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Speech by Mr Tharman Shanmugaratnam, Minister for Finance, at Launch of Project Dollars and Sense, 26 July 2008, 10.15 am at Frontier Community Club

28 Jul 2008

Mr Zaqy Mohamad, Member of Parliament for Hong Kah GRC

Mr Piyush Gupta, Head of Institutional Clients Group in ASEAN and Citi Country Officer in Singapore,

Dr Koh Noi Keng, Lecturer, NIE

Ladies and Gentlemen,

I am happy to be here with all of you this morning to launch this very meaningful programme "Project Dollars and Sense". I am heartened to see the partnership between the Keat Hong Grassroots Organisations (GROs), Youth Leaders, Citi and National Institute of Education (NIE) aimed at bringing basic financial skills to the public.

Coping with Rising Costs

2. With Singaporeans facing a rise in their cost of living, efforts to help households plan their budgets are more relevant than ever. The rise in oil and commodity prices especially is a new reality that the world, and we in Singapore, have to adjust to.

3. Our key approach in helping Singaporeans cope with inflation is to assist them in getting good jobs and earning a good living for themselves and their families. The best way to help the needy is still about helping them get a job, encouraging them to stay at it and upgrade their skills from time to time, and to support their family members.

4. In the short term however, the Government has also been able to provide substantial assistance to help Singaporeans at a time of high inflation, because we had surpluses to share. This year, the government is providing Singaporeans with about $3 billion worth of benefits in the form of GST Credits, Senior Citizen Bonuses, Growth Dividends, Service and Conservancy and rental rebates, and various other benefits. Low-income households especially will receive benefits that are far more than the increase in their cost of living owing to this year's higher inflation.

5. As individuals and families, however, much depends on how we manage what we earn in wages, or what we get in Growth Dividends and other one-off benefits, or what we draw from our CPF accounts when we retire. We all try to stretch the dollar, so that whatever we receive can go as far as possible for our families. But there are skills that can help us to do this - how to take stock of our families' expenses, review our weekly lifestyles, prioritise the most important expenditures, draw up a budget and stick to it as much as possible, so that we can save a little. Plus switching from some items of spending to others, for eg switching to energy-efficient household appliances.

6. Even for lower income folk, all these habits have been found to go a long way in helping them stretch the dollar.

7. Another way for families who have accumulated some amount of savings is to become more effective in earning a return on our savings. In other words, to make our money work harder. This involves upgrading our knowledge about financial planning as well as the attractions, features and risks of various financial products. We need to do our homework to understand a financial product and consider whether it is suitable before deciding whether to buy or invest in it.

8. It is worth constantly reminding ourselves too that financial planning is not something we have to think about or start doing only when we are near retirement. The earlier the better. Small changes in behaviour, or in how we save and invest, make a big difference over 20 to 30 years.

9. All this is why Dollars and Sense plays an important role. It helps families pick up the basic financial skills they need to make the most of their incomes and their savings.


10. I am glad the Keat Hong GROs and YouthLeaders have taken the initiative today. Their partnership with Citi-NIE allows for the community to tap on financial experts. I applaud also the efforts of Citi-NIE for their outreach to the community. Please join me in thanking all of them for making this event possible. Have a pleasant learning journey at Dollars and Sense!