4.1 Mr Speaker, Sir, beyond economic opportunity and a capable government, it is ultimately a sense of community that makes us truly a nation. We must be a society that is harmonious and united, caring and inclusive.

4.2 As Singaporeans, we have a shared responsibility to help the less fortunate members of our community. The better-off must help the poor and disadvantaged – the sick, the elderly, the disabled, and the unemployed. In many developed countries, the state takes on this responsibility, but this is invariably financed by high taxes and levies on businesses and those who are working. Our social compact is rather different. It is based on personal responsibility, with the family and community playing key roles in supporting people through difficulties. The state will provide a safety net, but it should be a last resort, not a first resort, and should focus on the minority who need help the most. We thus avoid state welfare, which will erode our incentive to achieve and sap our will to strive. Our social compact enables us to keep taxes low, and lets people keep the fruits of their labour and businesses the rewards of their enterprise. And when we do well and have budget surpluses, we can distribute some of them back to Singaporeans.

4.3 Singaporeans are a generous people. The outpouring of support in the wake of the recent tsunamis disaster is testimony to this. We must strengthen this sense of social responsibility - of helping those less fortunate than ourselves. The Government will make it easier for individuals, businesses and civic groups to take an active role in helping others. We will continue to target our financial assistance at the truly needy, and ensure that lower-income Singaporeans and their children have the opportunities to move up in society. Social mobility is a cornerstone of our social compact.

4.4 We also want to be an inclusive society, where people feel they have the opportunities to actively contribute and make a difference. Valuable contributions can come from talents in the arts, sports, or social work arenas, and need not be purely economic in nature. Everyone, including the disabled and elderly, has something to offer, and should be encouraged to live up to his or her potential.

4.5 I intend to distribute some of the projected budget surplus this year back to Singaporeans to foster a caring and inclusive society. This Budget will:

• help Singaporeans cope with changes;

• encourage savings for retirement;

• support families; and

• promote community involvement and philanthropy.