Debate on Annual Budget Statement

Mdm Speaker. Once again, Finance Minister Heng has delivered a Budget that is squarely aimed at the future. I commend him for his far-sighted approach and the courage to take measures that might be unpopular. In this speech, I will first speak about innovation in the Government and industry and then touch on the impact on families.

First, let me speak about the Government. Minister Heng boldly introduced a permanent 2% cut on the budget caps for all Ministries and agencies. Can the Minister clarify what will be the implication of this? How will the Government ensure this makes it more effective?

Will this affect the budget for hiring and retaining civil servants and, thus, the quality of the Civil Service? I think the Civil Service in Singapore is generally corruption-free and competent and much better than many other countries. But there is room for improvement in some areas. Some civil servants focus more on the rules of their own agency, instead of looking at what outcome will benefit Singaporeans.

Let me give Members an example. I recently visited a newly completed Build-To-Order (BTO) development, Khatib Court, which is beside Khatib MRT. It is a beautiful development, but it has one very strange feature. It has a covered linkway that is hanging and not completed. To me, it is not completed. It comes from Khatib Court, and here is the MRT station, and there is a gap of 10 metres. So, I asked the Housing and Development Board (HDB) what happened. Are you training my residents to be 10-metre sprinters, especially during rainy days? Then, they shared with me that it is because they faced a lot of challenges and the requirements from the Land Transport Authority which they said they cannot meet. Therefore, they aborted that portion. I called a meeting, both sat together, and I told both parties, "Regardless of what happens, I must have this covered linkway." Everyone forgot about the hassle-free first-mile and last-mile connectivity. [Please refer to "Personal Explanation", Official Report, 3 March 2017, Vol 94, Issue No 38, Personal Explanation section.]

I can give you another example, another one of my new BTO developments, Palm Breeze. As usual, I asked HDB to construct a covered linkway from the nearest block to the nearest bus stop. HDB agreed and the consultants submitted the plans. And what happens? Part of the covered linkway sits on top of a drain. So, PUB said, "No. No structure is supposed to be on top of my drain. Shift your footpath out into the grass verge." And you know grass verge belongs to who, right? The National Parks Board (NParks). NParks said, "Nothing is supposedly to sit on my grass verge." So, I do not know what innovation solutions that PUB and NParks can think of.

Today, Palm Breeze residents have collected their keys, are shifting in, and the plans are still not approved. Maybe I should seek our Coordinating Minister's help. [Laughter.] These are only small projects and we meet so many obstacles. In bigger policy decisions, I am sure there are even bigger roadblocks. Can our civil servants not be more result-oriented and objective-driven instead of just guarding their own turf?

I note that some of the funds cut from agencies will be diverted to cross-agency projects. I hope this will improve cross-agency cooperation and reduce such problems, instead of creating yet another layer of bureaucracy.

I also hope some of the funds will be used to examine innovation in the Government and in shoring up our ability to give innovative solutions. There are many ways the Government can be more innovative, and I will suggest some below, especially with regard to the construction industry and the environment.

For the construction industry, I am pleased that the Government will bring forward $700 million in infrastructure projects, including construction of community centres and facilities for sports and the arts. At the back of my mind, I was thinking, hopefully, this would include a new swimming complex in Yishun which I have been asking for.

But ultimately, for the construction industry, $700 million is not really enough to make an impact. Can the Government increase this number? The construction industry has been facing lots of pressures from the economic slowdown and Government requirements. I have heard that some smaller companies could not pay their staff on time. In 2017, their foreign workers' levy will go up again and they will be affected by the diesel tax, too. Can the Government consider deferring their levy increase till better times, like for the marine and process sectors?

More generally, while there are many efforts to assist small and medium enterprises (SMEs), I hope our Government can support the construction sector more to adopt more efficient work methods, so that they can raise their productivity. I spoke about innovation in the Government. Is there anyone in the Government to focus on such efforts, instead of only implementing rules?

Let me give Members an example, building information modelling, which we have been talking about for many years in the construction industry. And what happens today? Architects do the beam modelling just enough for submission. Later on, contractors come aboard, they do their own beam model again because they cannot use what the architects have produced.

Next, I would like to speak on sports. As the past President of the Singapore Table Tennis Association and Adviser for Singapore Swimming Association (SSA), I have witnessed how challenging it can be, from administration to the pressure of ensuring that our athletes perform at the highest level. But I have to ask this very pertinent question.

Are our national sports associations (NSAs) given enough support for the retention of staff? The work which is done by the secretariat can be challenging and, what is worse, there is a lot of administrative processes which need to be completed before funding is released − all for good reasons.

However, are our NSAs' secretariat staff being remunerated well enough at least up to market rate? How will any, if at all, funding cuts affect the secretariat staff? Also, are our NSAs getting enough support from the Singapore Sports Institute on sports science, nutritionists, biomechanics and so on?

These are as important as funding itself. For example, the Singapore Sports Institute's (SSI's) biomechanic who is assigned to SSA does not look after just the needs of SSA but also has other NSA responsibilities. Likewise, for the physiotherapists. But this sports science support system must be almost around the clock, 24/7, including weekends, because the swimmers are trained and also taking part in competitions during weekends.

