I received an email from Hri last night -- he mentioned that he had been trying to respond to my last post the past couple of days, but for some reason had not been able to post the comment. He then asked for my help to publish it.
Given the length of his response, and also the attention that our exchange seems to have garnered, we decided that it would be appropriate to publish his response as a standalone blog post. I've not really had time to digest it fully, but will aim to respond over the weekend -- since this is my blog, it's my chance to have the last word! :)
Hri's response is reproduced below in full, without edits.
Kum Hong,
We agree on a number of things. You have met my “extreme” example of an able-bodied person who does not want to work (I have met some, by the way) with another “extreme” - “the single mother supporting two children and an elderly mother, who has to go home after work to take care of her children and mother”. We both agree that the latter is more deserving of help.
But where we disagree is this: you feel that no help exists currently, and the children of the single mother will be trapped in the poverty cycle. The truth is that she will be helped, by both the Government as well as private parties. Let me give you some concrete examples. One of things we try our best to ensure is that no child is deprived of a good education, or even a meal in school, because of the lack of funds. So we help poor families with a combination of Government subsidies, COMCARE support, The School Pocket Money Fund and other sources. In Bishan Toa-Payoh GRC, we raised over $3 million last year from private donors to fund community scholarships for children of poor families for the next 10 years. We even visit the homes of those who do not enroll their children in kindergarten (although enrolment is not compulsory) to make sure that this not because of the lack of funds; and if it is, we help them with the fees. The number of children who do not go to kindergarten has now fallen to 1% of their cohort - most of these children are home-schooled.
So, it is easy to berate the current system as “punish(ing) the children for the sins of their parents”. But that is simplistic and inaccurate.
I prefer our current system which directs help to those who need it, rather than one which purports to give universal and unconditional aid. It actually means much more work for the Government, as it involves examining each case and determining the most effective form of help to give. But I think that is a worthwhile exercise as different families have different challenges and circumstances. What is wrong is for us to simply give public money to everyone who holds his hand out, without proper scrutiny and assurance that it will be effective and reaches the right people. Many taxpayers will object to using public money to support people who can help themselves. Their views are also relevant.
I am not suggesting that we have a perfect system. We do not. Where we can, and should never stop trying to, improve is to develop a system which ensures that every Singaporean who needs help is not missed. That is a real challenge. The only way to meet it is to involve everyone, from the Government, grassroots organizations, VWOs and the immediate community. Every Singaporean should feel that he has a part to play in looking out for those less fortunate than him. I think that is how it should be.
There will also be challenging cases – like your example of an able-bodied father who refuses to work, to the detriment of his children. I know of a real life example in my constituency. The way we helped was to find work for his wife, and to calibrate our aid so that the children have their needs met and are able to continue their education. We did not “turn our heads away”.
So I think we can agree on one more thing – real life does not lend itself to simple solutions like the one you have posed. But I am happy that this debate has gained interest, because it shows that Singaporeans feel strongly about this issue.
Showing posts with label Budget. Show all posts
Showing posts with label Budget. Show all posts
Friday, 18 March 2011
Sunday, 13 March 2011
Response to questions from Hri Kumar
It seems that MP Hri Kumar posted a comment in response to my piece "Room for fresh ideas on income gap". I missed it earlier but was just told about it.
Here is his comment in full:
I guess Hri and I must have very starting points and different philosophies on how (and to what extent) to help those less fortunate than us. Prof Kishore Mahbubani has suggested that the Government has, through its own surveys, ascertained that it costs S$1700 pre month for a 4-person household to maintain a "reasonable standard of living" -- as defined by the Government itself. The question then is whether we, as a society, have a duty to ensure that everyone has that reasonable standard of living (and corresponding standards for households with different configurations), and if so how.
I will take each of Hri's questions in turn:
How does this idea work? If an able-bodied person decides that he does not want to work, do we all have to ensure that he has a "minimal standard of living"?
In an earlier piece "Beefing Up Workfare" (published in TODAY on 24 Jan 2011), I had advocated using Workfare (but essentially pumped up on steroids) as the basic mechanism to get working families up to $1700 per month. So I do not subscribe to the idea of giving an able-bodied person, who deliberately chooses not to work, $1700 per month.
But as we will see below, this question oversimplifies the difficulties of real life.
If he is earning a living, but refuses to upgrade himself, do we pay him the difference between what he earns and the "minimum" sum he needs?
What does "refusal" mean? Perhaps we need to define that. I can anticipate the theoretical construct of an able-bodied person who is the sole breadwinner who works and earns a living (short of $1700), who can find the time to go for upgrading but deliberately chooses not to, because he/she prefers to sit in a coffeeshop drinking beer and smoking with friends.
But again, that may be an extreme. What about the single mother supporting two children and an elderly mother, who has to go home after work to take care of her children and mother? Does she have time to upgrade? If she declines to go for upgrading for this reason, is that "refusing to upgrade"?
What if the person works two jobs, both of which still come up to less than $1700, and going for upgrading might mean losing this precious second job? What if the person works just one job, but the job is not a fixed 9-5 job (as most jobs are wont to be nowadays), and the employer is not sympathetic and does not encourage the person to go for upgrading courses outside of working hours?
Do we penalise these workers as well, because of the possible existence of the theoretical construct?
In the Budget speeches, during the National Day Parade and at the National Day Rally, we frequently see celebrations of those workers who have managed to upgrade themselves and get better jobs. Kudos to them. But it would be a mistake to conclude from their shining examples, that all of the others who have not had those successes, had deliberately chosen not to take that path of upgrading.
Where is the money from the endowment fund going to come from - all of us I presume?
Yes, from all of us. If I were Carlos Slim, then I would fund all of this by myself. But if we, as a country, purport to subscribe to the principles of the Universal Declaration, then we have to fulfill those obligations applicable to us as a country.
In a Straits Times article "Thumbs-up for 'many helping hands'" (March 9, 2011), social welfare policy expert Prof Lester M. Salamon noted that "countries around the world have learnt that the problems of poverty, maintaining health, improving the environment, even fostering culture, cannot be handled by private philanthropy alone. 'They require as well the active involvement of government and the resources that government alone can command.'"
He went on: "No country that I am aware of has made the many helping hands philosophy work well yet without the government taking a significant leadership role. Perhaps Singapore will be the first one to do it. But since we don't have much data on non-profits here, we won't know whether it is working or not."
So yes, I think the money has to come from all of us, and I do not see an issue with that.
How much will such a fund require as a start and how much do we need to replenish it annually? What programs or other expenditure are we dropping to fund it? Unless these questions (and many others) are answered, I am afraid you have wasted a Saturday."
I'm not in a position to answer these questions -- the piece is meant (or rather hoped) to start a conversation, a debate, ideally a process. But the answers to these questions can be developed along the way.
I also don't understand why it is necessary to have all (or even most of) the answers in place before something can be considered; after all, even the Government conducts public consultations on proposed policies, presumably because the Government doesn't already have all the answers (otherwise it would be a wayang, would it not?). When MPs make speeches and propose policies, they also do not purport to offer complete solutions with all questions before making these suggestions.
So no, I don't feel like I had wasted that Saturday.
Since Hri has posed some questions, I have some of my own.
I agree that an able-bodied person may deliberately choose not to work, and we can then validly decide not to support him/her -- people have the right to choose, but they should also be prepared to live with the consequences of their choices.
But what about the others who are also impacted by those choices, but have no influence over it? If the able-bodied father of two children deliberately chooses not to work, and the mother is for some reason unable to work, then do we simply turn our heads away and ignore the children's and the mother's suffering? If the mother is able to work, but is not able to make enough to meet that $1700 per month standard, then do we nevertheless punish her and her children for the father's choices?
Do we ignore our duty to give the next generation the chance to succeed, and thereby punish them to a vicious cycle of poverty? Do we punish the children for the sins of their parents? Because punishment is exactly what it would be, if we have the power to help but decide not to -- because the father made the wrong decision. For all of the Government's rhetoric on personal responsibility and self-sufficiency, we hardly hear anything said about ensuring that the parents' sins are not visited on the children.
Yes, simple questions have clear, easy answers. But real life usually does not lend itself to simple questions like the ones posed to me above.
Here is his comment in full:
Kum Hong,
How does this idea work? If an able-bodied person decides that he does not want to work, do we all have to ensure that he has a "minimal standard of living"?
If he is earning a living, but refuses to upgrade himself, do we pay him the difference between what he earns and the "minimum" sum he needs? Where is the money from the endowment fund going to come from - all of us I presume?
How much will such a fund require as a start and how much do we need to replenish it annually? What programs or other expenditure are we dropping to fund it? Unless these questions (and many others) are answered, I am afraid you have wasted a Saturday."
I guess Hri and I must have very starting points and different philosophies on how (and to what extent) to help those less fortunate than us. Prof Kishore Mahbubani has suggested that the Government has, through its own surveys, ascertained that it costs S$1700 pre month for a 4-person household to maintain a "reasonable standard of living" -- as defined by the Government itself. The question then is whether we, as a society, have a duty to ensure that everyone has that reasonable standard of living (and corresponding standards for households with different configurations), and if so how.
I will take each of Hri's questions in turn:
How does this idea work? If an able-bodied person decides that he does not want to work, do we all have to ensure that he has a "minimal standard of living"?
In an earlier piece "Beefing Up Workfare" (published in TODAY on 24 Jan 2011), I had advocated using Workfare (but essentially pumped up on steroids) as the basic mechanism to get working families up to $1700 per month. So I do not subscribe to the idea of giving an able-bodied person, who deliberately chooses not to work, $1700 per month.
But as we will see below, this question oversimplifies the difficulties of real life.
If he is earning a living, but refuses to upgrade himself, do we pay him the difference between what he earns and the "minimum" sum he needs?
What does "refusal" mean? Perhaps we need to define that. I can anticipate the theoretical construct of an able-bodied person who is the sole breadwinner who works and earns a living (short of $1700), who can find the time to go for upgrading but deliberately chooses not to, because he/she prefers to sit in a coffeeshop drinking beer and smoking with friends.
But again, that may be an extreme. What about the single mother supporting two children and an elderly mother, who has to go home after work to take care of her children and mother? Does she have time to upgrade? If she declines to go for upgrading for this reason, is that "refusing to upgrade"?
What if the person works two jobs, both of which still come up to less than $1700, and going for upgrading might mean losing this precious second job? What if the person works just one job, but the job is not a fixed 9-5 job (as most jobs are wont to be nowadays), and the employer is not sympathetic and does not encourage the person to go for upgrading courses outside of working hours?
Do we penalise these workers as well, because of the possible existence of the theoretical construct?
In the Budget speeches, during the National Day Parade and at the National Day Rally, we frequently see celebrations of those workers who have managed to upgrade themselves and get better jobs. Kudos to them. But it would be a mistake to conclude from their shining examples, that all of the others who have not had those successes, had deliberately chosen not to take that path of upgrading.
Where is the money from the endowment fund going to come from - all of us I presume?
Yes, from all of us. If I were Carlos Slim, then I would fund all of this by myself. But if we, as a country, purport to subscribe to the principles of the Universal Declaration, then we have to fulfill those obligations applicable to us as a country.
In a Straits Times article "Thumbs-up for 'many helping hands'" (March 9, 2011), social welfare policy expert Prof Lester M. Salamon noted that "countries around the world have learnt that the problems of poverty, maintaining health, improving the environment, even fostering culture, cannot be handled by private philanthropy alone. 'They require as well the active involvement of government and the resources that government alone can command.'"
He went on: "No country that I am aware of has made the many helping hands philosophy work well yet without the government taking a significant leadership role. Perhaps Singapore will be the first one to do it. But since we don't have much data on non-profits here, we won't know whether it is working or not."
So yes, I think the money has to come from all of us, and I do not see an issue with that.
How much will such a fund require as a start and how much do we need to replenish it annually? What programs or other expenditure are we dropping to fund it? Unless these questions (and many others) are answered, I am afraid you have wasted a Saturday."
I'm not in a position to answer these questions -- the piece is meant (or rather hoped) to start a conversation, a debate, ideally a process. But the answers to these questions can be developed along the way.
I also don't understand why it is necessary to have all (or even most of) the answers in place before something can be considered; after all, even the Government conducts public consultations on proposed policies, presumably because the Government doesn't already have all the answers (otherwise it would be a wayang, would it not?). When MPs make speeches and propose policies, they also do not purport to offer complete solutions with all questions before making these suggestions.
So no, I don't feel like I had wasted that Saturday.
Since Hri has posed some questions, I have some of my own.
I agree that an able-bodied person may deliberately choose not to work, and we can then validly decide not to support him/her -- people have the right to choose, but they should also be prepared to live with the consequences of their choices.
But what about the others who are also impacted by those choices, but have no influence over it? If the able-bodied father of two children deliberately chooses not to work, and the mother is for some reason unable to work, then do we simply turn our heads away and ignore the children's and the mother's suffering? If the mother is able to work, but is not able to make enough to meet that $1700 per month standard, then do we nevertheless punish her and her children for the father's choices?
Do we ignore our duty to give the next generation the chance to succeed, and thereby punish them to a vicious cycle of poverty? Do we punish the children for the sins of their parents? Because punishment is exactly what it would be, if we have the power to help but decide not to -- because the father made the wrong decision. For all of the Government's rhetoric on personal responsibility and self-sufficiency, we hardly hear anything said about ensuring that the parents' sins are not visited on the children.
Yes, simple questions have clear, easy answers. But real life usually does not lend itself to simple questions like the ones posed to me above.
Monday, 28 February 2011
Room for fresh ideas on income gap
I wrote this over Saturday morning. The ideas in this piece had been percolating in my head over the past week, and they all came together and gushed out over a few hours. First published in today's TODAY.
Room for fresh ideas on income gap
Keep our economic model, but set up endowment to fund measures to ensure a minimal standard of living
05:55 AM Feb 28, 2011
As I thought about last week's Budget statement, a quote by Albert Einstein kept playing in my head. The pre-eminent genius of the 20th Century once said: "The definition of insanity is doing the same thing over and over again and expecting different results."
I am of course not suggesting in any way that the Government is mad, but what struck me most about the Budget - which Parliament will debate today - was that it was pretty much more of the same, albeit "upsized" for the anticipated elections: More ad hoc special transfer payments to help the low-income, more tax incentives to increase productivity, more funding for training and research and development, so on and so forth.
Finance Minister Tharman Shanmugaratnam said that Singapore's approach to helping the low-income must "remain centred on opportunities, not entitlements".
Many Singaporeans would agree with this, and they would disagree with the need to change a winning formula when the past policies have worked.
But I would hazard that most of those stuck at the wrong end of the widening income gap would disagree about the past policies having worked. Based on Department of Statistics figures, the Gini coefficient increased from 0.442 in 2000 to 0.472 last year, or from 0.430 to 0.452 if government special transfers are taken into account. So it is understandable for the low-income to question if more of the same would really address the issue.
At a forum at the National University of Singapore (NUS) last Tuesday, economist and NUS assistant professor Chia Ngee Choon noted that the Government's targeted 30-per-cent increase in productivity over the next 10 years would probably be achieved only by the middle and upper class, and asked: "Does this tide of economic growth raise all boats? It may raise only those in the middle income and above." In other words, the opportunities may be there, but they will fall largely to the middle- and high-income.
If the strategies used in the past have not successfully addressed one of the most critical socio-economic issues facing Singapore, why then would more and more of the same lead to a different outcome this time?
I am not advocating the wholesale abandonment of our existing economic model. But surely it is time for a fresh think about how to address the widening income gap.
For starters, the way we characterise and think about a stronger social safety net has to change. I am not calling for a Nordic-style cradle-to-grave social welfare system, or for the Government to use generous benefits backed by punitive taxes to equalise incomes across society.
But we have the room and resources for institutionalised social welfare measures to ensure a minimal standard of living reasonably commensurate with our overall developmental status as a society.
Anything beyond that minimal level should not be based on entitlement, but must instead result from the opportunities that the Finance Minister talked about, which we have to work hard to keep open to all. Entitlements and opportunities do not have to be mutually exclusive.
Some will argue that this would represent a dangerous first step down a slippery slope of ever-shriller calls for increased benefits. But this argument implies a willingness to disregard the suffering of our less-fortunate brethren, simply because of a theoretical risk that our Government cannot resist public pressure.
We can also mitigate any such "slippery slope" risk by funding such measures through a substantially-funded endowment fund, and topping up the fund only when resources are available - much like what is being done with the ElderCare and Comcare funds, as well as the National Research Fund.
The Government had, in its National Report for the United Nations' Universal Periodic Review process submitted recently, affirmed that "Singapore fully subscribes to the principles enshrined in the Universal Declaration of Human Rights (UDHR)".
The UDHR provides for everyone to have the rights to social security and an adequate standard of living. But the latest Budget measures fall short of those commitments.
Government surveys have found that a four-person household needs about S$1,700 per month to cover basic costs of living, according to Professor Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy. Yet statistics show many low-income households in Singapore fall below this threshold, and there were no Budget measures to specifically rectify this.
Ad hoc transfers like the one-off "Grow and Share" package in this year's Budget fall short of what our commitment to the UDHR requires, depending as they do on the existence of surpluses and the discretion and generosity of the government of the day.
In his New Year message at the start of this year, Prime Minister Lee Hsien Loong identified the widening income gap as a key concern to tackle. The lack of fresh ideas in the Budget statement was therefore disappointing. Hopefully this will change after the Budget debate that starts today.
Siew Kum Hong is a corporate counsel and the vice-president of MARUAH (Working Group for an ASEAN Human Rights Mechanism, Singapore), a human rights NGO and gazetted political association.
Room for fresh ideas on income gap
Keep our economic model, but set up endowment to fund measures to ensure a minimal standard of living
05:55 AM Feb 28, 2011
As I thought about last week's Budget statement, a quote by Albert Einstein kept playing in my head. The pre-eminent genius of the 20th Century once said: "The definition of insanity is doing the same thing over and over again and expecting different results."
I am of course not suggesting in any way that the Government is mad, but what struck me most about the Budget - which Parliament will debate today - was that it was pretty much more of the same, albeit "upsized" for the anticipated elections: More ad hoc special transfer payments to help the low-income, more tax incentives to increase productivity, more funding for training and research and development, so on and so forth.
Finance Minister Tharman Shanmugaratnam said that Singapore's approach to helping the low-income must "remain centred on opportunities, not entitlements".
Many Singaporeans would agree with this, and they would disagree with the need to change a winning formula when the past policies have worked.
But I would hazard that most of those stuck at the wrong end of the widening income gap would disagree about the past policies having worked. Based on Department of Statistics figures, the Gini coefficient increased from 0.442 in 2000 to 0.472 last year, or from 0.430 to 0.452 if government special transfers are taken into account. So it is understandable for the low-income to question if more of the same would really address the issue.
At a forum at the National University of Singapore (NUS) last Tuesday, economist and NUS assistant professor Chia Ngee Choon noted that the Government's targeted 30-per-cent increase in productivity over the next 10 years would probably be achieved only by the middle and upper class, and asked: "Does this tide of economic growth raise all boats? It may raise only those in the middle income and above." In other words, the opportunities may be there, but they will fall largely to the middle- and high-income.
If the strategies used in the past have not successfully addressed one of the most critical socio-economic issues facing Singapore, why then would more and more of the same lead to a different outcome this time?
I am not advocating the wholesale abandonment of our existing economic model. But surely it is time for a fresh think about how to address the widening income gap.
For starters, the way we characterise and think about a stronger social safety net has to change. I am not calling for a Nordic-style cradle-to-grave social welfare system, or for the Government to use generous benefits backed by punitive taxes to equalise incomes across society.
But we have the room and resources for institutionalised social welfare measures to ensure a minimal standard of living reasonably commensurate with our overall developmental status as a society.
Anything beyond that minimal level should not be based on entitlement, but must instead result from the opportunities that the Finance Minister talked about, which we have to work hard to keep open to all. Entitlements and opportunities do not have to be mutually exclusive.
Some will argue that this would represent a dangerous first step down a slippery slope of ever-shriller calls for increased benefits. But this argument implies a willingness to disregard the suffering of our less-fortunate brethren, simply because of a theoretical risk that our Government cannot resist public pressure.
