Committee of Supply – Head U (Prime Minister's Office)

Madam, as Deputy Prime Minister Tharman made clear in his Budget speech, this Budget is clearly focused on building Singapore's future. It is a bold, forward-looking, forward-thinking Budget, designed to help Singaporeans not only now but, particularly in the long term, to succeed.

That ethos is best encapsulated in Deputy Prime Minister Tharman's closing remarks in his Budget speech. When making mention of Joseph Schooling's first swimming coach, he said that the spirit of Singapore lies in being good at something, taking pride in it and then passing on the passion to the next generation, so that we, Singapore and Singaporeans, can keep moving up.

In the same way, we have to ensure that the people who lead our country, who sit on the front bench of this House and whose policies shape the lives of many future generations of Singaporeans to come, will, indeed, keep Singapore moving up. It was against this backdrop that back in January 2012, this House debated the White Paper on Salaries for a Capable and Committed Government. It was a robust and vigorous debate. I think it was so because all of us in this House appreciated just how important it is for Singapore that we set the framework for political salaries at the right level. It is important because we have to ensure that the best, the most capable, the brightest talents are brought into public service.

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I do not think anyone can seriously disagree with that.

The principles enunciated in the White Paper were designed precisely with these objectives in mind. Let me just quickly recap the three core principles which underscored the Committee's recommendations. First, salaries must be competitive so that people of the right calibre are not deterred from stepping forward to lead the country; second, the ethos of political service entails that there be financial sacrifices and, hence, there should be a discount in the pay formula; and third, we should continue to adopt a clean wage system with no hidden perks.

Based on these principles, the salary benchmark of a Member of Parliament-grade Minister is set at the median salary of the top 1,000 earners for Singapore citizens with a 40% discount to reflect the ethos of political service and no other payment.

We agreed on a new framework on the principles for Ministerial salaries and the application of a new benchmark. These principles were wholly accepted by this House, including by the Workers' Party. This is significant because we now can and, indeed, should, put aside any further political rhetoric on what the appropriate principles or benchmark should be and move on from here.

In fact, the recommendations by the Committee itself, which the Government has accepted, provide for a self-reviewing feature at the five-year mark for the new salary framework to be reviewed. This will be a useful exercise after having the experience of using and evaluating the practical application of the new framework. Even though we are now only about three years into the current framework or just slightly past the midway point of the five-year review period, may I ask the Deputy Prime Minister if it would be an opportune time now to take stock of how the new framework has been applied in practice and where the benchmark has moved over the years since implementation in 2012?

Mdm Chair, last year, the Prime Minister in his National Day Rally speech said that the Public Service can and will do more to support the aspirations of non-graduates. Currently, most non-graduates and graduates join the Civil Service under the Management Support Scheme (MSS) and Management Executive Scheme (MXS) respectively. Management Support Officers (MSOs) can already progress to take on similar jobs as those of graduates and be paid comparable

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salaries.

Following the Prime Minister's National Day Rally speech, the Public Service Division (PSD) announced that there would be faster career progression for MSOs from October 2014 and that more graduate and non-graduate schemes would be merged.

I understand that the PSD has since carried out a review of the MSS and MXS schemes of service with this in mind. I would like to ask for an update on the outcome of this review and how it can position the Civil Service as an early adopter and good exemplar of the recommendations of the ASPIRE Committee in recognising, developing, tapping and rewarding the talent and performance of both graduates and non-graduates within the Public Service.

Mdm Chairperson, first, let me thank Members for their interest in, and support for, the Public Service.

Let me first address Mr Edwin Tong's question on salaries for political office holders. In May 2011, Prime Minister Lee had appointed an independent Committee to review the basis and level of salaries for the President, Prime Minister, political appointment holders and Members of Parliament to help ensure honest and competent Government. The Committee's report was thoroughly debated in this House over three days in January 2012 and endorsed by this House.

In determining Ministerial salaries, the Committee was guided by three key principles: first, salaries must be competitive so that people of the right calibre are not deterred from stepping forward to lead the country; second, the ethos of political service entails making sacrifices and, hence, there should be a discount in the pay formula; and third, there should be a clean wage with no hidden perks.

Madam, there was consensus in this House, among all parties, on these three key principles. In particular, the Workers' Party stated that it agreed with the three principles and accepted benchmarking salaries competitively. This was a fundamental change from their past proposals. This significant change helped the debate to arrive at areas of convergence.

Based on these key principles, the House agreed to the Committee's recommendations to establish a new framework for Ministerial salaries. Let me briefly recap these recommendations.

One, a new benchmark, which is based on the median income of the top 1,000 earners who are Singapore citizens, with a 40% discount to reflect the ethos of political service; two, a new salary framework and National Bonus linked to the socio-economic progress of average and lower income Singaporeans and not just GDP growth alone; and three, removal of the pension scheme for politicians.

Based on this formula, the 2011 MR4 benchmark for Ministers was $1.1 million. We set the norm annual salary of an MR4 Minister at this level of $1.1 million. This is the norm total annual remuneration which includes all salary components – basic salary, 13th month, AVC

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and all individual performance and national bonuses. This meant an annual salary cut of 37% for an MR4 Minister. An entry-level Minister's total annual salary would start below that, at $935,000 in a year in total. The Prime Minister's total annual salary was reduced by 36%; and the President's total annual salary by 51%. With these changes, the President's annual salary is now 70% that of the Prime Minister's.

While accepting the three key principles, including competitive salaries and benchmarks, Opposition Members had suggested alternative formulas. The Workers' Party proposed to make Ministers' salaries a multiple of Members of Parliament's (MPs') allowances, to be benchmarked to the starting salary of the MX 9 (Superscale) grade in the Civil Service. In actual fact, the MX 9 (Superscale) pool is part of a select group of senior civil servants in senior leadership positions. They made up just 1.2% of our 76,000 civil servants then.

Importantly, the overall salaries derived by the Workers' Party proposal were at the same general levels as the Committee's recommended salary level. The Singapore People's Party also proposed salaries that were around the same level. In fact, the Singapore People's Party proposed a monthly salary that was 10% higher than what the Committee had recommended. In short, the proposals by the Workers' Party and the Singapore People's Party yielded salary levels that were not significantly different, either in principle or in quantum, from those proposed by the Committee and which Parliament endorsed.

The Committee also assessed that the current level of the MP monthly allowance was roughly correct and recommended maintaining the allowances of MPs, NCMPs and NMPs at about the same level as their monthly allowances then. Neither the Workers' Party nor the Singapore People's Party proposed cutting MPs' allowances, together with Ministerial salary cuts. The Government concurred with the feeling in the House and left MPs' allowances alone.

Madam, since 2011, the year-on-year benchmark movement has been moderate, moving up in two of the three years and down slightly in one year, giving an overall change of around 3% upward annually over the three years that the formula has been in operation. Because the changes in the benchmark have been moderate, we have not adjusted political salaries in these past three years. The 2014 MR4 benchmark should be $1.2 million, but we have kept the MR4 norm annual salary unchanged at $1.1 million.

Let me summarise the position, Mdm Chairperson.

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One, in January 2012, all parties in this House agreed to the key principles for setting political salaries as set out in the Committee's report.

Two, during the debate, Opposition parties in the House proposed salaries that were at the same general levels as recommended by the Committee.

Three, Parliament endorsed the current salary framework which meant an annual salary cut of 37% for an MR4 Minister.

Since then, the formula has remained stable and has worked well. The Committee recommended that the salary framework be reviewed every five years. Given that things have been stable, we believe the framework remains valid and we can continue to adjust salaries within this framework, should there be a change in overall salary levels in the coming years.

As Members have agreed, we must continue to keep wages in the Public Service realistic and strike the right balance between recognising the ethos of political service and providing a fair salary, to ensure a flow of able and committed leaders into Government to serve Singapore and Singaporeans well into the future.

Mdm Chairperson, I will now address Members' questions concerning hiring and promotion in the Public Service and what we are doing to improve the career prospects of all officers, in particular, non-graduates, as well as to support lower-wage officers.

I agree with Mr Inderjit Singh that we need to look at other factors and not just prior academic performance in hiring and promotion.

The Civil Service offers a diverse range of jobs. When recruiting officers, the Service considers several important aspects, beyond academic qualifications, such as character and motivation, commitment to public service, initiative and interpersonal skills, to assess suitability for a particular job.

