2.9 Let me move on to the Government's expenditure priorities. I refer members to the chart in Handout 1.

Sectoral Shares of FY 2002 Budget

2.10 As in previous years, the largest share of the Government's FY 2002 expenditure budget goes to Social Development, which accounts for 45% of total expenditure. Education, Health and Community Development & Sports will get substantial increases in their budget allocation. The increases support the Government's emphasis on human and social capital. These form the foundations for a strong, cohesive and resilient society. MOE will spend $2.6 billion in operating subsidies to educate our children at the primary, secondary, pre-university and junior college levels. Another $1.7 billion will be spent on university and polytechnic education, as well as on the Institutes of Technical Education. MOH will spend $1 billion on subsidised healthcare services at the 17 polyclinics, 64 voluntary welfare organisations and 13 public hospitals and healthcare institutions. These expenditures will be targeted more precisely at lower-income households through means-testing. Means-testing will also be applied to social assistance.

2.11 The next largest sector is Security & External Relations. The September 11 attacks have reminded us that we cannot take our security for granted. Despite the defeat of the Taleban and Al Qaeda in Afghanistan, global terrorism is still an active force, with numerous cells and networks endemic in many countries, including in our region. Our regional situation is complex and unpredictable. We cannot afford to let down our guard. To preserve and enhance our capacity to defend ourselves, the Government will devote 38% of the total expenditure budget for FY 2002 to Security & External Relations.

2.12 Economic Development is the third largest sector, at 12% of the total expenditure budget. Our expenditure in this sector will enable us to invest in world-class infrastructure to strengthen Singapore's competitive position as a compelling hub for global and regional business. MOT will spend $1 billion this year on road upgrading and rail projects, including the MRT Circle Line and the Sengkang and Punggol LRT.

2.13 The Government will continue to deregulate sectors of the economy which have not been fully liberalised, for example, the electricity industry. This will sharpen the innovative capacity of Singapore companies, and make them more efficient and competitive. We will help Singapore-based enterprises, including SMEs, to upgrade their capabilities and venture abroad. We will also continue to encourage new investments and economic activities in order to develop new growth engines, and add depth and resilience to our economy. At the same time, the Government will outsource services to the private and people sectors wherever it is cost effective to do so.

2.14 Government expenditure in the Economic Development sector will continue to emphasise worker training and upgrading. We have implemented many such programmes over the years. The second off-budget package last year enhanced employment assistance and training programmes, including the Skills Development Fund and the People-for-Jobs Traineeship Programme. Continuous skills-upgrading is the best form of job security.

2.15 The Government will not stint in its support for workers to upgrade themselves. In preparing this Budget, I reviewed the range of training and upgrading programmes to see whether more needed to be done. MOM and the trade unions told me that there was no shortage of money or training places. In fact, many places on the various training schemes still go unfilled. For FY 2002, there are 100,000 training places under the Skills Redevelopment Programme. MOM has also recently launched new retraining schemes, such as the WorkSkills Training Programme and the Self-Employment Training Programme. These should be sufficient. However, if existing programmes are filled, and the training places need to be expanded, MOF will be ready to fund them, the tight budget notwithstanding.

2.16 Government Administration remains the smallest sector, comprising 5.6% of the total expenditure budget. We will continue to keep this the smallest sector in line with our policy to keep the central administration lean and trim, so that the operational ministries can have the bulk of the resources to deliver public services. We will improve service delivery through the E-government initiative. By the end of this year, all government services that can be delivered through the Internet will be available online.