Joseph Schooling's gold medal at the Rio Olympics has only further proven how sports is an important component for nation-building. We should try to find more ways to support our athletes and NSAs.

Let me now turn to the environment. This Budget introduced some bold moves to change habits, like the water price increase, carbon tax and diesel tax. But there are more ways we can be more sustainable. One, I urge the Government to invest more in infrastructure for green energy, such as the use of natural gas.

Two, we need to do more to promote reduction of consumption, that is use less, reduce waste and more recycling, that is, reduce, reuse, recycle. We need to push the awareness of what will contaminate recyclables, so that nearly half of the recyclables collected do not have to be thrown away.

Every time I pass by the blue bin, I will peep into the blue bin. Almost every one of them is contaminated. I do not think our blue bins in our housing estates work.

Besides the recycling bins, how can we make it easier for everyone to recycle? More recycling bins in public next to trash cans, perhaps? Reward people for recycling? I urge the Ministry of the Environment and Water Resources to think deeper about this.

Three, in Singapore, electric cars are still expensive, around three times as expensive as regular cars. What can we do to provide incentives to car buyers? For example, in the US, the federal government provides tax credits of up to US$7,500 for each electric vehicle purchased. Some states also allow electric vehicles and vehicles carrying two or more people to use special lanes, to beat the jam. All these encourage consumption and production of electric vehicles.

Four, ensure that foreign cars coming into Singapore are subject to the same emission standards as local cars, if they want to drive on our roads.

Five, the water price increase will have an impact on production costs, that is, 2% to 4% increase in production of semi-conductors, for example, I was told. Our companies are competing in the global markets. In Malaysia, China and Taiwan, for example, the price of water is negligible. So, we would lose our competitiveness. Many of our companies are already doing water recycling and I hope the Government can work with the industry to see how we can do more water recycling to retain our competitiveness.

I was told that, currently, about 40% of the water is recycled in the semi-conductor sector. Can we increase it to 70%, like in Germany and Taiwan? Will there be any tax rebates or grants for the cost of adopting water recycling? Speaking of water, let me briefly speak in Malay.

(In Malay): [Please refer to Vernacular Speech.] Earlier, Minister Masagos explained why the price of water was raised. I will not speak about it again.

But can the Minister provide an explanation, recently, in spite of the rainy season, if the reservoir in Johor can only reach one-third of its capacity, can we get a supply of water without any disruption when the dry season comes? Or will there be a water crisis? What steps will PUB take to help residents save water and reduce their bills?

Finally, I hope the Government can monitor cases where operators transfer their cost to their consumers. These could be delivery operators in connection with the diesel tax, or food stall operators in connection with the water price hike. The increase in their sale prices should not exceed the increase in cost.

(In English): Please allow me to summarise my speech in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] There are many bold measures in Budget 2017 which focus on Singapore's future. However, I hope that the Government can see how these measures will impact families and companies. I would like to ask the Minister to explain whether our water supply is in danger. It is rainy season recently but the reservoir in Johor is only one-third full. Will we have enough water during the dry season? Will there be a crisis? How do we help our families to save water and reduce water cost? The Government should also keep a close watch on businesses to make sure that they will not pass on the increase to consumers or even take the opportunity to raise prices.

For the manufacturing industry, the water price increase, carbon tax and diesel tax will all lead to cost pressures. To keep our manufacturing industry competitive, how can the Government incentivise them to save and recycle water?

For the construction industry, although the Government has brought forward Government projects worth $700 million, with so many companies in the construction industry, the $700 million is not enough to be shared by them. Can the Government bring forward more projects and help the construction industry to adopt more efficient work processes?

Lastly, will the reduction in the budget for various Government agencies affect the services provided to Singaporeans? It is undeniable that a small number of civil servants insist on sticking to their agency's rules, making simple things complicated. I hope that the Government can make use of the money saved to improve cross-agency collaboration and cultivate creative thinking amongst civil servants.

Mdm Speaker, this is a prudent Budget. It is reassuring to know that we are recording a Budget surplus of $5.2 billion, larger than the estimated surplus of $3.5 billion for financial year 2016, so that the Government will have the ability and, I am sure, the willingness, too, to step in with more assistance should the conditions turn further south in this volatile and uncertain environment.

The Government has been rolling out incentives to support innovation and get businesses to increase productivity to counter cost increases. However, as innovation and the adoption of new technologies to increase productivity take time, the progress has been slow.

One main reason could be that businesses, while raising productivity, have to continue to provide jobs for our citizens. In the domestically oriented sectors which hire more workers than export-oriented sectors, productivity growth is understandably marginal. The capital required for automation and productivity projects can be substantial, and Government grants and subsidies only offset a portion of these costs. While still coping with rising costs, in particular, labour costs, the impending increase in utilities cost due to the increase in water prices and the proposed carbon tax would be additional financial burdens.

