Debated in Parliament on 4 Jun 2020.
Debate resumed.
Minister Iswaran.
Thank you, Mr Deputy Speaker. In the course of today's debate, several Members have spoken on the work of my Ministry, and our strategies to build a digital economy, and a digitally inclusive society which is also a key thrust in Deputy Prime Minister's Fortitude Budget.
I would like to thank Mr Liang Eng Hwa, Ms Sylvia Lim, Ms Jessica Tan, Mr Douglas Foo, Mr Patrick Tay, Mr Melvin Yong, Mdm Lee Bee Wah, Mr Christopher de Souza, Mr Muhd Faisal Manap and Ms Tin Pei Ling for their thoughtful comments and valuable ideas on this important national effort.
COVID-19 poses an unprecedented challenge – to our health, our society and our economy. It has turned the world upside down, and we have seen competing narratives on how different societies, cultures and political systems have dealt, for better or worse, with the challenges posed by the virus.
Now, as we emerge from the various measures to curb the spread of the virus, we will have to face the stark reality of its economic impact. So far, we been somewhat cushioned by the major fiscal measures announced by the Government – amounting to nearly $100 billion and 20% of our GDP. As Deputy Prime Minister Heng has said in his Budget speech, the Government has the responsibility to make the best use of our resources, to keep people safe, save jobs, transform businesses and, most of all, emerge stronger.
But let us be clear. The global economic outlook is bleak and Singapore will not be spared. Based on the latest data, MTI expects our economy to contract by 4% to 7% this year, and there remain significant downside risks. We have tough challenges ahead. But they are not insurmountable. And we are taking decisive steps to deal with them.
In this uncertain environment, the overriding economic imperative is to create opportunities and jobs for our people. That is the concern of Singaporeans. That is the focus of the Fortitude Budget. And that is the mission of the National Jobs Council established by Deputy Prime Minister Heng and chaired by Senior Minister Tharman.
We are doubling down in our effort to identify jobs across the economy – be they permanent jobs, temporary jobs, part-time jobs, or traineeships. We will spare no effort to prepare and place our people in these roles – be they fresh graduates, from Universities, Polytechnics and ITEs, or mature workers in our economy. And, we will work closely with the Labour Movement and employers in this difficult but critical effort.
One sector that holds promise is ICT, because COVID-19 has brought home the importance of digitalisation to our economy and digital inclusion to our society. Whether for individuals or families, businesses or industries, it is patently clear that digitalisation is no longer an optional extra. It is a critical necessity, if we are to survive this crisis and emerge stronger in a post COVID world.
We will therefore seize this moment to make a decisive push towards a digital future, with three key thrusts: digital opportunities for workers; digital inclusion for all; and a concerted push for a digital future.
In this year's COS debate, I noted that the promise of digitalisation is tempered by the uncertainty of change. Change and disruption have descended upon us now in dramatic fashion in the guise of COVID-19. The silver lining is that this crisis has crystallised the need and opportunity for digitalisation.
Consequently, the ICT sector remains one of the bright spots in our economy amidst the economic uncertainty. Digital and tech roles are in demand, within the ICT sector, but also across the rest of the economy as all sectors seek digital solutions. In the first quarter of this year, the ICT sector expanded by 3.5% with 1,100 new jobs.
But we have to keep it real. Even in the ICT sector, jobs will be harder to come by now compared to pre-COVID times. In the current economic climate, ICT enterprises, like others, will be more restrained in their hiring decisions.
That is why we are stepping up our partnership with the private sector. The TechSkills Accelerator initiative or TeSA will be enhanced in two important ways to help Singaporeans seize job opportunities in the ICT sector.
First, we will scale up the Company-Led Training programme. In other words, we will partner leading tech and non-tech companies to place and train 3,000 Singaporeans in good tech jobs over the next two to three years – in functions like digital marketing, software engineering, cybersecurity and data analytics.
Secondly, the TeSA Mid-Career Advance programme will run in parallel and create an additional 2,500 place and train opportunities for mid-career professionals aged 40 and above.
Our goal is to help fresh graduates and mid-career professionals alike to secure these jobs, advance their skills and start a fulfilling career in one of the more promising sectors in our economy today.
We adopt a similar broad-based approach to help enterprises at different stages in their digital journey. The SMEs Go Digital programme has Start Digital for new SMEs and Grow Digital for those expanding overseas using e-commerce platforms.
