| 1.11 While we remain alert to short-term
economic cycles and event risks, we must continue to
focus on our longer-term goal of remaking Singapore
to meet the challenges of globalisation. This Budget
will therefore aim to promote an economy brimming with
opportunity and to foster a stronger sense of
community among Singaporeans.
1.12 The best way to make Singapore a land of opportunity
is to grow our economy, to generate the resources to
realise our aspirations. That requires us to continually
adapt to the changing world, upgrading and restructuring
ourselves in order to stay competitive. Only then can
we create good jobs, realise our dreams, and provide
a better future for our children.
1.13 Singapore is not unique in facing pressures to
restructure. In this era, constant change is a necessity
for every country. Germany has been, for half a century,
a bastion of state welfare. Yet now a socialist government
is trying to cut back benefits and reduce wage costs.
Even the opposition acknowledges publicly the necessity
of this. Angela Merkel, the leader of the opposition
Christian Democrat Party recently said, "the discussion
now is whether Germany needs more far-reaching reforms.
The world around us is changing fast and we cannot afford
to stand still. I think more and more people in Germany
recognise that we can only maintain our jobs and our
prosperity if we can offer conditions to companies comparable
to conditions elsewhere." She is in the opposition.
She wants to win elections. But she is saying these
hard truths. (Germany's opposition leader faces foes
in own party, Straits Times, 9 Feb 2005)
1.14 In the United Kingdom, the old left-wing Labour
Party has morphed into a left-of-centre new Labour Party.
In government, New Labour has pressed on with the structural
reforms and market-oriented policies that began under
the Conservative government of Margaret Thatcher. As
the British Chancellor of the Exchequer Gordon Brown
said recently, "in this new global economy there
is no escape from uncompetitiveness by resorting to
loss-making subsidies, artificial barriers or protectionist
shelters. Indeed, in every part of the world, rigidities,
inflexibilities and lack of competitiveness …
are now fully exposed in the era of global competition.
… We will only maximise the benefits of globalisation
by becoming more efficient, increasing productivity,
and pushing ahead with the necessary structural reforms
to increase the flexibility of our labour, capital and
product markets." He said this in May last year.
They are going for elections in May this year. But this
is the truth for them too. (Speech at the CBI Conference
on Competitiveness in Europe-Post Enlargement, 12 May
2004)
1.15 In Australia, protectionist policies and labour
market rigidities have given way to a bipartisan consensus
– beginning with Labour Prime Ministers Bob Hawke
and Paul Keating, and continuing with the current Liberal
Prime Minister John Howard – that Australia needs
to gear up for the knowledge-based competition of globalisation.
Tariffs have been cut, taxes lowered, budgets tightened,
state-owned businesses privatised, and labour markets
made more flexible. Today, the OECD describes Australia
as the best performing economy among the rich countries.
But the Australians are not sitting still. As John Howard
has rightly warned, “the process of economic change
and economic improvement is never completed.”
1.16 If other countries can change and adapt, so can
Singapore. Our industries have always competed internationally.
Our people are used to constant change and are fully
prepared for it. Our unions understand what is at stake,
and are working closely with employers and the Government
to help workers cope. And we have the resources to invest
in our future, and to ease the transition to a more
flexible and dynamic economy.
1.17 Economic restructuring is unsettling and painful
for the people who are affected. Even as opportunities
blossom in the new economy, in financial services, pharmaceuticals,
IT, and biomedical sciences, old jobs are lost in declining
sectors through retrenchments and cutbacks. Workers
have to upgrade their skills and equip themselves for
the new jobs that are emerging, but not all will find
it easy to do so.
1.18 We must tackle this problem with vigour and realism,
and avoid tempting but ultimately self-defeating strategies.
Slowing down our restructuring will not work, because
we cannot slow down the changes taking place around
us. If we put off inevitable changes, we will only fall
further behind and make our problem worse. Alternatively,
we could try to shield certain sectors of the economy
from global competition, in order to protect and reserve
jobs for citizens. But as more service industries become
globalised and outsourced, our room for doing so will
diminish.
1.19 The best solution is to press on with restructuring,
but to give extra help to those who are struggling to
keep up, for example older and less educated workers,
or workers who cannot find jobs after being retrenched.
We should help to tide them and their families over
difficult times, and more importantly, equip them with
the skills they need to find new jobs.
1.20 We must provide this support in a targeted and
sustainable way, working together with community organisations
and the people sector. We must not breed a culture of
entitlement, encouraging Singaporeans to seek
Government support as a matter of right, whether or
not they need it. Instead, we must foster a culture
of opportunity, encouraging Singaporeans to see
Government support as a chance for them to concentrate
on acquiring new skills and jobs, and get back on their
feet again.
1.21 Beyond looking after groups affected by restructuring,
we want to make sure that all Singaporeans benefit from
our success. As we forge ahead, nobody should be left
behind. Everyone should have the opportunity to contribute,
and should make the effort to do so; and everyone’s
contribution will be valued. This will be a land of
opportunity for all.
1.22 In promoting economic growth and taking care of
our social needs, Government plays an important role,
by being small but active, lean but capable. The public
sector needs to be trim, in order to keep our tax burden
light and free up resources for the economy. And the
Government must be effective, directing resources to
the most critical areas, and taking initiatives that
are essential to our survival, security, and success
as a nation.
1.23 The initiatives in this Budget will therefore
address three areas:
- A Dynamic and Entrepreneurial Economy;
- A Lean and Effective Government; and
- A Caring and Inclusive Society.
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