Speech by Deputy Prime Minister and Minister for Finance Lawrence Wong at the Debate on President's Address17 Apr 2023
1. As President highlighted in her speech, this new session of Parliament is happening at an important milestone of our history, indeed of world history. After three years of the Covid crisis, we now confront other formidable challenges. But as we have seen again and again in our history, we can find opportunities in every crisis, and move quickly to take advantage of them.
2. There are stark realities facing Singapore and the wider world. From war in Europe, to deepening big power rivalry in our part of the world, we all feel a palpable sense of danger — danger not just to the economy, but also to an open and stable global order.
3. We will continue to be afflicted by these external headwinds. I know many Singaporeans worry about the unexpected twists and turns that may lie ahead. They see interest rates, prices and bills going up, and impacting their livelihoods. That is why I had implemented comprehensive support measures in the Budget. These measures will help to cover the inflation-induced increase in spending for lower-and middle-income households. Some of the support have been given out, while others will be rolled out progressively over the year. We have and will continue to do everything we can to address the stresses and strains that people feel on the ground.
4. Besides tackling the cost of living, sustaining growth will be more challenging in this new environment. We will have to redouble our efforts to attract investments and talent, and to create good jobs and opportunities for Singaporeans. We will have to intensify the pace of restructuring and transformation to stay ahead of the competition.
5. All this will not be easy. But COVID-19 has shown that Singaporeans have what it takes — the grit and resolve to overcome tough challenges. The odds may appear stacked against us. But we can turn challenges into opportunity. With pride in our history, and strength from our unity, we can forge ahead with confidence. So I say: do not fear; never lose heart.
6. We will build on our strong foundations. But we must also have the courage to change where change is needed. This is what my colleagues and I have set out to do with Forward Singapore. Through this exercise, we are reviewing our policies across all areas. We will ensure that the broad middle of society and their children see continued improvements in their lives; and we will close the gaps for the more disadvantaged groups.
7. We have heard from Singaporeans over the past months — your views, aspirations, and ideas. The many conversations and partnerships have yielded fresh insights on what we can do differently in our next stage of nation-building.
8. Today, I will share some of the key shifts that we will embark on as part of our new social compact:
- A new approach on skills
- A new definition of success
- A new approach for social support
- A new approach to caring for our seniors
- And a renewed commitment to one another — less about “I” and “me”, more about “us” and “we”.
9. If we succeed in effecting these shifts, we can secure a stronger social compact – and not just amongst ourselves, but between this generation and future generations to come.
A New Approach on Skills
10. Let me start with our new approach on skills. For skills are the lynchpin to lifelong success.
11. The skills journey begins early in life. We want every child to have a strong foundation that can propel them forward through life. We know that the first few years matter greatly in shaping a child’s potential. So we are scaling up the KidSTART programme nationwide, to reach out to more lower-income parents, and to close the early gaps in our children’s lives.
12. Beyond the age of three, we are stepping up the provision of MOE kindergartens and government-funded preschools. Enrolment in preschool at ages 5 to 6 is already near universal. But the attendance rate of children from lower-income families can still be improved. At ages 3 to 4 especially, more children from such families can also benefit from enrolling in preschool. So we will study how to strengthen their participation in these early years of development, so that we can give the children in these families the best possible start in life.
13. Once our children enter the school system, there is a comprehensive system in place to help them develop and grow. We already provide more resources in our schools to support children with greater learning needs. We will continue to do more on this front, so that every child can realise his or her full potential.
14. But there is a deeper challenge in our education system: our concept of meritocracy remains too narrow. Many feel caught in a rat race from a young age – under pressure to get the best grades, get into what they perceive to be the best schools, so that they can get the best university places. Many parents, too, are anxious about their children’s future. Some go to great lengths to maximise their children’s chances to get into perceived brand-name schools, even preschools.
15. A decade ago, DPM Heng Swee Keat said that “Every School is a Good School”. I fully agree with this. Because in Singapore, everyone can be assured that, no matter which schools their children are admitted into, they will receive a good education, and they will be well supported by their teachers. That was my lived experience too – I went to the primary and secondary schools near my home, and reaped the full benefits of learning in these schools. That was decades ago. The quality of our schools and teachers has improved dramatically since. These days, our teachers don’t just focus on content and knowledge; they help our children to think independently, and instil in them qualities and values that contribute to lasting success in life.
