Debate on Annual Budget 2016

Madam, I rise in support of Budget 2016. Budget 2016 has stayed on course to fulfill the Government's mission to build both a future-ready economy and a caring and resilient Singapore beyond SG50.

Analysts have acknowledged that it is a far-sighted Budget, with resources committed to support businesses to scale up automation, create high-value jobs and internationalise.

SkillsFuture, a big piece to secure Singapore's place in the new economy, is another key feature. Work is underway to develop more than 20 Sectoral Manpower Plans to identify the skills required in each sector and to develop a Singapore core. At the individual level, the first tranche of training dollars was already credited to Singaporeans to encourage lifelong learning.

The people's voice through the Our Singapore Conversations can still be heard in this Budget. Anxieties over high healthcare and financial worries of the ageing are addressed with several key moves. Our national safety net is now visibly stronger by the additional pieces in the form of higher Public Assistance quantum; the Pioneer Generation package; Silver Support and MediShield Life for all. This is a significant task that not many Singaporeans fully appreciate but is nonetheless critical for their future.

On concerns – as we confront the brave new world, I cannot help but still be alarmed at the speed and the disruption of change in the new economy. The 2016 World Economic Forum report on "The Future of Jobs" indicates that over the next five years, about seven million jobs could be lost through redundancy, automation or disintermediation, meaning the removal of the middleman in business processes. This loss is predicted to be only partially offset by about two million new jobs and mostly in the more specialised families such as Computer and Engineering.

In the logistics industry, for instance, both overseas and in Singapore, where large warehouses have been major employers of workers, robots now replace warehouse workers in jobs such as picking and packaging. Fully automated production processes from design to delivery, with very little manpower needs, is not far from reality.

Even our radio journalists in the local radio stations have had their jobs re-scoped. I was working with a lady Lu-Ann from 938LIVE and she now video-records her interviews with us, Members of Parliament, and presents reports in voice, video and other online writings as well. So such is the change.

Yes, as they say, embrace the digital economy or be left behind. Go digital or go home.

Groups at Risk – there is indeed cause for concern for businesses and people who are at risk of being left behind in the future economy. They include our SMEs, our PMETs and the lesser-skilled and unskilled employees amongst us. They are, after all, our own and are here to stay.

First up, is our SMEs which make up 99% of enterprises in Singapore and contributing more than 50% of our GDP. By sheer size and presence, they cannot be ignored and they have to drive our growth. Granted, many of them have moved up the league and are a lot more conscious and open to the need to upgrade, but even more of them are stuck. Remodel their business; fend off disruptive technology; move from value-adding to value-creation; use big data, use cloud computing, get into the Internet of Things – these are calls that are easier said than done for many of them.

Many SMEs are still concerned about the here and now – rental and manpower challenges. While they bemoan, the shake-outs continue. In the retail industry, brick and mortar stores are fast and furiously replaced by online stores. In the travel industry, tour operators continue to fold as travellers make their bookings online. Shake-outs are inevitable, but how can we reduce the numbers and how do we support those who finally exit?

The PMETS – at the individual level, there are still PMETs who are unsure of their place in the new economy. Many were not formerly exposed to the changes that are taking place.

A Straits Times article in March 2016 reported that the group that was hardest hit by layoffs last year was our highly skilled and middle aged employees who were seen by firms as too costly for their previous firms to retain and supposedly too old for prospective employees to hire. The days when PMETs who lost their jobs turned easily to the real estate, financial planning, insurance and even taxi-driving, are over.

Low-skilled and unskilled – it is a known fact that unskilled or low-skilled jobs will disappear. In my efforts to find jobs for my low-skilled, lowly-paid elderly residents in the Central District as a Mayor, I was informed that even makers of the 手工包, which is the hand-made buns, are replaced by machines in South China, for instance.

Our SMEs, PMETs and lower-skilled Singaporeans are at risk of being left behind – do we give up easily? Do we tell them go digital, or go home, although we all know that there is nowhere else to go for many of them because this is where Home is?

Madam, I have a few suggestions for consideration in this Budget.