We are augmenting this with sector-level digital solutions for F&B and Retail – two sectors that have many enterprises, that collectively employ many workers, and that have been significantly affected by COVID-19. We will introduce the Digital Resilience Bonus to encourage these businesses to adopt digital solutions like online ordering, e-invoicing, inventory management and e-payments to operate in the post COVID new normal.
IMDA will give more details but let me use the example of Foreword Coffee Roasters, which serves specialty coffee and hires workers with special needs, to illustrate how this will help our F&B businesses.
Foreword Coffee uses the baseline PayNow Corporate and PEPPOL e-invoicing accounts for transactions. The company also adopted a solution to create its online shopfront. Its new website was launched at the start of the circuit breaker and orders increased tenfold within one month. This digital initiative will allow them to receive a payout of $2,500 under the Digital Resilience Bonus.
To advance its digitalisation journey, Foreword Coffee’s owner Mr Lim Wei Jie adopted a digital ordering solution and he also plans to deploy HR, payroll and accounting solutions in the coming months. That will entitle the company to an additional $2,500 under the Digital Resilience Bonus Scheme.
Businesses that already have basic digital capabilities will receive an additional $5,000 should they decide to adopt advanced digital solutions like data mining and data analytics.
I would like to assure Ms Tin Pei Ling in particular that we will be extending the Digital Resilience Bonus to F&B and retail enterprises in the first instance, but based on our experience, we will then ssess how we can expand this to other sectors subsequently and this is a discussion that we will continue to have with MOF.
But let me now move to digital inclusion. Digitalisation is not an end in itself; it is a means to better lives and livelihoods. That is why digital inclusion has always been at the heart of the Government’s digitalisation effort. Our digital push must reach all segments of our economy and society, like our hawkers and senior citizens, so that they too can benefit and participate.
Hawkers Go Digital will boost e-payment adoption among stallholders from hawker centres, wet markets, coffee shops and industrial canteens. Apart from the obvious public health benefits, this initiative is also a good launch point for stallholders’ digital transformation journeys.
In this multi-agency effort by IMDA, Enterprise Singapore, NEA, JTC and HDB, we will reach out to and help over 18,000 stallholders adopt e-payment solutions by the middle of next year. Hawkers who sign up for the unified e-payment solution and fulfil the minimum transaction requirements will receive a bonus of up to $300 per month over five months.
Among our seniors, it is gratifying to note that digital adoption has been increasing, with smartphone usage more than doubling over the past five years. But we can and want to do more. Digital literacy will enable our seniors to lead more engaged, informed and fulfilling lives. For seniors who are employed, digital skills will enhance their skills and productivity.
We will therefore strengthen digital literacy and access among our seniors with the Seniors Go Digital Programme. The programme will help all our seniors build digital capabilities through virtual classes, one-on-one coaching at community places, once the Circuit Breaker measures allow for them, and that includes in libraries and community centres, small group learning with their friends and other hands-on learning opportunities.
IMDA is also working with our telcos to offer better mobile data plans for our seniors. We will also provide financial assistance to seniors who cannot afford devices and data plans. These were important points raised by several Members.
I understand the point made by Ms Sylvia Lim about keeping low cost non-digital options open for seniors and others who might need it. Indeed, that is the experience we have had and the effort we have made. For example, in the SafeEntry app, you can use your phone but you can also use the physical Identity Card (IC). In general, the idea is to encourage the adoption of digital solutions but to keep open the option of using non-digital solutions because we know that there will be some who still prefer them or are uncomfortable with the digital part. The same applies for cybersecurity; it is something that we will continue to emphasise in our training programmes with seniors and how we can instil greater cybersecurity awareness amongst them.
These new initiatives will complement our current digital inclusion programmes such as NEU PC Plus and Home Access to ensure digital access and connectivity for low-income households, including those with school-going children, and persons with disabilities. We have and will continue to enhance these programmes to meet the changing needs arising from COVID-19 and the Circuit Breaker measures.
Digitalisation and digital inclusion are the twin engines that will take us to our digital future. COVID-19 has catalysed a heightened interest and need among individuals, families, workers and enterprises to be equipped with digital access and to acquire the requisite skills. It has given us the impetus to invest in a decisive, all-out push towards a digital future.
A few days back, I announced the formation of the SG Digital Office, under IMDA, to drive a national movement for digital transformation in our economy and our communities. We will mobilise 1,000 Digital Ambassadors for this effort, to reach 18,000 hawkers and 100,000 seniors, so that they can all Go Digital. This effort will mark a quantum shift in our digitalisation effort in the community and greatly benefit the lives and livelihoods of our people.
