Annual Budget 2020

Sir, I support the Budget.

Accolades abound for Budget 2020. Budget 2020 has, as they say, has ‘something for everyone’ from businesses to Singaporeans, young and old.

Commendable are:

  • The agility and speed by which the Stabilisation and Support Package was put together to help sectors hit by COVID -19;

  • The empathy to delay the GST increase this year; and

  • The ability to keep an eye on both the short and longer term concerns of Singaporeans and businesses.

 Budget 2020 is responsive, prudent and balanced.

The original draft must have been in the making for many months before the onset of the unexpected COVID-19 outbreak. I doubt if any other government can pull a focused budget together like this with such agility and speed.

So, kudos to DPM Heng and the team for rising to the occasion!

5 CONCERNS

I would like to touch on 5 Concerns arising from inputs of many Singaporeans I met.

CONCERN 1: EXTENDED COVID-19 OUTBREAK SCENARIO

Not unexpectedly, the top-of-mind concern of Singaporeans is the “what-if” scenario of a longer-drawn COVID-19 outbreak; leading to an extended global and local economic downturn.

Many are relieved and thankful that Government acted swiftly to delay the expected GST increase and boldly decided on a larger than expected budget deficit.

But even with DPM’s recent public assurance that Government is prepared to do more if warranted, many people are nonetheless still worried about how long Government will be able to sustain deficits of such large quantums.

What will an extended Stabilisation and Support package look like?

How will it be further financed funded if the impact is even more broad-based than the tourism, retail and the transport sectors directly hit by the outbreak; when supply chains continue to be disrupted; when consumer sentiments and demands continue to decline; and companies start to shed their local manpower?

The anxiety is real and I seek DPM’s insights on this concern.

CONCERN 2: STRENGTHENING OUR SMEs

SMEs play an important role in all countries. In Singapore, they make up 99% of overall total enterprises and employ more than 70% of the workforce.

The success of Singapore’s economic restructuring and industry transformations hinges plenty on the ability of Singapore’s SMEs to re-invent themselves for the long term.

Since 2010, a slew of government initiatives was launched to help move SMEs up the value chain, streamline and digitalise operations; and to venture overseas.

Action however lags awareness n aspirations. SMEs continue to be challenged, as observed by Singapore Business Federation (SBF) in December 2019.

Mindsets, talents or lack of talents especially in digitalization and understanding of technology were cited to be key obstacles to business transformation. SMEs now face a more immediate challenge with the negative impact of the COVID-19 outbreak on businesses; except for perhaps the mask, disinfectant; sanitizer (or even toilet rolls) manufacturers and the like.

Besides tourism, transport sectors and businesses that rely on the PRC supply chain, many businesses that have little to do with China directly are also affected; even smaller ones like smaller businesses in food catering and event management which are hit by cancellation or postponement of local events.

There is a general anxiety amongst the SMEs that they may not be able to survive the short term.

Some are asking for administration of Budget measures to be more expedient and some ask for extension of measures such as job support to be extended to 6 months.

Mindsets of many SMEs are still on the ”here and now“ survival issues ; and training and work system redesigns etc are hitherto not corporate habits. This has been the perennial struggle of SMEs.

What is the prognosis that our local SMEs will be strengthened by Budget 2020’s suite of Enterprise Growth and Enterprise Transform Packages? Will Singapore’s economic transformation ever be supported by a very strong base of local innovative SMEs? Under current circumstances, what more can be done by the government and the rest of us to ensure that SMEs do come out of this crisis stronger?

CONCERN 3 : UPLIFTING OUR VULNERABLE

Budget 2020 presents a galore of measures to help Singaporeans with cost of living in daily living, housing, healthcare, schooling and retirement. I am concerned about 3 particular groups who are still at risk :

Our low-skilled seniors who still take on jobs such as cleaners that challenge them physically;

Our younger Singaporeans who take on low-skilled jobs such as food delivery and even private hire driving. Jobs that offer them short term gains and some autonomy but with sometimes little long term prospects; and

Our disabled citizens who are still unemployed or who are holding jobs that may disappear as a result of the disruption caused by technology.

How can Government and the rest of Singapore better support and uplift the vulnerable amongst us? Can more resources be invested to deep-dive and study their needs; create a spectrum of more suitable jobs and have more effective job placements? Can there be a more impactful and lasting way of signposting to guide them - for instance, or even to create a jobs clearinghouse of sorts?

For the disabled, which thankfully due to Government’s eyeballing and ground advocacy, things are improving but I feel it’s still not enough. Is there a way by which the SkillsFuture movement can include them in a more substantive and systemic way?

CONCERN 4 : INCOME INEQUALITY

Income inequality is a hot topic for many societies including Singapore.