Academic or professional qualifications are necessary for certain jobs, for example, in medicine, engineering, law or accountancy. For a candidate with no prior working experience, academic qualification can be one useful proxy to assess ability and suitability. But for a mid-career candidate, relevant work experience would be a better proxy. A candidate who is

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suitable will be offered a position commensurate with assessed abilities and experience.

After joining the Civil Service, an officer is assessed based on job performance and is developed and promoted based on performance and readiness to take on larger responsibilities. Officers will have training opportunities to acquire the necessary skills, competencies and knowledge, including academic or professional qualifications. For example, the People's Association partnered UniSIM to develop a Master of Community Leadership and Social Development to deepen their officers' expertise in community work.

In Statutory Boards, such as the People's Association and the Inland Revenue Authority of Singapore (IRAS), graduate and non-graduate officers are already appointed to the same scheme of service. Officers then progress along the same scheme according to their demonstrated performance and ability to take on larger responsibilities.

Mr Heng Chee How asked for an update on PSD's study announced last August, for a single career scheme for Management Executive Officers (MXO) and Management Support Officers (MSO). The study has been completed and I am happy to announce that we will extend the existing Management Executive Scheme to have a single scheme, with effect from August 2015.

Both degree holders and non-degree holders will be recruited on, and progress along, the extended Management Executive Scheme. All officers in the same grade will be assessed for performance and potential in the same way. Officers assessed to have the same performance and potential will have the same opportunities for advancement and career development, whether they are degree holders or not.

The extension of the scheme will be accompanied by a redesign of jobs and responsibilities so that the Civil Service can make full use of the abilities and potential of our officers. The Civil Service is aligned with SkillsFuture and we are committed to supporting our officers to acquire deeper skills relevant to their jobs.

Mr Ang Hin Kee asked for an update on upgrading our lower-wage officers. Madam, we remain committed to improving the jobs and skills of our lower wage civil servants, most of whom are Operations Support Officers in our schools. Last year, PSD partnered the Amalgamated Union of Public Employees and MOE to do a study on the work challenges of these officers.

We will provide our lower wage officers with more training opportunities. For example, Operations Support Officers can learn skills that are not just useful in their current job, but can also be applied in other jobs. The Civil Service has a Training Incentive Scheme to

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encourage and reward officers who upgrade themselves.

In support of the National Wages Council's recommendations, we had in the past three years given built-in wage increases of $60 to $70 per year to our Division IV officers. Taken together with our regular salary adjustments, our lower wage officers have received total salary adjustments of about $300 to $330 from 2012 to 2014. This amounts to about a 25% increase in the officers' monthly salaries and is over and above their annual increments.

Next month, approximately 2,200 lower wage civil servants will receive a salary increase of $60 to $80, to keep salaries market-competitive, as part of our regular review of salaries. From next month, their salary scales will also be lengthened so that officers who have reached the previous maximum of their scales can receive further increments as they uplift their skills.

The Public Service will continue to work closely with the unions and make salary adjustments where necessary, while providing our lower wage officers with relevant opportunities to upgrade their skills.

Mdm Chairperson, Mr Seng Han Thong called for a more effective delivery of public services and asked about engagement and maintaining integrity. Mdm Chairperson, the Public Service continues to review areas where we can serve Singaporeans more effectively. Where necessary, we will change the way we work to better meet the needs of Singaporeans. This includes agencies working in a more integrated way. I will cite three multi-agency initiatives. For single-agency initiatives, many of them have been covered by my colleagues under their respective Heads in the COS debate.

MSF's Social Service Offices bring help closer to our residents by working with VWOs and community partners to provide more coordinated social services. The new Municipal Services Office (MSO) ensures that municipal services are well coordinated across different agencies and delivered promptly and effectively. The Smart Nation Programme Office will partner various agencies to drive our whole-of-Government smart city applications for citizens.

I would like to thank Mr Seng for commending our officers for carrying out consultation, in particular, our officers involved in the Pioneer Generation Package. As mentioned by MOF during its Committee of Supply debate, our Pioneer Generation Ambassadors will continue their outreach programme and also reach out to Pioneers who need more specific help through house visits or engagements in smaller group settings.

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To support good quality policy development and effective implementation, we have been broadening our public engagement efforts, including through REACH's new citizen-centric platforms. Last year, REACH deployed 23 roving open-concept booths or "Listening Points" where Singaporeans can obtain information and provide feedback and suggestions on national policies and issues.

In addition, REACH uses the Internet and social media to reach out to Singaporeans. REACH received some 32,000 pieces of feedback through its various online channels in 2014. The eCitizen Ideas! crowdsourcing portal which was launched in April 2014 has received over 400 ideas in response to challenge statements posed by agencies. For example, some of the ideas to sustain Pulau Ubin's rustic charm are already being implemented.

My colleagues have also communicated more information on public engagement during the Committee of Supply debate on MCI which has just concluded.

Mr Seng also asked about anti-corruption measures. Our zero-tolerance approach against corruption is well-known and demonstrated through firm action. The number of corruption cases has remained at a stable and low level.

We have taken further steps to combat corruption in both the private and public sectors. In January this year, Prime Minister Lee announced that CPIB will increase its manpower by 20%. This is to better deal with an operating environment where corruption offences become more complex and trans-national. CPIB is also stepping up public education and outreach efforts.

A One-Stop Corruption Reporting Centre will be set up in the city centre for members of the public to make reports about corruption and learn more about the challenging journey of Singapore's fight against corruption, including CPIB's work. The Centre will be ready in about a year's time.

Although Singapore remains one of the most corruption-free countries, the fight against corruption goes on.

Mdm Chairperson, our Public Service is internationally recognised for its excellence, effectiveness and efficiency, with zero-tolerance for corruption and wrongdoing. I am confident that our public officers will continue to do their best and, in doing so, maintain public trust and confidence in the Public Service. I encourage our public officers and members of the public to continue to work together, with mutual respect and trust, to make Singapore a better home for all of us. And I thank Members for their support for our public

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servants as well.

Mdm Chair, catering to Singaporean voters overseas and ensuring that they can cast their vote as easily as possible is important for their democratic participation. It is also, after all, a civic duty that is mandatory in Singapore.

Many Singaporeans are deprived of the chance to cast their vote at general elections or by-elections, because travelling to overseas polling stations could be very much a hassle that is impractical.

I would like to ask what percentage of all eligible Singaporean voters do overseas voters make up and how many percent of eligible overseas voters actually cast their votes in the last general election and the subsequent two by-elections.

I would like to propose for the Elections Department to come up with reasonable means for one to cast one's vote privately, without having to travel long distances or to forfeit one's right to vote. Would the Elections Department consider introducing postal ballot?

As it stands, there are only 10 designated overseas polling stations for Singaporean voters – in New York, Washington DC, San Francisco, London, Shanghai, Beijing, Hong Kong, Tokyo, Canberra and Dubai. The overseas polling stations tend to be at our embassies or consulates in these cities. We certainly have many more embassies and consulates around the world than these 10.

There should be ballot boxes in every representative state of a large country, such as Australia, where there tend to be many Singaporeans. There is a sizeable population of Singaporeans living in Perth, Sydney and Melbourne, yet there are no polling stations there. Voters from Perth would have to travel over 3,000 kilometres to Canberra just to cast their votes. This is a feedback from some of the Singaporeans living there.

Separately, there is a need to have transparency in transporting the sealed boxes of uncounted votes back to Singapore by MFA officials. There should also be a need to have a third neutral person to accompany the sealed voting boxes back to Singapore. I would like to make a proposal to the Government to educate Singaporeans on the process involved when overseas votes are brought back to Singapore for counting and tallying during a General Election.

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Mdm Chair, the issue of improving access to overseas voting has been raised before at previous parliamentary sessions.

The selection of overseas polling stations takes into account several factors. First, there should be a significant number of Singaporeans living in that city and country. Second, the city must have Singapore Government managed facilities which enable the officials to exercise control to ensure that the voting process is carried out in a proper and orderly manner and the integrity of the process is safeguarded. Third, in order to ensure that we are able to optimise our limited resources, the city or country should not be so nearby that Singaporeans can travel back to Singapore to vote on polling day with relative ease.

Based on these considerations, the cities where we can site overseas polling stations are those where we have consulates or missions with sufficient mission staff to manage the overseas polls. At the last General and Presidential Elections in 2011, we had nine overseas polling stations where overseas Singaporeans could vote.

