Debated in Parliament on 28 Feb 2022.
Debate resumed.
Mr Edward Chia.
Mr Deputy Speaker, Sir, I welcome the 2022 National Budget announced by Finance Minister Lawrence Wong. This Budget builds on the strong social compact between our Government with Singaporeans. In particular, our Government has made decisive steps in the ongoing transformation of our labour market, with a clear focus on uplifting lower-wage workers.
The Progressive Wage Credit Scheme (PWCS), introduced in Budget 2022, provides transitional wage support for employers to adjust to upcoming mandatory wage increases for lower-wage workers covered by the Progressive Wage Model (PWM). Employers understand their critical role in strengthening our social compact and the need for them to build business resilience through fair and progressive employment practices. The transitional wage support, along with support grants and schemes to upskill workers and raise firm level productivity will enable employers to sustain these wage increases. Speaking with other employers, these support measures give us confidence that the Government is with us as we uplift our workforce wages.
The decision to stagger the increase of GST over the span of two years is another strategic choice welcomed by businesses. Many businesses, especially those in consumer-facing sectors, are still reeling from the impact of COVID-19, hence this staggered increase provides the additional time needed for businesses to respond. A one-off GST hike during a period of inflation concerns would have exacerbated concerns over a potential drop in consumer spending.
Beyond immediate business challenges, we need to adopt a larger resilience agenda grounded in adaptability and decisiveness. This resilience agenda will move beyond defensive measures and short-term goals to encompass strategies aimed at achieving inclusive and sustainable growth. In my speech, I will expand on two key aspects of resilience: labour resilience and climate resilience.
Labour market resilience can be characterised by a low unemployment rate, sufficient supply of skilled labour and productivity and wage growth. As observed from Budget 2022, the Government aims to instil labour market resilience through two broad strategies. Firstly, to ensure that Singaporeans who are willing and able to do the jobs, will get good jobs with higher wages and better work prospects. By calibrating the minimum qualifying salary for Employment Pass (EP) and S Pass applicants, employers are strongly encouraged to further consider the quality of foreign workers that they want to bring in and how these workers also strengthen the larger workforce with our Singaporean Core.
The second strategy aims to increase the productivity of our labour force through the digitalisation of processes and skills upgrading. This strategy is materialised through schemes like the Productivity Solutions Grant (PSG) that subsidises the implementation of digital and automated solutions designed to raise productivity, and the SkillsFuture Enterprise Credit that offsets up to 90% of expenses for skills upgrading initiatives.
While most businesses would agree with the rationale behind these strategies to strengthen labour market resilience, they face operational and structural challenges that impede their adoption of these strategies.
After many conversations with business owners over the past few months, the difficulty in hiring Singaporeans is a real one. Job recruitment advertisements for Singaporeans yield low responses. In a recent meeting with a fintech startup, the entrepreneur shared of his difficulty in hiring software engineers. At the same meeting, a business owner in the manufacturing sector lamented that he was unable to hire sufficient staff to fulfil customers' orders. Anecdotes like these are repeated by employers from other industries even when all of them show eagerness to hire Singaporeans.
The hiring challenges is also keenly felt in our social services sectors. In my constituency in Zhenghua, I have received numerous appeals from young parents for childcare and infant care placements. Our anchor operator has just taken possession of a large space at the new Senja BTO development, much to the delight of parents. However, parents will have to wait longer for placements as the operator is still facing challenges in hiring sufficient teaching staff. The centre is unlikely to run at its optimal capacity when it opens.
Mr Deputy Speaker, Sir, I believe Singaporeans are talented and driven, but there is simply not enough of us. This is a consequence of our ageing population and low birth rates. Our local workforce is anticipated to shrink in the coming years. While I agree that we must provide gainful employment for Singaporeans and strengthen the complimentary factor with the foreign workforce, we may soon or already have reached a point where there is simply not enough of us.
Beyond complementing our local workforce, we need to look at supplementing our workforce. This is especially so for essential services and what I would term also as "enabling" services. For example, services such as childcare and infant care enables young parents to dedicate themselves to their jobs, thereby enabling them to be economically active. As we recognise and emphasise the importance of our mental health, there will be a growing need for counsellors in our schools, workplaces and in our communities. With greater mental health capabilities, we can help and enable as many Singaporeans to be at the their best mental and emotional state.
One thing that I believe that all Singaporeans enjoy is our hawker food. Our hawkerpreneurs and culture is recognised by UNESCO. But will we have enough Singaporeans, especially with other sectors competing for the same local talent, take up the woks as our hawker legends hang up their ladles?
Essential and enabling sectors remain highly dependent on human labour. For sectors such as healthcare, social work and early childhood, human labour is literally the commodity being traded and digital adoption is commonly seen as complementary to human labour but not a perfect substitute. There are also regulatory requirements on service provider-to-client ratios that cannot be changed despite higher levels of productivity. An example would be our early childhood sector where ECDA mandates a teacher to student ratio of one is to a range from eight to 25, depending on ages.
Mr Deputy Speaker, Sir, there is really not enough of us. I seek the Government to review the essential services sectors' manpower requirements and the projected needs in the coming years vis-à-vis our local workforce numbers.
There is also growing concerns within the business and international community that Singapore is perceived to be closing up and foreigners are not welcomed. We need to address these concerns as such perceptions have grave consequences for Singapore. As shared, our workforce is ageing, our labour force growth is declining, and we would not have enough workers. For Singapore to stay relevant in this fast-changing world, we need access to the best talent and have them be part of our team. Domestically, we need essential and enabling workers to support Singaporeans' aspirations and care for our seniors and children.
This need for Singapore to remain open has to be felt both economically and socially to build labour resilience. Singapore has always been a talent capital and being welcoming to different nationalities and races to call Singapore their new home is essential for our continuous development. Marriage data shows that we have also more Singaporeans marrying foreigners and this trend is likely to continue. All of this makes social integration and acceptance absolutely important. This acceptance of differences is occurring at all levels of our society – from preschools where I have seen children who are not yet attuned to our local languages to workplaces where respect for religious beliefs in food and practices require more sophisticated HR practices.