It is indeed good news that our Department of Statistics reported that household income inequality as in 2019 was at its lowest in almost 2 decades; with a lower gini coefficient of 0.452 versus 0.458 the year before; and even lower at 0.398 after adjusting for government transfers such as workfare and GST rebates.

Experts are saying telling us that the difference between the Third Industrial Revolution and the Fourth is the impact of depth and breadth of technological change on everyday life and business.

From food to retail to banking, you name it, industries are going digital. Singapore’s SkillsFuture movement is a brilliant one but the speed of change globally and in technology is formidable. The 500,000 or so citizens who tapped on their SkillsFuture Credit in the first tranche works out to be only about 20% of the resident labour force.

Whilst the issue of wealth inequality is as old as time, Industry 4.0 will make inequality an even bigger issue. Research shows innovators, investors and high-skilled IT workers benefit the most in the future economy; and the rest of the population at risk of being left out.

To avert this scenario of a “winner-takes-all” scenario, how can we develop as many winners as possible amongst our people and businesses?

Government has moved several important chess pieces for our workforce to stay relevant and indeed, of course it is up to us Singaporeans to respond. But this is such an important topic, it still that calls for a deeper dive, to remove any income inequality that will surely arise from the advent of technology.

CONCERN 5: SG-TOGETHER

Lastly, I wish to cover the important Singapore-Together or the SG-Together movement, a brainchild of DPM Heng and typical of his style of listening and engaging others, including those not in cabinet or government not in authority.

DPM in Jan 2020 calls SG-Together the “new cornerstone of national building” – a new model of partnership between Government and Singaporeans in owning, shaping and acting on our future – to expand what is called a “democracy of deeds”.

SG-Together indeed, I feel, is a significant and necessary direction. Issues of the day are so many and so complicated and complex that Government no longer has the monopoly of ideas and action; or sometimes even resources.

Many citizens, myself included, want to be part of the solution to make our society not only just successful economically but also significant in the world.

Besides the concerns I mentioned earlier regarding strengthening SMEs, uplifting our vulnerable, and reducing income inequality; I can think of so many other areas in which Government and Singaporeans can work together:

  • Self-sufficiency in food production

  • Impact of the Rise of the robot workforce

  • Inclusive public housing estates

  • Mobile or pop up healthcare teams and clinics

  • Budget allocations and living within our means in future

  • Lifelong learning schools

  • Grants for private housing options

  • Feeding the poor in a dignified way; and several many others.

Some of us as enthusiastic advocates will need to acquire a broader understanding of not just only our area of passion and needs; but also understanding of the ecosystem and how different pieces affect other parts of society. If citizens want to harness resources, there must be a way by which the giver of resources whether Government or private donors can count on the track record and reliability of us, citizens and their partners. Hence, our need to not only demand but to build our competencies and credibility.

But, on the part of Government, I feel there are forces within the public service and political system that could lead to SG-Together becoming tokenistic, with not much impact.

Some of the changes I would ask DPM Government to consider to take SG-Together to new heights are these:

Vision – Can Government and statutory boards cast a wider vision of their role, beyond their traditional scopes?

  • The Ministry of Education should be envisioned as the Ministry of Lifelong Learning.

  • The Ministry of Environment and Water Resources should be our Ministry of Sustainability.

  • The Ministry of Transport is no longer dealing with transportation but connectivity;

Deployment – Can we get rid of the possible thinking that only the best executives remain as head honchos or thinkers in the Ministries?

Can we deploy more of the best brains to the ground and develop their execution muscles?

I remember the days when I was starting a leadership training business in China many years ago and I failed miserably at the start. The business only took off after I sent my best top staff to China and when I regularly work with my staff PRC team in the frontline.

There ought to be a strategy to change the way Government views and deploys its best. Station them on the ground to learn, facilitate, forge alliances through personally experiencing the challenges in the frontline; to implement the policies that are developed at the top.

Similarly, Government should be bold enough to appoint good mid-career practitioners to leadership positions in public service – offer them a bridging learning stint if need be.

That may make a big difference in the complexion and DNA of SG-Together;

Culture – The culture that will drive SG-Together to success will have to be one that learns to be less ministry-centric; and less controlling.

The people of Singapore has trusted the Government for so long; it is time for Government to also learn to trust the people too – not blindly, not indiscriminately but in a less controlling and more facilitative manner.

Sir, I believe the SG-Together is a very important direction for this Government. It can end up as a lofty aspiration; but if done right, it will be a powerful driver to a stronger Singapore that can weather many storms, much heavier than COVID-19 or more tragic crises.

CONCLUSION

Sir, I fully support the Budget and I seek DPM’s consideration of the inputs I have made.

I thank DPM and the Team behind Budget 2020 for its great work.

Thank you.

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Watch my speech here and read more here.

 

Community, Disabilities, Education, Parliament, MPDenise Phua