Debate on Annual Budget 2015

Madam, Singapore faces critical social and economic challenges as we embark on the next 50 years of our existence. These challenges, amongst others, include:

- An Ageing Population with seniors who may not have sufficient to retire in dignity;

- A worrying declining or at best flat performance in productivity of local firms and workforces, pressured by increasing global competition; and

- A Deepening Income Gap between Singaporeans who are highly skilled, globally mobile and those who are less skilled and at risk of being chronic low-wage earners.

If unaddressed, all three challenges reduce the sustainability of our economy and our jobs; potentially causing conflicts, disunity and instability in our society, crippling our long-term survival.

A. Changes Before Budget 2015

I would like to first talk about changes before Budget 2015. I applaud the Government for having taken various strategic steps to address these social and economic challenges, even before Budget 2015 was announced.

The seniors of our country were granted Pioneer Generation status and special benefits. Special employment benefits were also introduced to help employers hire seniors. MediShield Life was introduced to ensure that all Singaporeans are insured for basic healthcare for life, regardless of pre-existing conditions.

For the business sector, more than any other governments elsewhere, the Singapore Government has put up a slew of measures to assist local SMEs to innovate, grow and expand.

Madam, Budget 2015 introduced more than 30 measures to strengthen the social security and build the future of Singapore. Besides deploying the familiar bag of transfer tools such as the GST, the SC&C and income tax rebates, Budget 2015 introduced three strategic and significant measures.

The first is the introduction of the new income supplement, the Silver Support, for elderly Singaporeans who had not accumulated adequate resources to retire upon.

The second is the increase of the top marginal tax rate for the top five percentile of income earners. The increase makes for a more progressive tax system to mitigate income inequality and allows for those with higher ability to pay higher taxes. This is a pleasant surprise from the resistance I faced when I proposed two years ago, a higher "Do-Good" tax for top earners in our country to help pay for higher costs in social spending.

The third significant item in this Budget is the annual $1 billion SkillsFuture investment to empower every Singaporean to learn and develop throughout life, and to deepen their skills for future work. It is this big-ticket item that I wish to caution Government about.

B. On SkillsFuture.

Madam, having owned a training and consulting business before, I learnt one important feature about training. That is, unless training is properly designed, delivered and assessed; it will not lead to either learning, application, impact on one's performance or business outcome.

To ensure that SkillsFuture achieves its goals of deepening skills and cultivating the habit of lifelong learning for all Singaporeans, I propose we take a deeper look at the Why, the What, the Who and the How aspects of this important scheme.

First, on WHY SkillsFuture is important.

SkillsFuture is about the next phase of investment in the people of Singapore. It aims to help Singaporeans learn lifelong at every age and develop expertise in every field, creating many pathways of success. It is both about taking on better jobs and lifelong security and also about maximising one's potential in life.

Madam, although lifelong learning and developing deep skills should ultimately lead to better jobs and security, there is a risk to overly-linking training to promotions and higher salaries. Cynics have already started to ask, "What's in it for me in this SkillsFuture?", and questioned if it is not a boost to the adult training industry or worse, a chance to use public funds to develop one's hobby.

It is important not to overly promise immediate promotions and job salary increases so long as one completes a training. In fact, it is plausible that a number of us may not even get to keep our current jobs if we do not seek to constantly learn and improve.

So, my suggestion is this. As we invest the yearly $1 billion into SkillsFuture, we need also to invest in more aggressive communication to Singaporeans about Why the need to learn, to self-drive one's learning and the opportunities that lifelong learning brings and the risks if we do not.

Second, on WHAT SkillsFuture should cover

To foster deep skills and innovation, Deputy Prime Minister Tharman has announced the focus on the five growth clusters of Advanced Manufacturing, Applied Health Sciences, Urban Solutions, Logistics and Aerospace and Financial Services.

While I appreciate that we cannot achieve expertise and advanced capabilities in every area in the economy, I believe it is important to develop a robust SkillsFuture framework that also include basic core competencies relevant to the 21st century, and not only the more advanced capabilities favoured by the State.