The list of overseas polling stations is reviewed regularly and the Elections Department has recently announced a new overseas polling station in Dubai to serve overseas Singaporeans in the Middle East region. Eligible overseas Singaporeans can register as an overseas elector or change their assigned overseas polling station online via the Elections Department website with SingPass authentication.

We need a balance here. We extend overseas voting by this system to many Singaporeans who are overseas and who want to vote. We also need Singaporeans themselves to take a step forward to exercise their right to vote by coming to the polling stations either in Singapore if they are close by, or to the ones which are closest to them. We have made registration for them much easier already.

In light of the demographic challenges facing Singapore, the National Population and Talent Division in 2012, after a year-long engagement and public feedback, put forward the Population White Paper which outlined the key considerations and roadmap to building a sustainable population. The vision was to build a sustainable population where Singaporeans are at the core of our nation, where we have the opportunities to pursue our aspirations and where we have a Singapore that we are proud to call our home.

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I would like to ask, how we are tracking towards building a sustainable population for Singapore. What progress has been made to achieve this vision?

The strategy to build a Singaporean Core is anchored on the family at the heart of that strategy and our society. The focus is to encourage marriage and parenthood, engage Overseas Singaporeans and to bring in suitable immigrants who can contribute to Singapore. Can Minister share on the progress of this strategy?

Are the measures to encourage and support Singaporeans to get married and to have children having impact? In 2014, we did see a 10% rise in marriages involving at least one citizen. According to the latest statistics, this is the highest number of marriages in a year since 1997. Another welcome news is that more couples are having babies, too. Citizen births increased from around 31,000 births in 2013 to about 33,000 last year in 2014. This pushes up the total fertility rate (TFR) from 1.19 in 2013 to 1.25 in 2014. What were the factors driving this increase?

With globalisation and the opportunities that it presents, there is an increasing number of Singaporeans living and working overseas. How are we engaging our Overseas Singaporeans? What has the impact of these connections been? There are more than 150,000 Singaporeans living abroad, and being able to draw on this pool will be important for Singapore.

At our current falling birth rates coupled with increasing life expectancies, we are an ageing population with a shrinking citizen population and workforce. At current birth rates and if we do not have immigration, our citizen population will shrink from 2025. What is our current trend on immigration and what is its impact on our population?

Madam, while the policies outlined provide the parameters for planning to support this vision, a sustainable population with a strong Singapore Core will depend on a collective effort and engagement of the Government, Singaporeans and the community that will determine our population and our Singapore Core.

Mdm Chair, the Population White Paper sets out a roadmap to steer Singapore away from the path to stagnation and decline, given our low birth rates and ageing population. It painted a vision of how our nation could continue to be a vibrant global city. I would like to ask how the Government is tracking towards its vision of a sustainable population with a strong Singaporean Core and its plans to strengthen our

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national identity and social cohesion.

I was heartened to hear that Singapore's total fertility rate had improved to 1.25 in 2014 and that there were more marriages. I would like to ask the Minister whether the positive trend can be sustained and whether we can attribute it to any Government measures implemented. What can we learn from the Scandinavian countries and France on their reversal of declining birth rates through strong pro-family and work-life balance policies implemented by their governments?

Finally, even as we work very hard to build a strong Singaporean Core, we must accept that our children, the product of our excellent education and industry system, will be ever more internationally mobile. There are plenty of opportunities in the region and around the world for the considerable talents and strong brand that Singaporeans bring. I would like to ask the Minister, how can we ensure that Singaporeans feel deeply rooted here and will always consider Singapore their home, no matter where they go? How can we help Singaporeans returning from overseas assignments, assimilate painlessly into Singapore society, especially in the areas of housing and their education for their children?

Mdm Chairman, much had been discussed in this house about maintaining a "Singaporean Core", during the debates on the Population White Paper. One of the points, we were told, is that if the Total Fertility Rate does not improve, we have to look to receiving new immigrants and integrating them, to maintain this core.

Let us not forget our own Singaporeans who are residing overseas. Some of them may have, indeed, made a very conscious decision to remain and work overseas. Others want to return, but face difficulties and barriers in doing so.

We should review the strict criteria to lift up barriers to allow all Singaporeans that have been away for more than 30 years, including self-political exiles and their families, to return home despite their different ideological positions. Their feelings for Singapore are intense and heartfelt, albeit ambivalent even after being so long away.

A few years ago, the remains of lawyer Francis Khoo were returned to Singapore upon his request.

As Singapore celebrates its 50 years' golden jubilee and moves to a new era of being a first-world country, our mindset must change to allow not only the norm Singaporeans but controversial political exiles and their families to return to their homeland if they so wish.

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This is also a way of bringing back talents to serve the country.

I must commend the Overseas Singaporeans Unit at the PMO for their excellent job in organising Singapore Day over the past few years, in New York, London, Shanghai and Melbourne. But we must go further, beyond just maintaining the connection Singaporeans have with their place of birth. We must proactively ensure that the barriers which prevent Singaporeans from re-settling back here must go.

I would like to ask the Prime Minister, what is the number of Singaporeans who have come home to settle permanently since 2011, the progress it has made so far in encouraging Singaporeans to come back and how active has the Overseas Singaporeans unit been in keeping track of overseas Singaporeans.

If there is one thing I would like to suggest that might cause overseas Singaporeans to reconsider returning, it would be a welcoming environment.

Ms Lee Li Lian (Punggol East): Today, in Singapore, four in 10 marriages involving Singaporeans are between a Singaporean and a non-Singaporean. Yet, despite this increasing trend, many Singaporeans who tend to be lower income face a huge challenge getting their spouses the appropriate pass to stay in Singapore for long term and live as a stable family unit.

Today, we know that there are over 11,000 LTVP holders, including LTVP Plus holders. However, today, we are unable to track the number of spouses who only get short-term visit passes which require them to move in and out of the country and do not allow them to work in Singapore.

I would like to ask the Minister why it is that we are unable to track this number today and if there is a way to work towards being able to do so. Many of these foreign spouses on social visit passes tend to be female. If they have children, the children often have to shuttle in and out of Singapore along with their mothers. Extension of the social visit pass also takes time and there is no guarantee that the foreign spouse will be granted that extension. Such conditions create a lot of stress on a family who cannot plan a stable life together long term, given the constant disruption and unknown outcomes.

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We know, today, with the cost of living, it is very hard for a family with children to manage on a single income. Many of these foreign spouses would like to work and help support their Singaporean spouse and family but they are not able to do so because they are on short-term visit passes.

In cases where the Singaporean spouse who is the sole breadwinner passes away or becomes critically ill, the foreign spouse has little ability to support the family without working or being able to stay here long term.

I understand the need for caution and that we do not want to encourage sham marriages in exchange for benefits. However, no Singaporean should be unduly penalised for his or her choice in a marriage partner based on social status or income level.

The current criteria for applications regardless of long- or short-term passes, PR or citizenship should be made more transparent. We should prioritise long-term stays for foreigners married to Singaporeans, especially when there are children involved. They are a group that is naturally integrated in the Singaporean Core and priority should be given to them when granting new citizenships.

Madam, we need to be able to distinguish foreigners who want to make a home here from those who want to use Singapore as a transit point. With that, I urge the Government to provide more information on this family unit and support their efforts to make Singapore a home.

My next cut. The Child Development Account is part of the Baby Bonus and is a savings account where parents' deposits are met dollar-for-dollar by the Government, up to a cap ranging from $6,000 to $18,000, depending on the birth order of the child. In 2013, parents were given 12 years to deposit up to the savings cap, when previously they only had six years.

Giving a longer time period to save up to the cap, while intended to be kind-hearted, still does not go to the heart of the problem – the lower-income households are very much less likely to have spare funds to deposit into their CDA. A child's education needs have to be managed from the very start to ensure that all children have the chance to access as many opportunities as possible, not just those from higher-income households.

The suggestion to remove the matching criteria was brought up twice in this House during COS since 2013. The reply then was that the objective of such schemes is to help parents defray some of the cost of raising a child while recognising that the primary

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responsibility for the care and development of the child rests with the parents.

I acknowledge and agree that the care and development of the child is the responsibility of the parents. However, a Parliamentary Question reply on 7 July 2014 showed that only 48% of the total number of CDAs in the birth cohort of 2006 to 2013 saved to the maximum co-savings cap.