We can also mitigate any such "slippery slope" risk by funding such measures through a substantially-funded endowment fund, and topping up the fund only when resources are available - much like what is being done with the ElderCare and Comcare funds, as well as the National Research Fund.
The Government had, in its National Report for the United Nations' Universal Periodic Review process submitted recently, affirmed that "Singapore fully subscribes to the principles enshrined in the Universal Declaration of Human Rights (UDHR)".
The UDHR provides for everyone to have the rights to social security and an adequate standard of living. But the latest Budget measures fall short of those commitments.
Government surveys have found that a four-person household needs about S$1,700 per month to cover basic costs of living, according to Professor Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy. Yet statistics show many low-income households in Singapore fall below this threshold, and there were no Budget measures to specifically rectify this.
Ad hoc transfers like the one-off "Grow and Share" package in this year's Budget fall short of what our commitment to the UDHR requires, depending as they do on the existence of surpluses and the discretion and generosity of the government of the day.
In his New Year message at the start of this year, Prime Minister Lee Hsien Loong identified the widening income gap as a key concern to tackle. The lack of fresh ideas in the Budget statement was therefore disappointing. Hopefully this will change after the Budget debate that starts today.
Siew Kum Hong is a corporate counsel and the vice-president of MARUAH (Working Group for an ASEAN Human Rights Mechanism, Singapore), a human rights NGO and gazetted political association.
Monday, 9 February 2009
More thoughts on Jobs Credit scheme
After listening to Minister Tharman's round-up speech on the Budget Statement, here are my final thoughts on the Jobs Credit scheme:
These reasons are why, even though I thought Minister Tharman delivered a really solid speech, I remain unconvinced about the merits of JCS. But like I said, I hope I am wrong.
- It is clear to me, from the Minister's speech, that the direct intended outcome of JCS is essentially to give money to businesses, for them to spend as they desire. It is, as I said in my speech, a handout for businesses. If we accept that our reserves are so precious, then there is a valid question as to whether it is right to just give them out to businesses like that. Also, many, like I, would question the fairness of giving handouts for businesses, but not Singaporeans.
- The Minister cited some examples of how the funds could be used, ranging from keeping workers to paying suppliers on time. But other possible uses include dividends for shareholders, bigger bonuses for CEOs, spending on incentive trips and remitting back to foreign headquarters for MNCs. In other words, saving jobs is only one possible use, and there is no direct correlation between JCS and saving jobs. I think this is quite different from how JCS was first portrayed when it was announced, and that mis-portrayal was one of the key reasons for my decision to focus on JCS.
- The consequences of JCS include a stimulation in demand (as is implicit in the Minister's references to the multiplier effect from JCS), and retention of jobs through keeping businesses afloat. But the Government has repeatedly pointed out that demand stimulation in Singapore is of limited utility, due to the high leakage in our open economy. So I would not place so much weight on that as a benefit of JCS. As for retention of jobs through keeping businesses afloat, that is a very indirect outcome that is subject to many dependencies, including sufficient demand as I mentioned in my speech.
- The Minister and many MPs have cited anecdotal evidence of businesses saying that JCS would affect their retrenchment decisions. I may be cynical, but I would take those statements of support with a big pinch of salt. If Santa Claus asks a kid who has just received a great big present for Christmas whether he was happy, would the kid say no? Especially when there is the prospect of another such present next year? In fact, I have received a lot of support from folks in the private sector agreeing with my speech privately. One even described the reasoning in my speech as being exactly identical to how his management team thinks through such issues.
- Finally, it has been suggested that JCS will make businesses more ready to retrench foreigners as opposed to locals. This may not be quite right. The employers' CPF contribution rate for most locals (excluding older locals, etc.) is 14.5%. JCS equates to a 9% point reduction in that rate. So local employees are still 5.5% more expensive than foreign employees. An employer who is minded to think this way, of axing the cheapest employees, will still look to retrench locals first, since they are still more expensive even with JCS. The exception would be older workers, since the employers' contribution rate is lower. With JCS, the Government would actually be subsidising the business for employing these older workers.
These reasons are why, even though I thought Minister Tharman delivered a really solid speech, I remain unconvinced about the merits of JCS. But like I said, I hope I am wrong.
Wednesday, 4 February 2009
Video: Speech on Budget Statement 2009, 3 February 2009
The TOC folks seem to have beaten me to it -- here is the video of my speech in 3 parts. The exchanges with PAP MPs are in Part 3. Thanks watchtowerv!
Part 1
Part 2
Part 3
Tuesday, 3 February 2009
Budget 2009: Speech on Budget Statement, 3 February 2009
This is the final prepared text of my speech on this year's Budget. The version that I actually delivered may have some minor changes, but this is fairly definitive.
Right now, it looks like this speech may be under some sort of media blackout. The only media coverage I've seen is limited to the points I made about the use of the reserves, and the desirability of having the President publish details of his deliberations in approving the use of the reserves.
To me, those were self-evident and entirely uncontroversial. I think the points I make about the Jobs Credit scheme are much more interesting and newsworthy. Yet, I have dim hopes of them being covered by the MSM with fairness or in detail.
After I completed my speech, four PAP MPs stood up to question me. This is the first time this has ever happened to me, and it was really quite intimidating and unnerving. I really had to think on my feet. I hope I acquitted myself well.
When Mr Low Thia Khiang spoke earlier in the day, he had six PAP MPs stand up to question him, and that is being covered in the MSM, including the CNA website and on TV. Curiously, the CNA and TV coverage absolutely omits any mention of my exchanges with the PAP MPs. ST does have a short reference to my disagreement with the Jobs Credit scheme, but with very little detail. It also looks a little odd, that they used my photo to lead the story but there is only a one-line reference to my speech. I'll wait and see what is published tomorrow. [update 1: I thought the coverage in ST and TODAY turned out to be, on the whole, quite fair]
I'll try to get my exchanges with the PAP MPs transcribed. In the meantime, I'm trying to get the video uploaded -- Youtube has rejected the entire speech (plus questions) because the single clip is too long. [update 2: the video is now available here]
1. Mr Speaker Sir, thank you for allowing me to join the debate on the Budget Statement. I will touch on three aspects of this Budget: the use of the reserves, the Jobs Credit scheme, and the amount of help for the retrenched and unemployed.
Using the reserves
2. First, the unprecedented use of our reserves, to fund the Jobs Credit scheme and the Special Risk-sharing Initiative. I applaud the Government for taking this step.
3. Our reserves have always almost bordered on the mythical: Singaporeans speak of them proudly and reverently, but we know so little about these fabled reserves. Using them now sends the right signal about just how dire the situation is. It assures Singaporeans that the reserves are not sacrosanct, that they are not being accumulated for the sake of accumulating them, and that they will be used when it is necessary to do so. If the worst economic crisis the world has seen in six decades does not merit the use of the reserves, then nothing ever will.
4. But I have some concerns about the process in which the use of the reserves is being approved. We have always been told that the reserves are a hard-earned strategic asset of Singapore, and that the Elected Presidency is necessary to safeguard them. And yet, there has been precious little information about the deliberations of the President or of the Council of Presidential Advisers, in giving in-principle approval to use the reserves.
5. The Government should ask the President and the Council to publish detailed reasons for their decisions. This is the first time we are using the reserves. It is therefore a golden opportunity to define the principles for doing so. The Elected Presidency is all about the process for using the reserves – so it is important to ensure that the process in this instance is transparent and clearly articulated.
6. The Government has stated some principles for using the reserves, but principles articulated by the Government do not -- and more importantly, should not -- bind the President. After all, the President is supposed to be the independent check on the Government in its use of the reserves. The President is the guardian of the so-called second key to the reserves. It would therefore be helpful for the President, and the Council of Presidential Advisers, to publicly explain to Singaporeans why they approved the use of the reserves, and what principles they intend to adopt moving forward. Doing so would buttress the institution of the Elected Presidency.
7. These principles and guidelines do not have to be legally binding or even binding on subsequent requests to use the reserves. But they would certainly provide helpful guidance if we ever want to use the reserves again. Now is the time to set a sound foundation for the future.
8. This is all the more important, given that this Government has actually accumulated sufficient reserves during its term to fund the Jobs Credit and SRI schemes. The Government should therefore ask the President to explain whether and why he is satisfied with the Government’s reasons for not using its accumulated reserves.
Jobs Credit scheme
9. I now turn to the Jobs Credit scheme. It is one of the lynchpins of the Budget, and it seems to have caught the imagination of Singaporeans. Call it what you will, but it is fundamentally a wage subsidy for employers. It equates to a 9 percentage point cut in the employers’ CPF contribution rate. It will cost taxpayers S$4.5 billion dollars, and will be funded by our reserves.
10. The objective of this scheme is to save jobs. But how effective will it be?
11. Clearly, the effectiveness of the scheme for each employer will depend on the proportion of its costs attributable to wages. If wages form just 10% of an employer’s overall costs, then the Jobs Credit scheme will reduce its total costs by up to 0.8%. On the other hand, if 70% of costs are wages, then the scheme will reduce total costs by a maximum of 5.5%. These are theoretical maximums, based on improbable assumptions of 100% local employees, all earning $2500 per month or less.
12. The Minister has explained that the global economic crisis is caused by a worldwide collapse in demand. Simply put, there is massively reduced demand for the goods and services produced by our economy.
13. Last week, the EDB released a report on the manufacturing sector’s business expectations for the next six months. This report paints a shocking picture of just how dire things are expected to get. An across-the-board negative outlook for the first half of 2009 for manufacturing, with similarly negative forecasts for output and employment for Q1. For instance, 92% of data storage firms and 81% of precision engineering firms predict a drop in output.
14. When demand falls off a cliff like this, many businesses will face a drop in revenue far exceeding 8%. Businesses will have no choice but to cut costs to stay afloat.
15. In this context, I suspect that the Jobs Credit scheme will turn out to just a band-aid. Yes, it will provide a temporary cushion for businesses, especially SMEs. Yes, it will make employers a little bit more reluctant to lay off locals. Yes, whatever protection it creates will probably benefit the low-income more than the high-income. But it will still only be a band-aid at best, in stopping job losses.
16. And what a very expensive band-aid it will be. Citigroup’s head of Singapore research Dr Chua Hak Bin has pointed out that if the Jobs Credit scheme helps to save 50,000 jobs, then the cost of saving each job is $90,000 – three times the median annual salary of each job in Singapore. Even if it helps to save 100,000 jobs, the cost of saving each job is $45,000 – still 50% more than the median annual salary.
17. And contract workers, who are probably most at risk when a business cuts staffing costs, may not benefit from the Jobs Credit scheme. Contractors are usually hired by employment agencies and farmed out to companies. The agencies will receive the subsidy. They have no incentive to pass it on to the companies. Unlike with property tax rebates, the Government has not exhorted these agencies to pass the savings on to their customers. And so, the scheme could make contractors, who form a growing proportion of the workforce, even more vulnerable than they otherwise would be.
18. I agree with people like NUS professor Shandre Thangavelu, who has said that the Jobs Credit scheme will only have a short-run impact on the retrenchment behaviour of employers. Even the MOF team who designed the scheme is unable to predict just how many jobs it will help to save, and for how long. Mr Poon Hong Yuen, who led the team that put the scheme together, said:
20. The Jobs Credit scheme will end up benefiting capital owners disproportionately. It will reduce business costs, but I do not expect it to save very many jobs, and even then not for very long. It is essentially a special transfer to capital owners, such as business-owners and entrepreneurs. And considering that around 50% of the Singapore corporate sector is foreign-owned, a big chunk of this transfer will leak out of Singapore.
21. Today’s Straits Times Forum carried a letter from someone who works in an SME, praising the Jobs Credit scheme. But if you drill into the details, it is clear that the business was not considering retrenchments in the first place. Instead, it is considering using the Jobs Credit funding to invest further in its business. In these times, that is not a bad thing. But it clearly shows up the limitations in the scheme’s ability to achieve its stated goal of saving jobs.
22. The Jobs Credit scheme will have, at best, a marginal impact on businesses’ decisions on whether to retrench. Businesses facing collapsed demand will still retrench. Businesses doing well will reap a windfall benefit. MNCs will still, by and large, follow their corporate headquarters’ directions on retrenchments.
23. True, the Jobs Credit scheme is not meant to be the complete answer. It is not a panacea. It is one piece of the puzzle, albeit a big centrepiece, and there are many other measures to reduce business costs and help businesses through this difficult period. But the question must be whether spending $4.5 billion on the Jobs Credit scheme produces the most bang for the buck for Singaporeans.
24. This is a hand-out for businesses. But we have always opposed hand-outs for Singaporeans. Why are businesses different? In giving all this money away to businesses, are we somehow being psychologically held hostage to the ideological dogma that the best way to help Singaporeans is to help businesses, instead of helping Singaporeans directly?
Lack of help for the retrenched and unemployed
26. That brings me to my third point. This Budget does little for the retrenched and the unemployed.
27. The various elements that made up the GST offset package first announced in 2007 have been enhanced. The amount of GST credits for each household has been doubled, and there are additional S&CC and rental rebates.
28. But let us be honest with ourselves. These are mostly enhancements of measures previously announced to alleviate the pain from the GST hike in 2007. But the coming storm will inflict much more pain and much more suffering than the GST hike of two percentage points did. To equate the two is to severely understate the impact on Singaporeans in the coming year. They are simply incomparable. It is inconceivable to me, that the exact same tools used to soften the impact of the GST hike could be enough to address the worst recession the world has seen in 60 years.
29. In the past few weeks, various ministers have spoken about the need to save jobs. Rightly so. Saving jobs has to be the #1 priority. I may disagree on the effectiveness of the Jobs Credit scheme in achieving this goal, but I do not argue with the goal itself. And I would argue that helping those who have lost their jobs deserves to be the #2 priority.
30. Prevention is better than cure, so the saying goes. “Better than”, not “instead of”. When prevention fails, we still need a cure. Saving jobs is only one side of the coin; the other side of the coin must surely be to help those whose jobs were not saved. This Budget seems to have produced the singular oddity of a one-sided coin, where we concentrate so much of our efforts on saving jobs, but do so little to help those who do lose their jobs.
31. It is almost as if the retrenched are being dealt a double-whammy: the first hit is the loss of their jobs, and the second hit is the lack of assistance for them.
32. To be fair, SPUR have something for the unemployed. An unemployed, low skilled Singaporean who attends training courses to learn new skills can get an allowance of $4 per hour. A PMET who undergoes a PCP – a professional conversion programme -- can get an allowance of up to $1000 per month.
33. But SPUR is not without problems in implementation. It adopts the co-payment requirement of so many government measures. This strict insistence on a 10% co-payment of course fees means that trainees must still fork up an upfront fee. This can be difficult for many, since they by definition have no source of income. We should provide trainees with interest-free loans for the co-paid amount, with repayments in instalments and possibly interest-bearing after the trainee finds a job, which can be monitored through the CPF system.
34. Also, the PCPs will be unattractive to most retrenched PMETs. Some retrenched PMETs will have skills that are obsolete, and PCPs will be appropriate for them. But the majority of retrenched PMETs will have skills that are not obsolete; they are retrenched not because they are in sunset industries, but because their companies needed to cut costs.
35. Their skills will be in demand when the economy picks up again. They do not need and they do not want retraining for a new profession, because they will in all likelihood continue doing the same thing once the economy recovers. And in most cases, that is the rational choice, if only because retraining for a new profession means starting all over again at entry-level pay, wasting their accumulated experience in their existing profession.
36. For these retrenched PMETs, SPUR does not provide meaningful assistance. For these retrenched PMETs, the Budget has little else. For these retrenched PMETs, there is little help forthcoming.
Suggestions
38. I spoke about the Government’s approach to helping Singaporeans in my Budget speech last year. I spoke about my disappointment at how we put so much more emphasis on GDP growth than on helping less fortunate Singaporeans. I criticized this Government’s approach to social assistance, of being willing to let Singaporeans suffer rather than risk any wastage of public funds in helping them.
39. This year’s Budget again does not risk any wastage of public funds in helping Singaporeans. But it does risk wasting public funds in helping businesses. Even in these tough times, we do not give away money with no strings attached to individual Singaporeans. But it seems that these tough times justify giving away money with no strings attached to businesses, regardless of whether they are prospering or despairing.
40. Last year, I was criticized for being reckless and dangerous. At the risk of being called the same or worse this year, I will have to press on. I continue to believe that it is possible to craft targeted social assistance schemes to help the unemployed, that minimize the risk of eroding the work ethic. I have a few suggestions, and I hope I can articulate them clearly enough.
41. I ask the Government to introduce some form of unemployment insurance. In 2007, we introduced social risk-pooling for longevity risk, which is the risk of living longer than we expect or can afford to. Why not social risk-pooling for retrenchment? Not unemployment as such, but targeted for retrenchment with low benefits. This can be restricted so that only workers who are retrenched with payouts below a certain stipulated amount, say the lower of three months of the last-drawn salary or a stipulated quantum, get a few hundred dollars for so long as they remain unemployed up to six months, provided they seek re-employment during this period. This is targeted and limited. This will not sustain long-term unemployment, but is intended to tide over those who have been retrenched while they find another job. The pay-out will be small, but the assurance to those retrenched could mean so much.
42. And if the Government will not introduce unemployment insurance on a permanent basis, then I ask it to consider unemployment benefits for the retrenched, just for this year. It can be limited to workers who were retrenched since last November or who are retrenched this year. The amount can be limited to the lower of half of the last drawn salary or $1000 per month, capped at 6 months of payments. Just like the Jobs Credit scheme, it is a one-off scheme in light of the worst recession in 60 years.
43. But I know that realistically, both of these options will not be acceptable to this Government. And so I ask the Government to introduce a temporary assistance loan scheme, loosely modeled after the UK’s social fund. It should be made available to unemployed Singaporeans including the recently retrenched, to provide small loans for certain approved purposes. We can call this the No Jobs Credit scheme.
44. Examples of approved purposes could include medical expenses that are not covered by insurance, Medishield or Medifund for whatever reason, and expenses not covered by Comcare for whatever reason. To avoid abuse or misuse, the loan amounts could be disbursed directly to the persons charging for these bills and expenses. The loans should be interest-free and payable in small instalments once the borrower starts working again, perhaps by deductions from salaries through the CPF framework. Such a scheme would reduce the incidence of folks in desperate need for cash going to loan sharks or maxing out their credit cards, which would result in a downward spiral of crippling interest at a time when they could least afford it.
45. I also ask the Government to introduce more special transfers to the low-income. The doubling of GST Credits and the additional SC&C and rental rebates are helpful, but they are small in size. Inflation hit 6.5% last year, and even in this recessionary environment, there will be a time lag before prices go down. More special transfers in the first half of this year will help the low-income cope, until such time as disinflation kicks in. This will also provide a helpful fiscal boost, given that the MAS’s own Monetary Model of Singapore shows that direct transfers to the low-income has a high fiscal multiplier for the Singapore economy.
46. Sir, I do not see these suggestions as reckless or dangerous. I do not think they will necessarily result in a bloated bureaucracy. And even if they require some more resources on the part of the Government for implementation, that should not, in and of itself, automatically rule out policies that could benefit Singaporeans. Maintaining a lean government is a means to an end, and cannot be the end itself.
47. I know that there is Comcare, and it plays an important role in helping needy Singaporeans. Today’s edition of the TODAY newspaper carried a useful reminder of that scheme. But it is an ad hoc scheme that is highly discretionary, and only intended for 3 to 6 months of assistance. That timeframe may be too short for retrenched workers in this recession. The discretionary element does not give workers the all-important assurance and security that a formalized scheme provides. These times are already so uncertain, why add to the stress of retrenched workers by making assistance uncertain as well?
48. I think we can, and we must, do more and do better for Singaporeans who lose their jobs. When Franklin D. Roosevelt was inaugurated for his second term as US President in 1937, he said in his inaugural address:
Right now, it looks like this speech may be under some sort of media blackout. The only media coverage I've seen is limited to the points I made about the use of the reserves, and the desirability of having the President publish details of his deliberations in approving the use of the reserves.
To me, those were self-evident and entirely uncontroversial. I think the points I make about the Jobs Credit scheme are much more interesting and newsworthy. Yet, I have dim hopes of them being covered by the MSM with fairness or in detail.