With the proposed 2% downward adjustment to the budget caps of all Ministries and Organs of State, we can foresee a decrease in Government projects available for public tender. The profit margins on these projects will be lower and companies that cannot reinvent themselves or keep up with productivity may find it difficult to stay afloat.

Under such circumstances, would Singapore continue to be an attractive place for international companies to do business in? How will the Government continue to support SMEs to overcome these multiple challenges?

Any increase in cost of utilities, such as water, gas and electricity, has significant impacts on the economy. It may be that water accounts for a small share of overall business costs and consumer expenses.

Nonetheless, consider the knock-on and multiplier effects. A small SME may not be a large consumer of water. That would not stop their suppliers from raising the cost of supplies as a result of the water price increase. Neither would it prevent the management corporation of the SMEs' office building from raising their maintenance fees. The staff of the SMEs may need higher salaries to pay more to their respective Town Councils, children's service providers, and grocers. Eventually, the SMEs would have little choice but to pass on these added costs to end consumers.

We do not question the need to increase water prices. There are very good bases to justify the increase. The timing of the increase is of concern.

It is usual for price increases to coincide with the revenue recovery cycle of the economy. Businesses are experiencing slow to negative revenue growth. With the drive to push productivity in a tight labour market, every added burden to business costs could hurt the viability of the business.

For individuals, Government credits and rebates lessen the direct impact of the water price increase to the households. The indirect knock-on effects mentioned earlier are of bigger concern. We expect hawkers to up their food prices. What we are unsure of is the quantum of the increase. While coffee merchants had said that the higher water costs would not affect the coffee prices, the hawkers themselves may be faced with more expensive supplies and higher cleaning fees, and they, in turn, have to pass on these costs to the consumers.

[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]

The Government would have conducted an extensive study into the impact of the water price increase on all the economic and social sectors. Would the Government consider releasing the details to the public so as to prepare them for all the likely consequences and scenarios? The Government should also further reassure the public that they have mechanisms in place to prevent profiteering by businesses on the back of this increase. Mr Deputy Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] The increase in water price can be complemented by a push to change consumer habits in water usage. In this regard and to further assist the families, could the Government consider giving incentives or introducing a lower tier tariff for households that consume less water either on a household or on a per capita basis?

Since water consumption depends on family size and not flat type, it might be more effective for rebates to be given based on the number of persons residing in the household. A larger household would need more support from the Government than a smaller household staying in a similar flat type.

(In English): Let me now touch on boosting demand for our economy. I applaud the strategies to bring forward or increase infrastructure projects. Bringing forward $700 million worth of infrastructure projects will certainly help the construction sector. These projects will also create demand for services and products downstream − contractors, engineers, designers, information technology providers and so forth.

The Government can do more to boost local demand by including a "Buy Singapore" requirement. "Buy Singapore" should apply to both goods and services. From locally produced fish and vegetables when catering for meals at events to engaging the services of a Singaporean infocomm technology company, as long as the specifications are met and fees are reasonable, we should support Singapore suppliers and vendors. I am sure that some level of support is already occurring in our Government departments but a higher level of awareness and a stronger official mandate will go a long way to boost demand.

Such a campaign will also send a signal to the market and individual consumers: if we do not support our own, who will? Supporting our local companies and encouraging them to keep improving is the only way to help them grow big enough to spread their wings beyond our shores to increase their revenue sources which shall help mitigate the ever-increasing costs.

We should also ask ourselves if there are local industries that may potentially have an advantage in serving the domestic market that can be encouraged, supported or better funded to help them to grow. This is an important question which merits further and urgent study.

In addition, the Government can award companies which meet prerequisite standards within their industries with an official "Proudly Made in Singapore" product stamp or "Proudly Singapore" service logo. This will incentivise our local companies to strive for higher quality. Hopefully, in time, the "Made in Singapore" label will be as trusted and respected as "Made in Japan" or "Made in Germany" labels.

"Buy Singapore" also ties in with another important national objective − environmental sustainability. Minister Heng has highlighted the importance of sustainability in his speech and introduced measures targeted towards more sustainable business practices and consumer behaviour with the increase in water pricing, introduction of carbon tax and promoting the use of cleaner vehicles.

These measures will no doubt increase Singaporeans' awareness of the importance of environmental sustainability. In fact, many customers now actively look for products that are not detrimental to the environment, with a lower carbon footprint.

Buying products that are made or manufactured closer to home would be one way of reducing one's carbon footprint. For example, we can have more locally farmed produce, fashion or household items using materials that are preferably locally sourced. Not all companies will eventually grow into large multinational industries but they can play a part in fulfilling our collective environmental agenda.

I am happy to note that our young are being inculcated with the right values towards our environment. Teachers of preschoolers use the "Preschool 3R Awareness Kit"; older children have the "Youth for the Environment Day" platform to showcase environmental activities. As a father, I noticed that even composition and essay topics from primary school up to junior college use environmental issues as a recurring theme. We, as adults, must set good examples and take the lead in our family lives and in our professions to protect our environment for our present and future generations.