Retaining and growing our multicultural DNA is absolutely critical and now with even more diversity in it, we need to constantly work at it from our grassroots to our policy officers. Our social compact needs to be strengthened through social integration and I believe this is where much more effort can be put in our community with active involvement by companies too.
On the productivity front, the time lag between the implementation of productivity enhancement solutions and reaping their results is a very real challenge for businesses. Allow me to elaborate on this.
Even when businesses successfully leverage on the productivity enhancement schemes and implement more digitisation and skills transformation programmes, there will be a lag time before digital capabilities are running at full steam and employees are up to speed with their skills transformation programmes. During this transitional period, businesses face a shortage of "plug and play" labour to meet their business needs, compounded by labour shortages and the scarcity of tech talent in Singapore. As a result, even if companies are open to adopting new technologies, there is still apprehension and resistance to operationalising such solutions because of the inability to seize revenue opportunities in the short run.
Inevitably, businesses will eventually reach a tipping point for technology adoption. The COVID-19 crisis was such one crucial tipping point of historical magnitude. However, the purpose of cultivating labour market resilience is to ensure that businesses can ride on the waves of digitisation instead of being submerged under them. At present, operational and structural challenges are impeding businesses from actualising a resilient labour force. I acknowledge that a radical mindset shift on the part of businesses is needed to respond to larger global trends. However, I would like to ask the Government, what else can be done to address the short-term challenges that businesses face in building a resilient labour force? And what other measures can be put in place to guide businesses as they re-envision their business transformation roadmaps? With a clear labour shortage on our shores, what is the bigger strategy for our workforce composition that will enable us to remain competitive?
Another aspect of the resilience agenda is that of climate resilience. I affirm the Government's commitment towards strengthening Singapore's net zero goals and significantly raising carbon taxes. These steps are necessary and crucial in ensuring Singapore's transition to a green economy and affirm Singapore's commitment towards climate change.
Despite our efforts, the sobering reality is that it is unlikely for us to fully escape the effects of climate change. The floods that resulted from torrential rain in many states of Malaysia last December exposed the reality of extreme weather patterns caused by climate change. Hence, there is a need to strengthen our climate resilience through infrastructural interventions. The Government announced new plans in 2020 for coastal protection measures against rising sea levels to mitigate effects of climate change. The range of options to combat rising sea levels, include engineering feats such as reclamation and building sea walls, as well as nature-based solutions are being considered.
The Significant Infrastructure Government Loan Act (SINGA) will allow the Government to borrow up to $90 billion to pay for infrastructure that will last for at least 50 years.
To diversify the funding options for green infrastructure, Budget 2022 announced that $35 billion of green bonds will be issued by 2030 to fund public sector green infrastructure projects. This builds on the $19 billion worth of green bonds issued during Budget 2021. In relation to these new sources of funding, I would like to ask the Government to provide more details on the infrastructural projects that have been earmarked for development and specifically the opportunities for our local businesses to be involved in these developments so that they can build necessary capabilities. In addition to the other opportunities in the green economy, does the Government view engineering solutions in climate change adaption as a sector where our businesses can hone a niche in and eventually export solutions internationally?
Overall, this Budget will continue to strengthen our common resilience agenda and reinforce Singapore's strong social compact. Mr Deputy Speaker, Sir, I rise in support of the Budget.
Mr Cheng Hsing Yao.
Mr Deputy Speaker, Sir, I support the Budget as outlined by the Minister for Finance. I would like to touch on a few points that I think need emphasising.
In my interaction with various people in business, I can sense an admiration for Singapore. Our consistent past achievements and how we are seemingly the only Asian society that managed to move towards endemic COVID-19 are two aspects that they admire.
The interest to invest or expand in Singapore is strong. However, one of the most common concerns is whether we have the manpower and talents to support the growth. The reality is that the Singaporean labour force is not big enough. Thus, I am very glad to hear in Minister for Finance’s speech that we will remain "open and welcoming to talent from around the world but we will focus on complementarity".
This message is very important. I would like to urge the Government to repeat and say it more. This is because of late, the voice of xenophobia has become louder. We need the business leaders and investors to be clear where we stand.
As a relatively wealthy nation, some of us might get complacent and believe that economic development is no longer the main priority. That cannot be further from the truth. The various vulnerabilities we face as an island city nation must be familiar to Members already. And we also have, as the Minister for Finance pointed out, more and more social needs that have to be paid for.
We can and should look into refining our progressive and wealth tax regime, with a caveat that we need to be careful of any unintended consequences. Ultimately, unless we can develop and keep our economy vibrant, we will struggle to keep our Budget balanced and start to have surplus again.
Every public policy comes with an underlying trade-off. As we become more aware of the trade-offs on the environmental and social aspects, we must not under-emphasise the economic ones.
The concept of "complementarity of foreign labour" is an excellent guiding principle that ingeniously addressed all the conflicting concerns. I would like to highlight two considerations when we translate this principle into policies.
Firstly, the growth and demand for talents will be extremely uneven across business sectors and companies. Even as some experience huge labour shortage, there will still be a significant number of people who are unemployed or under-employed. As businesses are being disrupted at a faster pace, so will the rate of displacement of jobs and skills. I expect the pace at which people will find their skills and knowledge getting outdated to increase going forward. For traditional sectors that we want to transform to raise productivity, the more successful we are with the transformation, the more people will be displaced by new machines and talents. When crafting our policies, we should separate the needs for growth, from the need to care for the displaced workforce, so that we do not unnecessarily limit our growth potential.
Secondly, opportunities come to those who are strong and successful. Not to those who are weak and needy. To stay successful, we have to keep seizing new economic opportunities while we are still doing well. If we forego one or two opportunities, we are unlikely to sense any difference. But that is a slippery slope. By the time we have lost our appeal, it is already too late. The difficulty for the Government is to convince the public of a future-oriented policy when nothing seems to be broken yet.