After I completed my speech, four PAP MPs stood up to question me. This is the first time this has ever happened to me, and it was really quite intimidating and unnerving. I really had to think on my feet. I hope I acquitted myself well.
When Mr Low Thia Khiang spoke earlier in the day, he had six PAP MPs stand up to question him, and that is being covered in the MSM, including the CNA website and on TV. Curiously, the CNA and TV coverage absolutely omits any mention of my exchanges with the PAP MPs. ST does have a short reference to my disagreement with the Jobs Credit scheme, but with very little detail. It also looks a little odd, that they used my photo to lead the story but there is only a one-line reference to my speech. I'll wait and see what is published tomorrow. [update 1: I thought the coverage in ST and TODAY turned out to be, on the whole, quite fair]
I'll try to get my exchanges with the PAP MPs transcribed. In the meantime, I'm trying to get the video uploaded -- Youtube has rejected the entire speech (plus questions) because the single clip is too long. [update 2: the video is now available here]
Budget 2009
1. Mr Speaker Sir, thank you for allowing me to join the debate on the Budget Statement. I will touch on three aspects of this Budget: the use of the reserves, the Jobs Credit scheme, and the amount of help for the retrenched and unemployed.
Using the reserves
2. First, the unprecedented use of our reserves, to fund the Jobs Credit scheme and the Special Risk-sharing Initiative. I applaud the Government for taking this step.
3. Our reserves have always almost bordered on the mythical: Singaporeans speak of them proudly and reverently, but we know so little about these fabled reserves. Using them now sends the right signal about just how dire the situation is. It assures Singaporeans that the reserves are not sacrosanct, that they are not being accumulated for the sake of accumulating them, and that they will be used when it is necessary to do so. If the worst economic crisis the world has seen in six decades does not merit the use of the reserves, then nothing ever will.
4. But I have some concerns about the process in which the use of the reserves is being approved. We have always been told that the reserves are a hard-earned strategic asset of Singapore, and that the Elected Presidency is necessary to safeguard them. And yet, there has been precious little information about the deliberations of the President or of the Council of Presidential Advisers, in giving in-principle approval to use the reserves.
5. The Government should ask the President and the Council to publish detailed reasons for their decisions. This is the first time we are using the reserves. It is therefore a golden opportunity to define the principles for doing so. The Elected Presidency is all about the process for using the reserves – so it is important to ensure that the process in this instance is transparent and clearly articulated.
6. The Government has stated some principles for using the reserves, but principles articulated by the Government do not -- and more importantly, should not -- bind the President. After all, the President is supposed to be the independent check on the Government in its use of the reserves. The President is the guardian of the so-called second key to the reserves. It would therefore be helpful for the President, and the Council of Presidential Advisers, to publicly explain to Singaporeans why they approved the use of the reserves, and what principles they intend to adopt moving forward. Doing so would buttress the institution of the Elected Presidency.
7. These principles and guidelines do not have to be legally binding or even binding on subsequent requests to use the reserves. But they would certainly provide helpful guidance if we ever want to use the reserves again. Now is the time to set a sound foundation for the future.
8. This is all the more important, given that this Government has actually accumulated sufficient reserves during its term to fund the Jobs Credit and SRI schemes. The Government should therefore ask the President to explain whether and why he is satisfied with the Government’s reasons for not using its accumulated reserves.
Jobs Credit scheme
9. I now turn to the Jobs Credit scheme. It is one of the lynchpins of the Budget, and it seems to have caught the imagination of Singaporeans. Call it what you will, but it is fundamentally a wage subsidy for employers. It equates to a 9 percentage point cut in the employers’ CPF contribution rate. It will cost taxpayers S$4.5 billion dollars, and will be funded by our reserves.
10. The objective of this scheme is to save jobs. But how effective will it be?
11. Clearly, the effectiveness of the scheme for each employer will depend on the proportion of its costs attributable to wages. If wages form just 10% of an employer’s overall costs, then the Jobs Credit scheme will reduce its total costs by up to 0.8%. On the other hand, if 70% of costs are wages, then the scheme will reduce total costs by a maximum of 5.5%. These are theoretical maximums, based on improbable assumptions of 100% local employees, all earning $2500 per month or less.
12. The Minister has explained that the global economic crisis is caused by a worldwide collapse in demand. Simply put, there is massively reduced demand for the goods and services produced by our economy.
13. Last week, the EDB released a report on the manufacturing sector’s business expectations for the next six months. This report paints a shocking picture of just how dire things are expected to get. An across-the-board negative outlook for the first half of 2009 for manufacturing, with similarly negative forecasts for output and employment for Q1. For instance, 92% of data storage firms and 81% of precision engineering firms predict a drop in output.
14. When demand falls off a cliff like this, many businesses will face a drop in revenue far exceeding 8%. Businesses will have no choice but to cut costs to stay afloat.
15. In this context, I suspect that the Jobs Credit scheme will turn out to just a band-aid. Yes, it will provide a temporary cushion for businesses, especially SMEs. Yes, it will make employers a little bit more reluctant to lay off locals. Yes, whatever protection it creates will probably benefit the low-income more than the high-income. But it will still only be a band-aid at best, in stopping job losses.
16. And what a very expensive band-aid it will be. Citigroup’s head of Singapore research Dr Chua Hak Bin has pointed out that if the Jobs Credit scheme helps to save 50,000 jobs, then the cost of saving each job is $90,000 – three times the median annual salary of each job in Singapore. Even if it helps to save 100,000 jobs, the cost of saving each job is $45,000 – still 50% more than the median annual salary.
17. And contract workers, who are probably most at risk when a business cuts staffing costs, may not benefit from the Jobs Credit scheme. Contractors are usually hired by employment agencies and farmed out to companies. The agencies will receive the subsidy. They have no incentive to pass it on to the companies. Unlike with property tax rebates, the Government has not exhorted these agencies to pass the savings on to their customers. And so, the scheme could make contractors, who form a growing proportion of the workforce, even more vulnerable than they otherwise would be.
18. I agree with people like NUS professor Shandre Thangavelu, who has said that the Jobs Credit scheme will only have a short-run impact on the retrenchment behaviour of employers. Even the MOF team who designed the scheme is unable to predict just how many jobs it will help to save, and for how long. Mr Poon Hong Yuen, who led the team that put the scheme together, said:
“If just because of this they rethink (retrenchments), then I think it’s already quite an achievement.”19. I would praise the Ministry for its willingness to take a chance on the Jobs Credit scheme. I think this sort of policy risk-taking is important and helpful. But I don’t think the risk will pan out in this case. And I think Mr Poon sets a surprisingly modest target. At $4.5 billion, I would expect more.
20. The Jobs Credit scheme will end up benefiting capital owners disproportionately. It will reduce business costs, but I do not expect it to save very many jobs, and even then not for very long. It is essentially a special transfer to capital owners, such as business-owners and entrepreneurs. And considering that around 50% of the Singapore corporate sector is foreign-owned, a big chunk of this transfer will leak out of Singapore.
21. Today’s Straits Times Forum carried a letter from someone who works in an SME, praising the Jobs Credit scheme. But if you drill into the details, it is clear that the business was not considering retrenchments in the first place. Instead, it is considering using the Jobs Credit funding to invest further in its business. In these times, that is not a bad thing. But it clearly shows up the limitations in the scheme’s ability to achieve its stated goal of saving jobs.
22. The Jobs Credit scheme will have, at best, a marginal impact on businesses’ decisions on whether to retrench. Businesses facing collapsed demand will still retrench. Businesses doing well will reap a windfall benefit. MNCs will still, by and large, follow their corporate headquarters’ directions on retrenchments.
23. True, the Jobs Credit scheme is not meant to be the complete answer. It is not a panacea. It is one piece of the puzzle, albeit a big centrepiece, and there are many other measures to reduce business costs and help businesses through this difficult period. But the question must be whether spending $4.5 billion on the Jobs Credit scheme produces the most bang for the buck for Singaporeans.
24. This is a hand-out for businesses. But we have always opposed hand-outs for Singaporeans. Why are businesses different? In giving all this money away to businesses, are we somehow being psychologically held hostage to the ideological dogma that the best way to help Singaporeans is to help businesses, instead of helping Singaporeans directly?
Lack of help for the retrenched and unemployed
26. That brings me to my third point. This Budget does little for the retrenched and the unemployed.
27. The various elements that made up the GST offset package first announced in 2007 have been enhanced. The amount of GST credits for each household has been doubled, and there are additional S&CC and rental rebates.
28. But let us be honest with ourselves. These are mostly enhancements of measures previously announced to alleviate the pain from the GST hike in 2007. But the coming storm will inflict much more pain and much more suffering than the GST hike of two percentage points did. To equate the two is to severely understate the impact on Singaporeans in the coming year. They are simply incomparable. It is inconceivable to me, that the exact same tools used to soften the impact of the GST hike could be enough to address the worst recession the world has seen in 60 years.
29. In the past few weeks, various ministers have spoken about the need to save jobs. Rightly so. Saving jobs has to be the #1 priority. I may disagree on the effectiveness of the Jobs Credit scheme in achieving this goal, but I do not argue with the goal itself. And I would argue that helping those who have lost their jobs deserves to be the #2 priority.
30. Prevention is better than cure, so the saying goes. “Better than”, not “instead of”. When prevention fails, we still need a cure. Saving jobs is only one side of the coin; the other side of the coin must surely be to help those whose jobs were not saved. This Budget seems to have produced the singular oddity of a one-sided coin, where we concentrate so much of our efforts on saving jobs, but do so little to help those who do lose their jobs.
31. It is almost as if the retrenched are being dealt a double-whammy: the first hit is the loss of their jobs, and the second hit is the lack of assistance for them.
32. To be fair, SPUR have something for the unemployed. An unemployed, low skilled Singaporean who attends training courses to learn new skills can get an allowance of $4 per hour. A PMET who undergoes a PCP – a professional conversion programme -- can get an allowance of up to $1000 per month.
33. But SPUR is not without problems in implementation. It adopts the co-payment requirement of so many government measures. This strict insistence on a 10% co-payment of course fees means that trainees must still fork up an upfront fee. This can be difficult for many, since they by definition have no source of income. We should provide trainees with interest-free loans for the co-paid amount, with repayments in instalments and possibly interest-bearing after the trainee finds a job, which can be monitored through the CPF system.
34. Also, the PCPs will be unattractive to most retrenched PMETs. Some retrenched PMETs will have skills that are obsolete, and PCPs will be appropriate for them. But the majority of retrenched PMETs will have skills that are not obsolete; they are retrenched not because they are in sunset industries, but because their companies needed to cut costs.
35. Their skills will be in demand when the economy picks up again. They do not need and they do not want retraining for a new profession, because they will in all likelihood continue doing the same thing once the economy recovers. And in most cases, that is the rational choice, if only because retraining for a new profession means starting all over again at entry-level pay, wasting their accumulated experience in their existing profession.
36. For these retrenched PMETs, SPUR does not provide meaningful assistance. For these retrenched PMETs, the Budget has little else. For these retrenched PMETs, there is little help forthcoming.
Suggestions
38. I spoke about the Government’s approach to helping Singaporeans in my Budget speech last year. I spoke about my disappointment at how we put so much more emphasis on GDP growth than on helping less fortunate Singaporeans. I criticized this Government’s approach to social assistance, of being willing to let Singaporeans suffer rather than risk any wastage of public funds in helping them.
39. This year’s Budget again does not risk any wastage of public funds in helping Singaporeans. But it does risk wasting public funds in helping businesses. Even in these tough times, we do not give away money with no strings attached to individual Singaporeans. But it seems that these tough times justify giving away money with no strings attached to businesses, regardless of whether they are prospering or despairing.
40. Last year, I was criticized for being reckless and dangerous. At the risk of being called the same or worse this year, I will have to press on. I continue to believe that it is possible to craft targeted social assistance schemes to help the unemployed, that minimize the risk of eroding the work ethic. I have a few suggestions, and I hope I can articulate them clearly enough.
41. I ask the Government to introduce some form of unemployment insurance. In 2007, we introduced social risk-pooling for longevity risk, which is the risk of living longer than we expect or can afford to. Why not social risk-pooling for retrenchment? Not unemployment as such, but targeted for retrenchment with low benefits. This can be restricted so that only workers who are retrenched with payouts below a certain stipulated amount, say the lower of three months of the last-drawn salary or a stipulated quantum, get a few hundred dollars for so long as they remain unemployed up to six months, provided they seek re-employment during this period. This is targeted and limited. This will not sustain long-term unemployment, but is intended to tide over those who have been retrenched while they find another job. The pay-out will be small, but the assurance to those retrenched could mean so much.
42. And if the Government will not introduce unemployment insurance on a permanent basis, then I ask it to consider unemployment benefits for the retrenched, just for this year. It can be limited to workers who were retrenched since last November or who are retrenched this year. The amount can be limited to the lower of half of the last drawn salary or $1000 per month, capped at 6 months of payments. Just like the Jobs Credit scheme, it is a one-off scheme in light of the worst recession in 60 years.
43. But I know that realistically, both of these options will not be acceptable to this Government. And so I ask the Government to introduce a temporary assistance loan scheme, loosely modeled after the UK’s social fund. It should be made available to unemployed Singaporeans including the recently retrenched, to provide small loans for certain approved purposes. We can call this the No Jobs Credit scheme.
44. Examples of approved purposes could include medical expenses that are not covered by insurance, Medishield or Medifund for whatever reason, and expenses not covered by Comcare for whatever reason. To avoid abuse or misuse, the loan amounts could be disbursed directly to the persons charging for these bills and expenses. The loans should be interest-free and payable in small instalments once the borrower starts working again, perhaps by deductions from salaries through the CPF framework. Such a scheme would reduce the incidence of folks in desperate need for cash going to loan sharks or maxing out their credit cards, which would result in a downward spiral of crippling interest at a time when they could least afford it.
45. I also ask the Government to introduce more special transfers to the low-income. The doubling of GST Credits and the additional SC&C and rental rebates are helpful, but they are small in size. Inflation hit 6.5% last year, and even in this recessionary environment, there will be a time lag before prices go down. More special transfers in the first half of this year will help the low-income cope, until such time as disinflation kicks in. This will also provide a helpful fiscal boost, given that the MAS’s own Monetary Model of Singapore shows that direct transfers to the low-income has a high fiscal multiplier for the Singapore economy.
46. Sir, I do not see these suggestions as reckless or dangerous. I do not think they will necessarily result in a bloated bureaucracy. And even if they require some more resources on the part of the Government for implementation, that should not, in and of itself, automatically rule out policies that could benefit Singaporeans. Maintaining a lean government is a means to an end, and cannot be the end itself.
47. I know that there is Comcare, and it plays an important role in helping needy Singaporeans. Today’s edition of the TODAY newspaper carried a useful reminder of that scheme. But it is an ad hoc scheme that is highly discretionary, and only intended for 3 to 6 months of assistance. That timeframe may be too short for retrenched workers in this recession. The discretionary element does not give workers the all-important assurance and security that a formalized scheme provides. These times are already so uncertain, why add to the stress of retrenched workers by making assistance uncertain as well?
48. I think we can, and we must, do more and do better for Singaporeans who lose their jobs. When Franklin D. Roosevelt was inaugurated for his second term as US President in 1937, he said in his inaugural address:
“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”49. This year, there will be many amongst us who will have too little. Economists have forecast anything between 30,000 and 300,000 jobs lost over the next 1 to 2 years. But this Budget does little to provide for them. What then is the extent of our progress? Singaporeans will have to judge for themselves.
Wednesday, 22 October 2008
Speech on the Constitution of Republic of Singapore (Amendment) Bill: 20 October 2008
This is a significant change to our laws surrounding the use of the returns from our reserves. Indeed, it will inevitably shed more ilght on the reserves, and will allow for more accurate guesstimates on the size of the reserves. Even though the Minister has said that the funds will be used primarily on expenditures that invest for the future, this relieves the strain on our government finances and should indirectly allow for more social spending overall. That is why I am so clearly in favour of it.
Mr Siew Kum Hong (Nominated Member): Mr Deputy Speaker, Sir, thank you for allowing me to participate in this debate. As a Nominated Member, I will not be able to vote on this Constitutional Amendment. Nevertheless, I wish to express my support of this Bill.
Sir, the world is on the verge of a global recession or has possibly already entered one. Indeed, Singapore is already in a technical recession and things will almost certainly get worse before they get better. The Government has always said that it is building up the reserves for a rainy day. Well, it is going to thunderstorm over the next few quarters and Singaporeans will be expecting the Government to use the reserves to help Singaporeans. So the timing of this Constitutional Amendment could not have been better.
This Amendment will unlock more of the investment returns from our reserves to fund social expenditures than are needed today. The economy has in recent years become less reliant on direct taxes and become more reliant on indirect taxes. But with the upcoming economic troubles that Singaporeans will inevitably start running into, this means that there will be less tax revenue precisely at the time when more help is needed for struggling Singaporeans. So being able to tap on more of the returns from our reserves will go a long way in helping the Government balance its books.
The Minister has explained the mechanics of this Constitutional Amendment and I will not go into that. It suffices to say that the current formula artificially excludes capital gains from the calculation of investment returns from the reserves, and the new formula corrects this by including realised capital gains in the returns that may be used, and hence presents a much more accurate measure of these returns. Having said that, I have a few concerns that I hope the Minister can address and, perhaps, clarify.
Firstly, the new formula will not apply to Temasek Holdings’ portfolio of assets which is not included in the definition of "relevant assets" introduced by clause 3(d) of the Bill. The new formula applies only to relevant assets which will comprise only the assets managed by the GIC and the assets of MAS, less the Government's liabilities.
The Minister has stated the reasons for excluding Temasek Holdings, but this exclusion remains surprising. After all, Temasek is reported to have achieved a historical annual rate of return of 18% or so. Temasek is perceived to be similar to a private equity fund, which is prepared to make higher-risk investments than GIC. In a way, it is the higher-risk and higher-return portion of the Government's diversified portfolio. Presumably, the higher rate of return enjoyed by Temasek over GIC is at least substantially due to capital gains in Temasek’s portfolio. To exclude Temasek’s portfolio from this new formula would be to undercut the new formula and remove much of the potential benefits.
The sizes of GIC’s and Temasek’s portfolios are not publicly known. It is therefore impossible for the public, and indeed this House, to ascertain what are the effects and repercussions of excluding Temasek’s portfolio of assets. Hopefully, the Minister can elaborate on why Temasek’s portfolio is excluded from the new formula, and what impact this exclusion will have on the amount of incremental budget that would have been available to the Government. In this regard, it will also be very helpful if the Minister could shed some light on what are the Government's estimates of the fiscal effect of these changes.
Following from this exclusion of Temasek’s portfolio of assets from the new formula, it becomes possible for the Government of the day to manipulate the actual amounts that become available for use under the new formula. If the Government of the day wants to increase the returns from the reserves that are available for usage as net investment returns, it may seek to transfer assets from Temasek's portfolio into the assets under GIC's management, so that these assets then become relevant assets to which the new formula applies.
This possibility cannot be desirable. There should be more transparency, and more controls, over the allocation of reserves between the respective portfolios of Temasek and GIC, so as to prevent such situations. Of course, bringing Temasek Holdings under the umbrella of the new rule will obviate any such manipulations.
Also, on the point of transparency, the President and the Minister have to agree on the expected long-term real rates of return of our reserves at the start of each financial year, and the Minister then has to certify to the President the amounts available for spending using the agreed expected long-term real rates of return. Prof Thio has rightly noted that the President may have difficulty in determining whether the Minister's proposed rates are appropriate.
Furthermore, the Constitutional provisions do not require the rates of return, or the basis upon which they were calculated, to be published. There is, therefore, no way for Singaporeans or this House to evaluate whether the agreed rates are appropriate. One would also expect the expected long-term real rates of return to be consistent over time, but there is no way for the public to ascertain whether the agreed rates between the President and the Minister are indeed consistent over time, or whether they change radically from year to year. These are potential flaws that could weaken the strength of the system we have put in place to protect our reserves.
