Mr Speaker Sir,
I agree with the previous speakers that this is an interesting budget. It deals not only with specific issues of concern to the economy but of equal importance, it sets important outlines on issues of significance to us as a society. In terms of the economic issues, the focus of this year's budget is on enhancing Singapore 's competitive edge. In this respect, this year's budget continues with the process that was started last year to put in place some of the key recommendations of the ERC. Some Singaporeans have expressed disappointment, though, that there are no goodies for the individuals, except for the Medisave top up for those above 50 years of age, whereas many incentives were given to companies. To the extent that this budget will help to further strengthen companies and attract more investments, I hope that there will be a trickle down effect, and ultimately all Singaporeans will benefit.
Let me now make specific comments on some aspects of this budget.
On the issue of halting the falling birth rate, I agree with the DPM that a comprehensive approach is needed. To me the issues that we are confronted with can be categorized into three areas: cost, time and supporting infrastructure. In NTUC, our Women's Committee had conducted dialogue sessions with a few hundred women leaders and activists. The feedback that came across loud and clear is that cost is still a major factor affecting a couple's decision on whether or not to have children and if so, how many. In this connection, many had said that they were not looking at just the cost at the time of the birth of a child, but to them it is a whole process from infancy to adulthood. On the issue of time, many women also pointed out that there were insufficient alternative work arrangements such as part time work or teleworking to widen their choices after childbirth. Currently, their only choices are to stay at home to look after the children or to remain in the workforce.
Additionally, many also felt that there is a need for a more supportive environment at the workplace for working parents. In this connection of course, we have been working very closely with the MCDS in order to promote work life balance at the workplace, and we are happy to say that there are some positive results but more could be done. In Japan , for example, there is a good percentage of women doing flexi-work. And in, where there is a higher female labour force paid and rate, there are many flexible work arrangements for working mothers.
The proposal to lengthen the maternity leave period is an important one as it will also partly overcome the problem of lack of affordable infant care facilities. But the issue of discrimination against women will have to be dealt with, as many women are concerned about how the improved benefits will affect them in the job market. The point to note here is that in most of the countries where there are generous benefits for women to take care of the family, there are also legislation to protect their right to keep their jobs after they return to work and to provide a system for women who are discriminated against to file a complaint. It will be interesting to see whether without such a supporting legislation the measures that are put in place here will be effective to prevent discrimination against women. In this context I would like to suggest that even if the government is not prepared to consider legislation at this point of time, nevertheless it needs to put a mechanism in place to monitor the impact of such policies, otherwise the market will take care of itself. Women will not avail themselves of the longer maternity leave and have more babies because they may lose their jobs.
As one employer had put it in a newspaper interview recently, if it was just too troublesome he would not employ women. The other way of ensuring that there will be no discrimination against women if they avail themselves of the longer maternity leave, is to extend this benefit to fathers as well and describe this additional period of leave as parental care leave which can be enjoyed by either the father or the mother. In this way, the disruption to the workplace and cost to the employer will be spread out. At the same time, we also encourage fathers to assume greater responsibility over childrearing and family responsibilities. Over time, this would be itself creating a momentum in terms of changing society's norms and perceptions about work and family.
I would also like to add that we should not view this issue of procreation from a narrow, temporary perspective of how many babies will be borne to support our economic growth or contribute to our GDP. If we cast this entire debate and put all our efforts to boost the birth rate solely from a purely economic angle, we may see some results in the short term but I doubt that it will be truly sustainable in the long term. Economics and society are inextricably bound and intertwined. The policies that we adopt do shape our society. They are a reflection of our values, and they send important messages to our youths about what we value. A society that values children, parenthood and the family is far different from a society that does not.
The ongoing debate is healthy as it enables more people to buy into the idea. Through this process we can then develop a consensus on the kind of society that we want and what we are prepared as Singaporeans - the government, employers, workers and everyone who has a stake here – to put in place to support these values. Mr Speaker sir, how to address Singapore 's declining fertility rate is not an easy issue. It is a complex and intricate issue involving many facets. The current approach however has serious limitations as they are ad hoc and is not multi-agency, except when a problem crops up and a committee is set up to deal with the issue as we are now doing. I would like to suggest therefore that the government seriously consider setting up a multi-agency body that will champion issues concerning the family and will also act as the sounding board for all policies or programmes that will impact on the family.
Let me now come to the other points in the budget.
The Finance Minister has given us an overall assessment of the economy. Singapore continues to remain as a competitive manufacturing location especially for high tech, high value added activities. However, in the same breath, we are also tole that the manufacturing sector is not likely to generate many more jobs as MNCs are shifting to higher value added, less labour-intensive activities, and will increase output per worker rather than hire more workers. Hence, to create more jobs for Singaporeans, there will be strong emphasis on the services sector. But looking at the trend that is taking place today there is a cause for concern. Many companies are outsourcing their services. In the past only blue collar, manufacturing jobs are outsourced but today outsourcing involves white collar and higher value added jobs. Even the government is outsourcing, a trend which the Finance Minister has stressed will continue and in fact even intensified through the Best Sourcing Directive of the Ministry of Finance.