Beyond simple digital literacy, the SkillsFuture framework should identify core 21st Century Competencies such as building one's online presence, online marketing, online shops and digital videos and e-books for training one's staff in both mundane and higher order duties.

This will ensure a more inclusive outreach so that those who are not in the identified growth clusters would have access to strong foundational skills and be more future-ready, no matter what industry they belong.

Regular audits should also be conducted to ensure that content stays relevant and we must be robust and open enough to arrest future trends. Beware of what innovation guru, Dr Clayton Christensen, called "disruptive innovations or technologies" which can easily displace existing products or services, and creating new values instead of merely adding value to existing markets.

Third, on WHO should be involved in SkillsFuture.

First, on trainers. Madam, business owners in the SkillsFuture Council, to which I also belong, such as Mr George Quek of BreadTalk, have lamented how some of these past human resource development efforts in their companies yielded little impact because of incompetent trainers. And I agree with his observation.

Just as schools qualify and assess school educators, some form of standards – not too onerous – must apply to ensure the quality of those involved in SkillsFuture training.

The saying that "those who cannot do, end up training" is not without cause. Good trainers are hard to come by. However, the gems who have both actual work experience and the ability to train and coach effectively, must be identified, recognised and deployed in each targeted industry. I hence support the creation of a Masterclass Trainer category and some form of recognition scheme for quality trainers in SkillsFuture.

Next, on trainees, Business Owners and Leaders. On the same question of WHO, Madam, I would like to reflect the inputs that SkillsFuture should not be only for those in the worker or executive classes. It is not uncommon to hear trainees lamenting that it is their bosses who themselves need to attend trainings as well.

It is not uncommon to hear of business owners, leaders and managers who, by virtue of their positions, expect other people to take on lifelong learning but never think that the need to learn applies to themselves. Sure, they may have different learning needs and styles but, still, it is critical that those who lead or manage others must themselves lead by example and embark on lifelong learning themselves.

Special Needs Workforce. Still on trainees, Madam, I wish to also speak up for those who typically will need more attention and support in the workforce.

In an increasingly tight labour market, every person who can work is an asset, part-time or full-time. There is merit in giving a boost for the non-traditional local workforce and especially those who will need additional help, such as the elderly and those with special needs.

More must be done for the special needs adult learners by WDA, xCalibre and other related agencies, in the same progressive way that the Ministry of Education has catered and funded students with special needs. Many people with special needs can work, if the proper needs assessment, training and support are provided.

I urge the State to visibly step up its resources to organisations, such as WDA, xCalibre, SG-Enable, and to employers who hire this special workforce. Members of the special needs workforce deserve to be in the main chapters of SkillsFuture – they should not appear only in the footnotes or, worse still, be left out of the SkillsFuture masterplan.

Fourth, on HOW effective learning and training are conducted.

Madam, learning in the 21st century takes place in both physical and virtual learning spaces. Learning can be individual or in a classroom or community, it can happen face-to-face or real time, at home, remote or at the workplace.

For too long, we see classrooms of teacher-controlled learning where information is presented to cohorts of students, without regard for their learning styles, pace and level of knowledge. These hallmarks of old pedagogies should not remain hallmarks in SkillsFuture.

In addition, research suggests that the training resources that yield the highest effectiveness are not the training event. It is the analysis and design that are conducted pre-training, and the reinforcement that occurs after the training event that produce the higher level of results. Hence, as SkillsFuture rolls out its plans, it should seriously look at the entire training design process.

I ask that special attention be placed to ensure that the pedagogy behind SkillsFuture trainings be constantly updated to align with the 21st century and the future of work and that resources be allocated to the pre- and post-training design, not solely on the training event.

C. Finally, on Local Enterprises.

On small and medium enterprises (SMEs) of our country, the Government has a vision to grow 1,000 SMEs of $1,000 million turnover each by year 2020, contributing a worth of $100 billion.