Still on the issue of the expected long-term real rates of return, these rates effectively set a benchmark for the performance of GIC. That must be so, because the rates effectively state the returns that we expect the assets managed by GIC to achieve over the long term. That being so, I hope the Minister can confirm whether the long-term performance of GIC will be assessed against these agreed rates, and if so, how that will be translated into a system to measure the annual performance of GIC, which admittedly will fluctuate from year to year. But if the Minister does not intend to use these agreed rates as a benchmark for measuring GIC’s performance, I hope the Minister can clarify why not.
Indeed, this further strengthens the case for including Temasek Holdings under the new formula. When the Government was queried on the performance of Temasek Holdings and GIC in the past, it has consistently maintained that it looks at their performance over the long term. This is an answer that, I dare say, has not sat well with many Singaporeans.
We now have a mechanism for assessing the long-term performance of our reserves. So, why not take advantage of this opportunity to place both Temasek and GIC within this framework, so that in future there is an objective benchmark against which the performance of these companies can be measured? This would be the perfect answer to those who are concerned with ensuring that the performance of Temasek and GIC are adequate.
There is also a question over the treatment of unrealised capital losses. The definition of "realised capital gains" includes realised capital losses. So, how will unrealised capital losses be addressed? Does GIC adopt any form of mark-to-market accounting that would capture such losses? I hope the Minister can shed some light on this.
Finally, I would like to take this opportunity to touch on the investments made by Temasek and GIC in the recent past. I do not propose to discuss the merits or otherwise of the massive investments into the financial institutions. I believe that it is perhaps too early to tell whether or not they were wise.
However, I would make this point. Now that the returns from the reserves have assumed a much more important role in the Government’s budget, the reserves have become even more relevant to the people. This Bill will more closely align the size and performance of our reserves, with the well-being of Singaporeans. Singaporeans frequently ask, "What is the point of having massive reserves that are never touched and are never used to help us?"
With this Bill and with these changes, the point should start becoming clear to the people. That being the case, Singaporeans will expect more transparency, more accountability and sustained good performance in the management of our reserves. That is because the Government’s ability to help and improve the lot of Singaporeans will become more tied to the continued strong performance of our investments.
When the investments by GIC and Temasek perform poorly in a financial year, could this affect the expected long-term real rate of return in the next financial year, which would then affect the amount of funds available to the Government to use in helping Singaporeans? It will be even more unsatisfactory to Singaporeans, if they learn of more big investments using their reserves that do badly, and are told by the Government that it does not micro-manage GIC or Temasek and that they invest for the long term.
That was the answer given when the investment into Shin Corp was made, and when the investments into the financial institutions such as UBS, Citigroup and Merrill Lynch were made, and many Singaporeans were not satisfied with that answer. We can expect them to be much more unhappy in similar cases in future, because their well-being could become much more directly affected by the performance of such investments. The Government will have to be much more conscious of this moving forward, and will have to better accommodate and address the concerns and questions of Singaporeans with regards to our reserves.
Sir, I have made some criticisms of the Bill, and have touched on some areas of concern that I hope the Minister can clarify. But there should be no mistake in whether I agree with the objectives of this Bill. I firmly do, and I endorse it even though I am not able to vote on it. With that, I support this Bill.
Speech on the Constitution of Republic of Singapore (Amendment) Bill
Mr Siew Kum Hong (Nominated Member): Mr Deputy Speaker, Sir, thank you for allowing me to participate in this debate. As a Nominated Member, I will not be able to vote on this Constitutional Amendment. Nevertheless, I wish to express my support of this Bill.
Sir, the world is on the verge of a global recession or has possibly already entered one. Indeed, Singapore is already in a technical recession and things will almost certainly get worse before they get better. The Government has always said that it is building up the reserves for a rainy day. Well, it is going to thunderstorm over the next few quarters and Singaporeans will be expecting the Government to use the reserves to help Singaporeans. So the timing of this Constitutional Amendment could not have been better.
This Amendment will unlock more of the investment returns from our reserves to fund social expenditures than are needed today. The economy has in recent years become less reliant on direct taxes and become more reliant on indirect taxes. But with the upcoming economic troubles that Singaporeans will inevitably start running into, this means that there will be less tax revenue precisely at the time when more help is needed for struggling Singaporeans. So being able to tap on more of the returns from our reserves will go a long way in helping the Government balance its books.
The Minister has explained the mechanics of this Constitutional Amendment and I will not go into that. It suffices to say that the current formula artificially excludes capital gains from the calculation of investment returns from the reserves, and the new formula corrects this by including realised capital gains in the returns that may be used, and hence presents a much more accurate measure of these returns. Having said that, I have a few concerns that I hope the Minister can address and, perhaps, clarify.
Firstly, the new formula will not apply to Temasek Holdings’ portfolio of assets which is not included in the definition of "relevant assets" introduced by clause 3(d) of the Bill. The new formula applies only to relevant assets which will comprise only the assets managed by the GIC and the assets of MAS, less the Government's liabilities.
The Minister has stated the reasons for excluding Temasek Holdings, but this exclusion remains surprising. After all, Temasek is reported to have achieved a historical annual rate of return of 18% or so. Temasek is perceived to be similar to a private equity fund, which is prepared to make higher-risk investments than GIC. In a way, it is the higher-risk and higher-return portion of the Government's diversified portfolio. Presumably, the higher rate of return enjoyed by Temasek over GIC is at least substantially due to capital gains in Temasek’s portfolio. To exclude Temasek’s portfolio from this new formula would be to undercut the new formula and remove much of the potential benefits.
The sizes of GIC’s and Temasek’s portfolios are not publicly known. It is therefore impossible for the public, and indeed this House, to ascertain what are the effects and repercussions of excluding Temasek’s portfolio of assets. Hopefully, the Minister can elaborate on why Temasek’s portfolio is excluded from the new formula, and what impact this exclusion will have on the amount of incremental budget that would have been available to the Government. In this regard, it will also be very helpful if the Minister could shed some light on what are the Government's estimates of the fiscal effect of these changes.
Following from this exclusion of Temasek’s portfolio of assets from the new formula, it becomes possible for the Government of the day to manipulate the actual amounts that become available for use under the new formula. If the Government of the day wants to increase the returns from the reserves that are available for usage as net investment returns, it may seek to transfer assets from Temasek's portfolio into the assets under GIC's management, so that these assets then become relevant assets to which the new formula applies.
This possibility cannot be desirable. There should be more transparency, and more controls, over the allocation of reserves between the respective portfolios of Temasek and GIC, so as to prevent such situations. Of course, bringing Temasek Holdings under the umbrella of the new rule will obviate any such manipulations.
Also, on the point of transparency, the President and the Minister have to agree on the expected long-term real rates of return of our reserves at the start of each financial year, and the Minister then has to certify to the President the amounts available for spending using the agreed expected long-term real rates of return. Prof Thio has rightly noted that the President may have difficulty in determining whether the Minister's proposed rates are appropriate.
Furthermore, the Constitutional provisions do not require the rates of return, or the basis upon which they were calculated, to be published. There is, therefore, no way for Singaporeans or this House to evaluate whether the agreed rates are appropriate. One would also expect the expected long-term real rates of return to be consistent over time, but there is no way for the public to ascertain whether the agreed rates between the President and the Minister are indeed consistent over time, or whether they change radically from year to year. These are potential flaws that could weaken the strength of the system we have put in place to protect our reserves.
Still on the issue of the expected long-term real rates of return, these rates effectively set a benchmark for the performance of GIC. That must be so, because the rates effectively state the returns that we expect the assets managed by GIC to achieve over the long term. That being so, I hope the Minister can confirm whether the long-term performance of GIC will be assessed against these agreed rates, and if so, how that will be translated into a system to measure the annual performance of GIC, which admittedly will fluctuate from year to year. But if the Minister does not intend to use these agreed rates as a benchmark for measuring GIC’s performance, I hope the Minister can clarify why not.
Indeed, this further strengthens the case for including Temasek Holdings under the new formula. When the Government was queried on the performance of Temasek Holdings and GIC in the past, it has consistently maintained that it looks at their performance over the long term. This is an answer that, I dare say, has not sat well with many Singaporeans.
We now have a mechanism for assessing the long-term performance of our reserves. So, why not take advantage of this opportunity to place both Temasek and GIC within this framework, so that in future there is an objective benchmark against which the performance of these companies can be measured? This would be the perfect answer to those who are concerned with ensuring that the performance of Temasek and GIC are adequate.
There is also a question over the treatment of unrealised capital losses. The definition of "realised capital gains" includes realised capital losses. So, how will unrealised capital losses be addressed? Does GIC adopt any form of mark-to-market accounting that would capture such losses? I hope the Minister can shed some light on this.
Finally, I would like to take this opportunity to touch on the investments made by Temasek and GIC in the recent past. I do not propose to discuss the merits or otherwise of the massive investments into the financial institutions. I believe that it is perhaps too early to tell whether or not they were wise.
However, I would make this point. Now that the returns from the reserves have assumed a much more important role in the Government’s budget, the reserves have become even more relevant to the people. This Bill will more closely align the size and performance of our reserves, with the well-being of Singaporeans. Singaporeans frequently ask, "What is the point of having massive reserves that are never touched and are never used to help us?"
With this Bill and with these changes, the point should start becoming clear to the people. That being the case, Singaporeans will expect more transparency, more accountability and sustained good performance in the management of our reserves. That is because the Government’s ability to help and improve the lot of Singaporeans will become more tied to the continued strong performance of our investments.
When the investments by GIC and Temasek perform poorly in a financial year, could this affect the expected long-term real rate of return in the next financial year, which would then affect the amount of funds available to the Government to use in helping Singaporeans? It will be even more unsatisfactory to Singaporeans, if they learn of more big investments using their reserves that do badly, and are told by the Government that it does not micro-manage GIC or Temasek and that they invest for the long term.
That was the answer given when the investment into Shin Corp was made, and when the investments into the financial institutions such as UBS, Citigroup and Merrill Lynch were made, and many Singaporeans were not satisfied with that answer. We can expect them to be much more unhappy in similar cases in future, because their well-being could become much more directly affected by the performance of such investments. The Government will have to be much more conscious of this moving forward, and will have to better accommodate and address the concerns and questions of Singaporeans with regards to our reserves.
Sir, I have made some criticisms of the Bill, and have touched on some areas of concern that I hope the Minister can clarify. But there should be no mistake in whether I agree with the objectives of this Bill. I firmly do, and I endorse it even though I am not able to vote on it. With that, I support this Bill.
Tuesday, 8 April 2008
Budget 2008: MICA, 29 February 2008
I decided to speak on this topic after my abortive attempts at getting immigration and citizenship figures last year. It's no secret that the Government guards its secrets jealously, and uses official information to its strategic advantage, especially in responding to critics.
I'm not convinced that, in this day and age, this is the best way to go. Indeed, this may even be unhealthy for Singapore in the long run. A book on the civil service last year (the title escapes me right now) highlighted the danger of "group think" in the civil service, but it is well-nigh impossible to have a diversity of rigorously-researched views or analyses in the absence of adequate information to do research or to analyse.
The Senior Minister of State mentioned how MOM had published two papers on that day, about the employment of Singapore citizens, PRs and foreigners, and the quality of employment creation for Singapore citizens. I think that, far from supporting the SMS' argument, the fact that these papers were only published then, despite repeated requests by so many people -- not just myself -- really drives my point home. Why was the information not released earlier? Also, will it take a "cut" every Budget debate for such data to be released, or will MOM update and release this information regularly?
The SMS also referred to a survey by Transparency International. Someone pointed out to me that this was actually TI's Corruption Perceptions Index, and not transparency as such. He questioned whether it was deliberate obfuscation, or lazy incompetence by a staffer. I have no answer to that. But it should be clear that while transparency is an important component of the standard policy prescriptions on fighting corruption, this particular survey is really not relevant to what I was saying.
Finally, a couple of weeks after this exchange, the Straits Times ran an article on this issue. Hard to argue with its conclusions.
Mr Siew Kum Hong (Nominated Member): Sir, the Government collects and holds a lot of information. Yet, much, if not most, of that is unavailable, even to researchers for research purposes. The Government controls how much data to release, and how and when. Available data is sometimes presented differently at different times, making comparison difficult.
Even MPs, it seems, are not able to obtain certain data. I know, because I have asked for citizenship and PR figures in Parliament, but I have been told by MHA that it is "unable to provide this specific data requested." No reasons were cited. And it seems parliamentary convention permits this.
Meanwhile, we simply do not record some types of data. Most notably, when MOM tracks resident employment data, it does not differentiate between citizens and resident foreigners. I think most Singaporeans would consider that essential information if only to better understand how their country is changing. This Government fiercely prides itself on its transparency and accountability.
I therefore ask the Government to be more proactive in collecting and publishing official statistics. Any official data that does not invoke national security or similar concerns should be made available. Indeed, I urge the Government to enact a Freedom of Information Act to set the rules under which Government information is made available to the public as of right.
In 1946, the United Nations General Assembly adopted a resolution describing freedom of information as a fundamental human right. Article 19 of the Universal Declaration of Human Rights, which forms part of customary international law, explicitly provides for the right to seek and receive information. The right to information is therefore a fundamental human right. It is timely for Singapore to have its own Freedom of Information Act. Such legislation promotes transparency and accountability. It allows citizens to understand their governments better. It facilitates independent research. It enriches the history of the nation.
Today, over 70 countries around the world have such legislation. Even China, a Communist state, is implementing a statute on access to government information. It will come into force on 1st May 2008. It is time for Singapore, as a developed country, to take its rightful place within that group of countries.
The Senior Minister of State for Information, Communications and the Arts (Dr Balaji Sadasivan): [...]
Let me now turn to Mr Siew Kum Hong’s concern about freedom of information, which was a subject of discussion in this House at least twice before. Sir, Singapore is plugged into the globalised world and thrives on a free flow of information. The Political and Economic Risk Consultancy (PERC) in its Asian Intelligence Report’s assessment of economic statistics noted that for Singapore, "a wide range of topics are quickly compiled and made available to researchers on a regular basis". The range, coverage and availability of our economic and social statistics compare very favourably to those compiled and disseminated by more statistically developed countries, for example, US, UK, Australia and Hong Kong. The IMF, in its annual Article IV consultations, has also consistently assessed Singapore’s economic statistics to be timely, credible and reliable.
Mr Siew also asked about the availability of information such as employment data differentiating between citizens and non-citizens. In line with national statistical practice, MOM regularly publishes employment figures by residents (Singapore citizens and PRs) and non-residents (foreigners). MOM has also released two papers today retrievable on their website - the first on the employment of Singapore citizens, PRs and foreigners, a subject that Mr Siew showed interest in, and the second on the quality of employment creation for Singapore citizens.
Similarly, the Department of Statistics publishes regular demography statistics according to this breakdown, in addition to other economic and social statistics. In fact, all Government agencies regularly provide updated information on matters of public interest, such as health, education, and finance through the media, publicity campaigns as well as the Internet.
The National Archives of Singapore is also a rich repository of historical data that is invaluable to researchers. As stipulated by the National Heritage Board Act 1993, most archived public records are made available for public consultation after a 25-year period.
The lack of legislation on Freedom of Information has not prevented Singapore from doing well in international studies of transparency. In 2007, Transparency International ranked Singapore fourth in an international survey, above the United States, which does have a Freedom of Information Act.
That Singapore is a financial, information and economic hub, and that the people’s trust in our Government remains high, is proof that the system we have today is working well.
I'm not convinced that, in this day and age, this is the best way to go. Indeed, this may even be unhealthy for Singapore in the long run. A book on the civil service last year (the title escapes me right now) highlighted the danger of "group think" in the civil service, but it is well-nigh impossible to have a diversity of rigorously-researched views or analyses in the absence of adequate information to do research or to analyse.
The Senior Minister of State mentioned how MOM had published two papers on that day, about the employment of Singapore citizens, PRs and foreigners, and the quality of employment creation for Singapore citizens. I think that, far from supporting the SMS' argument, the fact that these papers were only published then, despite repeated requests by so many people -- not just myself -- really drives my point home. Why was the information not released earlier? Also, will it take a "cut" every Budget debate for such data to be released, or will MOM update and release this information regularly?
The SMS also referred to a survey by Transparency International. Someone pointed out to me that this was actually TI's Corruption Perceptions Index, and not transparency as such. He questioned whether it was deliberate obfuscation, or lazy incompetence by a staffer. I have no answer to that. But it should be clear that while transparency is an important component of the standard policy prescriptions on fighting corruption, this particular survey is really not relevant to what I was saying.
Finally, a couple of weeks after this exchange, the Straits Times ran an article on this issue. Hard to argue with its conclusions.
Ministry of Information, Communications and the Arts
Official Information
29 February 2008
Mr Siew Kum Hong (Nominated Member): Sir, the Government collects and holds a lot of information. Yet, much, if not most, of that is unavailable, even to researchers for research purposes. The Government controls how much data to release, and how and when. Available data is sometimes presented differently at different times, making comparison difficult.
Even MPs, it seems, are not able to obtain certain data. I know, because I have asked for citizenship and PR figures in Parliament, but I have been told by MHA that it is "unable to provide this specific data requested." No reasons were cited. And it seems parliamentary convention permits this.
Meanwhile, we simply do not record some types of data. Most notably, when MOM tracks resident employment data, it does not differentiate between citizens and resident foreigners. I think most Singaporeans would consider that essential information if only to better understand how their country is changing. This Government fiercely prides itself on its transparency and accountability.
I therefore ask the Government to be more proactive in collecting and publishing official statistics. Any official data that does not invoke national security or similar concerns should be made available. Indeed, I urge the Government to enact a Freedom of Information Act to set the rules under which Government information is made available to the public as of right.
In 1946, the United Nations General Assembly adopted a resolution describing freedom of information as a fundamental human right. Article 19 of the Universal Declaration of Human Rights, which forms part of customary international law, explicitly provides for the right to seek and receive information. The right to information is therefore a fundamental human right. It is timely for Singapore to have its own Freedom of Information Act. Such legislation promotes transparency and accountability. It allows citizens to understand their governments better. It facilitates independent research. It enriches the history of the nation.
Today, over 70 countries around the world have such legislation. Even China, a Communist state, is implementing a statute on access to government information. It will come into force on 1st May 2008. It is time for Singapore, as a developed country, to take its rightful place within that group of countries.
The Senior Minister of State for Information, Communications and the Arts (Dr Balaji Sadasivan): [...]
Let me now turn to Mr Siew Kum Hong’s concern about freedom of information, which was a subject of discussion in this House at least twice before. Sir, Singapore is plugged into the globalised world and thrives on a free flow of information. The Political and Economic Risk Consultancy (PERC) in its Asian Intelligence Report’s assessment of economic statistics noted that for Singapore, "a wide range of topics are quickly compiled and made available to researchers on a regular basis". The range, coverage and availability of our economic and social statistics compare very favourably to those compiled and disseminated by more statistically developed countries, for example, US, UK, Australia and Hong Kong. The IMF, in its annual Article IV consultations, has also consistently assessed Singapore’s economic statistics to be timely, credible and reliable.
Mr Siew also asked about the availability of information such as employment data differentiating between citizens and non-citizens. In line with national statistical practice, MOM regularly publishes employment figures by residents (Singapore citizens and PRs) and non-residents (foreigners). MOM has also released two papers today retrievable on their website - the first on the employment of Singapore citizens, PRs and foreigners, a subject that Mr Siew showed interest in, and the second on the quality of employment creation for Singapore citizens.
Similarly, the Department of Statistics publishes regular demography statistics according to this breakdown, in addition to other economic and social statistics. In fact, all Government agencies regularly provide updated information on matters of public interest, such as health, education, and finance through the media, publicity campaigns as well as the Internet.
The National Archives of Singapore is also a rich repository of historical data that is invaluable to researchers. As stipulated by the National Heritage Board Act 1993, most archived public records are made available for public consultation after a 25-year period.
The lack of legislation on Freedom of Information has not prevented Singapore from doing well in international studies of transparency. In 2007, Transparency International ranked Singapore fourth in an international survey, above the United States, which does have a Freedom of Information Act.
That Singapore is a financial, information and economic hub, and that the people’s trust in our Government remains high, is proof that the system we have today is working well.