I urge the Government to continue to provide more support to community-based projects that are environmentally beneficial. As the Government and people work together to ensure environmentally sustainable practices, we will lay the foundation for an even more beautiful and liveable home for our future generations. With this, I conclude my support for the Budget.

Mr Deputy Speaker, the Budget is variously viewed. In some quarters, it is viewed as underwhelming. And there are some of us who question the timeliness of the imposition of tariffs. There are, of course, others who support the Budget and the Debate will just go on and on, even after the Committee of Supply (COS).

But to me, this is a Budget of hope because it is a Budget that tells us that despite the challenges and difficulties that have caused many a good man to stay awake and to worry, that this is an opportunity for us to move ahead for many years to come. With that, it also brings a caution that it requires us to understand what these challenges are, what the difficulties are, what they will morph into and what new ones will appear on the horizon, and how we may convert them into our strengths. That alone is already daunting.

But this is not surprising. We live in daunting times. So, we cannot live like we used to live. We cannot think like we used to think. I submit that the Budget would not achieve its objectives if we implemented and relied on the Budget measures without a mindset change. Without discarding all that we have learnt and built in our individual and collective memories and achievements, we must, nonetheless, recognise that our success yesterday and today could be our failure tomorrow. In other words, we must be prepared to say that something that has worked before may need to be changed before it is too late.

There is a saying, "If it ain't broke, don't fix it". In times like this, I think we do not have the luxury of waiting for some things to break. But of course, unfortunately, something has already broken and this is something that bothers and troubles me a lot.

We hear a lot about the disconnect between the Government and the people. And I have spoken with businesses, friends and associates and they complain about difficult times and I asked them, "Why not try and seek the Government grants?" They say, "It is no use. It is too difficult. They do not understand." And I wonder why. Why do we have a disconnect?

We have heard it so many times. Is there anyone doing anything about it? Because if there is truly a disconnect, then whatever we are going to implement in our Budget is not really going to achieve what we want to achieve, because we are not going to be "one". We are not going to have that unity of vision and the unity of mind and the singleness of heart to move forward. I hear so much and I am concerned.

I understand that there are structural shifts that have caused unemployment and redundancies. But I wonder, as some people have asked me, whether some redundancies could have been caused because the Government overlooked certain trends and certain sectors. Was it because there were emerging sectors or fledging sectors that we did not, despite industries' feedback, nurture and grow?

I do not know, I do not have the answers. But I hope it is something that we can look into to address this disconnect that we now perceive on the ground. I am concerned because if we do not address the "disconnect", if we do not come across to our people as being willing to re-examine where we may have fallen short, that is very difficult to inspire confidence during difficult times. And now, I come back to the main point of this message which I am sharing today. I beg your pardon.

On mindset changes. A mindset change is what we need, because if we do not change our mindsets, the Budget will just be a bag of schemes and measures. But if we change our mindsets, it can be turned into a powerful game changer for Singapore. So, what do I mean by mindsets? I have nothing to share, nothing to define the mindset with. All I know is that there is a fear that, over the years, the universal values of compassion, empathy, of the ethos of hard work, of caring for one another, of the duty to country, community, family, self, and the respect for one another may have eroded.

We may need the change in mindset in each individual citizen for us to come back to where we should be. To know that we owe a duty to ourselves and to our country for the Budget to work. But we also need a change in the mindset of the Public Service and of the corporates. I say this with some consideration, not that I do not believe in the quality of the Public Service, but rather that I think, someone has to say some hard things.

I am very heartened that the Budget continues to talk about developing capabilities and employability of Singaporean workers. And I say the Government, employers and Singaporean workers must believe in that. You say, "Is it not odd?" The Government is the one that says we must develop the capabilities. And why do I say the Government must believe in that? It is because of that "disconnect" that I talked about earlier.

Whilst we hear in this House Ministerial speeches and Members' speeches about what we believe in, about the seriousness of the global situation and our dependence on other external factors, I fear that the seriousness of the message may not have filtered through to every level of the Public Service. I do not know. Perhaps, my comments are not fair. But I think that if people believe in what the Government wants, then the way they design their schemes will be very different. If they believe in the schemes achieving what the schemes are meant to achieve, then the way they implement the schemes will be very different. It will not be just a question, I hope, of checking checklists, ticking the boxes or keeping an eye on key performance indicators (KPIs). But it will be with that knowledge and that consciousness that every decision we make in matching and in granting a grant to an organisation, we are making a difference to our country and to our companies.

And I want to talk about developing the capabilities and employability of Singaporean workers because I believe in it. And quite frequently, when I talked about the Singaporean Core, well-meaning people would remind me, "Be careful, you could be misunderstood as xenophobic or protectionist". Let it be clear − I am neither. Companies will come and go. But the Singaporean Core will remain connected to Singapore and we need to develop the Singaporean Core.

Schemes and measures are critical. How do we develop a Singaporean Core? Just through schemes and measures, if the employers are not committed? And how can employers be committed if they are not so persuaded by the persons who grant them the grants and make the schemes and measures available to them?