First, on segmentation by ability, attitude and altitude. The first suggestion I have has to do with segmentation or adopting a less of a cookie-cutter approach when working with the groups of vulnerable SMEs, partners and individuals.

Madam, I fully understand the perspective that in the realm of business, Government should meddle less and not interfere with the free market mechanism. Shape up or ship out. My colleague, Assoc Prof Randolph Tan, said in Parliament yesterday that this is a matter of the head, and not the heart. However, because so many of our enterprises and people are involved, I would urge that one more layer of intervention be considered. Other than industry segmentation and partnering with Trade Associations, another dimension of segmentation must be considered. We must be even less cookie-cutter in our approach.

Profile the SMEs, PMETs, the lower skilled workers and even VWOs by three As. One, the ability, current and potential ability, knowledge, skills and tools; two, their attitude, their willingness to update, upgrade; and three, their altitude, the vision, the ability to rise above themselves in the industry in the current terrain.

For the Stars who possess all three As, Ability, Attitude and Altitude, Government's key engagement strategy should be to facilitate and to open doors, so they can scale and soar. These Stars may or may not be leading Trade Associations. They could be outliers. They may not toe the line or fall in place nicely with the rest of the industry. They may be trailblazers. They could be the Ubers in their own industry, disrupting current business models. We need to find a way to identity them so they could reach their peak.

Link them up with R&D resources, angel investors or even global Mentors; remove the barriers to performance which are within Government's circle of influence; create more Block 71 clusters to reduce the cost of business in rental and other shared corporate services such as in finance, legal and audit; develop even more mini Innovative Parks beyond the mega Jurong Innovation Park.

If they do not wish to be led by their Trade Associations, give them the creative licence and space to soar on their own. Invite them to join Industry Panels.

The second group – those with the Attitude and Ability but lack the vision at the moment and are at risk of being displaced, quickly guide and direct them to schemes and grants that can help them land firm and scale.

As for those with a willing Attitude, but lack the Ability, then, training comes into play.

For those who have the Ability but lack the willingness to change the Attitude, invest in counselling them, nudge them into action before giving up on them.

And then for those who have neither the Ability, Attitude nor the potential for Altitude, help them develop an exit strategy. They should not have been in the business in the first place.

Madam, my next suggestion is make SkillsFuture the mantra for every Singaporean. I believe SkillsFuture is one of the best answers to prepare our businesses and people for our future. There is, however, an urgency to move the whole nation more quickly into the SkillsFuture mindset and action. Whilst the $500 SkillsFuture credit to every Singaporean is a great welcome, it serves as a nudge at best, and is no guarantee that it will lead to an innate desire to learn or to learn lifelong. The SkillsFuture must be more than active-ageing training programmes. It must be more than meeting only the current sectoral manpower needs of businesses although that is important.

While the Council works on the bigger pieces such as the Sectoral Manpower Plans, we need to convince the man in the street that Singapore's future jobs and the funding of our social safety nets depends on how future-proof each one of us is. We need to transform the mindsets and skillsets of as many Singaporeans as possible before it is too late.

Here are some suggestions:

First, beyond intellectual rationalisation, we need to develop a SkillsFuture Communication Matrix for communication strategies to reach Singaporeans from different backgrounds. We need to outreach with more everyday applications to show the importance and impact of SkillsFuture.

A Hokkien-speaking aunty running a fashion accessory shop in one of the markets in my division, told me recently when we were discussing about re-modelling, reducing the cost of business, she said "MP, we are already buying stock from the Internet" in Hokkien. This morning, I heard Love 97.2 radio deejay, Chen Jianbin, sharing that he now has to find ways for the audience to not just listen to his jokes, or 听他的笑话 , but also "see him making jokes" or 看他的笑话. So, these are applications, our SkillsFuture is already happening and we need to get the message out to the streets.

Second, from the thousands of choices in the SkillsFuture galore of courses, we need to be able to appoint coordinators, SkillsFuture Ambassadors who can identify, help curate and communicate the list of competencies that will enhance the Future-Readiness Quotient of businesses and especially people on the streets.