Wednesday, 26 March 2008
Videos of Budget 2008 speech
Here are the videos (in two parts) for my speech on the Budget statement on 26 February 2008, once again courtesy of Watch Tower V.
Wednesday, 27 February 2008
Speech by Minister Tharman: 27 February 2008
Minister Tharman delivered his round-up speech today, on the debate on the Budget statement over the past couple of days. The text of his speech is available here, while the video will be available here for a limited time. I have reproduced his response to my speech below (from the prepared text, not checked against delivery).
I have always maintained that my speeches must speak for themselves, must stand and fall on their own. So I will only make a few short comments:
5.1. Mr Speaker Sir, the most important debate in the last two days has been about the basic ethic that we want to sustain in our society.
5.2. We all aspire to help and uplift the less fortunate members of our society.
5.3. Mr Siew Kum Hong made an impassioned speech. He says that the Government is only concerned about not eroding the work ethic, rather than caring for Singaporeans, and so we tend to provide the bare minimum to Singaporeans in need such that they have just enough to survive.
(a) His description does not square with the reality of Government interventions to support the lower income group. Through Workfare, through our housing subsidies, through our CPF subsidies and top-ups, through the support we provide the poor with Medifund and through the many flexible schemes that ComCare offers, we are providing substantial support for lower income Singaporeans.
(b) His desire to see nobody left behind is noble and shared by us all. But his exhortation that we should ignore waste, ignore deadweight loss, ignore disincentives to work is quite reckless.
(c) As Chew Chu Ching pointed out in his ZaoBao column today, commenting on Mr Siew Kum Hong’s speech, “if a country does not care about creating wealth at all, it is big question whether it could survive in the real world." [cartoon from ZaoBao to the same effect]
(d) To be able to help the poor, we must first create wealth, grow our GDP and provide every incentive for Singaporeans to strive and work to improve their lives and that of their families.
(e) If our policies harm that, for the noblest of reasons, we will be in serious trouble, as many other countries have found. Instead of helping the people we all want to help, we will be doing worse for them.
5.4. The real issue is how we can keep our economy productive and vibrant, and how we can keep our society resilient and caring, not just now or for a few years, but for many years to come. Will it be achieved by Government giving more and more and handing out more and more goodies, which MPs like Mr Sam Tan, Dr Ong Seh Hong, Mr Baey Yam Keng and Dr Lim Wee Kiak cautioned against?
5.5. As Chua Mui Hoong put it in yesterday’s Straits Times, “it is timely to recall that the Finance Minister is not the God of Fortune, and that not all calls for spending have merit. Even if there is a $6.4b surplus”.
5.6. Our basic philosophy has been and must remain what Mr Zaqy Mohamad, Mr Zainul Abidin Rasheed, Dr Lily Neo, Ms Lee Bee Wah, Mrs Josephine Teo and Dr Lim Wee Kiak expressed – we must keep alive the incentive for every Singaporean to strive and maximize opportunities to do better for themselves and their families.
5.7. This Budget has given Singaporeans something to tide over their present difficulties. But far more important is what we do to help every individual upgrade himself through education and training, to stay in a job and keep advancing his skills, and to save for retirement.
5.8. We have embarked on new initiatives, and there is much more work ahead. We will stay focused on this central task. As Mdm Halimah Yacob summed up, it is what we have to do so that this continues to be a place where everyone has the opportunity to fulfill his dreams through hard work and can look forward to the future with hope.
5.9. This is the philosophy which will keep Singapore going through good years and bad, which will ensure that prosperity will last more than 3 generations as Mr Seng Han Thong hoped. And above all, which will make this a society where every Singaporean can be proud that they are playing their part, not just by doing better for themselves, but by contributing to Singapore.
I have always maintained that my speeches must speak for themselves, must stand and fall on their own. So I will only make a few short comments:
- Minister Tharman did not say anything about the first part of my speech, about the benefits of GDP (not) going to Singaporeans.
- Someone (whose views I respect) told me that this was not one of my better speeches, that it was not constructive or different. Well, I think there is nothing constructive that can be said here about compassion -- either you believe in the idea of what I said, or you don't. It is about the idea, not about specifics.
- I did not advocate completely ignoring waste, deadweight loss and disincentives to work. Instead, I believe that in some situations, some wastage of public funds should be tolerated, if the overall benefit outweighs that wastage. While the road to hell may be paved with good intentions, not all good intentions lead to hell.
- I did not say anything that could possibly be construed as not caring about creating wealth at all, as the Zaobao columnist seems to have suggested. That is a strawman argument, and it's easy to debunk a strawman argument. Indeed, I do believe in and applaud the Budget measures aimed at our long-term competitiveness -- I merely chose not to include it in my speech.
- Finally, I suspect that as these things go, I got as mild a rebuke as I possibly could have. And I appreciate that.
Speech by Minister Tharman
27 February 2008
5.1. Mr Speaker Sir, the most important debate in the last two days has been about the basic ethic that we want to sustain in our society.
5.2. We all aspire to help and uplift the less fortunate members of our society.
5.3. Mr Siew Kum Hong made an impassioned speech. He says that the Government is only concerned about not eroding the work ethic, rather than caring for Singaporeans, and so we tend to provide the bare minimum to Singaporeans in need such that they have just enough to survive.
(a) His description does not square with the reality of Government interventions to support the lower income group. Through Workfare, through our housing subsidies, through our CPF subsidies and top-ups, through the support we provide the poor with Medifund and through the many flexible schemes that ComCare offers, we are providing substantial support for lower income Singaporeans.
(b) His desire to see nobody left behind is noble and shared by us all. But his exhortation that we should ignore waste, ignore deadweight loss, ignore disincentives to work is quite reckless.
(c) As Chew Chu Ching pointed out in his ZaoBao column today, commenting on Mr Siew Kum Hong’s speech, “if a country does not care about creating wealth at all, it is big question whether it could survive in the real world." [cartoon from ZaoBao to the same effect]
(d) To be able to help the poor, we must first create wealth, grow our GDP and provide every incentive for Singaporeans to strive and work to improve their lives and that of their families.
(e) If our policies harm that, for the noblest of reasons, we will be in serious trouble, as many other countries have found. Instead of helping the people we all want to help, we will be doing worse for them.
5.4. The real issue is how we can keep our economy productive and vibrant, and how we can keep our society resilient and caring, not just now or for a few years, but for many years to come. Will it be achieved by Government giving more and more and handing out more and more goodies, which MPs like Mr Sam Tan, Dr Ong Seh Hong, Mr Baey Yam Keng and Dr Lim Wee Kiak cautioned against?
5.5. As Chua Mui Hoong put it in yesterday’s Straits Times, “it is timely to recall that the Finance Minister is not the God of Fortune, and that not all calls for spending have merit. Even if there is a $6.4b surplus”.
5.6. Our basic philosophy has been and must remain what Mr Zaqy Mohamad, Mr Zainul Abidin Rasheed, Dr Lily Neo, Ms Lee Bee Wah, Mrs Josephine Teo and Dr Lim Wee Kiak expressed – we must keep alive the incentive for every Singaporean to strive and maximize opportunities to do better for themselves and their families.
5.7. This Budget has given Singaporeans something to tide over their present difficulties. But far more important is what we do to help every individual upgrade himself through education and training, to stay in a job and keep advancing his skills, and to save for retirement.
5.8. We have embarked on new initiatives, and there is much more work ahead. We will stay focused on this central task. As Mdm Halimah Yacob summed up, it is what we have to do so that this continues to be a place where everyone has the opportunity to fulfill his dreams through hard work and can look forward to the future with hope.
5.9. This is the philosophy which will keep Singapore going through good years and bad, which will ensure that prosperity will last more than 3 generations as Mr Seng Han Thong hoped. And above all, which will make this a society where every Singaporean can be proud that they are playing their part, not just by doing better for themselves, but by contributing to Singapore.
Budget 2008: Speech on Budget Statement, 26 February 2008
This is the prepared text of my speech. For the next few days, there will also be a video on CNA. The speech speaks for itself.
Midway through my speech, Minister Tharman got up and went to discuss something with the Prime Minister. That was a little unnerving. I look forward to his response tomorrow.
1. Mr Speaker Sir, much has been said about this year’s Budget – much praise, many keen observations, and certainly, plenty of smart suggestions. I hope that this House will bear with me, as I add a few more comments.
FY2007 surplus
2. We had a surplus of $6.45 billion last year. This year’s Budget is projected to incur a deficit of $0.8 billion. There will remain a huge amount of funds from last year’s surplus that remains untouched.
3. Singaporeans see last year’s unexpected surplus, as a windfall generated in large part by the increased GST rate, their overall increased consumption, and their property purchases. It is only then natural for Singaporeans to want to partake of this perceived windfall.
4. The Government has argued in favour of prudence, of keeping something in reserve to meet unexpected contingencies. The other side of the coin, then, is that the Government must not hesitate to use this massive war chest to provide assistance if and when needed. I think if either the economy or inflation gets much worse over the course of the year, Singaporeans will rightly expect appropriate off-Budget measures from the Government.
5. Perhaps more accurate forecasting and projections in future would go a long way towards avoiding the repetition of such surprises. After all, surprises on such a scale are not desirable.
6. Thanks to this Government’s ability to consistently perform better fiscally than initially projected, many people have learnt to discount its forecasts. Even before we start the new fiscal year, economists have begun contradicting the official forecast of a deficit for this year. This state of affairs cannot be healthy.
7. More importantly, improved accuracy in forecasting will ensure that we do not raise taxes like GST, or government fees and charges, unnecessarily, to make up for revenue shortfalls that do not materialize. Such increases impose a burden on the people, and as we have seen, have a strong inflationary effect.
Who benefits from GDP growth?
8. Sir, the Minister has attributed this massive surplus to an active property market and better-than-expected economic growth. But despite last year’s impressive real GDP growth of 7.7%, many Singaporeans still do not feel better off. Instead, in the face of the worst inflation experienced in 25 years, there is an extremely strong sense of being worse off amongst many Singaporeans. Why is that so?
9. No less than Nobel laureate Joseph Stiglitz has criticized the use of GDP growth as an indicator of progress. He noted that GDP growth does not measure environmental degradation or depreciation of natural resources. It can mask declines in quality of life, where GDP may go up but people’s income could be going down. He also pointed out that such a practice rewards governments only for increasing materialistic production. Well, Mr Stiglitz has been asked by the French President to head a panel, tasked with devising a new method of economic calculation that includes quality-of-life measures.
10. Indeed, there is a view amongst some Singaporeans, that our stunning headline growth numbers do not tell the full picture. We are told that Singapore has done well, is doing well, and will continue to do well. Our blistering GDP growth in recent years supports this view. Even with the imminent slowdown, we are still expected to grow by between 4 and 6 percent this year – healthy by any standards.
11. And yet, some questions persist. Who exactly has benefited from all this growth? How much have Singaporeans benefited from it?
12. Sir, I will try to shed some light on those questions. Let me start with wages. Wages as a proportion of Gross National Income has stayed relatively stable, averaging 43% in the period between 1993 and 2007. It was 41% in 2007.
13. We do not have official statistics on the breakdown of wages between residents and non-residents. But we do know that the majority of jobs created in the past three years went to foreigners.
14. As at December 2007, there were 900,800 non-resident foreigners employed here, or one-third of our workforce of 2.73 million. This compares with 671,200 non-resident foreigners employed here as at December 2005, or 28.9% of the 2.32 million workforce then. The proportion of non-resident foreigners in the workforce has increased by 15% over the past three years.
15. Unless most of the jobs that went to non-resident foreigners during the past three years were low-income jobs, which I certainly hope was not the case given how heavily our growth strategy relies on the attraction of high-quality foreign talent here, the increase in the proportion of non-resident foreigners in the workforce means that the share of wages going to foreigners has probably also increased in the past three years.
16. And this is based on non-resident foreigners. Once permanent residents are factored in, the proportion of wages going to non-citizens would be even higher.
17. In other words, in proportionate terms, non-citizens seem to be benefiting from our GDP growth more than Singaporeans are, at least in terms of wages. As our population moves towards 6.5 million in Year X, fuelled mainly by more foreigners coming to Singapore, this trend will only accelerate.
18. Well, what about capital? Perhaps if Singapore-owned capital is benefiting from the economic growth, then we could make the case that economic growth has benefited Singaporean entrepreneurs and investors.
19. Unfortunately, the picture may be even bleaker for capital. According to the Singapore Corporate Sector Report, in 1995, 30% of the paid-up shares in Singapore companies were foreign-owned. By 2005, this percentage had jumped to 45%.
20. In other words, the proportion of foreign ownership in the Singapore corporate sector increased by 50% in the 10 years between 1995 and 2005. If I had to guess, I would say that this proportion has increased further in the three years since.
21. Sir, even I would say that the statistics I have cited are not conclusive. There is a fair amount of inference and guesswork there. But I think it all shows that there are some very legitimate questions that can be asked, that need to be asked, about the true extent to which Singaporeans are benefiting from all this economic growth.
22. I do not think it is enough to merely say that our economic growth has created jobs for Singaporeans, that the low resident unemployment rate serves as a proxy indicator of the benefits from growth. That is a purely quantitative measure. Quite apart from the point that the statistics available group both Singaporeans and permanent residents together, those figures do not shed any light whatsoever on the quality of jobs going to residents, on the extent to which residents have benefited.
23. Sir, I do not mean to be xenophobic, or to argue against having foreigners here. I work in a US MNC, mostly with foreigners, and certainly I appreciate the many important contributions they make to our economy. But surely, Singapore’s economic growth should benefit Singaporeans more than others.
24. Some Members have already questioned the so-called “grow at all costs” strategy, of growing the economy as much as we can in good times, to make up for the years of slow or no growth. This seemingly unrelenting focus on GDP growth alone does not take into account the quality or nature of that growth, or the distribution of its benefits.
25. And I have to ask: why should Singaporeans continue to support this pursuit of GDP growth, when they pay the price for it in terms of higher inflation and more stressful and poorer quality of lives, and yet may not be reaping the benefits to an appropriate extent?
The Government’s approach to helping Singaporeans
26. Sir, a possible answer may be that even if Singaporeans are not benefiting as much as others, the Government does reap a fair amount of gains, which it then uses to assist needy Singaporeans.
27. Certainly, the special transfers are welcome. I applaud the Government for its efforts to re-distribute all this money to the needy and the lower-income. And I must confess that it dismays me, when higher-income Singaporeans complain about getting less than their less well-to-do brethren.
28. But special transfers are ad hoc in nature. Unless we tap on the reserves, they are conditional upon surpluses in past years. We need to make sure that there is protection for Singaporeans in bad times as well, which is exactly when the need for help is at its greatest.
29. Sir, I do not intend to suggest specific measures for the Government to consider. Other Members have made many sound suggestions, and I am sure that many more will be made over the next two weeks.
30. Instead, I propose to explore what seems to be the Government’s philosophy in helping Singaporeans. Its approach seems to be underpinned by three fundamental principles: avoid wasting public funds; avoid undermining the work ethic; and avoid creating a bloated bureaucracy by keeping things simple. Unfortunately, this approach will often clash with our basic human impulse for care, concern and compassion, and it will generally overlook intangible and unquantifiable factors.
31. Sir, last year’s Budget and Committee of Supply debates were my first. They were memorable for many reasons, but one particular sequence stood out in my mind. During the COS debate on the issue of a caregiver’s allowance for those looking after the disabled and older relatives, the Minister for Community Development, Youth and Sports referred to a concept in policy circles called “deadweight funding”.
32. The argument was that a caregiver’s allowance will require the Government to spend a lot of money, spread out over a very large number of families, and so the families who really need help will end up receiving less than they otherwise would. So, there will be no caregiver’s allowance. We should not waste public funds on those families with caregivers that do not really need help, never mind that there is currently no direct financial assistance at all for caregivers, never mind that this means that those who do need help will not get it, and never mind that the gesture of an allowance means a lot more than the actual amount.
33. I would hazard that a similar sort of thinking underlies the Workfare Income Supplement Scheme’s approach to casual and self-employed workers. To ensure that WIS payments are made only to those who are truly working, to encourage people to continue working, we require beneficiaries to make Medisave contributions to qualify.
34. This is in stark contrast to the previous Workfare bonuses, where casual and self-employed workers qualified for the payments simply by signing a form. As a result, only 54,000 out of an estimated 160,000 casual workers and self-employed are actually receiving WIS payments.
35. Sir, the reason is not difficult to understand. These workers are usually very cash-strapped, living day-to-day, hand-to-mouth. And that is exactly why the WIS was implemented in the first place, to supplement their low incomes.
36. But by requiring them to use their already insufficient cash to make Medisave contributions to qualify for WIS, the inevitable occurs. Many simply opt out, and we end up missing out on two-thirds of a key group that we were trying to help through the WIS.
37. Or take means testing. I will speak more about means testing during the COS debate on the Ministry of Health. But for present purposes, it suffices to say that the current proposal is to perform means testing based on one’s income level, and housing type for those without income, such as retirees. The rationale is to keep things simple.
38. But this is likely to end up penalizing the high income with big families and multiple dependents, households with a low per capita income. In effect, this is the group that ends up bearing the cost for the Ministry’s desire to keep the method of means testing simple.
39. In fact, the lesson seems so well learnt by some, that during the public feedback sessions on means testing, there were even calls to cut back on the subsidies even more. Have we really lost the capacity for compassion? I am glad that the Health Minister rejected this suggestion outright.
40. And what about Public Assistance? The Minister has announced a $40 increase in monthly PA payments, which for a single-person household represents a 13.8% increase, from $290 to $330.
41. But with prices having increased 6.6% over the past year, $330 is really worth $309.50 in January 2007 dollars. In other words, that singe-person household would only be seeing, at best, a 6.7% increase in real terms. I say at best, because the inflation rate experienced by the lowest income group tends to be higher than the average inflation rate.
42. The Minister for Community Development, Youth and Sports recently said that the groceries necessary to satisfy the Health Ministry’s nutritional recommendations for a person would cost $95 every month, and so $290 a month should be enough for a single-person household on PA.
43. Never mind that individual circumstances may result in some having greater needs than others. Never mind the stories of PA recipients surviving on rice and soy sauce, barely making ends meet. Never mind that limiting the amount so tightly seems to begrudge PA recipients some degree of comfort above subsistence levels.
44. To avoid eroding the work ethic, we leave no room for generosity, no room for error or contingency for PA recipients, no room for an occasional treat unless it is given to them by charities. Never mind that PA recipients are, by definition, unable to work in the first place.
45. Sir, we do not want to undermine Singaporeans’ work ethic. So we decline to implement an institutionalized social safety net that is either expansive or generous. We choose to err on the side of being conservative, some might even say stingy. We are willing to be under-inclusive and leave some of the needy out in the cold, instead of being over-inclusive and allowing some undeserving persons to slip through the cracks and benefit. We prefer to focus on safeguarding public funds, instead of helping people.
What does it mean to be Singaporean?
46. Many Singaporeans ask why the Government does not do more to help Singaporeans. Why doesn’t the Government help Singaporeans, when it has the resources to do so? I would rephrase the question like this: what does it mean to be Singaporean?
47. The Government consistently emphasizes the importance of individual responsibility, of ensuring that people do not abdicate responsibility for their lives to the Government. As a result, we provide the bare minimum level of assistance so that Singaporeans will not starve.
48. Yes, we are all responsible for our lives. We have to be. But that is not the full story. It cannot be.
49. The point is not about judging those who made mistakes or wrong choices somewhere along the line, of finding them undeserving. To cast the question in terms of whether a person deserves aid, is to miss the point.
50. The point is to help our fellow Singaporeans in their times in need. The point is to be compassionate, because there, but for the grace of God, go I. The point is to assure Singaporeans, that if, touch wood, they fall on hard times, they will be taken care of. Simply because they are Singaporeans, and Singapore will take care of its own.
51. We have to. Because if we don’t, nobody else will. The world does not owe Singaporeans anything. It has no obligations to do anything to help Singaporeans. But maybe, if being Singaporean is to mean anything, Singapore does, just like how the more fortunate amongst us have the duty to help the less fortunate.