I hope that all businesses, local or MNCs, will commit to developing the Singaporean Core. I want to say we welcome partners, but not raiders. I want to say that we must not be embarrassed to tell investors that we would like them to invest in Singaporean workers. This is because we also need to build our own industry movers and shakers. We should not be happy with big companies setting up facilities here only to build foot soldiers for us. We want them here because we want to develop our own people, and we must not forget that.

As I said, I am not a protectionist, but I want to remind ourselves that companies will only stay in Singapore if there are benefits to them. We must ensure that when they leave Singapore, we continue to have the human capital that made them successful, and that the human capital will be our Singaporean Core.

I want to touch on another subject that is also very close to my heart. At the last Budget, I spent half of my speech on that and, that is, on innovation. I understand that since then, there have been some changes. I have filed some cuts, so I hope to hear more. But I still hope that when our agencies are restructured, when our agencies reformulate the policies, we would be doing so in the context of what is good for our country.

I hope that we would lift ourselves beyond our historical baggage within each agency and reach out to our community partners. I hope that when we negotiate licences and ownership and partnership agreements with industries and companies, we will be thinking about what is right and what is fair, and what will incentivise creativity and innovation. And we will not try to win a greater share of the rights just for the sake of that. I hope that when we deal with people who are partnering the Government agencies, we will think about our country and not our KPIs.

In the area of employment, where again we need mindset changes, we have worked very, very hard to reach to private employers. We have also worked very hard to reach to the public sector. And we are encouraged that the Government continues to affirm its commitment to assist persons with disabilities to be trained for and find employment. There are many of us who have called on the Public Service, being the largest employer sector, to take the lead and to employ persons with disabilities. We do not ask for a compromise of the principle of meritocracy. We do not ask for an accommodation of our inability. We ask only for accommodation of our disability.

We were, therefore, encouraged when the Public Service Division (PSD) announced in 2016 its plans to recruit persons with disabilities. I met with Mr Peter Ong, Head of Civil Service, and his team. I was touched by Mr Ong's personal interest and commitment, as well as that of a couple of Permanent Secretaries whom I have interacted with over time, their commitment for the Civil Service to employ persons with disabilities.

I do recognise, of course, that the final employment decisions rightly are left to the respective agencies. Nonetheless, my observations are that unless the human resource teams of PSD and the respective agencies share the same values and commitment as the Head of the Civil Service, we will not be able to progress. I will await the replies to my COS cuts, but I think from my understanding, ground-up, this is another area where a mindset change is required. We need to be afraid not to change, we need not be afraid to change. When the Government sets the example, it stands on stronger moral grounds to urge the private sector to employ able persons with disabled bodies.

I speak at the risk of offending my good and dear friends in the Public Service, of offending those in the Public Service who have earned my respect. But I speak as a Singaporean, proud of our Public Service, and proud that our Public Service can be better. And I share this both with a heavy heart and with hope, that as we look at how people are reacting to the policies that we have, we will think about how we can improve.

In the same vein, I also would like to urge my fellow Singaporeans to take responsibility for our lives and our future. I think it is time for us to stop moaning that there is not enough assistance. I think there is time now for us to take our own future into our hands, take what the Government has given to us, but shape it with our own hands.

The Government can only do so much. The Public Service is made up of imperfect human beings like ourselves. And if we want them to be bold, to experiment, grow and lead, then we have to allow them to fail. And when they fail, we must be ready to support them.

What I want to say is that this is a Budget that gives us hope, but only if we decide that we want to move forward on our own two feet, with the Government supporting us. If we want to build a future for ourselves and our children, and we want to build a future for our Singaporeans and hold our heads high, then we must learn to stand on our own two feet, and we must learn to stand for one another. Mr Deputy Speaker, I support the Budget Statement. [Applause.]

Mr Deputy Speaker, I concur with our hon Member Ms Chia Yong Yong and what she just mentioned about paradigm shift and mindset change. And the mindset change should not just be about the Civil Service. It should extend to all private sectors and all Singaporeans. If all Singaporeans have the mindset to do the best they can for themselves, the country, their families, I think Singapore will continue to be a shining red dot for many more centuries to come.

Mr Deputy Speaker, let me just thank the Finance Minister for putting up this Budget at a time when there are so many unforeseen circumstances amidst this changing political landscape globally. Many Singaporeans had waited with much anticipation for this year's Budget because some feared that there would be austerity measures, while others were hopeful for goodies that can be given for this Budget.

I stared long and hard at this Budget after the Finance Minister delivered this Budget last week. In fact, this is one Budget that I categorise as a caring Budget − a three "care" Budget - it cares for the future, it cares for the people and it cares for the environment.

I am happy to note that this Budget has a very strong focus on business, especially on all the recommendations by CFE. It is about jobs, long-term viability and the growth of the economy. Of course, there is also much social support to help the needy to tide over, as they are the most vulnerable group during these difficult times. But this is not the first time that this Government has been doing it. This Government has been doing it all along. Last of all, I am very happy to note that this Budget has much more for the environment this time round, compared to the last two years. These are important issues because environmental issues concern sustainability and our living standards in the long run. However, we should look at how, as we improve our environment, not to impose too much of a burden on our people.

