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Speech By Mrs Lim Hwee Hua Senior Minister Of State For Finance And Transport, At The National Cashflow Competition On 29 March 2009 At Millenia Walk

29 Mar 2009

Distinguished Guests
Finalists of the National Cashflow Competition
Ladies and Gentlemen, Good afternoon.


I cannot think of a more relevant real-life situation than the current economic melt-down to drum home the importance of cashflow management at all levels. Nonetheless, I would like to take this opportunity to congratulate all the finalists and winners of the National Cashflow Competition. This commendable initiative by the Nanyang Technological University's (NTU) Investment Interactive Club is an innovative competition which promotes financial literacy and management in a fun and interactive manner.

Importance of Financial Literacy & Management

2. Notwithstanding the relevance during the current uncertainty, both financial literacy and management are important life-skills for all Singaporeans. It is particularly essential to impart these lifelong skills into our youth at an early stage, to help them manage their finances and enable them to better understand principles surrounding national finance.

3. Just look around us, in response to the global economic crisis, Governments around the world have introduced various measures to help their economies cope. The measures introduced are based on their reading of the economic situations. But people too, need to have a good understanding of the implications of these macroeconomic decisions and the inherent trade-offs between current fixes and long-term sustainability. Why?

4. We need to be aware of the overarching consequences of economic policies as these policies need to be viewed not only through the lenses of individuals, but also from a larger perspective taking into account long term consequences. Our policies would need to be balanced so that it would not only benefit Singaporeans in the short term, but be sustainable in the long run. Let me give you an example, people living in countries which export large quantities of agriculture and livestock could argue for export restriction to keep the domestic prices low; similarly, motorists in oil producing countries could ask for heavy subsidies for petrol and fuel oil. However, a responsible government would have to take into account various concerns and circumstances before making a decision. The same principles apply to personal financial management - all about establishing priorities, long term vs short term, and allocating resources. Hence, having a good grasp of personal financial management is the first step to understanding the issues concerning national finance.

Benefits of the National Cashflow Competition

5. In getting participants to assume a range of occupations, analyze their monthly cashflow statements and invest their savings to grow their passive incomes, the National Cashflow Competition which is based on the Cashflow 101 board game, simulates real life decisions that individuals face when managing their finances.

6. Apart from giving our youth the opportunity to experience various aspects of financial management in a fun and interactive manner, the competition also gives participants the opportunity to take risks and learn valuable lessons from the outcomes of their decisions, a luxury which many may not have in real-life. And at the end of the day, it is not about who wins the game, but the lessons that are learnt while playing the game.

Public-Private Collaboration Key to Promoting Financial Literacy

7. The Government recognizes the increasing importance of sound financial knowledge. The Monetary Authority of Singapore (MAS) and the Ministry of Education (MOE) jointly implemented a national financial education programme called the MoneySENSE programme in 2003. The programme provides training to improve individuals' basic money management, financial planning and investment skills.

8. As part of our youth outreach programme for the annual Budget, the Ministry of Finance has also introduced various programmes surrounding the themes of national finance since 2006. These include essay, video and debate competitions and an online Role-Playing Game which gives participants the chance to assume the role of the Finance Minister and manage the nation's finances.

9. Imparting the value of financial literacy and management cannot be done by the Government alone. To this end, I am very heartened by the support of organizations such as Citi Foundation and NTU's Investment Interactive Club. In 2007, Citi Foundation helped set up the Citi-NIE Financial Literacy Hub to provide financial literacy training to teachers who can in-turn impart these skills to their students. And today NTU's Investment Interactive Club and the Citi-NIE Financial Literacy Hub will be launching the Singapore Outreach Programme to run financial literacy programmes and set up investment clubs in schools. I understand that three secondary schools have already indicated their interest in the programme and I encourage more schools to support this initiative.


10. Since its inception in 2008, the National Cashflow Competition has helped to raise awareness and impart into our youth valuable skills on investment and financial literacy. And seeing so many of you present here today is a testament of the success of the competition. I hope events such as today's competition will generate a continuing interest in economics and finance in you. Thank you.