SPEECH BY ER DR LEE BEE WAH, MP FOR NEE SOON GRC, IN RESPONSE TO THE BUDGET, DURING PARLIAMENT SITTING ON 5 APRIL 2016
I rise in support of the Budget delivered by the Finance Minister. Every Budget is a balancing act, striking a balance between generosity and prudence. But this year’s budget has to balance another set of factors- helping Singaporean firms and families weather the economic storms ahead, while setting our long-term course for the right direction. This is definitely not an easy thing to do and I thank the Minister for largely accomplishing it.
Help businesses but they shouldn’t become reliant
First, let’s talk about firms. In the short term, companies, especially SMEs, will be facing quite a lot of pain. Our growth last year of 2.1% was the slowest since 2009, and economists expect growth for the next few years to remain stuck at around 2%.
Manufacturing actually declined by 5.2% last year, again the worst showing since the global financial crisis. At the same time, rental and wages remain high. Besides helping with wage credits and loans, is there more we can do to help our companies weather the storm? I urge the government to keep re-looking into the high rental cost issue. Many industrial buildings and shopping malls have been bought by REITs. Business owners tell me that whenever their lease is up for renewal, if they’ve made some money, then the rental will sure go up.
On the other hand, I have also seen many business owners who have not made any progress in reducing their reliance on foreign workers. Instead of relooking into their work processes, they ask their MPs to appeal to delay the time they have to send their foreign workers back. In fact, a resident told me: MP, do you know that foreign workers are like drugs? The moment you give it to us, it’s impossible for us to wean off them. If you take them away, it’s difficult for us to survive! I’m sure my fellow colleagues have met similar residents in your Meet-the-People’s Sessions, asking for more help.
I would like to urge our businesses to embrace the spirit of our pioneer entrepreneurs, and keep innovating even in economic downturns. One of our founding leaders Mr Lim Kim San was a perfect example of this.
After WW2, when Singapore’s economy was still ravaged by war, he came up with a machine to produce sago pearls cheaply and made his first million. He didn’t wait around for the government to give any research grants or PIC for machinery purchase!
Macroeconomically, reports suggest that our push to increase productivity by 2 to 3% is not on track. This will hurt our economic growth, and specifically the wages of locals. I suspect both government and businesses will have to work harder on this.
To sum up, we need to strike a balance between helping companies and preventing a passive and reliant attitude. There’s an old saying: “Give a man fish and you feed him for a day, teach him to fish and you feed him for a lifetime.” In the short term, Singaporean firms might rightly expect some fish from government to keep their workers fed.
But ultimately, the whole country will run out of fish if they don’t develop bigger, smarter and faster fishing ships to get better fishes from international waters. That is why I fully support the idea of automation and internationalisation. It is not going to be easy. But whichever company embrace this longer term plans will emerge stronger and survive better in this very competitive business climate.
Cut red tape further
I would also like to raise three specific points with regards to the economy– red tape, trade associations and retrenchment.
The first is red tape. I’m delighted to see the government provide a Business Grants portal so that companies can apply for grants easily. Beyond the portal, government can also look into harmonising the different types of grants and simplifying rules, so that companies don’t have to resort to consultants just to navigate the grants, and have their grants creamed off by these middle-men.
Over the last few months, I have met quite a few residents who came to my Meet-the-People’s Sessions. They are SME business owners. Why did they come to seek help? Because they were approached by or appointed some consultants, who told them there’s some money to be gotten from the government. In the end when their PIC applications were not successful, do you know what the consultants did? Ask them to go and see their MP.
In the past few years, many companies put up web sites, bought machineries, some of which are lying at a corner of their office and collect dust. How much more productive can it go? Hence, the transition from PIC grants to the Automation Support Package is the right way to go. But, I am sure, companies, especially SMEs will need a lot of help as automation is much more complicated. I hope Spring Singapore can play the role of facilitators or consultants, without creaming off their grants.