My final point is about a Singapore vision or dream. I want to, once again, thank the MTF and the whole of Singapore for the way we responded to the pandemic. The last two years were a big shock to Singapore and the world. In business, sometimes the best time to reform a company is after it has gone through a major disruption. Perhaps, we can use this time to put together a refreshed Singapore vision. The Minister has addressed a similar point, in terms of "renewing and strengthening our new social compact".
In the 1980s, when I was in Secondary school, the Government's "Vision 1999" had a big impact on me. It was a vision that covered many different aspects. But the parts that I related to the most were the target for Singapore to achieve the Swiss standard of living then by 1999 and the plans for Singapore's New Downtown. The latter played a part in why I have become an architect and joined URA to be an urban planner.
For mid-career folks like myself, who have gone from having handwritten letters to emails and then social media, what would inspire us? For the young ones who are digital natives, what would inspire them? It will be exciting to find out.
As we "chart our new way forward", to "emerge stronger" and "towards a low-carbon society", it might be useful to also define the qualitative aspects and value system of our society that we want to have in future. After two years of pandemic talk, I like the idea of having a holistic, refreshed and inspiring Singapore Vision to strive towards. With this, I support the Budget.
Miss Rachel Ong.
Mr Deputy Speaker, this is a Budget of hope, social conscientiousness and sustainable growth.
Several residents I spoke with shared that Budget 2022 responded to the needs and aspirations of Singaporeans. It tackled some very difficult issues that our people are concerned about and is a big step forward towards a more equitable, harmonious and progressive Singapore.
It is also encouraging to note that a large part of the Budget is devoted to social well-being, particularly our seniors, who can retire better with stronger financial support and adequate healthcare. Our less privileged families and children will also not be left behind.
Our lower-wage workers will be given a much desired lift through increased Government expenditures in Workfare and subsidies to help employers co-fund progressive wage increases.
The other aspect of this year's Budget that struck a chord is the effort to redistribute wealth through progressive taxes on top-tier earners and expenditures, directing these to the uplifting of those most in need.
Those in the top income brackets, while being asked to contribute more, are still only taxed moderately, as compared to many first-world countries. It is noteworthy that the top 10% of our income taxpayers contribute to 80% of personal income tax revenue. This is a significantly higher contribution to total income tax revenue than the top 10% of income earners of the US and the UK by at least 10 percentage points.
I believe this redistribution of wealth serves well to build up the social foundation by which our people can thrive together.
If I may share some observations and two considerations on advancing our green transition.
Observations on carbon tax and climate resilience. As corporates around the world raced to zero in the weeks and months leading up to COP26, one glaring area of needed change to Singapore's efforts was our $5 per tonne carbon tax. With the gradual increase in carbon tax to $50 per tonne and a further $80 per tonne by 2030, this starts to address the need to price in externalities and is a laudable move.
My resident and community leader who also serves as the Sustainability Director at Lendlease Singapore shared with me that Lendlease uses a shadow price of US$20 per tonne in 2020, rising to US$100 per tonne in 2030 and US$140 by 2040, which are integrated into Lendlease's investment decisions and prices in financial risks associated with climate change.
Singapore should continue to assess our carbon tax on an ongoing basis, aligning with international best practices, to respond to and aid the transition towards a low-carbon economy. This recognises the ecosystem services that our environment provides and in Doughnut Economics Theory, this points to the ecological ceiling by which we should not cross.
A greener living environment should also ensure that our buildings and infrastructure are climate-resilient so that our people can be. Flood risk is a significant physical climate risk that low-lying nations must contend with. I understand that at Lendlease, climate change and adaptation plans are integrated in all major developments to ensure the communities served have access to facilities in case of floods.
Forward planning by the Government, as well as other private developers, should consider climate risks and ecological limits for Singapore. This goes far beyond carbon emissions to include rising water levels, biodiversity loss, amongst other ecological impacts.
While we are cognisant of our limited natural resources and the need to balance economic and societal needs, applying such ecological limits may compel all of us – Government, urban planners, corporates and people sectors – to be truly creative in the way we use our resources and overcome limitations.
As for the two considerations, here is the first consideration – reducing our direct emissions in tandem with electrification. Soaring electricity prices in recent months have impacted economic recovery for businesses. Even as we move towards electrification for vehicles and land transport, Singapore still has to deal with emissions arising from electricity generated.
While Electric Vehicles (EVs) are inherently more sustainable, producing less emissions per kilometre, EVs still have a significant carbon footprint unless the electricity is from a renewable source.
One transitional option could be reducing our Scope 1 direct emissions via the use of alternative fuels, such as renewable diesel, also known as RD, which produces only one-tenth of conventional diesel's emissions, for the land transport, logistics and construction sectors. This recommendation follows the encouraging news that our aviation sector will now have access to sustainable aviation fuel.
On the land transport front, Singapore has made limited progress, despite the fact that we have Neste, one of the world's leading producers of RD, producing 1.3 million tonnes per year at our doorstep. To date, I understand that none of this diesel is meant for local consumption, since there are no local distributors, and the supplies are currently shipped to Europe and the US where there are government subsidies for RD.
With oil prices rising, impacting both pump and electric prices, as well as internal combustion engines and EVs, Singapore should consider a third fuel alternative, especially when Neste is producing locally.
The second consideration – accelerating the renewables market. The ability to use international carbon credits to offset up to 5% of taxable emissions will support the development of a regulated carbon market in Singapore and the region. I would also like to suggest that Singapore incorporate and consider regulating the use of International Renewable Energy Certificates, also known as IRECs, as an alternative means to carbon credits for corporate compliance in taxable emissions. This can be applied to companies which are large energy consumers, for example, those under GHG Protocol Scope 2, but not the large emitters in Scope 1.
The Singapore renewable market is illiquid at the moment, with much demand and insufficient supply. Prices for Singapore RECs have doubled in the last one year, from $35 per megawatt hour (MWh) to $70 per MWh. By encouraging and regulating IRECs as an alternative environmental attribute next to carbon credits, this could provide greater liquidity in the market and also support major developers' pursuit of net-zero carbon developments.
Mr Deputy Speaker, though there will always be areas where we can do better, I am fully persuaded that this Budget shows up very meaningfully for our people in such a pivotal time as this. With this, I am grateful and I support the Budget.
