Speech by Er Dr. Lee Bee Wah, MP for Nee Soon GRC, at the Budget Debate 2019
Watch the speech here
Mr Deputy Speaker Sir,
I thank Minister Heng Swee Keat for engineering a budget which has to take in so many evolving situations. There are so many factors he has to address to keep our economy vibrant and society inclusive.
Out of these factors, one of the trickiest is the transformation of our economy. For the past few years and past few Budgets, we’ve been tackling it, but there are still many challenges ahead. This year, the companies especially SMEs are really feeling the pinch. I’ll reflect some of their opinions and suggestions.
First, the loudest feedback is on diesel tax.
Many said why there is no lead time, no grace period, no warning? The increase is with immediate effect. As a result, many service providers have lost money overnight. They have contracts signed with the old price and they are not allowed to claim for material price fluctuation. They are obviously very upset. Some of them even asked me, “Is it because government needs money badly?”. This tax increase might have a domino effect on other prices. For example, I understand ComfortDelgro increased its diesel price from $1.04 to $1.15 immediately after the announcement. This has eaten into the take home pay of taxi drivers. Comfort has acted within their rights. But since Comfort made over $400 million in profit last year, I feel they missed an opportunity to show some magnanimity. At least absorb part of the price hike. Taxi drivers already toil day and night, and they earn just enough to support their family. We should not be adding to their burden.
In the 2018 budget, Minister Heng mentioned that Carbon Tax is not meant as income for government.
He was ready to give back the Carbon Tax collection to businesses as grants for companies to implement measures to reduce carbon footprint. Will he do the same for this collection from diesel price hike? If the government cannot do this, then I would like to appeal to large corporations, not to transfer the full price hike to your workers and customers. This could set off a domino effect of rising prices across the economy.
Service Sector Workforce
Next, Service Sector – many in the service sector are already “crying”. They’re facing problems like higher rental, no local workers etc. With the tightening of S-pass quotas by one-third over two years, many businesses, especially the smaller ones feel that their operation will be greatly affected. They have invested a lot in training of their current workers and it would be a waste to send them back. Because local workers generally don’t want to work on evenings and weekends, businesses might even have to scale down operations.
May I have one proposal for our Minister to consider:
Let businesses keep their existing S-pass holders. The new reduced quota will only apply when they apply for new workers or they reduce the local workforce. In this way, the impact on the operations of our businesses, especially the smaller SMEs will be minimised and we will not lose foreign workers who have already been trained.
The quota will also impact service standards. As Lianhe Zaobao reported, in restaurants, people look forward to chatting with the waitress and hearing her off-menu recommendations. These cannot be replaced by an iPad.
One resident also wrote to me, saying that when she went shopping in Taiwan, the saleslady made recommendations and even took extra care when wrapping. It was the best service she had ever encountered in her life.
She said, if the foreign worker quota go down further, and Singaporeans will not do such jobs full-time, then the staff turnover rate will be high. Staff will not have time to learn how to provide proper service. Since Singapore is already more expensive to shop in, we need good service to draw locals and tourists to spend in Singapore. I hope Minister can consider my proposal of letting the businesses retain their current foreign workers.
Next, can government help to rebrand the service sector to make it more “sexy”, more appealing to our local workers, especially the younger ones? We used to have great shortage in local school teachers, nurses, security guards. Now, we have overcome it to a certain extent. I am sure our Government can do it one more time for our service sector.
Digitisation – SMEs
Many agree that we need to catch up on many fronts if we want to be a smart nation. One area is the topic of digitisation. The SMEs and government agencies are opening up their system for exchange of data. Admittedly the SMEs’ systems would never be as robust as those of the government agencies. I hope these agencies can develop a standard protocol for exchange of data, which will maintain data security while being manageable for the SMEs. For example, IRAS and MOM have established Application Programming Interface (API) platforms which do not require SMEs to test their servers separately.
These systems also should not impose exorbitant compliance costs for the SMEs. For example, the EMA exchanges consumption and household data with open electricity market providers. Singapore Power has been managing the data for electricity. It demanded that the companies’ servers for data transfer must be tested annually and this cost over $10,000 every year!
To enter the open electricity market, these companies already had to set up a new Accounting System which costs $100K with billing. Some of them thought of asking SP to do the billing, which will be more convenient for residents as SP still bills them for water. SP quoted $200,000, just for billing. I ask the EMA to keep a close eye on this, because if the providers can’t handle the costs and go bust, it will cause great inconvenience to citizens.