The idea of strengthening trade associations with grants and seconded government officers is also a timely one, as trade associations are the ones who knows the needs and challenges of their respective industries.
Civil servants, trade associations and businesses should have more trust in each other and have common vision of transforming our businesses, with more automation and bringing our businesses to the world stage.
Madam Speaker, Chinese please.
Retrench as few Singaporeans as possible
The third issue is retrenchment. We need to make sure companies try to retain as many Singaporeans as possible, including in high-income jobs. Don’t cut the locals from management jobs while retaining the low-income locals to fulfil the quotas.
Madam Speaker, Malay please. Kini, saya ingin ketengahkan isu pemberhentian kerja. Saya berterima kasih kepada Menteri kerana menangguhkan kenaikan levi pekerja asing, yang akan membantu perniagaan mengharungi keadaan ekonomi yang tidak menentu. Dengan penangguhan ini, kita harus memastikan rakyat Singapura tidak akan hilang pekerjaan, jangan biarkan rakyat kita dibuang kerja seperti apa yang berlaku baru-baru ini dan mungkin lebih ramai akan hilang pekerjaan. Saya ingin menggesa syarikat-syarikat, apabila melaksanakan pemberhentian kerja, dapat mengekalkan rakyat Singapura.
Saya juga ingin menggesa pemerintah memastikan syarikat memberikan keutamaan kepada rakyat Singapura dan tidak mengorbankan mereka untuk menyelamatkan pekerja asing. Ini termasuk mengurangkan mereka yang berpendapatan lebih tinggi dengan mereka yang berpendapatan rendah untuk memenuhi kuota.
Saya juga berharap pemerintah akan memberikan bantuan yang komprehensif kepada mereka yang dibuang kerja. Bantuan daripada latihan hingga mendapat pekerjaan.
Government cannot replace filial piety
The other major thrust of this Budget is families. I commend the government for not overlooking the plight of the needy in our midst, and of young couples who are starting families. The CDA First Step Grant, KidStart and Fresh Start Housing Scheme will greatly help needy families with young children, to ensure no child is left behind as our nation progresses.
I urge more people to complement this effort by volunteering their time and expertise, to befriend and encourage such families.
I would like to share the story of 3 residents whom I met at the coffeeshop. They spoke to me in Mandarin, so Madam Speaker, Chinese please.
Capping of tax reliefs for high-income mothers
Another change I have heard a lot about is the capping of tax reliefs, which will primarily affect high-income mothers with two or more children. One such mother told me that this will increase her tax burden by 20%.
She has three children and was considering a fourth, but with this change, she no longer feels the same incentive and support from the government to do so. She is already feeling stress from juggling her work, kids and parents, and is now even reconsidering quitting the workforce to focus on her family. I know this cap is expected to net $100 million a year in revenue, but I certainly hope it will not turn out to be “penny wise pound foolish” by driving high-income mothers away from the workforce, or reducing the number of children they add to our future workforce. The cap appears to contradict our government’s effort to encourage procreation. May I asked what has changed to prompt this change in policy?
Talking about procreation, based on the feedback from my residents who are young parents, I doubt these financial incentives will give you the desired outcome. Maybe of the young parents told me that they’re discouraged by the rising cost of childcare and milk powder. I asked them, under what circumstances will you have more children? They told me, give my children free education from childcare to university, and subsidise the milk powder.
Many do not want to commit resources, both time & money, to the next generation. So if there’s no change in the mindset, (if people don’t feel the need to) 传宗接代 or have more babies as survival for the country, I don’t think all these packages we are dishing out will give us the desired outcome.
In conclusion, everybody wants more help from Government, from retirees to young parents.
Our Minister for Finance has a very challenging balancing act to perform. He needs to do an admirable balance between generosity and prudence, between short-term support and long-term development. I would like to urge Singaporeans to innovate, think deeply and work together with government. With trust and unity, we can surely weather the storms ahead, and chart a new course towards broader and brighter horizons.
Madam, I beg to move. Thank you.