Mr Shawn Huang.
Mr Deputy Speaker, Singapore has many notable science and tech achievements. Those of my generation would fondly remember the 1989 Sound Blaster by Creative Technologies' Sim Wong Hoo. It is probably difficult to comprehend why the hype over quality music and sound over a desktop computer. Back then, this was cutting-edge. It was a computer chipboard that enabled users to play and record speech and music, selling more than 400 million Sound Blaster cards worldwide and the first Singapore company to be listed on NASDAQ. Just two decades ago, Trek 2000 International Limited, a Singapore company, invented the thumb drive. Using a USB interface, the thumb drive, the thumb-sized storage device, had a plug-and-play convenience. It was a wave that swept the floppy discs and mobile storage segments.
Looking at the trend of mobile payments today, a cashless society and the rise of mobile wallets, Network for Electronic Transfers (NETS) started work on their ambition in 1986 with electronic transfers at point-of-sales; the digital or mobile wallet in the form of cash cards was then rolled out in 1996. Singapore was ahead of our time and spearheading technologies and pushing the frontier of fintech.
Today, on the list of the world's 10 most valued and largest companies by market capitalisation, except for two – that is – Berkshire Hathaway and Saudi Aramco, all the rest are IT and tech companies. The future economy will be driven by the fourth IR, moving from traditional digitalisation to an intelligent era – smart home, smart factories, lights out manufacturing – a great way to mitigate manpower and environmental issues, in smart cities.
The future powerhouses will be driven by innovation. According to the World Bank, in 2017, Singapore's R&D percentage spend of GDP was 1.94% or an estimated US$6.7 billion. At the same time in 2017, Israel spent US$16 billion on R&D. In 2021, Israel was 4.94%, Korea was 4.53% and Switzerland 3.37%. Slovenia, Czech Republic and Iceland ranked higher for percentage GDP spent on R&D. The OECD average is 2.4%. To further put into context, Alphabet Inc, the parent company of Google, spent US$31.5 billion on R&D; Amazon, US$42.7 billion; and Microsoft US$19 billion, just to name a few. Although highly innovative companies with substantive R&D expenditures provide much opportunities and some form of inoculation, it does not guarantee survival.
Much still requires leadership. We know of Kodak, Nokia, Blackberry and Yahoo!. Interestingly, any keen observer will realise that Kodak and Fujifilm were in the same position. Kodak filed for bankruptcy but, in 2010, just when Kodak was close to bankruptcy, Fujifilm posted a 57% revenue growth between the years 2000 and 2010. This was because Fujifilm had the courage to face possible realities, act swiftly and change its business.
There was no time to be incremental, no time for quick wins, no time for low-lying fruits. These methods would not have been sufficient to steer a behemoth. The management quickly downscaled production lines, closed redundant facilities and they unified their research efforts, enhanced communications and improved the culture of innovation amongst the engineers. But this was not enough. The President of the company ordered a quick stock-take of all of Fuji Film's technologies and quickly mapped out how existing in-house technologies could be used to power future markets. It was an existential moment for them and Fuji Film survived, moving into pharmaceuticals, cosmetics and functional materials.
With rapid tech cycles and disruptions to industries, we must be courageous in investing and building our future capabilities. One example amongst the numerous is oil and gas. With peak oil expected to occur between 2025 and 2030, we will expect the subsequent decline of oil and gas within the next 50 years.
Singapore has substantial investments and revenue from Jurong Island and this is truly one Kodak moment we want to avoid. Avoiding Kodak moments is only one small aspect. There is the imperative to recognise long-term trends and the ability to foresee and, most importantly, is Singapore technologically agile and capable to pivot rapidly? Does it have the ability to build strong networks of ecosystems to solve disruptive and multidiscipline challenges of today and the future? Is our workforce able to build expertise in different ecosystems and networks to spur collaboration and innovative capabilities?
The World Intellectual Property Organization (WIPO) ranked Singapore eighth in the Global Innovation Index in 2021. It has been top 10 in the last 14 years. More recently, Singapore is second on the Bloomberg Innovation Index. Looking further into the details of report from 2018 to 2020, WIPO ranked Singapore number one in innovation inputs but ranked 15th in innovation outputs. In a sub-segment of knowledge and technology outputs, Singapore was ranked 13th.
To note, China, Korea and Japan ranked high in knowledge and technology output within Asia. Singapore produced less innovation outputs relative to its level of innovation investments. Singapore's education system, infrastructure, R&D environment as well as business ecosystems are our core strengths. And we rank very, very high on those categories. However, the ability to produce knowledge products and creative assets have been less than ideal.
To achieve the high level of productivity we aspire, we must maximise our innovation potential and project tangible and quantifiable results. We must not forget that the science, technology and innovation landscape is constantly shifting. Taking China, for example, China's feat is dramatic. China's global share of research papers in the few of just one AI has vaulted from 4.26%, which is about 1,000 papers in 1997, to 27.68% in 2017. This is global – 37,343 papers, AI patents filed, surpassing any country in the world including the US, a position it continues to hold. China also consistently files more AI patents in any other country. As of March 2019, the number of Chinese AI firms has reached 1,189, second to only the US which has more than 2,000 active AI firms.
Many countries are systematically gaining ground with China: Malaysia, Thailand, Turkey, Vietnam, India and Philippines, improving their rankings substantially in the last decade. Competition does not stand still. They are constantly on the move, moving at a rapid pace and gaining ground.
This is from a whole country's perspective. But in reality, science and technology activities are centred around clusters, tech ecosystems that are usually defined by geographical areas. Some of them are well-known, like Tokyo-Yokohama, which is ranked first. Second, which Shenzhen, Hongkong, Guangzhou followed by Seoul, Beijing and then San Jose, the famous Silicon Valley at the fifth. Singapore is ranked at 29th, behind Dejan, Nagoya, Osaka, Nanjing, Hangzhou, Shanghai, Taipei. Singapore is ranked 47th in in science and technology intensity amongst the top 100 science and technology clusters. In terms of total IP following activity, Singapore ranks 28th behind Ukraine, Mexico and Thailand.