Mr Deputy Speaker, I have outlined in some detail our initiatives to create jobs and opportunities in this challenging economic environment, and to make a decisive push towards digitalisation in our economy and digital inclusion in our society. The SG Digital Office, our Digital Ambassadors who will be embedded in the community, TeSA, the Digital Resilience Bonus, the Hawkers-go-Digital and Seniors-go-Digital programmes – all of these and many others are a measure of the scale and scope of our ambition for this national digitalisation movement and the resources we are committing to it.
However, to succeed in this effort, we need the "X" factor. And that "X" factor is our people, our mindset, and our willingness to learn and adapt to the "new normal", as some have described it. It means workers who are prepared to pick up new skills and adjust to new jobs and circumstances, no matter what their background; it means seniors showing us the way that age is not a barrier to learning and making the digital transition; and it means hawkers who have the gumption to "try lah", as one hawker representative vividly put it to me, because of the conviction that this is a good thing.
I know that some will be anxious about these changes and what it means for them. To them I say, on behalf of the Government, we will leave no one behind and will walk this digital journey with you. So, let us come together, seize this opportunity fully and secure a bright digital future for each and every Singaporean.
Miss Cheryl Chan.
Mr Deputy Speaker, today, there is still much uncertainty around COVID-19. Will there be a second wave locally or globally? What would the transmission rate be like after circuit breaker? How long would the downturn last? There are many questions that will still be left unanswered even if the entire nation is COVID-19 tested, assuming no mutation of the virus or until an effective vaccine against COVID-19 is found.
However, what is certain at this point is we cannot afford to be in a standstill indefinitely. Reduced global trade has taken a toll on the global economy and businesses are struggling to stay afloat and retain their workers. The current situation is not just about economy, it greatly impacts lives. The central question is: how will we as a country recover from this pandemic and ensure we learn to put continuity in place if we ever face the next crisis.
Budget 2020 is an unprecedented one in history both in magnitude and the support coverage across all segments in Singapore. In the Fortitude Budget, a further $33 billion is set aside to ensure livelihoods are broadly sustained and it seeks to provide a lifeline for businesses to resume in small steps. For many SMEs, sectors affected due to the nature of their trade and companies impacted by global restrictions, these grants are certainly welcome but they are still insufficient. At the same time, we also hear calls from concerned citizens to exercise prudence as they are worried the country’s reserves may be depleted before a full recovery is in sight.
Personally, I am heartened that the Government has listened and continue to make adjustments to bridge and support the gaps in society through all subsequent Budgets from February. Having done these in a quick and calibrated manner, reaching out to the public, social sectors and the business groups, putting in place step measures as we continue our fight against COVID-19.
I associate this to Our Singapore Conversation, which was first initiated in 2012. However, this time it had taken place in a much condensed timeframe of about four months. Are we done with the conversation? I do not think so.
While many measures spelt out in the Budget serve its primary intent of rescuing situations in a downturn, I think it is pertinent for us to look at how to approach such resolutions through a whole-of-society involvement.
Let me highlight a few areas to explain why it is inadequate for the Government or agencies alone to navigate these challenges.
First, the trade classification on resumption of business after circuit breaker.
It is understandable why the need for us to re-open in three phases but the rationale of why one trade is allowed to open in Phase One while another quite similar in nature is not allowed to do so had raised brows on how MTI decided the trade classification for business resumption.
Take an example – after 2 June, the pet owners can bring their pets for grooming services but certain vet services are not allowed like the routine elective preventive care services or vaccines for their pets. It is not surprising some of these pet owners who are puzzled as to which is more important – the health condition or the looks of their pets.
And while some companies are allowed to open in Phase One, their suppliers are placed in a different phase for re-opening or their sub-contractors could not receive approval to resume operations from Government agencies. An example of this is the construction, landscaping and renovation sector, in which many of our SMEs are affected. It is typical in these sectors for a single project to be fulfilled by a pool of suppliers and workers of varying skillsets from different companies. Main contractors outsource some parts of the project, have workers from different companies, staying in different dormitories to provide service at the same work site. This scenario, though typical in the past, have now become an insurmountable management task due to the new measures in place. Even if the companies understand and wish to comply with the new rules, some of the rules are impractical, or they would reduce productivity owing to its long roll-out period and further exacerbated by the inconsistency of the new measures that is detailed across the agencies.