Enterprise Singapore should help with such compliance costs. However, Enterprise Singapore states that if it is government requirements, no help can be extended. Then how can SMEs survive and grow? The help to SMEs has to be more coordinated and focused.
In a similar vein, some practices by agencies are very unproductive.
This morning, my parliamentary colleague Mr Ang Wei Neng, has mentioned some.
For building contractors, agencies require long processes of applying for services diversion, power, water and so on, and require lots of manpower just to watch other people do work. I will share more details in the COS debate on MND.
On the re-employment of senior workers, I have received feedback that some workers were forced to leave the company upon reaching retirement age, even if they are still productive. So, will government consider tighter legislation for re-employment. Allow me to share one example.
I have a 62-year-old resident, after working for 24 years with an international airline company, was asked if he would like to continue working till 67. As he is still healthy, obviously, he said yes.
He was then asked if he is willing to take up extra duties from his younger colleagues. Again, he said yes.
Later on, the company told him, he has to take a 40% pay cut. The company cited the Tripartite Guidelines on the re-employment of older employee which stated that wages can be adjusted to the mid-point of the salary range of the position.
Of course, I understand that re-employment might not be at the same salary, but to suffer 40% pay cut with additional job scope, that is too much. That is exploitation.
I hope Government can relook this issue. This is not the first time I heard from my residents on such unfair treatment from their employers.
MGP, CPF top-ups, Bicentennial Bonus
I move on to measures that directly impact families. The Merdeka Package is very welcome especially the help on medical expenses. I hope Merdeka Generation Singaporeans will take advantage of the $4000 incentive to join CareShield Life.
It will give them and their family some peace of mind, that they will be taken care of if they unfortunately become severely disabled.
Just like when Medishield Life was launched, we should conduct CareShield Life consultations at all CCs too. This will help middle aged and senior Singaporeans figure out how much they have to pay for Careshield Life and encourage them to sign up.
I was also struck by the CPF top ups for Singaporeans aged between 50 and 64 who do not have sufficient CPF savings. Many of those who would benefit would be women who have been housewives for most of their lives.
This is a great way to help this group achieve retirement adequacy. It is also a way to show our appreciation to all of them for their sacrifices. I urge families to take the chance to top up more for your mums and wives. You will get a tax relief of up to $7000 for doing this.
But more importantly, it is to show her how much you appreciate her sacrifices.
On the Bicentennial Bonus – what is interesting about the bonus is that it favours the middle and lower income.
Although almost everyone gets something, the lower income gets more in the form of GST cash vouchers and Workfare Income Supplement top-ups. I think this reflects that our society is indeed doing its utmost to help those in need.
In Malay please.
Cukai diesel yang dikenakan terlalu mendadak menyebabkan banyak SMEs, ramai pemandu teksi dan pekerja hantaran tersentak.
Bolehkah pemerintah membantu mereka yang terjejas supaya mereka dapat menggunakan bantuan ini untuk membeli bahan bakar yang lebih mesra-alam. Bantuan seperti yang dilakukan untuk cukai karbon.
Saya juga ingin merayu kepada syarikat-syarikat yang lebih besar agar tidak mengambil kesempatan ini untuk memindahkan cukai ini kepada para pekerja dan para pelanggan. Ini boleh menyebakan kesan”domino” dan menjejas ekonomi negara.
In Chinese please. 这次预算案中，柴油税的增加立即见效。这让许多中小企业、德士司机、送货司机等等，成本顿时增加，十分伤脑筋。
最后，我想以一个故事来总结这次的财政预算案。我家隔壁，有个男孩，他的名字叫Ah Seng。他有一个非常疼爱他的阿公。阿公总是省吃俭用，衣服破了总是补了又补,把每一分钱，一分一分地储蓄起来。每三五年，阿公都会拿出一笔钱，给他心爱的Ah Seng。比方说，Ah Seng进大学的时候，阿公给他一笔钱。Ah Seng要出国参加Immersion Program的时候，阿公也给他一笔钱。Ah Seng要结婚、娶老婆的时候，阿公也给他一笔钱。Ah Seng和他的朋友要出来做小生意的时候，阿公也给他一笔钱。