The term "Start-up Nation" was title of a book in 2009 by Dan Senor and Saul Singer about the economy of Israel. The presence of thousands of start-ups and more engineers per capita than anywhere else in the world makes Israel a natural hub for innovation, best known for defence and military-inspired technologies. Entrepreneurs across the nation are now focused on building mixed generation applications, helped by government support, societal acceptance and presence of large numbers of multinationals eager to buy innovative technology from start-ups. Israeli companies are building a wide range of products and services for the world.
So, from Creative Sound Blaster Cards to pioneering cashless payments and disrupting the data storage industry, Singapore has journeyed a long way since Independence. We progressed from being and having the ambition for innovation in the 1960s, built up a strong core of citizens in engineering and science, attract technology advanced foreign investments, a national plan for research and development the formation of A*STAR, our research investments into biomedical science or Independent Review Entity (IRE) plans. And more recently, our highly successful Smart Nation initiative and a formation of Smart Nation and Digital Government Office (SNDGO) to better serve Singaporeans in Singapore.
Here are a few suggestions I would like to make.
First, the breadth and depth for Singapore's research, science and technology capabilities together with our creativity, innovation ambitions are critical in ensuring we remain agile in a disruptive world, navigate global challenges and achieve our strategic and national goals. Today's problems are complex and far-reaching into different domains. There are significant long-term and substantial science and technology endeavours that require a high level of aggregating efforts at the highest level – MTI with a A*STAR and Economic Development Board (EDB); PMO with National Research Foundation (NRF) and GovTech; MCI with Cyber Security Agency (CSA) and IMDA. And depending on the sector or domain, it would require further participation of other stakeholders, such as MAS for finance; BCA for building construction or LTA for transport.
Scientific America published an article on the need for the US to establish a Federal Department of science and technology as the STEM-related policies is administered by a bewildering array of entities which dilutes is effectiveness. It stated that the failures of producing COVID test kits, slow and ineffective rollout of COVID-19 vaccines and cybersecurity attacks on government agencies, despite multiple warnings. This reflects the central failure of agencies with science and technology ambitions to meet the challenges of the 21st century. Similar to events leading up to 9/11 in the US where organisational weaknesses were revealed in scattering of multiple intelligence capabilities across agencies and the federal government.
As such, there is a need to better organise scientific efforts. More recently, the US has elevated the Office of Science and Technology to a Cabinet-level appointment with plans to establish a new Department of Science and Technology. Many other successful and innovative countries have done so – South Korea, Japan, Israel, India, Denmark. Given the emerging trends and existential nature of science and technology for Singapore's future, it may be timely to consider re-establishing the Ministry of Science and Technology to bring laser focus on making Singapore scientific, technology and innovation efforts more effective.
Next, to succeed, we must keep our pace. In fact, we must double or triple our pace to maintain our competitiveness and relevance. These are important decisions and the choices that the Government takes on research, innovation science and technology will set the future trajectory for Singapore. One of the most important commitments is to increase the total R&D investment. To achieve and maintain global leadership requires sustained increase investments, both from a percentage GDP and also from absolute numbers.
Given Singapore's relatively small GDP, we must aim to commit a much larger percent GDP spent on R&D to sustain and keep up with the competition to achieve at least the OECD average of 2.4% today and with a further commitment to increase 3% to 4% of GDP in the next five years.
Third, for Singapore to maintain its competitiveness as a business destination for investments in R&D, the Government should review the speed and agility of business execution in Singapore and balance with the risk reward outcomes. Singapore must keep pace with decision cycle and execution agility of businesses today, especially so when added stability will reduce R&D investment risk, enabling businesses to invest in the long term and build innovative partnerships. These investments must be coherent with our ambitions to build up local enterprises, manpower and Singapore's overall capabilities.
Fourth, building local R&D capabilities by supporting local research and development clusters, collaborate, partner and sharpen product and service quality locally, build portfolio and credentials locally for international markets and accelerate growth through regional and global networks. ST Engineering is one prime example. For decades, MINDEF has partnered ST Engineering to develop capabilities in-house. To release R&D and capability development, ST Engineering was able to scale and export capabilities overseas. We can build more of these such champions and there are numerous opportunities.
For example, given that we are the largest customers of elevators in the world, there are opportunities to build a regional, if not, global elevator technology champion. Our Singapore water stories, one of the most compelling in the world, building capabilities and overcoming challenges, we have co-developed water technologies and there are opportunities to build a multibillion-dollar, Singapore water technology champion. We had a Singapore company that was a potential unicorn in the renewable energy for Singapore and the region. But today, we are not.
Route and building technologies. Healthcare, such as COVID-19 test kits, high-tech hand sanitisers, and the list goes on. I have spoken to some entrepreneurs who have mentioned the difficulty that their products having to face immense scrutiny by local registry or authorities, the skepticism of being a locally made product and the fear of endorsing a product. I think we can do much more to build a collaborative environment that encourages partnerships to help these entrepreneurs navigate through difficult requirements and enable them to build on their capabilities. We must seize every opportunity to build long-term R&D partnerships and co-create capabilities with our local enterprises.
Fifth, Singapore must be open to attract talent from across the world. In the United States, evidence shows that immigrants are often the most productive innovators and entrepreneurs. They are vital to competitiveness and fuel growth. In the United States, the National Foundation for American Policy finds that 55% of the billion-dollar start-up companies in the United States has at least one immigrant founder. These companies are not only valuable, but they employ a lot of people. Among privately held billion-dollar start-up companies in the United States, those with immigrant founders have created an average of 1,200 jobs per company in the US. The collective value of some of these 50 immigrant-founded companies far exceed the entire stock market of several countries.
America's ability to attract international students foster entrepreneurship. About 23% of billion-dollar startup companies had a founder who first came to America as an international student – Slack, Peloton, SpaceX and WeWork are all immigrant founders. The American education system has embraced international students as part of the learning experience and cultural exchange, which results in more robust, vibrant and competitive landscape.