Citing one of the new measures on mandating workers to be sent for swab test every fortnight before they are allowed on the work site, cost being one concern, but the ability to have enough testing and rapid results made available would likely be the bottleneck in the months ahead. Based on current test rate, we only managed to test over 10% of the total foreign worker population mainly residing in the dormitories. With the added test requirement, how should the construction sector manage their schedule?
Some of the works are also physically unviable to be done by a sole worker at the site under reasonable safe distance. How then can these companies work in compliance with all the new measures.
While the manifestation of COVID-19 amongst the foreign workers is an unfortunate situation, the biggest challenge any business owner faced is a restart date that is not determined by the end of circuit breaker. Instead, it hinges upon whether their network of suppliers is allowed to provide them services, the ability to obtain approval for start work order from the different Government agencies and whether they have the financial means to survive without a definite start date. Most of these SMEs have on-going liabilities like stocks, worker levy, rental, utilities and general expenses. In short, taking a SME loan or having tax deferment do not help a company that cannot generate revenue in the short term or when the visibility to begin work is beyond their control.
Second, mindset change is pivotal in this recovery process. We need positivity and adaptability to adjust to this changing landscape and imbue resilience to emerge stronger when the pandemic passes. With the right mindset to face and overcome this pandemic is the starting point for most of us. This includes how we sustain and apply current changes to a new normal in life, people’s willingness to learn and adapt constantly on their own free will and those in society who will step forward to help others with less resources.
Over the past months, we have seen living examples of individuals and companies in Singapore who played their part actively in society. Some ingeniously came up with new ideas, roped in others within their sector or amongst their friends and made good use of the lull period to help others financially and in kind.
This is the Singapore spirit we aspire to promote and uphold. In order to achieve this, the thought and act of it must largely come from ourselves. The Government can act as a catalyst, but we ourselves must be the change makers.
Just take a look at the F&B sector. Before COVID-19, we would not imagine it possible for many hawkers and stallholders to be willing to sell their products and take orders online. In Singapore’s digitalisation push over the years, the agencies collaborated with the private sector to encourage more takers to come onboard. Though it gained traction, it was not progressing swiftly at the adoption rate we hope to achieve. But it took a crisis to absolutely move the needle. The sheer need to survive made it possible, as what Minister Iswaran has just said, from online wet marketing to incessant online food deliveries, it has become a much needed change in traditional business models and the merchants recognise this. They are willing to try for efficiency and for a larger share of the market. So, we must not let this opportunity slip and should do more henceforth.
I am glad that Minister Iswaran has just mentioned the national push for this effort is no longer optional and the need for it to be inclusive. The Digital Ambassadors can bring more to this partnership for business owners and to help our seniors in the community navigate this digital giant. For those who are willing to support our hawker and wet market culture, this is the time to help the community.
On this note of digitalisation, I would like to ask the Minister about the Safe Management Officers mandated training by BCA. There is ground feedback of insufficient training slots available until early July. Given the pervasiveness of technology and the ease of setting virtual meetings, is it not possible for several mass online training sessions to be conducted for workers even if they do not belong to the same company?
Also, if there is a need for certifications, the workers who are trained can individually do the assessments online using their mobile phones and be certified via these platforms. This would be more efficient and enable more companies to harness their resources which are already hard strapped, given the need for workers to be cohorted or put on segregated teams.
And lastly, collective wisdom of the society will bring us further in this marathon of nation building.
As seen in this fight against COVID-19, organisations, institutions, trade associations and individuals have demonstrated that much of this knowledge exist within different groups. In preparation for business resumption, there are companies which are not classified for opening under Phase 1 but have detailed plans of how they have modified their business models to fit the new normal and can operate safely. Some even expressed their willingness to take the lead to begin operations earlier if allowed to, adjust quickly and share their experiences with fellow sector operators on how they can also embark on this change and be ready. As much as adjustments should be made to businesses, we need to recognise there are some service industries which inevitably require a human and not robots or online transactions to deliver the service or experience.
Other industries like the automotive industry have trade nature in which huge capital commitment is involved and are dependent on the local regulatory system that significantly impacts its product sales and volume. To enable these businesses and industries to restart in the new normal, the Ministries must be prepared to solicit inputs, take onboard the industries' proposals and make specific adjustments instead of broad measures.