In this light, my question is where are the jobs coming from? Will the number of jobs that are created be enough to cover the number of school leavers entering the job market and soak up those who are retrenched or unemployed? What more can be done to encourage companies that are based here to try and retain the jobs in Singapore , and even if they have to outsource it, to do so to local companies? Has there been an assessment of the impact of outsourcing on our economy and jobs and with the growth of India and China , what will be the future implications? Will outsourcing intensify and if so which are the more vulnerable sectors? I think it is important that we address these questions as the concern down the ground continues to be whether enough jobs will be created. a concern which is further compounded by the announcement that we will be making permanent residence here much more attractive in order to attract more foreigners to sink their roots here.
I also see a certain contradiction in the policies. On the one hand, the focus is on creating more higher-valued added jobs for Singaporeans. But at the same time, the policies affecting the employment of foreign workers are made more liberal. I am referring specifically to the new category of “S” passes that are being created to replace the Q2 passes. Unlike the R passes for skilled and semi-skilled workers, and the P passes for professional workers, the “S” passes are meant to attract the middle-tier skilled workers with diploma and post secondary level education. The feedback I have received is that Singaporeans fear that the S pass workers will pose a direct competition to our polytechnic and university graduates. It is not competition per se that Singaporeans are concerned about. Rather the concern is that they may pose an unfair competition with Singaporeans because they can be employed at much lower cost than Singaporeans, as their minimum salary is only $1,800.
There is also no restriction on their countries of origin compared to the previous Q2 passes that are now being abolished. This concern has some basis as last year's retrenchment figures show that a higher proportion of those retrenched are executives. With the presence of the S passes, this will be the category that will find it even more difficult to get employment if they are retrenched. I note in particular that the S passes will now be open to the healthcare, IT, aerospace and pharmaceutical sectors. These are high valued added industries and if Singaporeans have to compete with foreigners even in these job sectors, I wonder how that would impact on the employment prospects of diploma holders and university graduates. I remember reading last week's report that one in five polytechnic graduates end up in a part-time job. I would therefore like to ask the DPM and Finance Minister, if he could kindly give an assurance that Singaporeans will not be displaced by foreigners and that our policies will continue to give priority to Singaporeans for good, high value added jobs, now that the gates have been opened even wider. Although there is a limit of 5% imposed on the number of “S” passes, based on past precedents, we know that it will only be a matter of time before employers agitate for an increase.
I am particularly curious why we have shortage of such manpower that is now the target of the S passes, considering that we now have 5 polytechnics and two universities and we aim for a 60% rate in terms of the cohort entering university by 2010. Does this indicate that our planning and manpower projections are not as effective as they should be in meeting the needs of the various sectors of the economy? What more can be done to systematically identify areas or sectors in the economy where jobs are being created and to prepare Singaporeans workers for jobs in these sectors, so that we will not have situation where even higher value added jobs end up with foreign workers.
Mr Speaker Sir, I strongly support the decision to raise the Skills Development Levy's salary ceiling from $1,500 to $1,800 in line with the increase in the number of training places that is projected from now onwards. Training and skills upgrading is of critical importance to our workers to enable them to remain employable and this increase is in fact long overdue. However, there are limitations to the current system. Workers continue to complain that employers are not prepared to train them for skills that are not relevant to their current job. Workers on the other hand are concerned that if they stick only to job related training, they may not be prepared for other jobs when they are retrenched. Workers are prepared to go for training at their own time even but do need assistance in funding. In this regard, I would therefore like to urge the government to consider some means of assisting workers who wish to attend non job related training but which will prepare them for other sectors of the economy.
We have mooted the idea of individual learning accounts on several occasions but somehow this has not received much support. I would therefore like to ask for government support again for this idea of an individual learning account for workers in line with our focus to develop lifelong learning. The government can consider opening an account for every working adult with a CPF account and regularly topping up this account, much in the same manner that it has done in topping up the Medisave account for those above 50. In my view this will go a long way towards promoting lifelong learning and employability. It also sends a strong signal of government support for individual efforts at improving themselves.
Let me now come to the next point. This year there will be a 2% cut in the budget for all the Ministries except Mindef, for FY 2004 and FY 2005. I understand the rationale – revenues have become increasingly constrained because of the growth volatility and the reduction in corporate tax and other incentives given to companies have also affected the revenue stream. Nevertheless, my concern is whether this would have an impact on the government's social expenditure. Will this have an impact on the social assistance programmes run by the Ministries for the poor and needy and will these affect subsidies for services such as health and education? I understand the need to balance the budget and to reduce deficits, nevertheless my concern is how this will impact on low income families as there are still many who need help. Although the retrenchment rate is expected to be lower this year, nevertheless the rate of unemployment is still high and many Singaporeans continue to need help to secure jobs, and even those who are working will require support since their salaries may not be sufficient to meet basic needs.