Sixth, we must strengthen Singapore's skills and competencies by maintaining a strong supply of skilled workers, provide continued training and skills acquisition throughout their careers, build up alternate entry pathways for those who are doing mid-career switches and recognise the transferability of skills. This will provide the required opportunities for Singaporeans to remain agile and productive longer. It must also be recognised that present and future challenges are complex and multidisciplinary, which would require a team with diverse skills and expertise. We must stretch the potential Singaporeans to enable them over their lifetime on their own time to achieve the highest education and skills potential. It can be a diploma, it can be a degree, Masters or PhD or any other professional certifications, working experience that builds upon skillsets.
According to World Economic Forum, percentage of PhDs and higher education OECD average was 1.1% with most innovative countries taking the lead, like Israel, US, Switzerland, Germany at 3%, 1.4% or 2%, Sweden and Denmark. This OECD average is set to increase to 2.3% by advancing knowledge and research across academia and industry. Doctoral students and holders can make economies more innovative.
However, I want to caution that this is not a narrative about certifications but macro trend of increasing demand for skills and increasing competitive supply of skills worldwide. We must also be mindful not to be overly concerned with degrees and diplomas as we are all reminded by the likes of Bill Gates, Steve Jobs, Mark Zuckerberg, Sean Parker and Mark Darcy. None of them had University degrees, but a good combination of connective, interpersonal, self leadership and digital skills that set them apart from the rest. This opens possibilities across education, experience, skill archetypes, everyone that has a role to play. Most importantly, as we embark on this journey, we leave no one behind. I believe that everyone deserves an opportunity, an opportunity for a good job for every Singaporean. Every Singaporean including those who are neo-diverse.
The last 18 months was the most rewarding journey for me, a journey that is proved to those who are new diverse and can hold good jobs that pay well and have rewarding careers, careers in ICT and cybersecurity, an industry with much promise. I work closely with sister Denise Phua and a team in Autism Resource Centre (ARC), supportive bosses, Delan and Casey, my teammates Zaishao, Arian and Ken Hwee, with leading cybersecurity company Ensign Infosecurity, with the support of Tammy and Steven, it was an open collaborative environment, where ARC identified neo-diverse individuals and together with Ensign Infosecurity, trained them and emplaced them in high-quality jobs and provided them with job support.
The Ensign Infosecurity team also trained to make sure there was a conducive working environment for all it. It was a team effort and that was what made the difference, all of us doing a bit more for one another. From a small training pilot programme of four cybersecurity analysts a year, within two months, and because of these individuals' remarkable performance, we will now want to increase hiring by 400% from four per year to four for every quarter.
When I heard that the programme was a success, it truly touched my heart.
Be bold in investing in our future. Be bold in investing in our people and there will be a place for all of us. Geraldine, on your birthday, papa would like to wish that you have a Singapore that is tech and rich, inclusive and above all, kind, loving and in all we do, fighting for a better Singapore. Majulah Singapore! I support the Budget. [Applause.]
Miss Cheryl Chan.
Mr Deputy Speaker, in the 2019 Budget debate, I spoke about the need for a "decent living wage" for the lower-income workers, in particular, those with young families, so that they can have more cash at the end of the month and not have to live hand-to-mouth. I am glad that there are actions since by the Government, implementing Progressive Wage Model (PWM) across more sectors, more social programmes to support these families, and in this current Budget, there are more schemes to uplift the lower-income group.
This pandemic has seen our strong dependence on the essential workers in Singapore and globally. As we speak, the need for frontline workers to get us through this pandemic has not subsided. Let us remember, we need every segment in our society in good and bad times. Thus, I am supportive of the measures in this Budget that will drive us forward as a nation and help those that are more in need. Our ability to accept this and contribute meaningfully in our own way is what defines us as a growing country that keeps up with time.
I see Budget 2022 as a crucial turning point as we adapt to a post-pandemic life, pivoting our industries to the new economy and learning what it takes to address nation building with our citizens at different life stages. A few things stood out for me in Budget 2022 – our strengthened focus on the green transition, building new capabilities for the future, involving Singaporeans to enable healthy ageing in place and addressing concerns on cost of living.
Sir, as we seek to forge a new normal, the lingering effects from the pandemic and the lessons learnt must be taken dearly. With core inflation having risen to 2.1% in December 2021, and with the impending hike of the GST, it is only natural that the cost of living continues to bear on the minds of our people. While I am thankful that the Government uses tax rebates, cash payouts and other forms of aid to cushion the impact of the GST hike for a large majority of Singaporeans, particularly the low-income group, I would like to raise the following for consideration towards a multi-prong approach to address the rising cost of living on the longer-term horizon.
First, strengthening resiliency in critical supply chains locally and globally.
Supply chain bottlenecks have been a pertinent issue in 2021, exacerbating in the last quarter with a spill-over that may persist through a large part of 2022. The supply chain effects result in rising pressure on all fronts that touches the lives of every individual: from food, transport, utilities and more. With more severe weather patterns occurring globally and unstable political situations, the likelihood of an end to escalating inflation and costs are nowhere in sight.
Singapore's scarcity of natural resources and heavy reliance on imports for necessities from food to energy, meant the impetus to redesign our supply chains and buffers to better weather the inflation due to shortages from time to time is critical.
I am certain the agencies have thought about this, the need for diversification and the vulnerabilities of not doing so, as illustrated in the creation of NEWater and the "30 by 30" plan. But what I am suggesting is for a more concerted and focused approach by looking across the entire value chain and deepening our access of capabilities into the critical elements of each part of the value chain.
In building these capabilities, a more intentional effort to scale up the number of local enterprises, bringing their expertise international and to better export Singapore's brand beyond education and governance. Due credit is to be given to Enterprise Singapore for its efforts in helping local enterprises internationalise and assisting the startups. The next steps would be increasing the number and breadth of the different types of enterprises to enable them to create a value chain with scale that can truly create an impact to Singapore's ability in being more self-reliant, especially in the strategic industries.