In my view, there is no better time to put Our Singapore Conversation and the making of our future economy to the test than now by bringing people with direct experience and deep trade insights together – people from all walks of life – and partnering them as we promised. Likewise, the trade associations and merchant groups can now rise to the challenge and revamp their industries of which we hope the Industry Transformation Roadmaps would bring about. This will truly give a fresh breath of life to the industries at an accelerated pace – one which adapts to the new environment and concurrently creates new jobs, revamps job scopes, provides upskilling and new customer experiences that are sustainable.
Sir, I am certain that as fellow Singaporeans, we all feel and understand where we are in this downturn. But in every crisis, there lies opportunities. There will also come a time when an upturn will occur. It is a matter of when. Today, we know deeply that we need to roll up our sleeves and work together through all these challenges unflinchingly with one another. Thus, my clarion call for a whole-of-society involvement.
The five core aspirations that emerged from Our Singapore Conversations earlier are: purpose, opportunities, assurance, spirit and trust. I trust this Government does not shy away from making the right decisions and moves for our future generations. As Prime Minister Lee said on the COVID-19 situation, "If there is any country that can see this through, it is Singapore."
Sir, I cannot agree more. We are all in it together and we will get there. With this, I support the Fortitude Budget.
Mr Saktiandi Supaat.
Mr Deputy Speaker, these are unprecedented times, indeed, as we witness the rolling out of a fourth Budget in less than half a year to help save and create jobs and speed up the pace of recovery when the economy exits from the circuit breaker measures. Some economists and analysts highlight that the Fortitude Budget schemes will help to contain the job losses to around 100,000 to 150,000 or less – down from earlier estimates of about 150,000 to 200,000 – for the full year.
So, thank you, Deputy Prime Minister and Minister for Finance Heng and his team for their relentless hard work. COVID-19 continues to wreak havoc on the economy and on the lives of people around the world. Singapore, being highly dependent on the global economy, has not been spared from the brunt of it. But first and foremost, I am grateful that the practical policies, dedicated essential workers and our mostly sensible Singaporeans and people have shielded us from the worst.
I will be sharing today on three issues covering support for workers and businesses, emerging stronger from this pandemic and some views on the use of Reserves.
First, the coronavirus crisis has split the workforce into three groups. First, those who have lost jobs or at least some pay – we have seen that and some Members here have shared some of their experiences with some residents. Second, we have those who are deemed essential workers who must labour on through the crisis, often at great risk to their own health. And third, there are those who are virtual knowledge workers whose lives have hardly been affected.
I am glad to see that more help and support have been made available for middle-aged Singaporeans through the 4,000 traineeships and enhanced hiring incentives. There is also the SGUnited Jobs and Skills Package that aims to create close to 100,000 jobs, traineeships and skills training opportunities. As the number of job losses has been projected to hit around 100,000 in 2020, this is a highly adequate effort. But wage reduction or downward income adjustment is a significant problem that we must not neglect.
I know a family – a typical sandwiched middle income group, husband-and-wife who were laid off from the airline industry. They have two school-going children and elderly parents with chronic illnesses. They found jobs as social distancing ambassadors and are very thankful. But their household income has been drastically reduced and they worry about affording their parents' medical bills and the housing loan thereafter as well as possible far-reaching impacts of the COVID-19 on their children. They had to completely re-adapt to a new format of learning and then big sacrifices will have to be made as they make adjustments to their new income level.
Such accounts are not uncommon among many of the sandwiched generation, who had been fairly comfortable managing their various commitments and liabilities until COVID-19 hit. In our pursuit to help workers and match jobs for affected workers, we may not be able to fully equalise the outcomes, but we can and we must strive to create equal opportunities and access to resources for all families and future generations – the children. I hope that further down the road, more healthcare and financial assistance for education cost assistance will be given to affected lower middle and middle income families with higher income thresholds and for those families with above 40-year-old breadwinners.
Next, I want to talk in particular about income tax deferments. Businesses and employees pay income tax based on income and earnings in the previous fiscal year. Many middle and high-income earners as well as self-employed persons were doing relatively well last year. But this year, many will see their wages and earnings severely affected. Yet, they still have to pay income tax for Year of Assessment 2019. The tax filing deadline has been extended to 31 May 2020 but I hope that the Government can consider further deferring this timeline, considering that this is still a developing situation. I also hope the Government will soften the blow with tax credits or rebates. Tax authorities in other countries are reviewing policies to offer relief to affected taxpayers. Canada, for example, has extended tax payment deadline from 30 April to 1 September 2020. Thailand has extended their tax filing and payment deadline from 31 March to 30 June 2020. These will go a long way to help the sandwiched middle income households and probably a significant number of those aged 40 and above.