As I commented at the beginning of my speech, this Government has tried, more than any other government I know, to grow local businesses inside and outside Singapore with a slew of incentives, including setting up of regional SME centres and consultants and so forth.

I hope that more incentives will be granted for larger successful local enterprises to buddy, mentor or even start industry-based training academies in the likes of the American Motorola University, MacDonald University and Disney University.

Despite the many efforts, things do not seem to have improved as much as desired in this sector. We hear from businessmen, such as Member of Parliament Mr Inderjit Singh and Nominated Member of Parliament Mr Thomas Chua, Chairman of Singapore Chinese Chamber of Commerce and Industry, who lamented yesterday the low utilisation of the SME schemes that the Government has provided and called for breakthroughs to address the ground challenges of many SMEs.

Up till today, I still hear of unfair tenancy agreements where institutional landlords charge, beyond a base rental, additional rental of up to as high as 30% of top-line revenue of retail shops/retailers, without the landlords themselves committing to bring in higher shopper traffic through better tenant mix or marketing support.

Madam, I support the principle of self-reliance and pro-activity, especially when it comes to business. But I believe that there are significant ground issues in this sector that call for more dedicated resources to study and look into.

Dedicated Minister and Team. In this regard, I would like to propose the appointment of a dedicated Minister and supporting team with the relevant track record in businesses to concentrate on this sector. A comprehensive deep review of the state of the SME sector should be conducted and recommendations made on what should start, what should stop and what should continue in order to achieve the Government's vision for this sector. Much like the MSO, which is the Municipal Service Office, is carved out as a separately resourced strategic unit.

Next, on Small and Micro Businesses. Finally, Madam, I wish to lend a voice to the many small and micro businesses of Singapore. Many of them employ less than 10 headcounts. They could be start-ups or old brands. Mr Kurt Wee, the CEO of Association of Small and Medium Enterprises (ASME) told me that there are some 150,000 small and micro enterprises. He calls them the last cushion of employers to provide jobs at this level.

Although there is a school of thought that size matters in business and that small enterprises without scale should exit through natural attrition, I urge that we do not write off these small enterprises too soon. These outfits reflect a spirit of entrepreneurship, tenacity and energy we may not want to quench in our country. Not especially when the Government is advocating many pathways of success here.

I think of Adrenalin, a high-energy event management company led by a group of very diligent, enthusiastic young people; Butter Studio, known for its preservative-free cupcakes; Amino Bar, a one-stop protein drinks shop that specialises in protein drinks, fresh juices and supplements; and DIY Laundry, a coin-operated laundromat in the Whampoa heartlands. I think of the numerous neighbourhood flower shops, car mechanic workshops, hairdresser and beauty salons.

The owner-operators of these micro enterprises did not take the typical path of perhaps even finishing a degree and then working as employees. But I am very impressed by their enthusiasm and energy. Enterprises like these are not without challenges. They face manpower and cost issues, such as rental, like their larger peers, and they may not yet have the capacity or capability to improve their business model and build for their future. But there is a level of energy, enthusiasm and tenacity about these micro enterprises I observe that prompts me to ask if there is something we can do to nurture them further and not put out that spark too soon.

Granted, not all of these micro enterprises will or should succeed, but I urge the relevant Ministries to look deeper into how these small enterprises can be grown and scaled, if appropriate. Size and scale matter in business I know, but not always, especially if they are masters in their class, boutique in nature or serve a specific geographic niche.

Who knows if there will be some amongst them who will thrive and become a miracle or improbable success, as termed by ex-Minister Mentor Lee Kuan Yew, like our very own small and beloved country, Singapore?

Madam, I hope more will be done on SkillsFuture and also for the Small and Medium Enterprises and, especially, micro-enterprises of our country.

On that note, Madam, I thank the team which has put together such an excellent visionary Budget. I know that, whether we are going right or left, as long as we are all going forward and not backwards, it will be good for our country. I strongly support the Budget.