While these companies' international growth is important to us, the larger benefit of their growth is the ability to tap on the resources of raw materials, labour and produce overseas to secure the supply for needs back in Singapore. There have been some successful enterprises like PSA, CapitaLand and many others, who have scaled its international operations over the years and are able to compete internationally. We need more of them and the group of enterprises to create different value chains that are significant to our own supply needs.
To illustrate this, I would use an example of the food industry. The "30 by 30" plan today outlined the focus on the supply of 30% of our nutritional needs by 2030, but it does not include how we are looking at the food volume supply. In expanding the food supplies, we need to look beyond just basic procurement of supplies. Instead, help local enterprises to scale with partnership models in Southeast Asia or countries where there are swathes of land for agriculture, but they require technology to increase the yield. This would help to enable faster experimenting the growth of different crops and allow us for expansion in future, when our local shores are constrained by land availability.
The second area I would like to touch on is to increase workers' ability to have more active incomes.
Most people are familiar with the concept of active income during their working years until retirement. But with longer life expectancy and later retirement age, the challenge we face is multi-faceted. Often, we hear feedback about ageism at the workplace, a lack of work scope redesign that caters for part-time work, returnees from expatriate postings overseas that are unable to find suitable roles due to seniority and so on.
As the world becomes more volatile and uncertain, the possibility of a young worker's career being truncated or relocated, due to the competitive external climate and remote nature of work is looming. Thus, I am glad that we continue to invest in the skills and ensuring our workers' relevance in the workforce.
Over the years, much has been done to support the upskilling of workers through SkillsFuture and SGUnited Mid-Career Pathways Programmes. However, beyond that, what can be done to provide supplemental pathways to enable our workers to have additional income streams beyond their day job? In picking up freelance roles, it will also allow flexibility in learning new skills, augment their savings and buffer the slack in the workforce. For this, I do not mean those in the gig economy that are doing some of the freelance work about deliveries and those where we think more in the blue collar, but really more those in the professional sense, because age will not become a barrier for these individuals and professionals who choose to continue working in the gig economy after the official retirement age.
In my previous speeches, I have also raised the need to provide micro jobs for the seniors and the special needs community to better allow more flexibility to provide them a sense of dignity in the road to independence. Could we consider how to expand the scale of micro jobs to fit the needs of part-time workers where women with family care duties and senior workers can also better participate in the workforce?
Beyond the need for financial retirement adequacy, our ability to increase the worker's ability to have more active income till later years will enable them to be active, mentally and physically, for a much longer time and such interactions will only help lower their need for healthcare services and thus expenses. While it is not uncommon for senior executives to take on advisory roles during retirement, could this practice be expanded to a greater portion of the workforce? From the expat returnees guiding local enterprises that are looking for internationalisation opportunities or for them to mentor companies by domain expertise or their area of interest, their wealth of experience and network will benefit the ecosystem. This would involve a whole-of-society approach and a change in mindset as to how they perceive their golden years to be. From a time to enjoy one's retirement – of course, I am not saying that they cannot; they could if they choose to – to another tranche of lifestyle where there is a transfer of knowledge from one generation to another.
Lastly, balancing the taxation structure and intensifying the use of existing resources.
Rising cost of living also impacts us as a nation as the Government expenditures increase due to sociological changes in demographics and inflation. While Singapore's comparative advantage is in skilled labour and expertise and the ability to attract investments due to our stable socio-economic political climate, it also similarly exposes the risks we as a nation face.
The recent Budget by Minister Lawrence Wong outlined new strategies in generating government revenues, primarily through progressive taxation on different income tiers. While this approach may help to enable a more inclusive and equitable society over time, we still run the risk of not being able to address the return of funds into our reserve that we have dipped into or cover the Budget deficits.
Also, many of the highly skilled labour and multinational corporations are global citizens in nature. They have the ability to relocate or offshore services as long as the conditions and the new host countries are palatable. This undeniably would have an impact on our Government revenues in the long run and there will be new constraints or challenges to raise corporate taxes unreservedly.
As we rethink our nation's taxation structure, it is equally sensible to be prudent in our use of funds and resources as well. This involves creative solutioning to problems, existing problems and new ones, working with existing resources and infrastructures instead of investing in new ones each and every time we think of solving a problem. In the longer term, it involves looking at the social compact and the partnerships between the Government and citizens, including the ones with private sectors as we move towards the green transition.
To summarise, Sir, with Singapore's reliance on imports for resources, inflation and by extension, the rising cost of living would be a constant fixture in the years ahead. The way to more holistically manage this issue sustainably, in my opinion, is for us to adopt a whole-of-Government and perhaps even a whole-of-society approach. We need to become more increasingly sustainable for our own basic necessities and having some degree of independence for strategic resources by being prudent and intentional in our use of existing resources in solving our country's problems.
I will end off with a quote from Charles Darwin: "It is not the strongest of the species that survive, nor the most intelligent, but the one that is more responsive to change". I believe Singapore and Singaporeans have the ability to do so. With that, Sir, I rise in support of the Budget.
Mr Yip Hon Weng.
Mr Deputy Speaker, Sir, I will share three perspectives on the Budget. First, what this Budget is essentially about. Second, what we should do less of. And finally, what more can we do, to build up the Singapore we love.
Mr Deputy Speaker, Sir, as we emerge from the worst of the pandemic, we will have to increase Government spending, to strengthen our social compact and to create opportunities and growth. Managing the Budget is a zero-sum game. We consume public resources; therefore we need to pay for it. Yet, the idea of increasing taxes to fund programmes evokes resistance.
In reality, revenue and expenditure are two sides of the same coin. To spend without regard for revenue, is not sustainable for the future. The question is how to raise revenue from taxes, in a fair and equitable way. One method is through a progressive tax system. This means that the wealthy and higher income earners will pay more taxes. This is a slight shift from previous Budgets in the direction of fairness and inclusivity. It brings to life our claims of a new social compact.
But we must strike a balance. There will always be populist calls for wealth taxes. But if we push the narrative that the wealthy are responsible for driving inequality, we risk provoking resentment and jealousy, against those who may have accumulated wealth through hard work and sacrifices. This will only further polarise society. Our current revenue structure is a balanced one, where ultimately, everyone contributes taxes, but those who are richer contribute more.