Next I come to the point on Best Sourcing. This requires public sector agencies to undertake “market testing”, so as to compare the cost of providing their services in-house against the cost of having private sector vendors provide the services. If private sector vendors can deliver the service more economically, it will be engaged to do so. The public sector will then discontinue doing the function. The public sector agency will then discontinue the function, and either redeploy or release the affected staff. Sir, the rationale for Best Sourcing is understandable, nevertheless in view of the current economic climate and the still high unemployment rate, there are concerns among public sector employees. The older public sector employees feel particularly vulnerable. Many fear that they will not get jobs so easily if they were retrenched as a result of Best Sourcing, particularly since employers today are still biased against older workers. Many have also asked whether there is a need for the government to also behave like the private sector, particularly when the job market is still soft. Some were also concerned that when jobs were outsourced these may invariably end up in the hands of foreign workers. There were also concerns that some public sector management may invoke the special gratuity scheme instead of the special resignation scheme in order to remove surplus staff. The payment under the Special Gratuity Scheme is much lower compared to that under the Special Resignation Scheme although the SGS is not meant to cover redundancy situations. These concerns should be addressed so as not to affect the morale of public sector employees.
As far as possible, all efforts should be made to redeploy affected staff. If it is not possible to continue employing them, then they should be informed in advance and assisted in securing alternative employment or to undergo training in order to prepare them for other jobs. I would appreciate if these concerns can be addressed. Public sector employees perform an important role in our economy. The public employment practices have undergone tremendous changes over the last few years; the most recent one being the revision of the SRS, and last year there was a major restructuring at the HDB. Public sector employees are aware that they can no longer expect an iron rice bowl and public sector unions have been have been at the forefront in bringing the message of change to their members. Public sector employees are also aware that employment practices cannot be fossilized and they must expect greater alignment with the private sector. Nevertheless, it is important that in the face of the budget cuts, and the push for Best Sourcing, we ensure that public sector employee continue to feel confident that they have good career prospects and their concerns for stability and job security are addressed.
Sir, I see expenditure in education as an important and necessary investment in our people. I am therefore concerned that if the universities are allowed to set their own fees, university education may become too expensive and out of reach of low and middle income Singaporeans. True, we should get students to pay a higher proportion of the fees but we should not kill the Singapore dream - where everyone aspires for a better life through education. Although there may be loan schemes available, I wonder whether it is really good to have so many young Singaporeans burdened by a high level of indebtedness when they leave the university. Imagine how this would affect their decision to get married, buy a house and have children. Hence, I would like to urge that we continue to ensure that university fees remain affordable to Singaporeans. I do not see university education as benefiting the individual more compared to investments in primary or secondary education. We are a small country and people are our only assets, coupled with the fact that many of the investments that we are bringing in are high value added; there is certainly a need for more people with university qualifications. It was Mr Philip Yeo who said that in the life sciences sector those who have the first degree are only fit to wash test tubes. Hence, I would like to urge the government to ensure that university education will continue to remain affordable and within reach of the average Singaporean family.
On means testing for hospital care, I agree with the principle that we need to focus subsidies on those who need them, and so make the most of our healthcare budget. However, usually the devil lies in the details and I would like to urge that before we introduce any means testing for hospital care we should study the issue very carefully. I know that means testing has already been applied for step down care and a few other services, but hospital care is a different kettle of fish as the cost involved is much more and for those suffering from catastrophic illnesses the medical bills are huge. Singaporeans who are really poor and the upper income will have fewer problems but those caught in between may face difficulties. Likewise, those who suffer from a prolonged illness, even though they may be enjoying a certain income level, will have their savings wiped out and little monthly income to support their medical needs. We also have to bear in mind that there we are an ageing society and we now want families to have more children. If as a result of the new means testing policy, they have to pay more in terms of hospital care, then our efforts at promoting pro-creation may be affected if families feel that they have to incur increased liabilities in meeting the healthcare needs of their children.
Many Singaporeans today are saddled with multiple responsibilities. In addition to taking care of their own children, many have the responsibility of taking care of old and sickly parents. If we use income alone as a yardstick, it may not be very helpful as a person may be earning a certain income but it may not be sufficient for him to take care of his multiple needs. Policy making is not an easy process and there are risks associated with any policy. We do not want to see a situation where because of certain policies, people do not seek treatment or they neglect their aged parents. I do urge the government to study this issue very carefully before proceeding with means testing as healthcare is an issue which is close to the heart of many Singaporeans. Means testing should not be the only way in which we control health care costs in Singapore . A lot more has to be done to ensure that healthcare remains affordable particularly continuous efforts at identifying and addressing the areas which had caused the costs of hospital care to balloon over the years.
Thank you.