To account for the lower income households with less disposable income available to divert into savings, Madam, I would like to recommend a system of ratio of dollar-for-dollar matching from the Government starting from a base of a monthly household income of $2,000. Every dollar deposited would attract a $3 match from the Government. The ratio of dollar-for-dollar would decrease as the household income rises and, eventually, normalise at the current rate when it hits $6,000.

We can follow the household incomes as set out on the ECDA childcare subsidy. This would give even greater incentive to lower income households to save for their children's future, encourage co-responsibility, give more targeted assistance to those in need and ensure a levelling of opportunities available to children from lower income households.

Mdm Chairman, as an open economy, social diversity will be a permanent feature here. An inclusive workforce with people from diverse cultural backgrounds and nationalities also enhance our competitiveness in the region. I believe that a majority, if not all Singaporeans and foreigners living in Singapore, appreciate the social harmony and diversity that Singapore has. Thus, together, we must guard against deliberate behaviour that may potentially disrupt the balance that we have painstakingly achieved, as well as in sensitive remarks in both the online and offline social space that may injure the feelings of the different communities residing in Singapore.

May I know what more does the Government intend to do to ensure Singapore's social cohesiveness is preserved with our increasing diversity? What more does the Government plan to do to build a resilient society that appreciates and embraces communal differences?

Madam, many foreigners here in Singapore might be living in a multi-religious and multicultural society for the first time in their life. Coming from a homogenous society that is culturally different from ours, these foreigners may not be fully aware of how their actions and speech may potentially unbalance the harmony that Singapore took so long to build. I would like to know whether the Government's outreach efforts that have been put in to promote integration are effective. Would the Government consider providing more support to strengthen our outreach by our grassroots organisations and NGOs, like the Migrant Workers' Centre?

Mdm Chairperson, I would like to thank Members for their questions.

Ms Jessica Tan and Ms Foo Mee Har have asked about our progress towards a sustainable population for Singapore. We saw positive signs in 2014, with more couples marrying and having children. Citizen births have risen to around 33,000 births, up from about 31,000 births in 2013, and the TFR has increased to 1.25 from 1.19 the year before. There were about 24,000 marriages involving at least one citizen in 2014, the highest since 1997. We are heartened by these encouraging developments.

We have maintained our calibrated approach for immigration. Last year, 20,348 Singaporean Citizenships (SCs) and 29,854 new Permanent Residencies (PRs) were granted. The size of our Permanent Resident population has stabilised and, in fact, fallen slightly in the last two years. Overall, our immigrants help to prevent our citizen population from shrinking.

We remain on track for slower and more sustainable population growth. Our total population grew last year, but the overall growth rate of 1.3% was the slowest in the last decade, in line with what was proposed in the Population White Paper. This is due to concrete measures taken to moderate foreign workforce growth. As we restructure our economy, we expect the tight labour market to continue. We recognise that this is a challenging period and have, as announced in the Budget, increased the support for businesses by expanding the Special Employment Credit, deferring some of the levy increases for S Pass and Work Permits planned for this year and supporting innovation and internationalisation.

Within our citizen population, the median age increased to 40.4 years and the proportion of those aged 65 and above rose to 12.4%. More of our older Singaporeans are remaining active and meaningfully engaged. And many of the measures in the Budget, including CPF adjustments and the Silver Support Scheme, are intended to put our older Singaporeans in a position to be better prepared for the future and to ensure a high quality of life even as more Singaporeans age.

In all, we remain committed to our goal of a sustainable population, to ensure that Singapore remains a good home for Singaporeans of all ages to live, work and play.

We will continue to grow and strengthen the Singaporean Core in the workforce. We strive to provide the right programmes and resources, so that all Singaporeans have access to fulfilling career opportunities.

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More Singaporeans, especially older workers and mothers, are re-joining and remaining in the workforce. The labour force participation rates for those aged 55 to 64 and for women have risen steadily over the past decade. Singaporeans and their employers can tap on schemes, such as WorkPro, to support back-to-work Singaporeans. In addition, childcare subsidies and leave schemes have helped working mothers to better achieve their family and career aspirations. Through SkillsFuture, we are enabling Singaporeans to develop to their full potential through lifelong learning and mastery of skills.

Overseas Singaporeans, too, are part of this vision for the Singaporean Core. And I thank Mrs Lina Chiam, Ms Jessica Tan and Ms Foo Mee Har for speaking so passionately about engaging Overseas Singaporeans.

Indeed, Singaporeans go abroad for various reasons, such as work and study. Through outreach efforts of the Overseas Singaporean Unit (OSU), we keep in touch with them, so that they maintain ties back home and remain committed to Singapore's shared future.

We coordinate efforts across Government agencies to facilitate those who wish to return. Contact Singapore facilitates career opportunities, while MOE helps with school admission and placement for children. The OSU runs programmes, such as Camp@Home for students who are back in Singapore for holidays, to familiarise them with life in Singapore, for a smoother re-integration when they return.

Employers are hiring returning Singaporeans because of their skillsets and global outlook. One example is Ms Rena Sim, an occupational therapy specialist who completed her degree in Australia last year. Despite having opportunities in Australia, Rena chose to return. She says, "My main takeaway from having lived abroad is to be appreciative of what Singapore has done for me and not forget my family who has been so supportive". Rena got in touch with Contact Singapore through career fairs and secured her current position as an Occupational Therapist with Thye Hua Kwan Therapy Services. Occupational therapy is growing in demand in Singapore and Rena looks forward to applying her expertise gained from her time in Australia to help fellow Singaporeans.

As for the individuals whom Mrs Lina Chiam referred to, these people have chosen to remain in self-imposed exile. Some of them are liable for outstanding offences which they are required to resolve with the authorities. They cannot be expected to be placed above the law. Others have outstanding security cases and would need to resolve their cases with our security agencies. For example, those who were involved or associated with the violent Communist Party of Malaya (CPM) would have to sever ties with the CPM, renounce violence

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and be interviewed by the security agencies. These conditions are not new or unreasonably onerous. Many of their former CPM compatriots had accepted them and gone on to resettle in Singapore with their families.

Even as we build up the Singaporean Core in our workforce, it is important that Singapore remains open to foreigners. Foreigners help to plug gaps that cannot be filled by Singaporeans, provide expertise and ideas to kick-start new sectors and transfer skills that enrich our local workforce and businesses. For example, research and development in Singapore has benefited from the experience and expertise from around the world and has resulted in several breakthroughs, such as more effective treatment of tuberculosis and underwater robotics. The result is a more flexible and competitive workforce which is responsive to the shifting global business environment.

On the marriage and parenthood front, we hope that the increases in both marriages and births in 2014 will mark the start of a positive trend, with even more marriages and births in Singapore's 50th year of Independence.

Singaporeans have given us positive and enthusiastic feedback on the SG50 Baby Jubilee Gift initiative and we hope this warm reception will mean that we will give out many more Jubilee Gifts this year. On this note, we would like to remind everyone that there is still some time left, although not very much, and it is not too late to have a SG50 Baby!

Supporting Singaporeans in their marriage and parenthood aspirations remains a key priority in our population policies. Over the past few years, we have enhanced our Marriage and Parenthood Package, and invested significantly in support measures like enhanced housing options and more affordable quality childcare.

Ms Lee Li Lian and Ms Kuik Shiao-Yin have suggested improving the support given to parents. There are several initiatives in this Budget to support families and children through their developmental years, amounting to an estimated $470 million in 2015. For instance, there are measures targeted at lowering education costs, including enhanced financial assistance schemes for students, waiver of examination fees, and top-ups for the Child Development, Edusave and Post-Secondary Education Accounts. The Foreign Domestic Worker concessionary levy has also been halved.

Ms Kuik suggested improvements to the childcare sector to provide equal opportunities for all children. To help give every child a good start, the Early Childhood Development Agency, or ECDA, is increasing pre-school places, enhancing subsidies and strengthening the pipeline of quality manpower. ECDA will be introducing the Partner Operator Scheme, or POP, to complement the Anchor Operator Scheme, AOP. Childcare operators on the scheme

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will have to commit to keeping fees affordable, developing their teachers and enhancing the quality of their centres. The Minister for Social and Family Development will provide more details in his speech.