For the less privileged, I have raised concerns about the GST hike on previous occasions in Parliament. I shared my residents' sentiments that the GST hike should only be implemented after the job market stabilises. I am heartened that the Government has listened to ground feedback. It has not only delayed the GST implementation, but has staggered it over two years. This gives more time for the job market and economy to adapt and prepare. I have also previously asked whether additional assistance would be provided on top of the Assurance Package and the GST Voucher (GSTV) scheme. I am pleased that the Government will continue to absorb GST on essentials like healthcare and education. Permanent schemes like the Workfare Income Supplement and the GSTV schemes are also enhanced. Overall, it is a fair and comprehensive Budget with an eye for the future.
But, Mr Deputy Speaker, Sir, doing more for our people does not necessarily mean we should spend more. Instead, we should challenge ourselves and think hard about what we should spend less on. This is quite a contrarian view, as the Budget is a time when we discuss how Government will increase spending in various areas. The hard truth is that while it is good to have everything, our resources are finite. We should reduce non-essential, duplicative and non-strategic initiatives.
One tangible example is roadworks. Roads are often dug up and closed for various types of works, ranging from the installation of broadband cables, water pipes to electrical cables and so on. They never seem to end. Many of the works are certainly necessary. However, can we coordinate better amongst the agencies for a fixed period, where the road is dug up and all are repaired at that time? Moreover, frequent road closures slow down traffic, adding to inefficiencies.
Another example is the numerous Government apps and websites sometimes offering similar services. The more there are, the more maintenance is needed. It also inconveniences residents who have to navigate numerous websites and install many apps on their phones. Can we take some inspiration from the UK government, which consolidated their 300 over websites into one in 15 months?
Being prudent with finances is a virtue that is not incentivised enough. When a department receives a budget, the goal purportedly is to spend it all. The common mentality is that having surpluses would imply that the department did not work hard enough and need to find new areas to work on. We need to stop linking expenditure with KPIs. Ministries should not feel guilty about having excess money to return to the coffers. In fact, the Government should throw a grand challenge – create an award and recognise Ministries that best reduce their expenditure, streamline their operations and cut out non-essential projects. The savings can go to the people or be used for more important areas and social programmes.
Mr Deputy Speaker, Sir, one important area which we will certainly need to do more for is for our seniors. We are a rapidly ageing society. The provision of minimum protections around risks like illnesses, unemployment and old age are better shared by society and the community, rather than individuals, families or employers. I have three suggestions.
First, Mr Deputy Speaker, Sir, we want our seniors to live well. One particular area is to facilitate meaningful employment for our seniors, who wish to work. I applaud the raising of CPF contribution rates for senior workers. But we need to go beyond monetary incentives.
I wish to reiterate my hopes for the Government to play a bigger role in promoting micro jobs. Many Members have shared about this earlier. For example, to offer integrated search and listing platforms, with accreditation and training available for persons who may want to take up micro jobs in the community, such as healthcare assistants and babysitting.
Next, focus on job redesign by allowing employers to hire and retain senior staff in the long-term. We need to look into stronger support for workplace redesign for senior workers. How many companies have made use of the Job Redesign Grants for older workers? Will the Government take on a more proactive approach to coax and compel companies to move in the right direction?
Second, Mr Deputy Speaker, Sir, for those seniors who are frail and cannot work, we must ensure that we can better care for them. From my conversations with my residents, care navigation in Singapore has room for improvement. Today, Government agencies like MOH and MSF often focus on policy and administrative matters and devolve the actual provision of care to various social service agencies, or SSAs. Yet, some of these organisations have limited resources. They may also not be equipped to deal with clients saddled with multiple co-morbidities and complex social issues.
Having choices and a lack of clear information complicates matters for caregivers trying to find the most suitable and affordable formal care service for their family's needs. We need a simple platform that integrates all available resources and service providers, for caregivers to seek out all the available options and do their own cost-benefit analysis. Ultimately, we need an integrated care system that works on the ground. This means better sharing of information, care plans, resources, networks and financial support schemes. Caregivers need only to browse this one-stop centre to have all their concerns addressed.
A Yio Chu Kang resident, Mr K, confided that he gave up his career and went into full-time caregiving to both his aged parents. The burden fell upon him as he was the only son. He did not feel safe leaving his parents in the care of a foreign domestic worker, who may neither have the professional experience nor temperament to care for the elderly with special needs. He does not regret the decision, but it is no doubt a setback for his career. Most of us would agree that caregivers like Mr K should be applauded for prioritising family over career. But we should not take the sacrifices of caregivers for granted. As a society, we must do more to uplift caregivers.
Lastly, Mr Deputy Speaker, Sir, we need to help seniors at the end of life to leave well. In my past experience working in the healthcare sector, I see how people die badly. They die in pain, with tubes connected to all parts of their bodies in a sterile hospital environment, just to have life extended by days and at max, by weeks. It is a torture, both for the individual as well as for the families. We need to facilitate their departure to be as comfortable as possible, and for them to live out their remaining lives with dignity.
We must push for higher standards of palliative care. Only four in 10 of healthcare professionals received training in palliative care, according to a 2021 survey. Consequently, most healthcare professionals did not feel prepared to give palliative care. The Singapore Hospice Council is doing good work and they are developing a training framework on palliative care. Will the Government provide more resources and funding to support this effort? How will the Government take the lead to improve the quality of palliative care and to generate more awareness in Singapore?
In conclusion, Mr Deputy Speaker, Sir, the pandemic has posed many challenges to our society over the past two years. Our Budget is well-balanced and provides a path forward as we emerge from COVID-19.
To be prudent, we should reflect on what we can spend less on – cut waste, reduce redundancies and for the Government to coordinate better. Resources should be channelled to areas where more help is needed.
One clear area is in caring for an ageing population. The signs are already here. We may be an ageing society, but what we face need not be a "silver tsunami". It can be a "silver fountain" – one of vitality and productive longevity, where we all keep well, age well and die well. I support the Budget.
Leader of the House.
PAPERCUTS