I would like to focus on three things in this particular Budget. First is the inflationary impact of the water as well as the diesel tax. Second is the future carbon tax which the Finance Minister mentioned. Third is about globalisation of our students as well as our workers.

First, the inflationary impact of the water and diesel tax. Last week, as I was driving, I was listening to some of the talk shows talking about this water tax increase. Of course, there was a lot of public unhappiness about this water increase. Quite surprisingly, we heard one academic from one of the IHLs mentioning that the increase should be much more, that it should be more than 30%, that it should be 100%, to deliver a shock effect so that people will start to save water. I hope that is not the intent of the Government to deliver a shock effect. In fact, I think the Members of both sides of the House have helped to deliver this shock to everybody. And the Government is scrambling now trying to relieve this shock from everybody, to say that the impact is not that bad in the first place.

I would like to ask the Government whether before they considered this 30% hike in the water price over the next two years, particularly for the man-on-the-street, did they do an impact study as to what is the real impact on the economy. For domestic households, what percentage of their monthly utility bills does water consumption constitute on average? And thanks to public education efforts, in fact, many domestic households, on the whole, are quite streetwise with their water usage. In fact, the water usage trend has been trending downwards in terms of water usage per capita. However, based on feedback from my residents, many are still concerned that water consumption cost will make up a significant portion of their monthly expenditure with this increase. So, I hope the Government would dismiss that notion.

Water, like fuel, is something which has a very strong knock-on impact on the community as a whole. We need water to drink, prepare food, cook and wash, sanitation, and it applies to all, including eateries and school canteen operators, not to mention hotels. We need water to maintain a certain standard of cleanliness in public areas, homes, hospitals and buildings, and in keeping our public transport vehicles clean. We need water for factory production processes and a whole gamut of various industrial activities that we see in our industrial parks.

I dread to think about how this will impact the cost of living. This year, we started off by having to cope with the rise in electricity tariffs by an average of 5.7% or 1.07 cents per kilowatt hour for the period of January-March, compared to the previous quarter, as announced by power provider SP Services on 30 December 2016. This was due to the higher cost of natural gas for electricity generation, which increased by 10.6% compared to the previous quarter.

The big question is, so, why does there seem to be such an urgency to raise the water price after 17 years? Why was the water price not raised in between? Why wait until 17 years later, especially now when Town Councils have already revised their service and conservancy charges on households? In fact, the rise in water price could have also pulled the rug from under the Town Council, as they would be facing higher operating cost now arising from the revision of the price of water. The inflationary effect may well negate the various rebates and other schemes that were spelt out in the Budget. I know it is a tough call for the Finance Minister but I hope at least there will be some explanation given to address the public concerns.

The commonly heard complaint from residents is that the rebates are sort of one-off on a year-to-year basis, but the effects of the increase are long term and would stay long after the rebates have expired. But many had ignored the fact that the Minister had also announced a permanent increase in Goods and Services Tax (GST) Voucher and U-Save on top of the one-off GST Voucher special payment. May I ask if the price revision could have been considered to phase out in a longer period, such as increasing at 10% per year over the next three years? Or why not adopt an even more progressive water tariff to tax those with higher water consumption?

Major cities in many countries, such as the US, France, Australia and China, have adopted the use of multiple-tiered water pricing, alternatively known as progressive water tariffs, or increasing the block tariffs. According to a research study by Stanford University's Water in the West Programme, tiered water pricing is a critical tool in incentivising water conservation. Under such a pricing system, the first block with the lowest pricing usually corresponds with the amount of water that a typical household requires for basic needs, such as bathing, domestic cleaning and cooking. Each subsequent tier then commands a higher charge on excessive water usage that applies to luxuries like maintaining large gardens or swimming pools.

China is a country with a multiple-tiered water pricing system. Like us, their price of water is state controlled. Water prices are low by international standards, but there is a problem for them, because their water per capita availability is low. By raising water prices, the authorities feared would intensify the income inequality, as water consumption represents a higher share of income for low-income households. The local governments experimented with multiple-tiered pricing systems for urban households and industrial users, charging higher prices for higher water consumption. And these reforms have found to achieve their desired outcomes and, as such, from 2015, all localities started to adopt the new water pricing system for China.

However, the concern with a tiered water pricing system may not be of much help to low-income households with many, many family members. Certainly, no system is perfect. So, I hope the Government is continuously exploring ways to keep the cost of water affordable for low-income families, while discouraging excessive use of water.

Next is the diesel tax. This is another inflationary impact on the people and on businesses as a whole. There are about 185,000 Singapore-registered diesel vehicles on the roads. They account for about 20% of the vehicle population in 2015. Most are trucks, vans and commercial vehicles, rather than passenger cars. What can we expect? Another round of price increases by transport operators, including school bus transport for school children? Many businesses use their vehicles to transport workers and equipment to and from worksites. Not just that, but many of the diesel vehicles are used for transporting and delivering goods, from wholesalers to retailers, from retailers to consumers, especially for online purchases as well. These are diesel vans that are used for various purposes, as handymen also use them for delivery for plumbing services, carpentry and electrical services, even delivery of liquified petroleum gas to homes and eateries. I am worried that we may see an uptick in their fees when they are called upon now to do minor repairs for our households.