52. Yes, help needs to be applied in a smart, careful and judicious manner. But avoiding waste, avoiding erosion of the work ethic and avoiding a bloated bureaucracy should not detract or distract us from the very reason for providing assistance in the very first place. We should not extend help with our right hand, and then pull it back with our left hand.
53. Sir, sometimes, it can be worth having some wastage or inefficiency, or “deadweight funding”, if the net benefit to Singaporeans outweighs such wastage or inefficiency or deadweight. And by benefit, I mean benefit in a holistic sense, both tangible and intangible, and not just economic or financial benefit.
54. Intangible benefit could mean better peace of mind for PA recipients, secure in the knowledge that there is some buffer in their monthly allowances. It could mean the sense of recognition enjoyed by caregivers from having their efforts recognized by the state in the form of a caregiver’s allowance, even if they don’t necessarily need that money, or even if the sum is more symbolic than substantial.
55. It could mean the relief felt by casual workers and self-employed, in not having to make Medisave contributions before enjoying the benefits of WIS. Or it could mean the security of the middle class and especially the sandwiched class, whose high salary translates into a low household per capita income when spread across all of their dependents, in knowing that they will still be entitled to the full subsidy offered by the Government if they opt for a C Class ward.
56. Sir, Mr Ngiam Tong Dow, in an interview with the Petir magazine, cited the view of a so-called "thinking Singaporean”, that “all our national policies serve only at the altar of economic survival”. Mr Ngiam argued that “The government has to appeal to the people’s heart to build the nation of Singapore, not just their stomachs.”
57. I agree whole-heartedly with Mr Ngiam. And appealing to the people’s heart, requires the Government to put aside its penchant for hard calculations, and occasionally err on the side of generosity and graciousness.
Conclusion
58. Sir, I want to live in a country that cares for its people first and foremost, not a country that prioritises GDP growth for its own sake. I want to see a nation where Singaporeans are valued for everything that we are, not just the economic contribution we can make. I want to grow old in a state that places a higher premium on helping citizens, than on ensuring that there is no wastage. I want to be part of a generous society that helps its most vulnerable members, instead of counting the pennies and tightening the purse strings.
59. I do not think that I live in such a country yet. And that disheartens me. I sometimes question what it means to be a Singaporean, and I consider myself one of the lucky ones. This bodes ill for us in this era of global mobility, if other Singaporeans are similarly disenchanted. And those who leave, those who are able to leave, the 1000 Singaporeans who leave every year and never come back, are exactly the ones that we need to stay.
60. Sir, I hope one day, I can say that I do live in such a country. Maybe one day, I will see a Budget that reflects the principles and ideals that I have just spoken about. Until then, I can only continue to hope.
Midway through my speech, Minister Tharman got up and went to discuss something with the Prime Minister. That was a little unnerving. I look forward to his response tomorrow.
Budget 2008
1. Mr Speaker Sir, much has been said about this year’s Budget – much praise, many keen observations, and certainly, plenty of smart suggestions. I hope that this House will bear with me, as I add a few more comments.
FY2007 surplus
2. We had a surplus of $6.45 billion last year. This year’s Budget is projected to incur a deficit of $0.8 billion. There will remain a huge amount of funds from last year’s surplus that remains untouched.
3. Singaporeans see last year’s unexpected surplus, as a windfall generated in large part by the increased GST rate, their overall increased consumption, and their property purchases. It is only then natural for Singaporeans to want to partake of this perceived windfall.
4. The Government has argued in favour of prudence, of keeping something in reserve to meet unexpected contingencies. The other side of the coin, then, is that the Government must not hesitate to use this massive war chest to provide assistance if and when needed. I think if either the economy or inflation gets much worse over the course of the year, Singaporeans will rightly expect appropriate off-Budget measures from the Government.
5. Perhaps more accurate forecasting and projections in future would go a long way towards avoiding the repetition of such surprises. After all, surprises on such a scale are not desirable.
6. Thanks to this Government’s ability to consistently perform better fiscally than initially projected, many people have learnt to discount its forecasts. Even before we start the new fiscal year, economists have begun contradicting the official forecast of a deficit for this year. This state of affairs cannot be healthy.
7. More importantly, improved accuracy in forecasting will ensure that we do not raise taxes like GST, or government fees and charges, unnecessarily, to make up for revenue shortfalls that do not materialize. Such increases impose a burden on the people, and as we have seen, have a strong inflationary effect.
Who benefits from GDP growth?
8. Sir, the Minister has attributed this massive surplus to an active property market and better-than-expected economic growth. But despite last year’s impressive real GDP growth of 7.7%, many Singaporeans still do not feel better off. Instead, in the face of the worst inflation experienced in 25 years, there is an extremely strong sense of being worse off amongst many Singaporeans. Why is that so?
9. No less than Nobel laureate Joseph Stiglitz has criticized the use of GDP growth as an indicator of progress. He noted that GDP growth does not measure environmental degradation or depreciation of natural resources. It can mask declines in quality of life, where GDP may go up but people’s income could be going down. He also pointed out that such a practice rewards governments only for increasing materialistic production. Well, Mr Stiglitz has been asked by the French President to head a panel, tasked with devising a new method of economic calculation that includes quality-of-life measures.
10. Indeed, there is a view amongst some Singaporeans, that our stunning headline growth numbers do not tell the full picture. We are told that Singapore has done well, is doing well, and will continue to do well. Our blistering GDP growth in recent years supports this view. Even with the imminent slowdown, we are still expected to grow by between 4 and 6 percent this year – healthy by any standards.
11. And yet, some questions persist. Who exactly has benefited from all this growth? How much have Singaporeans benefited from it?
12. Sir, I will try to shed some light on those questions. Let me start with wages. Wages as a proportion of Gross National Income has stayed relatively stable, averaging 43% in the period between 1993 and 2007. It was 41% in 2007.
13. We do not have official statistics on the breakdown of wages between residents and non-residents. But we do know that the majority of jobs created in the past three years went to foreigners.
14. As at December 2007, there were 900,800 non-resident foreigners employed here, or one-third of our workforce of 2.73 million. This compares with 671,200 non-resident foreigners employed here as at December 2005, or 28.9% of the 2.32 million workforce then. The proportion of non-resident foreigners in the workforce has increased by 15% over the past three years.
15. Unless most of the jobs that went to non-resident foreigners during the past three years were low-income jobs, which I certainly hope was not the case given how heavily our growth strategy relies on the attraction of high-quality foreign talent here, the increase in the proportion of non-resident foreigners in the workforce means that the share of wages going to foreigners has probably also increased in the past three years.
16. And this is based on non-resident foreigners. Once permanent residents are factored in, the proportion of wages going to non-citizens would be even higher.
17. In other words, in proportionate terms, non-citizens seem to be benefiting from our GDP growth more than Singaporeans are, at least in terms of wages. As our population moves towards 6.5 million in Year X, fuelled mainly by more foreigners coming to Singapore, this trend will only accelerate.
18. Well, what about capital? Perhaps if Singapore-owned capital is benefiting from the economic growth, then we could make the case that economic growth has benefited Singaporean entrepreneurs and investors.
19. Unfortunately, the picture may be even bleaker for capital. According to the Singapore Corporate Sector Report, in 1995, 30% of the paid-up shares in Singapore companies were foreign-owned. By 2005, this percentage had jumped to 45%.
20. In other words, the proportion of foreign ownership in the Singapore corporate sector increased by 50% in the 10 years between 1995 and 2005. If I had to guess, I would say that this proportion has increased further in the three years since.
21. Sir, even I would say that the statistics I have cited are not conclusive. There is a fair amount of inference and guesswork there. But I think it all shows that there are some very legitimate questions that can be asked, that need to be asked, about the true extent to which Singaporeans are benefiting from all this economic growth.
22. I do not think it is enough to merely say that our economic growth has created jobs for Singaporeans, that the low resident unemployment rate serves as a proxy indicator of the benefits from growth. That is a purely quantitative measure. Quite apart from the point that the statistics available group both Singaporeans and permanent residents together, those figures do not shed any light whatsoever on the quality of jobs going to residents, on the extent to which residents have benefited.
23. Sir, I do not mean to be xenophobic, or to argue against having foreigners here. I work in a US MNC, mostly with foreigners, and certainly I appreciate the many important contributions they make to our economy. But surely, Singapore’s economic growth should benefit Singaporeans more than others.
24. Some Members have already questioned the so-called “grow at all costs” strategy, of growing the economy as much as we can in good times, to make up for the years of slow or no growth. This seemingly unrelenting focus on GDP growth alone does not take into account the quality or nature of that growth, or the distribution of its benefits.
25. And I have to ask: why should Singaporeans continue to support this pursuit of GDP growth, when they pay the price for it in terms of higher inflation and more stressful and poorer quality of lives, and yet may not be reaping the benefits to an appropriate extent?
The Government’s approach to helping Singaporeans
26. Sir, a possible answer may be that even if Singaporeans are not benefiting as much as others, the Government does reap a fair amount of gains, which it then uses to assist needy Singaporeans.
27. Certainly, the special transfers are welcome. I applaud the Government for its efforts to re-distribute all this money to the needy and the lower-income. And I must confess that it dismays me, when higher-income Singaporeans complain about getting less than their less well-to-do brethren.
28. But special transfers are ad hoc in nature. Unless we tap on the reserves, they are conditional upon surpluses in past years. We need to make sure that there is protection for Singaporeans in bad times as well, which is exactly when the need for help is at its greatest.
29. Sir, I do not intend to suggest specific measures for the Government to consider. Other Members have made many sound suggestions, and I am sure that many more will be made over the next two weeks.
30. Instead, I propose to explore what seems to be the Government’s philosophy in helping Singaporeans. Its approach seems to be underpinned by three fundamental principles: avoid wasting public funds; avoid undermining the work ethic; and avoid creating a bloated bureaucracy by keeping things simple. Unfortunately, this approach will often clash with our basic human impulse for care, concern and compassion, and it will generally overlook intangible and unquantifiable factors.
31. Sir, last year’s Budget and Committee of Supply debates were my first. They were memorable for many reasons, but one particular sequence stood out in my mind. During the COS debate on the issue of a caregiver’s allowance for those looking after the disabled and older relatives, the Minister for Community Development, Youth and Sports referred to a concept in policy circles called “deadweight funding”.
32. The argument was that a caregiver’s allowance will require the Government to spend a lot of money, spread out over a very large number of families, and so the families who really need help will end up receiving less than they otherwise would. So, there will be no caregiver’s allowance. We should not waste public funds on those families with caregivers that do not really need help, never mind that there is currently no direct financial assistance at all for caregivers, never mind that this means that those who do need help will not get it, and never mind that the gesture of an allowance means a lot more than the actual amount.
33. I would hazard that a similar sort of thinking underlies the Workfare Income Supplement Scheme’s approach to casual and self-employed workers. To ensure that WIS payments are made only to those who are truly working, to encourage people to continue working, we require beneficiaries to make Medisave contributions to qualify.
34. This is in stark contrast to the previous Workfare bonuses, where casual and self-employed workers qualified for the payments simply by signing a form. As a result, only 54,000 out of an estimated 160,000 casual workers and self-employed are actually receiving WIS payments.
35. Sir, the reason is not difficult to understand. These workers are usually very cash-strapped, living day-to-day, hand-to-mouth. And that is exactly why the WIS was implemented in the first place, to supplement their low incomes.
36. But by requiring them to use their already insufficient cash to make Medisave contributions to qualify for WIS, the inevitable occurs. Many simply opt out, and we end up missing out on two-thirds of a key group that we were trying to help through the WIS.
37. Or take means testing. I will speak more about means testing during the COS debate on the Ministry of Health. But for present purposes, it suffices to say that the current proposal is to perform means testing based on one’s income level, and housing type for those without income, such as retirees. The rationale is to keep things simple.
38. But this is likely to end up penalizing the high income with big families and multiple dependents, households with a low per capita income. In effect, this is the group that ends up bearing the cost for the Ministry’s desire to keep the method of means testing simple.
39. In fact, the lesson seems so well learnt by some, that during the public feedback sessions on means testing, there were even calls to cut back on the subsidies even more. Have we really lost the capacity for compassion? I am glad that the Health Minister rejected this suggestion outright.
40. And what about Public Assistance? The Minister has announced a $40 increase in monthly PA payments, which for a single-person household represents a 13.8% increase, from $290 to $330.
41. But with prices having increased 6.6% over the past year, $330 is really worth $309.50 in January 2007 dollars. In other words, that singe-person household would only be seeing, at best, a 6.7% increase in real terms. I say at best, because the inflation rate experienced by the lowest income group tends to be higher than the average inflation rate.
42. The Minister for Community Development, Youth and Sports recently said that the groceries necessary to satisfy the Health Ministry’s nutritional recommendations for a person would cost $95 every month, and so $290 a month should be enough for a single-person household on PA.
43. Never mind that individual circumstances may result in some having greater needs than others. Never mind the stories of PA recipients surviving on rice and soy sauce, barely making ends meet. Never mind that limiting the amount so tightly seems to begrudge PA recipients some degree of comfort above subsistence levels.
44. To avoid eroding the work ethic, we leave no room for generosity, no room for error or contingency for PA recipients, no room for an occasional treat unless it is given to them by charities. Never mind that PA recipients are, by definition, unable to work in the first place.
45. Sir, we do not want to undermine Singaporeans’ work ethic. So we decline to implement an institutionalized social safety net that is either expansive or generous. We choose to err on the side of being conservative, some might even say stingy. We are willing to be under-inclusive and leave some of the needy out in the cold, instead of being over-inclusive and allowing some undeserving persons to slip through the cracks and benefit. We prefer to focus on safeguarding public funds, instead of helping people.
What does it mean to be Singaporean?
46. Many Singaporeans ask why the Government does not do more to help Singaporeans. Why doesn’t the Government help Singaporeans, when it has the resources to do so? I would rephrase the question like this: what does it mean to be Singaporean?
47. The Government consistently emphasizes the importance of individual responsibility, of ensuring that people do not abdicate responsibility for their lives to the Government. As a result, we provide the bare minimum level of assistance so that Singaporeans will not starve.
48. Yes, we are all responsible for our lives. We have to be. But that is not the full story. It cannot be.
49. The point is not about judging those who made mistakes or wrong choices somewhere along the line, of finding them undeserving. To cast the question in terms of whether a person deserves aid, is to miss the point.
50. The point is to help our fellow Singaporeans in their times in need. The point is to be compassionate, because there, but for the grace of God, go I. The point is to assure Singaporeans, that if, touch wood, they fall on hard times, they will be taken care of. Simply because they are Singaporeans, and Singapore will take care of its own.
51. We have to. Because if we don’t, nobody else will. The world does not owe Singaporeans anything. It has no obligations to do anything to help Singaporeans. But maybe, if being Singaporean is to mean anything, Singapore does, just like how the more fortunate amongst us have the duty to help the less fortunate.
52. Yes, help needs to be applied in a smart, careful and judicious manner. But avoiding waste, avoiding erosion of the work ethic and avoiding a bloated bureaucracy should not detract or distract us from the very reason for providing assistance in the very first place. We should not extend help with our right hand, and then pull it back with our left hand.
53. Sir, sometimes, it can be worth having some wastage or inefficiency, or “deadweight funding”, if the net benefit to Singaporeans outweighs such wastage or inefficiency or deadweight. And by benefit, I mean benefit in a holistic sense, both tangible and intangible, and not just economic or financial benefit.
54. Intangible benefit could mean better peace of mind for PA recipients, secure in the knowledge that there is some buffer in their monthly allowances. It could mean the sense of recognition enjoyed by caregivers from having their efforts recognized by the state in the form of a caregiver’s allowance, even if they don’t necessarily need that money, or even if the sum is more symbolic than substantial.
55. It could mean the relief felt by casual workers and self-employed, in not having to make Medisave contributions before enjoying the benefits of WIS. Or it could mean the security of the middle class and especially the sandwiched class, whose high salary translates into a low household per capita income when spread across all of their dependents, in knowing that they will still be entitled to the full subsidy offered by the Government if they opt for a C Class ward.
56. Sir, Mr Ngiam Tong Dow, in an interview with the Petir magazine, cited the view of a so-called "thinking Singaporean”, that “all our national policies serve only at the altar of economic survival”. Mr Ngiam argued that “The government has to appeal to the people’s heart to build the nation of Singapore, not just their stomachs.”
57. I agree whole-heartedly with Mr Ngiam. And appealing to the people’s heart, requires the Government to put aside its penchant for hard calculations, and occasionally err on the side of generosity and graciousness.
Conclusion
58. Sir, I want to live in a country that cares for its people first and foremost, not a country that prioritises GDP growth for its own sake. I want to see a nation where Singaporeans are valued for everything that we are, not just the economic contribution we can make. I want to grow old in a state that places a higher premium on helping citizens, than on ensuring that there is no wastage. I want to be part of a generous society that helps its most vulnerable members, instead of counting the pennies and tightening the purse strings.
59. I do not think that I live in such a country yet. And that disheartens me. I sometimes question what it means to be a Singaporean, and I consider myself one of the lucky ones. This bodes ill for us in this era of global mobility, if other Singaporeans are similarly disenchanted. And those who leave, those who are able to leave, the 1000 Singaporeans who leave every year and never come back, are exactly the ones that we need to stay.
60. Sir, I hope one day, I can say that I do live in such a country. Maybe one day, I will see a Budget that reflects the principles and ideals that I have just spoken about. Until then, I can only continue to hope.
Wednesday, 30 January 2008
WPQ 21 January 2008: Net Investment Income Formula
I filed this question because in the last Budget, the Government had announced that the formula of calculating Net Investment Income (NII) would be amended such that NII would include capital gains. The amendment was supposed to be implemented last year, but this has not been done. Now that we are almost at the next Budget, I wanted to get an update. So we'll just have to wait a while longer.
8. Mr Siew Kum Hong: To ask the Minister for Finance if he will provide an update on the proposed Constitutional amendment to revise the Net Investment Income formula.
Mr Tharman Shanmugaratnam: Mr Siew Kum Hong asked for an update on the proposed Constitutional amendment to revise the Net Investment Income formula. The MOF staff have been studying this issue, and discussing their proposals with the President's office and the CPA. We are finalising the details, and will present a Constitutional Amendment Bill to Parliament this year after the Budget session. We aim for Parliament to debate and pass the Bill in time for the new rules to take effect for the FY2009 Budget.
WPQ
NET INVESTMENT INCOME FORMULA
8. Mr Siew Kum Hong: To ask the Minister for Finance if he will provide an update on the proposed Constitutional amendment to revise the Net Investment Income formula.
Mr Tharman Shanmugaratnam: Mr Siew Kum Hong asked for an update on the proposed Constitutional amendment to revise the Net Investment Income formula. The MOF staff have been studying this issue, and discussing their proposals with the President's office and the CPA. We are finalising the details, and will present a Constitutional Amendment Bill to Parliament this year after the Budget session. We aim for Parliament to debate and pass the Bill in time for the new rules to take effect for the FY2009 Budget.
Saturday, 28 April 2007
Budget 2007 Debates: Ministry of Community Development, Youth and Sports, 8 March 2007
I know this is a little late. But it's the last one from the Budget debates. I promise to do better in future in terms of posting speeches, questions, etc. from sittings.
I've always felt that the Government penalised single mothers by withholding certain privileges and benefits from them. The Government's stance is that such privileges and benefits are meant to be incentives for married couples, and hence it is not penalising single mothers.
With respect, I think that is mere semantics. Denying benefits is as much of a punishment as imposing a penalty.
The reality is that married couples, and hence their children, get privileges and benefits that single mothers and their children do not. Yet, single mothers are precisely the ones who need help the most. The result is a headstart for children in intact families that ends up aggravating the gap in resources between them and children of single mothers.
Furthermore, dressing the privileges and benefits up as an "incentive" does not hide the fact that the ultimate intent is to deter women from having children outside of a conventional family unit, or to put it the opposite way, to incentivise them into having children only within a conventional family unit.
But we have never seen any statistics or evidence to support the argument that this deterrent, or attractive, effect is valid. Indeed, anecdotal evidence and logic both tell us that the choice facing most if not all single mothers is between having the child out of wedlock and abortion, not between having the child out of wedlock and having the child within a family unit.