Ms Kuik also suggested enhancing leave for fathers to encourage shared parental responsibility. We agree that fathers and mothers should play a more equal role in raising their children and have been strengthening support for fathers over the years through measures, such as paternity leave and shared parental leave, which we introduced in 2013. We will monitor if this should be enhanced and will continue to study ways to encourage fathers to play a more active role in child-raising and to strengthen work-life support for working parents, in partnership with employers. We are glad to see that more companies are putting in place flexible work arrangements. Progressive employers assess and value their employees based on the quality of their work, rather than "face-time". This benefits the employees and also gives companies a competitive advantage in talent retention and recruitment.

Singapore company, Home-Fix, is a good example. Home-Fix educates its middle management on making work-life initiatives more accessible to its employees. The company is reaping dividends, as employees who feel engaged and satisfied go the extra mile to provide excellent customer service. The company can also better retain and groom talent from within. Many companies in the retail sector expect their frontline staff to work six days a week and to avoid taking days off during peak business days – typically on weekends. Mr Alvin Tay, Branch-in-Charge at Home-Fix Marina Square, appreciates that his company has made the bold move to buck the industry norm. He has the option of a five-day work week, and two days off on weekends per month, which gives him more quality time with his wife and two-year-old son. Alvin has been with Home-Fix for 10 years. Other commendable examples include Citibank Singapore, IT and business technology firm Avanade Asia, and translation and copywriting firm Elite Translations Asia. These companies are from very different industries and vary in size. Yet, all of them exercise the same foresight in investing in programmes that take employees' work-life needs into account, to the mutual benefit of employees and the business.

We will continue to look at providing integrated support along the marriage and parenthood journey and encourage greater shared parental responsibility for both fathers and mothers to care for and bond with their children. These are key factors that have contributed to the higher TFR in the Nordic countries.

Ms Kuik suggested treating children equally, regardless of whether they are born to a single parent or a married couple. We understand that parenthood is a challenging journey and we have along the way buttressed the support for families. We value every Singaporean child and are committed to giving all Singaporean children a good start in life. Our M&P

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Package and the related initiatives announced in the Budget, support different objectives and different phases of a couple's life: from marriage, getting a first flat, conceiving and delivering a child and raising a child – whether it is cost involved in education or healthcare – to supporting women to continue working. So, it is a whole package with a slew of announcements, but each meeting a different social objective, rather than a single initiative that meets all objectives. So, by having a slew of initiatives, we hope that we are able to fulfil different needs from different perspectives.

Single parents who are widowed or divorced would have received the same benefits as married parents. For those single parents who have not ever been married, while incentives to encourage marriage would not be available to them, they are able to tap on benefits, such as the Medisave grant and MediShield coverage for newborns, child care and infant care subsidies, and childcare leave for parents. The Government has, over time, enhanced the benefits that these single parents can tap on for their child.

Stay-at-home mothers can enjoy most of the measures under the Marriage and Parenthood Package. All parents, regardless of work status, are supported with some child and infant care subsidies. Working mothers receive more subsidies as they may need to send their children to full-day childcare programmes, whereas non-working mothers have the option of sending their children for half-day childcare or kindergartens, both of which would have cost less. And for stay-at-home mothers, the SkillsFuture will benefit them directly, having not been able to benefit from employer-sponsored training.

I am glad to hear that Ms Lee Li Lian supports the CDA scheme being a co-savings scheme with the Government supporting parents who wish to save for their children. Ms Lee suggested further support for lower-income families. There is currently support for low income families through several Government schemes, such as ComCare assistance schemes, additional infant care and childcare subsidies and subsidies under the Kindergarten Fee Assistance Scheme.

Also, in response to Ms Kuik's suggestion earlier on, we try as much as possible with schemes, such as the childcare subsidies or infant care subsidies, to address the needs of those who have lower income and are, therefore, in need of greater financial support. Low-income families, for example, pay as little as $3 per month for childcare and $1 per month for kindergarten. So, in terms of equalising support for the child, I think some of these schemes do go a long way to try as much as possible to make up for a different starting point. I just take, for example, the basic universal childcare subsidy which is $300 for all mums, but if you are a low-income family, you will get up to probably $400, $450 more a month. And if you analyse, let us say, for five years of the child's preschool education, that would more than make up for any difference in the Child Development Account or Baby Bonus.

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And eligible first-timer lower-income couples who purchased BTO flats, for example, are subsidised heavily for housing. They may receive housing grants of up to $60,000. And those who purchase resale flats can receive housing grants of up to $80,000, comprising the CPF Housing Grant of up to $40,000 which is available to all first-timer applicants of resale flats, and the Additional CPF Housing Grant of up to $40,000 given to lower- and middle-income first-timers. So, there are schemes to address the financial needs of low-income couples.

The Baby Bonus Scheme is part of the overall Marriage and Parenthood Package to provide parents with broad-based support in their parenthood aspirations. It is designed to be in line with the principle that parents bear the primary responsibility for the care and development of their children, with support from the Government. So, we are in agreement with Ms Lee. With regard to Ms Lee's specific proposal about changing the ratio of support, that is a suggestion that we welcome and we will look carefully into the effectiveness of the scheme.

On foreign spouses, there are immigration facilities available to support the family and the foreign spouses to settle in and integrate. These include the Long-Term Visit Pass (LTVP) and Long-Term Visit Pass Plus (LTVP+) which enable the spouses to be employed and have access to some medical benefits and, over time, progress towards naturalisation as PRs and citizens.

As at end-December 2013, we have around 39,200 foreign spouses who had taken up PR and then citizenship under the Family Ties Scheme. This cumulative figure has since grown to about 78,900 by end-December 2014.

The Government recently introduced a series of measures to help Singaporean foreigner couples better plan for their future and to support such cross-cultural marriages. The Pre-Marriage LTVP Assessment (PMLA) introduced in January this year provides couples with greater clarity on their eligibility for LTVP before marriage. It is also now easier for foreign spouses who hold an LTVP or LTVP+ to seek employment. Prospective employers of foreign spouses with LTVP or LTVP+ only have to apply for a Letter of Consent (LOC). These foreign spouses will not be subjected to Work Permit restrictions and their employers are not required to pay the foreign workers' levy for them.

The Government also launched new marriage programmes to help Singaporean-foreigner couples better manage cross-cultural differences, equip the foreign spouse with basic conversational English and introduce the couples to useful community resources. Since

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the measures were introduced in January 2015, ICA has received 726 applications for PMLA in the first month and 93 couples have attended MSF's Marriage Preparation Programme or Marriage Support Programme. As the measures were only introduced very recently, we will continue to monitor the effect closely.

Mr Yeo Guat Kwang, Ms Jessica Tan and Ms Ellen Lee have asked about maintaining our strong and cohesive society. As Singaporeans, we are proud of our multicultural heritage. We worked hard over the years to strengthen the cohesion of our multicultural society. And we will need to apply constant effort to maintain this as our population becomes more diverse.

Immigrants are attracted to Singapore for the opportunities and the way of life here. To address Mr Muhamad Faisal Manap's question, Malay migrants have similar considerations in deciding whether to come to Singapore. We will continue to welcome new immigrants of all ethnicities, including Malays, who are willing and able to integrate well, share our values and contribute to our society. I am glad to note that Mr Faisal Manap is supportive of immigration and is making a suggestion for a plan to attract Malay migrants.

New immigrants help to enrich our multicultural society and bring new perspectives, ideas and solutions. However, as newcomers take time to adapt, frictions may arise. It is understandable that Singaporeans are concerned with the impact of these changes to our identity as a people. It is important that newcomers adapt to and respect our way of life. Those who choose to settle down here for the long term must share our values and be committed to our common future. At the same time, let us remain confident of our ability to strengthen and enrich our Singaporean identity, as we reach out to friends, neighbours, co-workers and even family members who have come from beyond our shores.

There are signs that we are making progress. I am heartened to observe many instances where people, Singaporeans and newcomers alike, treat one another with respect and consideration. There are many stories of friendships between Singaporeans and newcomers. We are also seeing more balanced responses to reports of undesirable behaviours by individuals, which tend to gain traction quickly on social media. As and when tensions arise, everyone must make the effort to keep a cool head and work together to resolve them.

We will continue to strengthen integration efforts by leveraging natural touch points, such as in schools and workplaces, and through ground-up and community-based efforts. Mr Yeo Guat Kwang has suggested grasssroots organisations, NGOs and so on. We welcome the participation of all such groups.