The knock-on effect would thus be across the board. I know the Budget is giving help to businesses to adjust by providing commercial diesel vehicles with a 100% road tax rebate for one year, and a partial road tax rebate for another two years. There is an additional cash rebate for operators for diesel buses ferrying school children. We should reduce the road tax for diesel vehicles further to be on par with petrol vehicles. What will the Government be doing to ensure that all these rebates will be filtered down to the consumers?

Taken together, may I ask the Finance Minister what is the predicted inflationary effect of both the water price increase as well as the diesel duty implementation on the Singapore economy in the near and medium term?

Next, carbon tax. I am deeply concerned about the impending carbon tax that has just been announced for 2019 which the Finance Minister mentioned. Although the proposed tax will generally apply upstream on power stations and other large direct emitters, it will have a knock-on effect on all electric users, both domestic and commercial. We signed the Paris Agreement on climate change at the United Nations last April and affirmed our support and commitment to the Agreement. Singapore ranks 123rd in emissions intensity out of 142 countries worldwide, but promised that the country will "continue to do more", to quote the Ministry of Foreign Affairs' statement. The introduction of a carbon tax in 2019 is a good move to stay in step with international standards on environmental conservation. We pledged to reduce emission intensity by 36% from 2005 levels by 2030 and stabilise emissions with the aim of peaking around 2030. It is still in the early days, but I would like to know what is the Government's take on how challenging it will be to meet this goal.

I note that to encourage car buyers to switch to cleaner and environmentally-friendly models, the current Carbon Emissions-based Vehicle Scheme (CEVS) will be replaced. There will be a new Vehicular Emissions Scheme. The new scheme considers four other pollutants, on top of carbon dioxide, so as to account more holistically for the health and environmental impact of vehicular emissions. The Budget states that the new Vehicular Emissions Scheme will run for two years, starting from 1 January next year and will be reviewed before it expires. In the interim, CEVS will be extended till 31 December this year. How bad are we performing or how good are we performing, in terms of the area of carbon emissions? How much more carbon have we emitted over the past two decades? Taking into account that we are a very small country with very limited potential to tap on renewable energy, what can we do to reduce our carbon emission? Is the Government considering the introduction of a Climate Bill in tackling this carbon tax?

I feel that we should spend more resources to explore the use of solar energy. There is a lot of scope and potential for us now to tap on solar energy as the cost of solar panels has dropped over the years. Another positive outcome of implementing the carbon tax would be that it serves as a motivation for companies and businesses to innovate with cleaner, greener energy sources. I hope the Government can use the revenue collected under this carbon tax to help businesses with this endeavour and also promote green innovation.

I think solar technology is something that we should tap on a larger scale. May I ask what is the Government doing to encourage and incentivise commercial, domestic and the public sector to harness the potential source of renewable energy so as to lower our carbon footprint? We should also look at how to help homeowners to use solar energy. And Town Councils should look at this as a source of energy for the future.

My last point is learning from overseas globalisation. In a globalised society, it is important to be exposed to foreign countries, whether it is culture, education system, the job market and so forth. I note that the Budget presents a slew of measures under the Global Innovation Alliance to help businesses and employees to operate overseas. One such measure is helping students in Singapore universities getting work experience in foreign startups.

I would like to propose to the Government to help local universities to establish tie-ups with universities in Europe. This is a region with huge cultural diversity. They are also accomplished in many important sectors, including technology, finance, medicine, the arts and so on. We should explore student exchange programmes with Grandes Écoles in France, and also many other design and engineering institutions in Germany and Scandinavian universities which are also known for their innovation. In the INSEAD Global Innovation Index 2016, Switzerland was ranked first, Sweden was ranked second, the UK third, with the US fourth, Finland fifth and Singapore sixth. Currently, many university courses offer exchange programmes, but these programmes are often short term, with a focus on academics. I hope partnerships can be developed with the aim of helping students establish a longer-term residence and also obtaining residency in terms of internship programmes and job opportunities in their host country.

Mr Deputy Speaker, the Budget reveals the Government's foresight and meticulous planning for the future. With these measures to guide us, I am confident that we can look forward to a brighter, cleaner, greener and more sustainable future. I support the Budget.

Mr Deputy Speaker, I rise in support of the Budget.

First, building capabilities. I support the key thrusts of the Budget, namely: first, to build capabilities among our businesses and people; second, to seek new opportunities in the changing and uncertain global market; and third, to build a caring and resilient community in Singapore.

As proposed by the Finance Minister, there is a dire need for Singaporeans and our businesses to embrace digital technology so that we can seize opportunities to pursue a better quality of life in the future.