Mr Deputy Speaker, in Malay, please.
(In Malay): [Please refer to Vernacular Speech.]: The third point I want to raise is about empathy for small landlords.
On help for businesses, I have received feedback from some residents who are small landlords affected by COVID-19, such as those who own shops that are rented out at lower rates, and in fact, it cannot even cover their mortgage repayment. They have voiced out their concerns about the over-protection of tenants. One of my residents highlighted that, while thus far the focus has been to push landlords to give rebates to their tenants, what happens to the landlords who are themselves in a tight predicament where the rent collected is only a pittance? Should these smaller landlords then be given some relief since the tenants are given two months' rent waiver?
It is bad enough that the rent cannot cover the loan repayment. But it is a double blow to have to forgo a two-month rent. I hope the Government can continue to look at the individual circumstances of some of these small landlords, and offer them support through higher property tax rebates, or even through longer bank mortgage deferments. I was happy to hear that MOF, IRAS, ESG and MAS announced a package of measures on Wednesday (yesterday) to support these smaller landlords who may face cash flow constraints due to the relief given to tenants via the deferment of principal and interest repayment up to 31 Dec 2020.
In addition, I would also like to touch on the best ways for us to adapt and emerge stronger.
Balancing the efficiency and equity effects of technology has always been a perennial challenge for societies. This issue was highlighted in Minister Iswaran's speech earlier, which shows that the Government is looking at the challenges of technology. This is likely to get worse with this crisis, given the newfound urgency to push for greater digitalisation and automation. I am glad we are accelerating the timeline for Secondary School students from the previous projection for them to own digital learning devices in 2028. I look forward to hearing more details from Minister Ong Ye Kung, particularly on the updated timeline.
Therefore, in spite of best efforts by the schools, community and social services, some students of low-income families find it challenging to do their home-based learning. Some had to share the devices with multiple siblings. Others received second-hand devices that were incompatible or could not support the software required to run the Home-Based Learning lessons smoothly. By the time we could get them the necessary assistance, they had already missed important lessons.
These are just cracks on the surface. Moving deeper, we will find that some of these children are facing many troubling distractions at home, from domestic violence, to having to play the role of parents to their younger siblings. These problems existed pre-COVID-19, and are made worse when everyone is spending a lot more time together at home.
Regardless, going digital is the future, and we must equip all our students with the skills and tools to navigate the digital landscape. We must spend more to build on our digital inclusion programmes, as mentioned by Minister Iswaran earlier. This would come on top of enhanced comprehensive efforts to address the challenges faced by students from families that have challenges. Hence, with social distancing measures, social services are stretching their already limited resources to cope with a rising number of cases. May I ask how is the Government working with the social services sector to ensure that they are equipped with the necessary resources to help their clients through this crisis? Social workers too can suffer from burnout in times of crisis. In our pursuit to narrow of the inequality gap, we cannot equalise the outcomes, but we can and we must strive to create equal opportunities and access to resources for all families. The objective of sustainable and inclusive growth must continue to be our goal beyond this Budget.
(In English): Mr Deputy Speaker, in English, please.
My last point in this section is about addressing economic hysteresis.
Monetary stimulus has been limited due to several factors – already low rates and limited impact of weaker exchange rates on exports, lower demand for goods globally and the trend of de-globalisation. Over the next five to 10 years, if many countries carry out fiscal austerity at the same time, the reduction of incomes in each country will likely increase because not all countries can reduce the value of their foreign exchange rates while increasing net exports simultaneously.
So, fiscal consolidation could add to the pain of those who are likely to be already impacted by the current demand and supply impact of COVID-19. On the one hand, being dependent on global supply chains running reliably means we will see prices of daily necessities going up. Some of our local businesses and manufacturers are facing labour uncertainty and shortage because their workers have gone back overseas or are in quarantine. On the other hand, Singaporeans are losing jobs or at risk of losing jobs.
Sir, the pandemic has taught all of us an important thing – self-sufficiency is important, be it on supplies or labour. There is greater urgency than ever to ramp up self-sufficiency, especially on basic necessities like food, re-develop empty properties and land to do high-tech farming and encourage more Singaporeans to venture into this area so that we can localise the sector and be less reliant on foreigners. In the meantime, our people are gainfully re-employed so we can avoid or reduce hysteresis. That is, there is a permanent change in the workforce from the loss of job skills, making workers less employable even after a recession has ended.