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We share Ms Kuik's passion about the use of Literature. The teaching of Literature and Social Studies are important in cultivating values, such as resilience and a commitment to social cohesion, as well as the skills in understanding and evaluating different perspectives. We agree with Ms Kuik's observation. Besides these subjects, there is also the Character and Citizenship Education (CCE) curriculum where, through Learning Journeys and Co-Curricular Activities, all students are taught to put the values into practice. We have encouraged our students to pursue learning in their interest areas. Minister Heng Swee Keat has emphasised in this House that learning should go beyond grades, to learning for mastery of skills as well as internalising important values. Our education system will continue to provide multiple pathways for students to pursue their interests and be all-rounded learners.

In the wider society, there is growing awareness of the importance of integration. We are encouraged by the enthusiasm of individuals, communities and organisations that want to play their part. We provide resources to support and synergise these efforts, including co-funding ground-up integration projects, through the Community Integration Fund. We look beyond one-off events. That is why in our selection of projects to co-fund, we pay more attention to those which encourage meaningful interactions and promote positive mindsets between Singaporeans and newcomers.

One example is the Breaking Boundaries @ SIM programme, in which Singaporean students lead newcomers on an experiential tour around Singapore. Along the way, they share about Singapore's social norms and local culture. Friendships begun this way are strengthened as the participants later go on to work together on other projects. Programmes, such as this, help participants to deepen and sustain their relationships with one another.

We are also always on the lookout for new and innovative approaches. Last year, we co-funded "Encounters 2014", a series of playback theatre performances involving Singaporeans, new immigrants and migrant workers. Audience members were invited to share their personal encounters, which the performers then enacted through improvisation. "Playing back" these stories help audiences to reflect on their own experiences and consider their own assumptions about people from different backgrounds. We are happy to work with the community to explore other fresh ideas that can bring more groups together.

The goal of our population policies is to build a better Singapore for our people. Singapore will be a good place to raise children, where we can enjoy quality family time and build strong families. Our society and economy will remain open, to provide ample opportunities for Singaporeans to fulfil their aspirations. In our cosmopolitan society, there will be harmonious relations between people of different backgrounds and we will build a cohesive nation united by shared values and goals.

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I read with interest the recent articles by Mr Sourav Roy in The Straits Times where, on behalf of foreigners living here, he expressed deep gratitude for Singapore, and said, "We want to be a part of you, not for what we can take from you but for what we can share with you". First and foremost, he wanted to share his love and respect for our "wonderful country" and its "beautiful people". What was encouraging was that a foreigner had put into words all the good he sees in Singapore and Singaporeans and expressed his desire to start his family here and contribute to this place. It takes someone, sometimes with a different perspective, to help us see who we are. What was even more heartening was the response from Singaporeans, who welcomed him and invited him into their lives. This, to me, is quintessentially Singaporean – to be generous of heart and to be able to see the person behind the differences.

Even simple gestures – taking the time to say "hello" or sharing a meal together – can open the door to deeper interactions and understanding. Let us make it a point this year to greet, meet and eat together and be involved.

Singapore has achieved much. Through our collective efforts, we are confident that we will remain a cohesive society and we can realise Singapore's promise as a vibrant global city and an endearing home for all of us.

Mdm Chair, whilst the overall consumer credit situation in Singapore is in good shape, we should be concerned about the fate of one group of borrowers who are already heavily indebted.

By 1 June this year, MAS has announced the imposition of a borrowing limit of one year's income for every individual's aggregated credit card and unsecured debts across banks. I applaud this measure for ensuring fiscal prudence in a pre-emptive way. However, we must ensure that the heavily-indebted borrowers, those who already chalked up debts larger than their annual income, are able to unwind their positions in an orderly manner. This group of borrowers typically borrow from one lender to pay another, constantly revolving their loans in order to keep afloat.

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In Minister Lawrence Wong's reply to me in Parliament last year, he estimated that this group comprised about 6,000 people, based on the data available to him at that time. However, from sources in the banking industry, I have heard of estimates of 50,000 or 60,000 or even higher. Furthermore, the level of indebtedness of many individuals extends well beyond the one-year income limit. Could the Minister please provide an update on the latest estimated numbers?

Madam, I have witnessed the heartbreaking consequences of credit failure and hardship suffered by individuals, families and society during the credit card crises in Hong Kong, Korea and Taiwan. The Government can play a big role to facilitate orderly deleveraging by both individuals and financial institutions. They can set rules for restructuring loans and ensure sufficient credit counselling capacity to help individuals work through their financial situation and find the path to recovery.

Given the potentially large population of borrowers that could be impacted, I would like to ask MAS how it will work with financial institutions to avoid a credit crisis and whether there is sufficient capacity in banks, as well as Credit Counselling Singapore, to deal with a potentially large volume of cases.

Would MAS consider a more gradual easing of legacy debt burdens by taking a phased approach, starting with those segments which are most severely indebted, for example, with debts greater than two years' income, before working through less indebted segments, over a more extended timeline? This will also allow the system to be fine-tuned along the way, as we learn lessons from implementation.

To help individuals unwind from their excessive debt burdens, I urge the Government to facilitate a debt restructuring programme on lower interest rates, compared, for example, to the 24% that borrowers typically pay on their credit card loans. With the lower interest rate, only then will individuals have a chance to systematically pay down their debts and banks recover their loans.

To prevent individuals from turning to moneylenders out of desperation, I would like to ask the Minister if regulations for the moneylending industry will be changed in tandem with implementation of the rule set by MAS, so as to ensure that the unsecured credit market functions in a coordinated way.

Madam, we must engineer a soft landing for the heavily-indebted borrowers. With the right level of support, resolve and determination, I am confident that many will be able to

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overcome their debt problems.

Madam, financial services employed over 130,000 Singaporeans as at June 2013, contributing about 12% of GDP. We know that some 70% of employees in the overall financial services sector are Singaporeans. But there exists a perception that there are not enough Singaporeans in the leadership tiers of the financial services sector.

The Government has been cognisant of the need to groom a Singaporean Core in financial services. In 2012, Deputy Prime Minister and Minister for Finance Mr Tharman spoke about how MAS was creating programmes to groom Singaporean talent in the financial services sector. The Managing Director of MAS, in 2013, also spoke of what the MAS is doing to, in his words, "groom a first-rate Singaporean talent base, while continuing to secure highly-skilled global professionals."

Madam, I appreciate that foreigners with experience and expertise contribute to the development of our finance industry. We must remain open to talent and we must give companies some degree of latitude to run their businesses successfully. The price of failing to do so would be disinvestment and job destruction.

However, we should ensure there is a level playing field for Singaporeans. I have heard that many Singaporeans who work in financial services perceive that foreign financial services institutions tend to hire foreigners into senior level positions even when seemingly equally-qualified Singaporeans are available.

This unease perhaps is due to a lack of data on the results of the Government's programmes to encourage Singaporean leadership in the sector. As the programmes I mentioned have been around for a few years, I would like to ask if the results of these programmes have been positive. If not, there should be further discussion about the underlying root causes and on what more can be done.

Mdm Chair, financial literacy can be defined as a set of skills and knowledge that allows an individual to make informed and effective decisions in managing their finances.

In today's world of easy access to credit, it is easy for someone to fall into a debt trap, as described by hon Member Ms Foo Mee Har. The Government is fully aware of these

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concerns and has launched MoneySENSE in 2003 with the objective of equipping all Singaporeans with the necessary capabilities to manage their finances.

It is encouraging to note that according to a 2005 survey by MoneySENSE, Singaporeans have a fairly healthy attitude towards basic money management, financial planning and investment matters and that the majority of Singaporeans do save, do monitor their spending and are, generally, responsible in the use of credit. Most Singaporeans also recognise the importance of financial planning and have done some basic level of financial planning.

Not so encouraging, however, from the same survey was that as much as half of the respondents indicated a lack of interest in financial education, with about a third of these citing that they did not view financial education as a priority.

The Malay/Muslim community has also recently done their own survey looking into debt issues within the community. Their findings bear some similarities in that, while the debt issue was not alarming, the group called Professionals, Managers, Executives and Technicians is found to be a risk group due to their access to credit. This is basically indicative of a group that is having a lower level of financial literacy.

I have, therefore, three questions for the Ministry.

Firstly, is there a more recent update on the state of financial literacy among Singaporeans?