So I decided to pose this question. Unfortunately, the response was what it was: unmarried mothers are entitled to some but not all of the benefits available to married mothers. I'm not sure that addresses the fundamental issue.
Mr Siew Kum Hong (Nominated Member): Madam, the Government's long-standing policy is that an intact family unit is the ideal environment for a child to be raised. The Government, therefore, does not encourage mothers to remain unwed. This is why certain maternity benefits, such as Government-paid maternity leave, are withheld from unwed mothers.
Madam, I agree that intact families are ideal, but we live in an imperfect world. The unwed mother is very often a victim of circumstance. She does not choose to be unmarried. Chances are that marriage is not an option. The father may be married, he may be gone, he may simply not want to marry her. In these cases, the choice is not between being a single unwed mother and being a married mother. The choice, a very stark one, is really between being a single unwed mother and having an abortion. And I doubt if the issue of maternity benefits, like Government-paid maternity leave, cross the mind of women grappling with whether to be an unwed mother.
A 2004 Cornell study concluded that children of single parents can do as well as children of dual parents, if the single parent is able to provide a sufficiently supportive environment. Withholding support from an unwed mother could end up disadvantaging the child. Should we penalise the child for the sins, if there are indeed sins, of the mother? I would, therefore, ask the Ministry to refine its policy. If the aim is to avoid encouraging women to choose to be unwed mothers, then, perhaps, maternity benefits, like Government-paid maternity leave that is for the ninth to twelfth week, can be provided for the first child, but not subsequent ones. This would not penalise single mothers by circumstance while still sending the message that we discourage unwed mothers by choice.
The Minister of State for Community Development, Youth and Sports (Mrs Yu-Foo Yee Shoon): [...]
Mr Siew Kum Hong has asked whether benefits such as the third month of paid maternity leave and Baby Bonus could be extended to single mothers so that their children are not disadvantaged. Single unwed mothers are not a large group - about 500 children are registered without the father's name annually. Single mothers are entitled to 12 weeks of maternity leave under the Employment Act, of which eight weeks are paid for by the employer for first and second births. They also qualify for Foreign Domestic Worker Levy Concession, Childcare Leave, and can rent or buy a HDB flat with their parents, or as a single if they are aged 35 and above.
Their children are eligible for centre-based childcare and infant care subsidies. They pay the same school fees, enjoy Edusave grants and qualify for the same scholarships and bursaries. No Singaporean child will be denied an education due to the circumstances of his birth.
The Marriage and Parenthood Package is an incentive for married couples. It is not a financial assistance scheme for children. So the Government cannot and should not be the surrogate father.
I've always felt that the Government penalised single mothers by withholding certain privileges and benefits from them. The Government's stance is that such privileges and benefits are meant to be incentives for married couples, and hence it is not penalising single mothers.
With respect, I think that is mere semantics. Denying benefits is as much of a punishment as imposing a penalty.
The reality is that married couples, and hence their children, get privileges and benefits that single mothers and their children do not. Yet, single mothers are precisely the ones who need help the most. The result is a headstart for children in intact families that ends up aggravating the gap in resources between them and children of single mothers.
Furthermore, dressing the privileges and benefits up as an "incentive" does not hide the fact that the ultimate intent is to deter women from having children outside of a conventional family unit, or to put it the opposite way, to incentivise them into having children only within a conventional family unit.
But we have never seen any statistics or evidence to support the argument that this deterrent, or attractive, effect is valid. Indeed, anecdotal evidence and logic both tell us that the choice facing most if not all single mothers is between having the child out of wedlock and abortion, not between having the child out of wedlock and having the child within a family unit.
So I decided to pose this question. Unfortunately, the response was what it was: unmarried mothers are entitled to some but not all of the benefits available to married mothers. I'm not sure that addresses the fundamental issue.
MINISTRY OF COMMUNITY DEVELOPMENT, YOUTH AND SPORTS
Single Mothers
Mr Siew Kum Hong (Nominated Member): Madam, the Government's long-standing policy is that an intact family unit is the ideal environment for a child to be raised. The Government, therefore, does not encourage mothers to remain unwed. This is why certain maternity benefits, such as Government-paid maternity leave, are withheld from unwed mothers.
Madam, I agree that intact families are ideal, but we live in an imperfect world. The unwed mother is very often a victim of circumstance. She does not choose to be unmarried. Chances are that marriage is not an option. The father may be married, he may be gone, he may simply not want to marry her. In these cases, the choice is not between being a single unwed mother and being a married mother. The choice, a very stark one, is really between being a single unwed mother and having an abortion. And I doubt if the issue of maternity benefits, like Government-paid maternity leave, cross the mind of women grappling with whether to be an unwed mother.
A 2004 Cornell study concluded that children of single parents can do as well as children of dual parents, if the single parent is able to provide a sufficiently supportive environment. Withholding support from an unwed mother could end up disadvantaging the child. Should we penalise the child for the sins, if there are indeed sins, of the mother? I would, therefore, ask the Ministry to refine its policy. If the aim is to avoid encouraging women to choose to be unwed mothers, then, perhaps, maternity benefits, like Government-paid maternity leave that is for the ninth to twelfth week, can be provided for the first child, but not subsequent ones. This would not penalise single mothers by circumstance while still sending the message that we discourage unwed mothers by choice.
The Minister of State for Community Development, Youth and Sports (Mrs Yu-Foo Yee Shoon): [...]
Mr Siew Kum Hong has asked whether benefits such as the third month of paid maternity leave and Baby Bonus could be extended to single mothers so that their children are not disadvantaged. Single unwed mothers are not a large group - about 500 children are registered without the father's name annually. Single mothers are entitled to 12 weeks of maternity leave under the Employment Act, of which eight weeks are paid for by the employer for first and second births. They also qualify for Foreign Domestic Worker Levy Concession, Childcare Leave, and can rent or buy a HDB flat with their parents, or as a single if they are aged 35 and above.
Their children are eligible for centre-based childcare and infant care subsidies. They pay the same school fees, enjoy Edusave grants and qualify for the same scholarships and bursaries. No Singaporean child will be denied an education due to the circumstances of his birth.
The Marriage and Parenthood Package is an incentive for married couples. It is not a financial assistance scheme for children. So the Government cannot and should not be the surrogate father.
Friday, 6 April 2007
Budget 2007 Debates: Ministry of Defence, 5 March 2007 and Ministry of Education, 7 March 2007
In an earlier post, I talked about these two speeches I made during the Budget. These are the official transcripts of the speeches, responses given, and clarificatory question asked (for Mindef).
Mr Siew Kum Hong (Nominated Member): Mr Chairman, Sir, all NSmen face reservist liability. I understand that PES-C NSmen, including clerks, are subject to NS call-ups as well. I was told of a case where a company was deciding whether to locate an investment in Singapore. But they could go ahead in Singapore only if a PES-C NSmen could get a deferment from his ICT. He was crucial to the project, if it was to happen in Singapore. But his ICT clashed with an important deadline. Despite repeated request, he was not granted a deferment. He went for his ICT and his company located the project in China.
Sir, I can understand the rationale if this NSmen was a key appointment holder and essential to the ICT. But he was not. I would like to ask the Ministry what is the value of calling PES-C NSmen for reservist training and whether more flexibility can be introduced in considering deferment for NSmen who are not key appointment holders and, especially, if they are clerks? Is there sufficient consideration given to the actual benefit derived from calling up an NSmen compared to the potential opportunity cost to his employer and his career?
Sir, there is a wider dimension to this. Many NSmen seem to believe that NS liability has adversely affected their career prospects. There is also some anecdotal evidence about employers discriminating against Singaporean males to do their NS liability and in favour of foreign talent. I hope that the Ministry will also state its position on this issue and explain what measures are in place to address such discrimination.
The Second Minister for Defence (Dr Ng Eng Hen): Mr Siew has asked how we can actively engage employers, and we do, so that they can better understand the needs for NS and see how we can better address their concerns. For example, MINDEF organises employer visits where employers can witness what their NSmen do during in-camp training. I was in one such visit where an employer says, "Thank you very much. I thought my employees were having a good time during their ICTs. But I realise they are really doing serious training, and that helps." This has helped employers appreciate the role of their employees and how they have a role as citizen-soldiers. And, indeed, quite a few employers have also told us that the certificate of service for full-time NS is really useful to them when they want to employ prospective job candidates. They look for it because, if this person can succeed as a commander, they think he can add to their organisation. They look more favourably on a candidate if he has been a commander, because it reflects capable leadership and initiative.
Mr Siew has also asked us about our policy on PES-C clerks' or reservists' duties. Let me first state that, through National Service, every serviceman is responsible for and expected to contribute to the defence of Singapore, the principle of universality I articulated earlier. The 3G SAF, as with all modern armies, requires servicemen of different vocations and specialisations to work together to fight as a cohesive unit. Therefore, we need frontline soldiers who need the critical combat support and combat service support sustainment to achieve their victories. Our NSF and NSmen are assigned to duties according to their Physical Employment Standard (PES). But let me remind Members and the public that a lower PES grading cannot and does not mean that less is required of that soldier. The responsibilities they are asked to shoulder in their vocations depend on their aptitude, motivation and demonstrated leadership qualities.
Service-fit servicemen or those graded PES-C, as alluded to by Mr Siew, therefore, can and do play important roles. We do deploy them on a diverse range of vocations, including doctors, technicians, signal operators, medics, drivers and clerks. Each one of them, in their own significant way, is a vital link in the defence of our nation. To enable our servicemen to carry out their duties, we need to call them back for annual in-camp training to refresh their skills and ensure that they are always operationally-ready. Otherwise, they will put the safety of their own lives and the lives of their comrades at risk. For these reasons, it would not be possible to exempt every PES-C NSman who is assigned to be a clerk. We do need them to carry out their duties in their units, and it would erode the cohesiveness of units if we were to disrupt them. Also, it is not equitable to exempt all PES-C clerks from in-camp training.
In summary, Mr Chairman, Sir, the training of our soldiers and units is of paramount importance to the operational readiness of the SAF, and a capable SAF is vital to the security of Singapore.
Mr Siew Kum Hong: Mr Chairman, I would like to thank the Second Minister for this thorough responses to my questions. However, I am not sure that he addressed the specific issue of employers favouring foreign talent over Singaporean males due to NS liability. So I would like to clarify if the Ministry is aware of this perceived bias, whether it has investigated its existence and what measures are in place to address any such bias?
Dr Ng Eng Hen: Sir, first let me thank Mr Siew for bringing them up. As he said, these are anecdotal incidents. We have various committees. We have the ACCORD and we interact with employer organisations and we have awards for employers. Perhaps we should invite Members of the House to attend these to give a sense of how we engage the employers community.
By and large, our feedback from them is that there is no, if you like, systemic discrimination against NSmen; in fact, the reverse is true. Many of them had fed back that they actually value, as I said, the Certificate of Performance. They want to know how Singaporeans have performed in NS. We have one story where the employer said he had so many applications, he wanted to shortlist them, so he said, "OK. Show me those who have done well in NS and I will just concentrate and start there." But if there are specific instances that Members know, then, of course, please forward them to us and we can look at them.
In terms of his question about calling up NSmen and losing out business opportunities, I admit there might be many instances where Singaporeans have to sacrifice, whether it is opportunity loss because of specific instances. We will try to reduce them because we give advance notice for deferment. But I accept that out there, in terms of our NSmen, there could be opportunities missed. That is why we choose other ways to recognise, through RECORD, through our NS bonuses, and this year in the GST offset credits. It is a very small token never commensurate with the sacrifices that our NSmen have to make but, nonetheless, there are certain ways that we can show that we appreciate their efforts and sacrifice.
Mr Siew Kum Hong (Nominated Member): Mr Chairman, Sir, the enhanced performance management system, or EPMS, is MOE's method for assessing teacher's performance. It has been a subject of repeated criticism by present and former teachers and blamed for many teacher resignations. But MOE has consistently endorsed it.
These are some of the criticisms. Firstly, some see it as simply an administrative chore to get out of the way as quickly as possible. Secondly, there is no transparency in the rankings as teachers are not told what they have been ranked, and teachers have to guesstimate their rankings based on their performance bonuses, if any. Thirdly, and perhaps most crucially, it does not adequately recognise good classroom teachers. In fact, teachers believe that the way to a good EPMS evaluation is to simply cite a long list of projects and then play them up as much as possible. Actual merit does not seem particularly relevant.
Sir, the teachers themselves said it better than I can. From a friend, "How I have seen it used is, either not at all, people ignore it, see it as a nuisance thing to be filled up and done with, or by superiors as a way of forcing more work out of people. So, what did you do this past half a year? If you do not tell me the next five minutes, you are going to get a "C" grade." From Wong Siong Yan, in a letter to the Today newspaper last March, "Supervisors usually rely on work review discussions, during which teachers are encouraged to showcase what they have. Those who can produce photographs, video clips and reflective journals often steal the show. Good but modest teachers who do not blow their own trumpets get sidelined." Finally, retired teacher, Ho Kong Loon, who had won an MOE Caring Teacher Award in 2000, wrote in the Today newspaper last October, that EPMS currently marginalises outstanding classroom teaching and that many good classroom teachers get poor EPMS gradings.
Sir, I think the amount of unhappiness with and criticisms of EPMS shows that there is a problem, and we need to remember that a lot of the criticisms have come from ex-teachers who are far more likely to give honest feedback than serving teachers. So I would like to ask how does the Ministry explain the discrepancy between its official stand on EPMS and teachers' perception of it. And in the light of these criticisms, does the Ministry have objective evidence that EPMS does work? Also, given the view that more projects equal a better EPMS ranking, teachers are compelled to pile on extra duties, that means, long hours in school. A teacher in the morning session will have classes from 7.30 am until 12.30 pm or 1.00 pm. This is followed by CCAs, projects, workshops, meetings and other commitments that can last till 5.00 pm or later. So when does the teacher do things, like marking and lesson preparation? At night? Sir, that is not tenable. I would therefore also like to ask the Minister what institutionalised measures and safeguards are in place to ensure that teachers are not overtaxed so that they are able to devote sufficient time to their students and through lessons and teaching while not burning out. If there are no such measures and safeguards, will the Ministry consider doing so?
Sir, Minister Tharman emphasised last week in the Budget debate that education is the starting point in ensuring equality of opportunity in Singapore. But for education to remain the great leveller that it has been, we need a strong and healthy teaching profession. We need to resolve these problems with EPMS so that we will have one.
RAdm (NS) Lui Tuck Yew: Let me thank Mr Siew and, earlier, Mr Alvin Yeo, for their comments and questions about teachers.
Teachers are critical and special in our system: critical because they have the important responsibility of nurturing our young with the skills and attitudes that they will need to face the future with confidence; special because their role is not just about imparting knowledge but also about engaging hearts and minds - encouraging every student on, and helping them find their unique strengths and talents.
Over the past five years, we have grown the strength of our teaching force from 25,000 in 2002 to about 28,000 today. We have maintained the high standards that we expect of new entrants and we have also been able to retain good teachers. This is despite the competition from other attractive sectors in a robust economy. The major improvements in the “Grow” Package for teachers have also helped to keep the teaching profession an attractive one. The overall attrition rate due to retirement and resignation has remained steady at a low rate of about 2.4% over the years, and we intend to watch this very carefully.
Before I address Mr Siew's points on the EPMS, let me talk about managing the workload for teachers. To achieve a high quality holistic education for our students, we expect our teachers to play many different roles: mentors, facilitators, coaches and counsellors. As professionals, they want to excel, give of their best and make a difference in the lives of their students. Many take it upon themselves to upgrade their skills and knowledge by tapping on the wide range of training courses available. We recognise the demands and challenges of being teachers and are keenly aware of their workload. Let me share with you three areas in which we are working on to give them greater support.
Firstly, we are recruiting and deploying more teachers to schools. With the additional teachers recruited over the past five years, we have, on average, been able to give each school an additional five teachers. By about 2010, provided we can sustain our pace of recruitment and keep attrition low, we target to deploy another five teachers to each school.
These additional teachers have resulted in a significant improvement in the pupil to teacher (PTR) ratio over the past few years. The pupil to teacher ratio for primary schools was reduced from 24 in 2004 to 22 in 2006 and for secondary schools from 19 to 18 over the same period. By 2010, our target is to reduce PTR further to below 20 for the primary schools. I note Mr Alvin Yeo's earlier comment about reducing class sizes. But we think it is best for schools to decide how to use these additional teachers - sometimes a smaller class for a particular subject or assignment or give teachers more time to meet the other needs of their students.
To prescribe smaller class sizes for all schools across all levels, we will have to trade off quality for quantity, lowering the high standards that we expect of our teachers. Alternatively, it is to assign more classroom periods to each teacher. So recruiting new teachers of lower quality or assigning more classroom periods to each teacher, I think neither is a desirable outcome.
Beyond the allocation of additional teachers, schools can also leverage on the Adjunct Teaching (AJT) scheme, introduced in 2004, to appoint trained teachers who had left service. The adjunct teachers can support schools when their teachers go on the Part-Time Teaching Scheme, or pursue professional development opportunities. On average, each school managed to engage about four to five adjunct teachers last year.
With these additional teachers, schools have greater flexibility in terms of staff deployment. Many have introduced new programmes, or allowed greater diversity in the school curriculum to better respond to their students’ learning needs. At Guangyang Primary School, they have creatively tapped on their adjunct teachers to conduct differentiated teaching. During these lessons in Mathematics, Mother Tongue and English, small groups of students who are weaker in these subjects are taught separately by the adjunct teachers, giving them the special and dedicated attention that they need. The teachers focus on using strategies and activities that best suit the needs of these students. Such flexibility and enhanced learning have been made possible because of the availability of additional teacher resources that have been judiciously used to meet specific needs.
To further support teachers and meet the needs of the students, we have deployed para-educators like the Co-Curricular Programme Executives (CCPEs), the Full-Time School Counsellors (FTSCs) and Special Needs Officers (SNOs). These para-educators have enabled teachers to concentrate more on lesson preparation and classroom teaching duties.
Secondly, MOE has also provided schools with more financial resources to purchase manpower or other services to take over some of the duties previously done by teachers, for example, in running CCAs, training the school choir, and so on, where an external agency may be better equipped with the skill set to do so. This has helped to further ease teachers’ workload. The manpower grant had been increased over the years. For a primary school with 1,500 pupils, it has increased from about $50,000 in 2004 to $126,000 today, a 160% increase. Likewise, the grant disbursed to a secondary school with the same number of pupils has increased from $115,500 in 2004 to about $150,000 today.
Thirdly, within the school itself, there are systems in place to support teachers. To ease the transition of the beginning teachers to the demands of the job, they are given 80% of the standard teaching load. They are also mentored by Senior Teachers to help them better manage their workload and meet the challenges of the profession. By leveraging on IT, teachers are able to access databases of lesson materials and customise them to meet their students’ needs. Schools are also creating more opportunities for teachers to collaborate and plan together. By 2010, each teacher will have one hour of ‘timetabled time’ per week for this particular purpose.
We will endeavour to refine the ways where we can better support our teachers as they continue the important mission to nurture and develop our students.
Mr Siew Kum Hong also raised the issue of teacher appraisal. In particular, he asked about the value of the Enhanced Performance Management System (EPMS). In any organisation, there is a need for an appraisal and performance management system to help the organisation identify its talent, develop its people and reward their performance. The teaching profession is no exception. We need an appraisal process that is consistent, transparent and trusted. In this way, teachers who have done well are fully recognised and rewarded while others who need to improve on their performance are coached by their supervisors.
The EPMS is a new system fully implemented in 2005, and it was in response to feedback from the ground and designed with their inputs. We believe it is an improvement to the previous system. And I will talk more about this later. As professionals, our teachers have no issue with being held to high standards of performance; indeed, they expect it of themselves. Their request was for the appraisal process to provide a clearer idea of what competencies they were expected to show, and what areas they had to focus on to improve further. They wanted a more explicit discussion of their performance in specific areas, and clear identification of their training and development path.
The EPMS was developed after extensive consultation with education officers at all levels, phasing gradually from 2003 - first to the school leaders, then to Heads of Departments and other key appointment holders, and finally, school wide, to all teachers in 2005.
