resolve the gaps before they widen too far," Mr Gan told The Straits Times.

In recent weeks, the issue gained renewed attention. Deputy Prime Minister Tharman Shanmugaratnam named slowing social mobility, and an ageing population, as the two big challenges that Singapore faces. Last week, a new book, This Is What Inequality Looks Like by sociologist Teo You Yenn, was launched, generating debate about how Singapore's competitive education system could perpetuate class differences.

In his reply to Mr Gan, Mr Lee said income inequality in Singapore has declined slightly over the past decade. The Gini coefficient fell from 0.470 in 2006 to 0.458 in 2016 - and the figure was 0.402, after accounting for government taxes and transfers. A value of zero indicates perfect equality, while a value of one suggests maximum inequality.

To fund increased social spending, "significant changes" have been made, from introducing GST in 1994 to increasing the reliance on Net Investment Return Contributions as a source of revenue, he noted.

In terms of social mobility, every citizen in a fair and just society must have the opportunity to do better and move up in society based on his efforts and talent, said Mr Lee.

"Some degree of income inequality is natural in any economy," he said. "But in a fair and just society, this inequality must be tempered and complemented by social mobility. Nobody should feel that his social position is fixed based on his parents' income level or position in life."

Education is a critical plank of the Government's efforts, he stressed, whether in building up pre-schools and having schemes like KidStart for children from poor families or giving out bursaries and getting people to go for training via SkillsFuture.

Meanwhile, the Government takes a "deliberate and proactive approach" to measures that encourage mixing among classes, such as in planning where facilities like hawker centres and playgrounds should be sited.