The proposed SMEs Go Digital Programme will definitely help our SMEs to enhance their digital capabilities and improve business operations, providing better customer services in turn. However, the key challenge faced by SMEs lies in training staff to go digital or recruiting and retaining staff who already possess the skills to do so. Due to the different learning abilities of workers, there is a need to adopt more standardised and industry-wide digital solutions. This will help to reduce the learning curve and ensure that the workers' new-found skills are applicable in various companies.

To further support a digital economy, we must also equip consumers to be digital savvy. Many Singaporeans, especially the elderly, are still facing difficulties using e-services and smartphone applications. Thus, I would propose that we provide free e-services and smartphone applications training at every Community Club (CC) to build digital capabilities in our community.

Second, construction ITM. Sir, I fully support the focus to transform our industries through close partnerships with trade associations and chambers. The construction industry is complex and comprises many stakeholders and trade associations. At present, there is a general lack of initiatives from the ground up, as well as the necessary leadership to bring the industry into the future.

Over the last 30 years, limited progress has been made to enhance professionalism, productivity and quality in the construction industry. To date, construction productivity is low, while its quality has struggled to meet clients' expectations. The industry's professional practices currently leave plenty of room for improvement as well.

Sir, the Construction Industry Joint Committee (CIJC) is a ground-up initiative formed by eight professional bodies and trade associations of the construction industry in 1997. Its main role is to provide feedback to the Government and be a think-tank to discuss strategies for industry development.

Sir, I have recently accepted to be the advisor of CIJC and have urged CIJC to take a more proactive role to spearhead the development of the construction industry. With that said, I also hope that the Government can co-chair with CIJC to jointly develop the construction ITM.

I am pleased to note that the Budget has provided a $150-million Public Sector Productivity Fund to allow Government agencies to procure innovative and productive construction solutions. Based on the findings of the Auditor-General's Office, there are often lapses in the procurement and project management of Government projects. This is mainly attributed to a lack of expertise in inexperienced staff with regard to procurement and project management in the public sector.

I would like to propose that the Government set up a Public Sector Construction Division similar to the former Public Works Department. As we move towards building a vibrant and connected city, we must ensure that the public sector has a core group of project managers and facilities managers to procure, implement and manage public sector projects. The public sector can take the lead to develop a professionalism and quality assurance framework that incorporates industry best practices to upgrade the construction industry.

Third, building a quality environment. Sir, I support the bringing forward of $700 million worth of public sector infrastructure projects, especially in the upgrading of community clubs and sports facilities. In line with the Government's push for environmental sustainability and the Public Sector Taking the Lead in Environmental Sustainability (PSTLES) programme, the North West Community Development Council launched its Eco CC@North West programme in October 2016, which focuses on two key areas of improvement for CCs, namely, first, the green "hardware", and second, the green "software".

Green "hardware" refers to infrastructural works to enhance the environmental performance of CCs, which include aspects of energy and water efficiencies, while green "software" refers to the promotion of green consciousness and adoption of green practices among the users of CCs, such as using sustainable and environmentally-friendly products, reducing the use of energy and water, maintaining a healthy indoor environment, practising effective waste management and general education on the topic at large.

Bukit Panjang CC was the first CC in Singapore to attain the Building and Construction Authority's Green Mark Gold Plus award under the Non-residential Existing Building Category after its installation of solar panels and retrofitting of its existing building. A CC Green Committee was also set up to promote green living among residents.

The Bukit Panjang CC incurred an expenditure of about $400,000 to install energy-efficient air-conditioning systems, light emitting diode (LED) lightings, water saving sanitary appliances, as well as a green wall to reduce heat transfer.

Sir, as community touchpoints, CCs can play a pivotal role in rallying residents to adopt a green lifestyle. However, one barrier which currently prevents CCs from going green is the lack of funding to introduce green technologies and features into the CCs. Thus, I would like to urge the Minister for Finance to consider providing a one-off Green CC grant to expedite the greening of all CCs in Singapore.

Sir, while I support the introduction of a carbon tax, which is based on the "polluter pays" principle, I am concerned that such a measure will further increase business costs which will ultimately be passed on to consumers. As an alternative to further encourage the adoption of green technologies that will reduce greenhouse gas emissions, I would urge the Minister for Finance to also consider providing incentives or grants to companies or organisations which support such go-green initiatives.

Sir, since 2011, the 15 People's Action Party Town Councils have implemented the LED bulk tender programme to replace the less energy-efficient 2D, panel light, tubular (T)8 and T5 lightings to LED lightings. To date, we have installed 1.18 million LED lights at the common corridors, staircase landings and void decks of HDB blocks, and are presently installing another 730,000 LED lights to replace lightings at the outdoor open areas. The LED lighting programme will result in about 40% energy saving and, thus, a reduction of greenhouse gas emissions.

Sir, in addition, HDB has been working with the Town Councils to install solar panels in our HDB blocks, thus adopting clean technologies. I would once again urge the Minister for Finance to consider giving grants or incentives to further expedite the reduction of greenhouse gas emissions in Singapore.