Secondly, can the Ministry provide an update on their strategies to improve outreach to the segments that I have described that may be more at risk or has shown a lack of interest in financial literacy?

Thirdly, for non-profit organisations who are keen to contribute in the outreach efforts, are there any forms of assistance that are available for these organisations to tap into, and can the Ministry elaborate on what they are?

Mdm Chair, let me start by addressing Mr Inderjit Singh's questions about the Singapore dollar and the impact on inflation. I will start by giving the overall context of CPI inflation in Singapore. It has come down considerably in recent months, reflecting an easing of both external and domestic price pressures. The main driver has been the plunge in global oil price from an average of

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US$93 last year to US$49 so far this year.

Inflation in the countries we import from has also been largely benign. Reflecting these external developments, overall import prices in Singapore fell by 8.7% year-on-year in the fourth quarter of 2014, which was the steepest decline since mid-2009.

On the domestic front, while there are cost pressures stemming from a tight labour market, the pass-through to consumer prices has been generally moderate. Enhanced medical subsidies, including those under the Pioneer Generation Package, have also led to a one-off reduction in the prices of healthcare services.

These developments are expected to continue to exert downward pressure on inflation in the months ahead, although some pick-up in price increases could be expected in the second half of the year as oil prices recover to some extent.

Overall, the MAS Core Inflation is projected to be 0.5% to 1.5% for the whole of 2015, lower than the 1.8% recorded last year. The CPI All-Items inflation is expected to average minus 0.5% to 0.5% in 2015, compared to 1.0% in 2014.

So, it was against this backdrop of a more benign inflation outlook for 2015 that MAS reduced the pace of appreciation of the Singapore dollar NEER policy band in January. I want to clarify and emphasise that the Singapore dollar NEER policy band is not on a path of depreciation. It remains on a modest and gradual appreciation path which, MAS has assessed, would secure the gains already made in bringing down inflation.

As MAS manages the Singapore dollar exchange rate against the basket of currencies within its policy band, the gradual appreciation stance does not preclude short-term market fluctuations, particularly movements in bilateral exchange rates of the Singapore dollar against other currencies.

It is important not to confuse market movements in the Singapore dollar against the US dollar, for example, as indicative of MAS' policy stance. Nor does the Singapore dollar-US dollar exchange rate, or any bilateral exchange rate for that matter, have a greater impact on inflation than the broader Singapore dollar NEER movement.

Indeed, there are important trade-offs from any change in policy settings, as Mr Inderjit Singh has highlighted. That is why MAS has repeatedly emphasised that an excessive weakening of the domestic currency will only lead to higher inflation. So, I would like to assure Members that MAS will stay vigilant and will continue to closely monitor the impact of external and domestic price developments across a range of consumer goods and services

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in our economy.

Next, I turn to how we are developing Singapore as a key financial hub for the region and also creating opportunities for Singaporeans to have good and rewarding careers in financial services, a point which Ms Sylvia Lim made.

To achieve this, we must remain open to the best regional and global talent while, at the same time, do our utmost to build a strong Singaporean Core in the finance sector. So, it is about getting our balance right. I am very glad to hear just now Ms Lim herself saying that we must remain open to talent because, if we do not, there will be disinvestments and job destruction which will be detrimental to Singaporeans. How then can we go about strengthening the Singaporean Core and what have our efforts yielded?

Under the SkillsFuture initiative, MAS and the Institute of Banking and Finance (IBF) are working with the financial industry to chart the future skills needed and systematically equip our people with these skills.

First, we will provide learning pathways and training opportunities, so that Singaporean finance professionals at all levels can tap on the SkillsFuture measures to pursue mastery in their respective fields. We have already started this, as the hon Member highlighted, and, with SkillsFuture, this will give it further impetus, going forward.

Second, MAS has been engaging the top leadership of key financial institutions on the need to build a stronger Singaporean Core and to maintain robust HR practices that are merit-based and also to safeguard against discriminatory hiring. The response has been positive, with many proactively strengthening their Singaporean talent base and I will cite some examples.

DBS has launched four new programmes aimed at grooming Singaporean diploma and degree holders for careers in retail banking, SME banking and customer service. Barclays has introduced a new apprenticeship programme, where Polytechnic graduates are employed in entry level positions for business units, including operations, human resource and finance. Citibank and NUS recently collaborated to launch a Transaction Banking module in the Business School programme. So, these are just a few examples of things that have started.

Within MAS itself, we also have several initiatives to develop Singaporean finance professionals. For example, we provide subsidies to support professionals in acquiring deep expertise as well as to develop cross-functional capabilities. These are done through the Financial Training Scheme (FTS) and the IBF Standards Training Scheme (IBF-STS).

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We provide scholarships to Singaporeans to develop in specialist tracks like quantitative finance, risk management and information technology in finance. These are offered under the Financial Scholarship Programme (FSP). So far to date, 170 FSP scholarships have been awarded.

MAS works with financial institutions to develop programmes that also develop professionals with more cross-functional exposure within their financial institutions as well as to create more overseas exposure for these individuals. These programmes are aimed at preparing Singaporean professionals for possible future leadership positions.

In particular, MAS has been working with academic institutes and industry to create a new Asian Financial Leaders Programme (AFLP). The AFLP aims to develop leadership capabilities geared towards operating and managing in Asian markets. Participants will have opportunities to engage regional policymakers, key corporate leaders and fellow financial sector peers. The AFLP will be launched in the second half of this year.

Madam, remaining open to the best global talent while building a strong Singapore Core of Singaporean professionals and leaders in finance is crucial in ensuring our continued success as a financial centre.

I would also add that while there is this perception about foreigners in our financial sector, let us not downplay the many Singaporean talents we have who have succeeded on their own steam and who are already taking up leadership positions in the financial sector.

If you look across many of the banks in Singapore, Citibank, JP Morgan, Deutsche, UBS, Julius Baer, Barclays, the country heads are Singaporeans and it is also very encouraging to note that Singaporeans are leading banks overseas as well. Standard Chartered Indonesia is led by a Singaporean; JP Morgan's trade finance securitisation department in London is headed by a Singaporean. So, we have talents in Singapore in the financial sector and they have succeeded, they are doing well, we engage with them very closely and they acknowledge that our measures are having an impact within the sector and, progressively, we are confident that we can build up a good pipeline of Singaporean talent in the financial sector.

MAS takes this work very seriously and we will work with the industry to invest in Singaporeans who are committed to a career in the financial sector.

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Finally, Madam, let me touch on our household credit situation and the importance of financial planning. The overall debt situation in Singapore remains healthy. A vast majority of borrowers would not be affected by the aggregate cap on unsecured borrowing from banks that would come into effect in June 2015, as they had borrowed within prudent limits. However, an estimated 4% to 5% of borrowers may be above the 12-month borrowing limit.

MAS is getting from the Credit Bureau a full and more accurate estimate of the number of affected borrowers by the end of this month. I agree with Ms Foo that affected individuals will need help to adjust as well as more time. MAS has been working closely with key lending banks and Credit Counselling Singapore (CCS) to facilitate this transition. Let me outline some of the things that we are doing.

First, since last year, banks have been reaching out to borrowers who may be affected to update their income records so that they will not inadvertently lose access to credit as a result of outdated income information. I encourage borrowers to update their income records with their banks to avoid any disruption to their credit facilities.

Second, we do need realistic solutions for borrowers who have accumulated significant unsecured debts above their annual incomes, as suggested by Ms Foo. The Association of Banks in Singapore (ABS), the leading retail banks and CCS have, indeed, been working on a debt repayment solution for these borrowers. The ABS would be announcing the details of this scheme early next month.

Third, CCS has significantly ramped up resources to counsel and help indebted individuals who are affected by the new rule to manage their debt downwards in an orderly fashion. This requires some building up of capabilities and resources within Credit Counselling Singapore and they are doing so.

Fourth, MAS has granted banks the flexibility not to suspend credit for borrowers who already exceed the borrowing limit. These borrowers have up to June 2019 to make the transition. I should also clarify that the borrowing limit does not apply to loans for medical, education or business purposes.

Finally, MAS is, indeed, reviewing the implementation timeline for the borrowing limit on unsecured credit and it intends to make further adjustments once the full data on the number of affected borrowers is in. The details would be announced early next month.

Besides addressing the concerns of affected borrowers, we also have to do more work upstream, in terms of financial education and planning, which was something highlighted by

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Mr Mohd Ismail.