We believe the EPMS allows a holistic assessment on our educators’ performance based on competencies, and follows a more structured process to help them identify areas for further development and improvement. The system spells out the knowledge and skills required as well as the professional characteristics and behaviour patterns appropriate for each of the three different career tracks, namely, Teaching, Senior Specialist and Leadership. Let me say that there is no disadvantage in any of our teachers pursuing one of these tracks. They are not discriminated against in any way in the performance appraisal process. With this differentiation, teachers have the greater clarity of the expectations and behaviour that are essential for success in each particular field of excellence.
No assessment system is perfect, not least because there will always be some degree of subjectivity involved. Neither is the EPMS perfect nor has it been implemented evenly across all schools. We are committed to making it work even better. We are putting new teachers through EPMS workshops to help them better use and understand the tool, and we are putting also the new evaluators through the new supervisors through the system so that they can better understand their responsibilities in assessing teachers under their charge.
The Ministry will continue to take in feedback and suggestions from our teachers and school leaders on how to improve the system. For example, we have refined the EPMS work review form to include a training and development section that will encourage a more in-depth discussion of the officers’ career aspirations and developmental needs.
Mr Siew has given anecdotal evidence and extrapolated that to show that our teachers are very unhappy with EPMS. I am not sure that that is true nor does it do credit to the system and to the assessment appraisal process that we have today. Feedback from teachers that we have gathered shows that they recognise the benefits of the EPMS. Those who have been in service longer and were able to make a comparison between the past and present system, feel that the EPMS is a better tool compared to that used earlier. While it might still seem to some an additional administrative procedure to fill up the form, teachers acknowledged that the system has provided them with greater clarity in terms of expectations and how they can further develop themselves professionally. That is what the system was designed to achieve.
Mr Siew talked about teachers being given additional recognition if they were to work on projects, have more attractive means of delivering their lessons. I would say that finding ways to further and better engage the students is important. If you have two classroom teachers, one merely teaching from the textbook and the other finding new ways through projects and engaging methods to bring the lessons to life and engage the students, I think I would have to give a greater recognition to the latter. Let me say that EPMS attempts to capture the key essence of teaching in its many facets and challenges but, at the end of it all, it requires astute and perceptive school leaders to recognise and reward the many intangible but important aspects of teaching. They include care, concern and counsel that teachers give to their students, the values teachers impart through their interactions and through effective role modelling; and the encouragement and inspiration to students so that they will further believe in themselves and pursue their dreams. And this is what we are trying to ensure our school leaders take into account when they assess holistically the performance of the teachers.
But beyond formal recognition and reward, what motivates a teacher must be a calling, a deep sense of mission to shape young lives, knowing that what they do is a noble endeavour and a sacred responsibility. The gestation period is long and the results of their labour may not be immediately apparent. But it is the joy of seeing students do well in school and in life, sometimes seemingly against all odds, that have been and will be their best reward and lasting legacy. The recognition and appreciation by students, parents and the community are also an important morale booster for our teachers. I am happy that their dedication and commitment have not gone unnoticed. The public in 2004 ranked the teaching profession first in importance, ahead of doctors and lawyers in a public perception survey. Let us all continue to give teachers the support they need and deserve on their meaningful and important mission.
MINISTRY OF DEFENCE
National Service
Mr Siew Kum Hong (Nominated Member): Mr Chairman, Sir, all NSmen face reservist liability. I understand that PES-C NSmen, including clerks, are subject to NS call-ups as well. I was told of a case where a company was deciding whether to locate an investment in Singapore. But they could go ahead in Singapore only if a PES-C NSmen could get a deferment from his ICT. He was crucial to the project, if it was to happen in Singapore. But his ICT clashed with an important deadline. Despite repeated request, he was not granted a deferment. He went for his ICT and his company located the project in China.
Sir, I can understand the rationale if this NSmen was a key appointment holder and essential to the ICT. But he was not. I would like to ask the Ministry what is the value of calling PES-C NSmen for reservist training and whether more flexibility can be introduced in considering deferment for NSmen who are not key appointment holders and, especially, if they are clerks? Is there sufficient consideration given to the actual benefit derived from calling up an NSmen compared to the potential opportunity cost to his employer and his career?
Sir, there is a wider dimension to this. Many NSmen seem to believe that NS liability has adversely affected their career prospects. There is also some anecdotal evidence about employers discriminating against Singaporean males to do their NS liability and in favour of foreign talent. I hope that the Ministry will also state its position on this issue and explain what measures are in place to address such discrimination.
The Second Minister for Defence (Dr Ng Eng Hen): Mr Siew has asked how we can actively engage employers, and we do, so that they can better understand the needs for NS and see how we can better address their concerns. For example, MINDEF organises employer visits where employers can witness what their NSmen do during in-camp training. I was in one such visit where an employer says, "Thank you very much. I thought my employees were having a good time during their ICTs. But I realise they are really doing serious training, and that helps." This has helped employers appreciate the role of their employees and how they have a role as citizen-soldiers. And, indeed, quite a few employers have also told us that the certificate of service for full-time NS is really useful to them when they want to employ prospective job candidates. They look for it because, if this person can succeed as a commander, they think he can add to their organisation. They look more favourably on a candidate if he has been a commander, because it reflects capable leadership and initiative.
Mr Siew has also asked us about our policy on PES-C clerks' or reservists' duties. Let me first state that, through National Service, every serviceman is responsible for and expected to contribute to the defence of Singapore, the principle of universality I articulated earlier. The 3G SAF, as with all modern armies, requires servicemen of different vocations and specialisations to work together to fight as a cohesive unit. Therefore, we need frontline soldiers who need the critical combat support and combat service support sustainment to achieve their victories. Our NSF and NSmen are assigned to duties according to their Physical Employment Standard (PES). But let me remind Members and the public that a lower PES grading cannot and does not mean that less is required of that soldier. The responsibilities they are asked to shoulder in their vocations depend on their aptitude, motivation and demonstrated leadership qualities.
Service-fit servicemen or those graded PES-C, as alluded to by Mr Siew, therefore, can and do play important roles. We do deploy them on a diverse range of vocations, including doctors, technicians, signal operators, medics, drivers and clerks. Each one of them, in their own significant way, is a vital link in the defence of our nation. To enable our servicemen to carry out their duties, we need to call them back for annual in-camp training to refresh their skills and ensure that they are always operationally-ready. Otherwise, they will put the safety of their own lives and the lives of their comrades at risk. For these reasons, it would not be possible to exempt every PES-C NSman who is assigned to be a clerk. We do need them to carry out their duties in their units, and it would erode the cohesiveness of units if we were to disrupt them. Also, it is not equitable to exempt all PES-C clerks from in-camp training.
In summary, Mr Chairman, Sir, the training of our soldiers and units is of paramount importance to the operational readiness of the SAF, and a capable SAF is vital to the security of Singapore.
Clarification
Mr Siew Kum Hong: Mr Chairman, I would like to thank the Second Minister for this thorough responses to my questions. However, I am not sure that he addressed the specific issue of employers favouring foreign talent over Singaporean males due to NS liability. So I would like to clarify if the Ministry is aware of this perceived bias, whether it has investigated its existence and what measures are in place to address any such bias?
Dr Ng Eng Hen: Sir, first let me thank Mr Siew for bringing them up. As he said, these are anecdotal incidents. We have various committees. We have the ACCORD and we interact with employer organisations and we have awards for employers. Perhaps we should invite Members of the House to attend these to give a sense of how we engage the employers community.
By and large, our feedback from them is that there is no, if you like, systemic discrimination against NSmen; in fact, the reverse is true. Many of them had fed back that they actually value, as I said, the Certificate of Performance. They want to know how Singaporeans have performed in NS. We have one story where the employer said he had so many applications, he wanted to shortlist them, so he said, "OK. Show me those who have done well in NS and I will just concentrate and start there." But if there are specific instances that Members know, then, of course, please forward them to us and we can look at them.
In terms of his question about calling up NSmen and losing out business opportunities, I admit there might be many instances where Singaporeans have to sacrifice, whether it is opportunity loss because of specific instances. We will try to reduce them because we give advance notice for deferment. But I accept that out there, in terms of our NSmen, there could be opportunities missed. That is why we choose other ways to recognise, through RECORD, through our NS bonuses, and this year in the GST offset credits. It is a very small token never commensurate with the sacrifices that our NSmen have to make but, nonetheless, there are certain ways that we can show that we appreciate their efforts and sacrifice.
MINISTRY OF EDUCATION
Enhanced Performance Management System
Teachers
Mr Siew Kum Hong (Nominated Member): Mr Chairman, Sir, the enhanced performance management system, or EPMS, is MOE's method for assessing teacher's performance. It has been a subject of repeated criticism by present and former teachers and blamed for many teacher resignations. But MOE has consistently endorsed it.
These are some of the criticisms. Firstly, some see it as simply an administrative chore to get out of the way as quickly as possible. Secondly, there is no transparency in the rankings as teachers are not told what they have been ranked, and teachers have to guesstimate their rankings based on their performance bonuses, if any. Thirdly, and perhaps most crucially, it does not adequately recognise good classroom teachers. In fact, teachers believe that the way to a good EPMS evaluation is to simply cite a long list of projects and then play them up as much as possible. Actual merit does not seem particularly relevant.
Sir, the teachers themselves said it better than I can. From a friend, "How I have seen it used is, either not at all, people ignore it, see it as a nuisance thing to be filled up and done with, or by superiors as a way of forcing more work out of people. So, what did you do this past half a year? If you do not tell me the next five minutes, you are going to get a "C" grade." From Wong Siong Yan, in a letter to the Today newspaper last March, "Supervisors usually rely on work review discussions, during which teachers are encouraged to showcase what they have. Those who can produce photographs, video clips and reflective journals often steal the show. Good but modest teachers who do not blow their own trumpets get sidelined." Finally, retired teacher, Ho Kong Loon, who had won an MOE Caring Teacher Award in 2000, wrote in the Today newspaper last October, that EPMS currently marginalises outstanding classroom teaching and that many good classroom teachers get poor EPMS gradings.
Sir, I think the amount of unhappiness with and criticisms of EPMS shows that there is a problem, and we need to remember that a lot of the criticisms have come from ex-teachers who are far more likely to give honest feedback than serving teachers. So I would like to ask how does the Ministry explain the discrepancy between its official stand on EPMS and teachers' perception of it. And in the light of these criticisms, does the Ministry have objective evidence that EPMS does work? Also, given the view that more projects equal a better EPMS ranking, teachers are compelled to pile on extra duties, that means, long hours in school. A teacher in the morning session will have classes from 7.30 am until 12.30 pm or 1.00 pm. This is followed by CCAs, projects, workshops, meetings and other commitments that can last till 5.00 pm or later. So when does the teacher do things, like marking and lesson preparation? At night? Sir, that is not tenable. I would therefore also like to ask the Minister what institutionalised measures and safeguards are in place to ensure that teachers are not overtaxed so that they are able to devote sufficient time to their students and through lessons and teaching while not burning out. If there are no such measures and safeguards, will the Ministry consider doing so?
Sir, Minister Tharman emphasised last week in the Budget debate that education is the starting point in ensuring equality of opportunity in Singapore. But for education to remain the great leveller that it has been, we need a strong and healthy teaching profession. We need to resolve these problems with EPMS so that we will have one.
RAdm (NS) Lui Tuck Yew: Let me thank Mr Siew and, earlier, Mr Alvin Yeo, for their comments and questions about teachers.
Teachers are critical and special in our system: critical because they have the important responsibility of nurturing our young with the skills and attitudes that they will need to face the future with confidence; special because their role is not just about imparting knowledge but also about engaging hearts and minds - encouraging every student on, and helping them find their unique strengths and talents.
Over the past five years, we have grown the strength of our teaching force from 25,000 in 2002 to about 28,000 today. We have maintained the high standards that we expect of new entrants and we have also been able to retain good teachers. This is despite the competition from other attractive sectors in a robust economy. The major improvements in the “Grow” Package for teachers have also helped to keep the teaching profession an attractive one. The overall attrition rate due to retirement and resignation has remained steady at a low rate of about 2.4% over the years, and we intend to watch this very carefully.
Before I address Mr Siew's points on the EPMS, let me talk about managing the workload for teachers. To achieve a high quality holistic education for our students, we expect our teachers to play many different roles: mentors, facilitators, coaches and counsellors. As professionals, they want to excel, give of their best and make a difference in the lives of their students. Many take it upon themselves to upgrade their skills and knowledge by tapping on the wide range of training courses available. We recognise the demands and challenges of being teachers and are keenly aware of their workload. Let me share with you three areas in which we are working on to give them greater support.
Firstly, we are recruiting and deploying more teachers to schools. With the additional teachers recruited over the past five years, we have, on average, been able to give each school an additional five teachers. By about 2010, provided we can sustain our pace of recruitment and keep attrition low, we target to deploy another five teachers to each school.
These additional teachers have resulted in a significant improvement in the pupil to teacher (PTR) ratio over the past few years. The pupil to teacher ratio for primary schools was reduced from 24 in 2004 to 22 in 2006 and for secondary schools from 19 to 18 over the same period. By 2010, our target is to reduce PTR further to below 20 for the primary schools. I note Mr Alvin Yeo's earlier comment about reducing class sizes. But we think it is best for schools to decide how to use these additional teachers - sometimes a smaller class for a particular subject or assignment or give teachers more time to meet the other needs of their students.
To prescribe smaller class sizes for all schools across all levels, we will have to trade off quality for quantity, lowering the high standards that we expect of our teachers. Alternatively, it is to assign more classroom periods to each teacher. So recruiting new teachers of lower quality or assigning more classroom periods to each teacher, I think neither is a desirable outcome.
Beyond the allocation of additional teachers, schools can also leverage on the Adjunct Teaching (AJT) scheme, introduced in 2004, to appoint trained teachers who had left service. The adjunct teachers can support schools when their teachers go on the Part-Time Teaching Scheme, or pursue professional development opportunities. On average, each school managed to engage about four to five adjunct teachers last year.
With these additional teachers, schools have greater flexibility in terms of staff deployment. Many have introduced new programmes, or allowed greater diversity in the school curriculum to better respond to their students’ learning needs. At Guangyang Primary School, they have creatively tapped on their adjunct teachers to conduct differentiated teaching. During these lessons in Mathematics, Mother Tongue and English, small groups of students who are weaker in these subjects are taught separately by the adjunct teachers, giving them the special and dedicated attention that they need. The teachers focus on using strategies and activities that best suit the needs of these students. Such flexibility and enhanced learning have been made possible because of the availability of additional teacher resources that have been judiciously used to meet specific needs.
To further support teachers and meet the needs of the students, we have deployed para-educators like the Co-Curricular Programme Executives (CCPEs), the Full-Time School Counsellors (FTSCs) and Special Needs Officers (SNOs). These para-educators have enabled teachers to concentrate more on lesson preparation and classroom teaching duties.
Secondly, MOE has also provided schools with more financial resources to purchase manpower or other services to take over some of the duties previously done by teachers, for example, in running CCAs, training the school choir, and so on, where an external agency may be better equipped with the skill set to do so. This has helped to further ease teachers’ workload. The manpower grant had been increased over the years. For a primary school with 1,500 pupils, it has increased from about $50,000 in 2004 to $126,000 today, a 160% increase. Likewise, the grant disbursed to a secondary school with the same number of pupils has increased from $115,500 in 2004 to about $150,000 today.
Thirdly, within the school itself, there are systems in place to support teachers. To ease the transition of the beginning teachers to the demands of the job, they are given 80% of the standard teaching load. They are also mentored by Senior Teachers to help them better manage their workload and meet the challenges of the profession. By leveraging on IT, teachers are able to access databases of lesson materials and customise them to meet their students’ needs. Schools are also creating more opportunities for teachers to collaborate and plan together. By 2010, each teacher will have one hour of ‘timetabled time’ per week for this particular purpose.
We will endeavour to refine the ways where we can better support our teachers as they continue the important mission to nurture and develop our students.
Mr Siew Kum Hong also raised the issue of teacher appraisal. In particular, he asked about the value of the Enhanced Performance Management System (EPMS). In any organisation, there is a need for an appraisal and performance management system to help the organisation identify its talent, develop its people and reward their performance. The teaching profession is no exception. We need an appraisal process that is consistent, transparent and trusted. In this way, teachers who have done well are fully recognised and rewarded while others who need to improve on their performance are coached by their supervisors.
The EPMS is a new system fully implemented in 2005, and it was in response to feedback from the ground and designed with their inputs. We believe it is an improvement to the previous system. And I will talk more about this later. As professionals, our teachers have no issue with being held to high standards of performance; indeed, they expect it of themselves. Their request was for the appraisal process to provide a clearer idea of what competencies they were expected to show, and what areas they had to focus on to improve further. They wanted a more explicit discussion of their performance in specific areas, and clear identification of their training and development path.
The EPMS was developed after extensive consultation with education officers at all levels, phasing gradually from 2003 - first to the school leaders, then to Heads of Departments and other key appointment holders, and finally, school wide, to all teachers in 2005.
We believe the EPMS allows a holistic assessment on our educators’ performance based on competencies, and follows a more structured process to help them identify areas for further development and improvement. The system spells out the knowledge and skills required as well as the professional characteristics and behaviour patterns appropriate for each of the three different career tracks, namely, Teaching, Senior Specialist and Leadership. Let me say that there is no disadvantage in any of our teachers pursuing one of these tracks. They are not discriminated against in any way in the performance appraisal process. With this differentiation, teachers have the greater clarity of the expectations and behaviour that are essential for success in each particular field of excellence.
No assessment system is perfect, not least because there will always be some degree of subjectivity involved. Neither is the EPMS perfect nor has it been implemented evenly across all schools. We are committed to making it work even better. We are putting new teachers through EPMS workshops to help them better use and understand the tool, and we are putting also the new evaluators through the new supervisors through the system so that they can better understand their responsibilities in assessing teachers under their charge.
The Ministry will continue to take in feedback and suggestions from our teachers and school leaders on how to improve the system. For example, we have refined the EPMS work review form to include a training and development section that will encourage a more in-depth discussion of the officers’ career aspirations and developmental needs.
Mr Siew has given anecdotal evidence and extrapolated that to show that our teachers are very unhappy with EPMS. I am not sure that that is true nor does it do credit to the system and to the assessment appraisal process that we have today. Feedback from teachers that we have gathered shows that they recognise the benefits of the EPMS. Those who have been in service longer and were able to make a comparison between the past and present system, feel that the EPMS is a better tool compared to that used earlier. While it might still seem to some an additional administrative procedure to fill up the form, teachers acknowledged that the system has provided them with greater clarity in terms of expectations and how they can further develop themselves professionally. That is what the system was designed to achieve.
Mr Siew talked about teachers being given additional recognition if they were to work on projects, have more attractive means of delivering their lessons. I would say that finding ways to further and better engage the students is important. If you have two classroom teachers, one merely teaching from the textbook and the other finding new ways through projects and engaging methods to bring the lessons to life and engage the students, I think I would have to give a greater recognition to the latter. Let me say that EPMS attempts to capture the key essence of teaching in its many facets and challenges but, at the end of it all, it requires astute and perceptive school leaders to recognise and reward the many intangible but important aspects of teaching. They include care, concern and counsel that teachers give to their students, the values teachers impart through their interactions and through effective role modelling; and the encouragement and inspiration to students so that they will further believe in themselves and pursue their dreams. And this is what we are trying to ensure our school leaders take into account when they assess holistically the performance of the teachers.
But beyond formal recognition and reward, what motivates a teacher must be a calling, a deep sense of mission to shape young lives, knowing that what they do is a noble endeavour and a sacred responsibility. The gestation period is long and the results of their labour may not be immediately apparent. But it is the joy of seeing students do well in school and in life, sometimes seemingly against all odds, that have been and will be their best reward and lasting legacy. The recognition and appreciation by students, parents and the community are also an important morale booster for our teachers. I am happy that their dedication and commitment have not gone unnoticed. The public in 2004 ranked the teaching profession first in importance, ahead of doctors and lawyers in a public perception survey. Let us all continue to give teachers the support they need and deserve on their meaningful and important mission.
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