Third, we need to encourage and incentivise as many Singaporeans as possible from young to each own their personal Individual Future-Proof Development Plan with a Future-Ready Toolkit.

Fourth, we must make pervasive, freely accessible Future-Readiness Self-Assessment Toolkit and bite-sized taster at convenient neighbourhood sites, the CCs or online – courses such as:

(a) Using video and voice applications such as Skype;

(b) Taking great digital photos;

(c) Setting up online stores from scratch;

(d) Construct our own website;

(e) Learn to Code;

(f) Create simple Apps on the smartphone;

(g) Make objects through customised 3-D printing;

(h) Write for the Internet.

There is no end to what one can learn, regardless of age and language. We need to spread the message of the new economy more urgently to the man in the streets.

And, finally, let me move on to the subject of Partnership. Typical of Minister Heng Swee Keat's style to listen and engage the ground, the theme of the Budget is termed "Partnership for the Future". And indeed, in a landscape that is featured by structural changes, disruptive technologies that can displace jobs easily, and manpower constraints, the former top-down problem-solving approach by Government can no longer suffice. While I truly appreciate the importance of partnership, I fear that unless we move towards a more enlightened form of partnership, the outcomes of the Budget may not be as effective as desired.

There are two things I would like to highlight.

First, the application of enlightened form of partnership in the Business arena. Whilst it makes sense to engage Trade or Clan Associations to take the lead in selected industries, we must not be overly rigid with this strategy.

Trade Associations, like other organisations, comprise of us mortals who may not all share the same vision or agree on the same tactics, and may be distracted by politics and personalities.

It would be useful, as we pour more resources into industry-led transformations, to also set some targets that are co-shared by all the Partners.

We must allow space for SMEs with the Ability, Attitude and Altitude to charter their paths – without insisting that they must toe the line of their industry associations.

Public Officers who are supposed to be sent to assist the Industries should preferably be senior enough to impact policy making. We should invite or even pay for successful global industry leaders to sit as Advisors to Industry Panels which comprise the Trade Associations and the other member players.

In the Social Service sector, where Minister Heng has kindly created the "Business and IPC Partnership Scheme" (BIPS) to incentivise businesses to donate services in kind to IPCs and charities, I would caution against behaviour that may be counter-productive. Volunteering is, after all, about giving something back and not getting something back. Already, business consultants have started to issue advice to businesses to start reviewing their Corporate Social Responsibility (CSR) strategies or plans, so that they can enjoy greater tax deductions under this new scheme.

There is also a worry that if we are not careful, the BIPS would cannibalise what charities are currently receiving in much-needed cash donations. Those who used to donate in cash may now decide that service or volunteering is more pocket-friendly.

To this end, I would recommend a more targeted approach to direct corporations and donors to the known pain areas or the growth areas in the social service sector, areas such as:

(a) Redesigning jobs for the elderly, the lower-skilled or even the unskilled.

(b) Helping children with rare diseases and their families. I have seen many of them. Try visiting some of the families. Some of the young parents are really under a lot of stress and need a lot of help.

(c) Others old and young who are severely disabled.

(d) The homeless.

(e) Those who are isolated elderly residents in many of our estates.

(f) Need for pro bono accounting, audit and legal services.

(g) Fund-raising and marketing and even e-learning modules or curricular development for these special schools.

Do not limit the BIPS donations to only $50,000 for each VWO. For outfits that serve the very severely disabled, their needs are way beyond $50,000.

So, in summary, my suggestions are, first, on triple A − the need to identify those with the Ability, Attitude and Altitude − and help these potential trailblazers to trailblaze and soar; second, to make SkillsFuture a more pervasive phenomenon to the man-in-the-street; and, third, for more enlightened partnerships.

In conclusion, Madam, I would like to thank the Minister for Finance, Mr Heng, for his inaugural Budget. This is a considered Budget that I know is the outcome of much of the Minister's style of listening to the ground. It is a balanced and sensible Budget that will play a large part in securing the future of our country and our people. Madam, I support the Budget.