16. Remember, at the end of the day, we are more than our grades; we are more than the schools we go to. This is an aspiration Singaporeans have voiced for some time now, from when we held Our Singapore Conversation a decade ago. Since then, we have made significant moves, and slayed some sacred cows. Today, PSLE T-scores are a thing of the past. So will be the labels of N(T), N(A), and Express streams – and in their place, there is full subject-based banding. We hope these moves will go some way to remove the stressors in our education system. But more importantly, we hope they will signal to all in society that we are serious about refreshing our system.
17. And I hope our society too – every man, woman, and child; young and old; rich or poor – all of us will be serious about refreshing our mindsets about schools and grades. It is not possible to change something that has become so ingrained in our nature by government decree. We must be the change we want to see in our society. Every Singaporean must want to give themselves – and their children – more breathing space to discover and develop their diverse talents, and to maximise their potential.
18. How do we achieve this? A key mindset shift is to recognise that formal education early in life is not the endpoint of our meritocracy. Far from it. Our refreshed meritocracy must be a continuous one, with learning opportunities, milestones, ladders at multiple junctures. All must have the chance to try again, do better, and move forward in life, years after leaving school.
19. The skills journey begins in schools, but it does not end with schools. Our new approach on skills must include a fresh commitment to making continuous learning, reskilling and upskilling a way of life. This will become more important with slower economic growth, rapid technological disruptions, and greater job churn. To remain an upwardly-mobile society, lifelong learning will be key. Not just upskilling once and being done with it; but multiple times, to become more adaptable and resilient, well-equipped and confident to face the future.
20. To get there, education cannot just be confined to the first 25 years of our lives. Learning must be a continuous journey, for the whole of our lives. We launched SkillsFuture in 2015. We’ve made some headway since then, but there is still much more to be done.
21. We are therefore looking at major changes to strengthen SkillsFuture. We aim to reduce the costs, and lower the barriers to training. We will work with industry partners to come up with effective training programmes, including work-based learning options. These courses will have to be better curated and vetted, so that they translate into meaningful employment outcomes. We will discuss with tripartite partners how we can support workers to take time off to train. This will help the workers individually, but it will help businesses too. At the same time, businesses must shift their emphasis from hiring credentials to hiring skills, and invest in the development of their employees. And Singaporeans themselves must be open to change.
22. Sir, let me share with you the story of Afifah. Nur Afifah Bte Rakif graduated with a Diploma in Communication and Information Design eleven years ago, when she was 22. She later chose to teach in a preschool in 2013, took up various early childhood education programmes to re-skill and upskill, and became the Deputy Centre Lead of the NTUC First Campus. To strengthen her skillsets, she is now pursuing a degree under the SUSS Work Study Programme, and will graduate later this year. Afifah exemplifies the spirit of lifelong learning and the value of reskilling and upskilling in pursuing one’s passions. I salute her.
23. With this new approach on skills, how well you did in school should not define the opportunities you can unlock, nor should it determine your entire life. You are not stuck at your highest formal educational level attained; you can update your skillsets, pivot to new careers, seize new opportunities, and keep moving forward in life.
24. Some other nations aspire to create a welfare society, from cradle to grave. We will aspire to create in Singapore a full-fledged Learning Society – from cradle to grave. That is how we will become a people ready for the future, and equipped to succeed.
A New Definition of Success
25. But what does success mean? Naturally, it means different things to different people, in different places. Yet somehow, as a society, we tend to converge around material definitions – the size of the paycheck, or the property we own.
26. How can we shift our lens, and collectively adopt and embrace wider definitions of success? After all, success is really for each one of us to define. There is no model answer to follow. We should not feel pressured to compare with others, or to conform to preconceived notions. The Japanese talk about discovering your “ikigai” – something that gives you a sense of purpose and joy. We should strive to be a meritocracy where everyone can be the best possible version of themselves; and where there are many ways for diverse talents to contribute and earn respect in our society.
27. Mindset shifts are necessary, but I don’t think mindset shifts alone will effect societal change. It is not enough to say we will celebrate a variety of professions. Our economic structures, remuneration, and career prospects in various professions must also be consistent with what we value.
28. We will consider ways to tilt the scales, and narrow the wage gap across professions. One specific way is to further professionalise skilled trades like electricians and plumbers: Why not enable them to attain accreditation for their skills, and set a clearer progression ladder as they take on greater responsibilities? We can ascribe the right values to such forms of labour, and grant such workers greater remuneration as professionals.