Financial education is a multi-pronged effort involving the Government, the industry and the community. It takes many parties to get this right. Within the public sector, for example, the CPF Board has been educating the public on its schemes for retirement and healthcare planning. In schools, all lower Secondary school students now learn some basic modules of money management and budgeting. We also have consumers and investors associations, like the Consumers Association of Singapore, the Security Investors Association of Singapore as well as many non-profit organisations and self-help groups, like CDAC, MENDAKI and SINDA.

MAS will continue to work closely with these different partners to set up our efforts in financial education and we are happy to work with other non-profit organisations, as suggested by the Member. We also have the programme called, MoneySENSE, where we provide financial education through diverse channels, customised to the needs of different segments of society. For example, to reach out to Singaporeans in the heartlands, MoneySENSE has organised roadshows at public libraries and community clubs. The response to these roadshows has been positive. Besides face-to-face engagement, MoneySENSE also puts up content on social media. This includes guides to help consumers manage their money, plan ahead and learn more about financial products. There are also consumer alerts to warn the public about investment scams and the pitfalls of dealing with unregulated entities.

Going forward, the Member asked about what are our outreach plans. MAS is, indeed, working with various stakeholders to implement a more comprehensive financial education roadmap for the next few years. We will soon start a campaign to educate the public about upcoming changes to the life insurance landscape. These include the setting up of an online web aggregator where you can easily compare life insurance products online and the introduction of lower cost direct purchase insurance products which consumers can buy directly from the insurers.

Other themes that we have lined up for the campaign include educating the public about the pitfalls of over borrowing, encouraging consumers to save and invest wisely and warning consumers about the risk of investing in unregulated investment schemes.

We will also work with partners to strengthen our outreach with specific segments, such as seniors and other vulnerable members of society. For the outreach with seniors and retirees, we think it is important so that their golden years can be spent without unnecessary financial stress. We will step up financial education programmes for social workers and counsellors. We think this is important, too, so that our social workers on the frontline, when they counsel and reach out to families in need, they themselves can be better equipped to

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support those who seek help. We will focus on our young, keeping in mind that these values of financial literacy are set early in life. MoneySENSE is in discussion with our partners to bring financial literacy talks to tertiary students as they prepare to start work.

MoneySENSE will also reach out to Singaporeans at key life stages where they need to make major decisions. For example, we are going to engage young couples about to settle down and start their families so that they can properly plan their wedding expenses and purchase a flat that they can afford. We will equip young adults who are about to join the workforce so that, as they start their work, they would also have basic financial skills and knowledge. Our overall aim is to ensure that important financial tips are delivered to Singaporeans in a targeted, timely and helpful manner.

Madam, financial education is a continuous journey that requires sustained effort and with continued support and active participation of our partners. More importantly, financial education is not just about knowledge. It is really about encouraging the right values and beliefs and, working together with our partners, we believe we can achieve a more secure financial future for ourselves and our families.

Mdm Chair, in November last year, the Prime Minister made a speech at the launch of the Smart Nation initiative, establishing the Smart Nation Programme Office (SNPO) under the auspices of the PMO. I would like to ask the Ministry what is the budget that has been allocated to this office. What are its terms of reference and how does it plan to shepherd Singapore to Smart Nation status in 10 years, which was the suggested timeline provided by the Prime Minister?

Secondly, I note the desire of SNPO is to develop a greater appreciation of technology, beginning in schools and through the education system, to teach coding and programming to students, for example. I would like to query whether these initiatives would be rolled out to all schools. I hope these initiatives would be inclusive in nature and involve students who are not technologically inclined as well, as unassociated passions and interests, such as calligraphy, as some Members of the House have alluded to previously from the Steve Jobs example, can go a long way to seed an initiative and to increase the prospect of greater breakthrough ideas.

Separately, will SNPO also highlight and drive the number of skills upgrading opportunities by offering or promoting technology-related courses through SkillsFuture, which older Singaporeans may seek to attend?

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Thirdly, many of the initiatives that were raised by the Prime Minister in the drive to a Smart Nation have already been invented, for example, the driverless cars by Google and other companies. There is a possibility that in copying the example of other countries, SNPO will be imitating projects making Singapore a follower and less of a leader. Is SNPO envisioned to drive the development of fresh new initiatives and what are the immediate and medium-term targets that have been set up by SNPO?

Finally, Mdm Chair, as much as technology is the centrepiece of SNPO, Singapore's small size also gives us a unique opportunity to address some of the shortcomings of technology, too.

Parents of young children, for example, are becoming concerned with children becoming heavily addicted to handheld devices and technology, having short attention spans, in addition to having little interest in social relationships. Can I enquire if SNPO plans to address such issues, the responses to which are likely to be well-received by many other cities and countries facing the same problem?

Mdm Chair, this is one of the few occasions I can agree substantially with Mr Pritam Singh. The advent of computers, the Internet, the World Wide Web, high resolution video, robotics, 3D printing, big data analytics and the Internet of Things have a profound implication on the way we live, work, play, study, communicate, socialise, even on politics.

These are not just new tools. These are platform technologies. They will transform the basis on which we build our economies and our societies. Because Singapore is so small and so open, we have no choice but to be an open, dynamic, competitive and innovative society that embraces this revolution. We cannot be luddite, rejecting technological advances. We have to embrace it. We have to be at the forefront of this change. SkillsFuture is, therefore, an urgent and critical pillar for us to prepare our people for the digital future and to ensure that our skills remain relevant.

Two hundred years ago, over 80% of the jobs in the United States were in the agriculture sector. Fast forward to today, it is less than 2%. It is not that the agricultural output has decreased. But technology transformed it. A lot more could be produced at a lower price for more people.

A similar transformation, I fear, is going to occur for jobs which used to be white-collar middle-class jobs because routine work can be automated and you cannot compete successfully to be cheaper, better, faster than a robot or a computer doing routine tasks.

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Similarly, in schools, yes, we are going to teach in all schools access to coding and computational thinking. However, this is not just about geeks and technology. You are right – artistic ability, calligraphy, creativity, expression – all these are equally important skills for a digital future. Similarly, we are not going to leave old Singaporeans behind. We need to make sure they have access to all the new tools and technology, we have to educate them and SkillsFuture will also be relevant to them.

Even this question of addiction – I see students in the galleries listening to our speeches – we do not want our students to be addicted to games. We want our students to create those games that other people become addicted to. That is where the value of creation is.

Mdm Chair, even as we upgrade the "software" aspects of a Smart Nation Programme, Singapore also needs to ensure that we remain at the cutting edge of the digital infrastructure and that we roll out projects that benefit all citizens. Members have heard the programmes and announcements by Minister Yaacob and, indeed, by the Ministers of all the other different Ministries. Smart Nation is a standalone project. You will see Smart Nation being rolled out in the budgets, programmes and projects of all the different Ministries. SNPO is just a small unit in PMO. Our job is to ensure consistency, coherence in policies to ensure that there is no wasteful duplication, to maximise synergies and to make sure that we work on a whole-of-Government basis. So, it is about alignment. It is not about duplication.

I would also emphasise the point that Mr Singh has said that many of the technologies have already been invented. We are not here merely to duplicate and replicate them. That is why we chose the concept of a Smart Nation, and not a Smart City. Yes, you can have a driverless car driving around in San Franciso. But we can be the first nation where because we are a single level of Government, because we can digitise literally every square metre of Singapore, because we can make every lamppost an active, smart, geo-tag pillar, we can do things on a scale and on a level which is not so easily duplicated elsewhere.

We will not be Silicon Valley, but we will be the ideal test site, a prototype site, to test prototypes, proof of concept. It is like what we did with water. We did not invent reverse osmosis but we upscaled it, we nationalised it. And, today, a Singaporean water company has opportunities all over the world. That is why we have chosen the concept of a Smart Nation, not merely a Smart City.

But at the end of the day, we want to create more opportunities for all Singaporeans, we need to prepare them for these gut-wrenching changes which are going to occur, not over 200 years, but within one lifetime; to prepare ourselves for multiple jobs requiring

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multiple intelligences.

We want to make sure Government services remain responsive and accessible to all Singaporeans and we want to strengthen community bonds. This is also an opportunity for us to build trust, strengthen a collective sense of ownership and facilitate co-creation of the future by all Singaporeans.