To be less reliant on a foreign workforce, we need to localise the workforce. So, we need to build the Singapore Core – as Member Mr Patrick Tay has mentioned – is very important and key. But first, we need to do very purposeful public education to get Singaporeans to change their mindsets and embrace the new norm. In recent years, community gardens and farmer's markets have gained substantial interest among the population. We need to encourage them to turn their interest into a career, by making this career one that is respectable and provides sustainable incomes. This applies to other areas of essential services.
Mr Deputy Speaker, my last section is on the of reserves – prudent management of national reserves.
The amount of fiscal support so far is indeed staggering. The Government set aside another S$33 billion in the fourth Budget this year, with a big focus on helping firms stay afloat and creating jobs. This brings the total fiscal support to $93 billion, about 20% of GDP, placing Singapore as among the top spenders in this global pandemic. Out of the $33 billion, $13 billion was set aside in the Contingencies Fund, which the Government can draw from in the case of unforeseen developments. So, it is a significant large amount. This is more than seven times, in terms of fiscal deficit, estimated in the first Unity Budget which was about $10.5 billion.
Going forward, to ensure sufficient buffer, the Singapore Government is required to maintain a balanced Budget over each term of Government under the Constitution. Elections will likely take place soon and the "new" Government will have less fiscal room in the new term under current fiscal rules.
So, if the crisis or its after-effects drags on into 2021 with no improvement in sight, or if other shocks hit us along the way, the fiscal constraint may be overly tight. The Government can keep on tapping and running down its fiscal reserves, of which $52 billion has already been drawn and counting but runs the risk of depleting its war chest. With these concerns in mind, I seek to put forth some suggestions.
First, can a case be made that under such a crisis and national emergency, the Government can borrow and tap on the bond market to fund fiscal spending? Under the Government Securities Act, the Government cannot spend the money raised from the three existing domestic debt securities it issues. So, all borrowing proceeds from the issuance of debt are invested. The fiscal deficit in FY2021 will likely remain large, as any economic recovery will be very gradual.
Singapore is rated AAA from all three international credit rating agencies and can tap on the bond market at record low interest rates at the moment. The 10-year SGS bond yield is currently trading at 0.8%. This may be a more optimal fiscal option than further running down fiscal reserves and liquidating assets when markets are down. The financing costs of debt is exceptionally low now, while the longer-term return on reserve assets will likely be much higher.
Second, to expand our fiscal room and options, should the Government also consider allowing the relaxation of the constitutional requirement of a balanced Budget over the term of Government? I believe temporarily relaxing the requirement is favourable to depleting the reserves war chest, especially when there will be concerns that our current spending will now be to save jobs and businesses and use of reserves could lead to some level of tighter fiscal spending or "consolidation" the next few years or so. I am concerned if it will have the typical of short run effect of reducing incomes and raising unemployment, post COVID-19.
In conclusion, Mr Deputy Speaker, research by the International Monetary Fund or IMF, indicates that the inequality gap widens after previous epidemics. COVID-19, I think, is no exception and we could potentially see it happen in Singapore. So, good pre-distribution policies must be enacted, ensuring extreme inequalities of income do not manifest themselves in the first place, with existing ones enhanced to ensure that extreme inequalities of income do not manifest themselves.
So, this should be done through the relentless pursuit of equal access for all, to digital devices and digital skills, education and the push by what Minister Iswaran highlighted earlier is fabulous, and also access to education and healthcare. While necessities like food and financial assistance are necessary short-term emergency solutions, the long-term solution is to ensure all are equipped with skills and knowledge to generate an income is key. Healthcare is crucial for a decent quality of life, which enables one to live their best each day at any age.
Meanwhile, I urge Singaporeans, regardless whether you are looking for a job, searching for one that is more aligned with your preferences, or even taking a break, to remain hopeful and see any opportunity that comes along as an avenue for self-exploration. Unemployment is distressing. We do not want many Singaporeans to be unemployed. And I think the efforts by the Government is tremendous in terms of the use of reserves and efforts in the four Budgets. But the current situation is distressing already for most of us. So, let us remember that it is not our circumstances, but what we do with them, that defines who we are. Sir, I support the Bill.
Leader of the House.
PAPERCUTS