29. More broadly, we also want to give Singaporeans who graduate from ITE and polytechnics stronger assurance: that their wages and career prospects will not be too far below their university-going peers, and will not be permanently conscribed to be below. They don’t have to succumb to a paper chase to secure a good salary and a viable career path. They can excel in the professions that they have trained in and have the aptitude for, be it hospitality, infocomm, social services, or others. There are many ways to make a difference, many talents to nurture, and many forms of contributions to reward.
30. Take lower-wage workers for example. Many of them serve in essential services like security, lift maintenance, and cleaning. We have been doing much to uplift lower-wage workers through Workfare and the Progressive Wage Model, and we will continue to do so: increase wages, set out a skills ladder, provide opportunities to upgrade. We cannot close the gap altogether between lower-wage and median workers, but we can certainly stop their wages from diverging too far.
31. Here I have a plea to all: For a new definition of success to become a reality, all of us – as consumers – must be willing to bear a higher cost for the goods and services we consume. We must recognise the important work that our fellow citizens undertake to keep our society going, and do our part to uplift and boost their wage prospects.
32. I know this is not an easy ask, given the rising cost of living. But we will do our best to manage the pace of change, and to help everyone, especially our lower- and middle-income families, adjust to this new environment. I might add too: All will gain when even the most vulnerable amongst us become better off. We will become a better people, a more just and a more equal society.
A New Approach on Social Support
33. In a more uncertain world, we must also relook our approach on social support: how can we assure both the broad middle and the vulnerable that they can meet their needs in life, and not fall by the wayside or be left behind?
34. For the vulnerable, we have been gradually shifting our approach from social assistance to social empowerment. We want not only to help people to tide through difficulty, but also to boost their sense of drive and purpose, and strengthen their sense of agency and ownership over their own circumstances.
35. For example, today we have the Fresh Start Housing Scheme to help second-timer lower-income families, like Mr Gan and his wife Mdm Chai, own a home. The two of them work as cleaners and they lived in a rental flat in Redhill. But they were determined to buy a home of their own, for themselves and their young daughter.
36. Mr Gan and Mdm Chai joined the Fresh Start Housing Scheme, and received personalised support and financial guidance from HDB and social service officers throughout their home ownership journey. They received a $35,000 Fresh Start Housing Grant. The rest of the loan will be fully serviced by their CPF contributions.
37. Today, the Gans are proud owners of a 2-room flexi flat in Bukit Batok. They collected their keys two months ago and just moved in earlier this month. Their daughter is very excited about getting to decorate her own space. Over the next five years, our officers will continue to walk alongside them and give them the support they need.
38. The Fresh Start Housing Scheme is, in effect, a means to uplift and empower the vulnerable. We want to expand this approach of empowerment to cover more forms of social support. For example, we could provide additional financial help to vulnerable families who do their part to help themselves, such as staying gainfully employed and sending their children to preschool regularly. So the more a family takes ownership of their goals, the more we will help you to reach even higher — a mutually reinforcing, virtuous circle.
39. We also want to consider another group: persons with disabilities. We will do more to alleviate the impediments they face in life, and adopt new ways of caring for and empowering them. In particular, we want to reduce the financial burden on parents of children attending special education schools and care centres.
40. Equally important is to empower persons with disabilities when they reach adulthood. We will involve and enable them to contribute to society. The onus is on all of us to find ways to affirm the dignity of our differently-abled citizens and enable them to realise their full potential.
41. Sir, all of us must come together to fight the ills of inequality. Singapore must never succumb to the kind of harsh inequality we see in so many other parts of the world. However treacherous the terrains ahead, so long as Singapore continues to progress, all Singaporeans must continue to progress—with none among us left behind.
42. No less important in our social strategy is to assure the broad middle that they too can be confident of meeting their needs at every stage of life, even in the face of setbacks.
43. Housing, education, and healthcare – these are basic needs for all Singaporeans. This Government has delivered on all these fronts over the decades, and we will continue to do so.
44. We know that housing is top-of-mind – we’ve discussed this recently in Parliament, in the housing debate, and in the Budget.
45. We’re sparing no effort to ramp up the supply of BTO flats and to catch up on the delays caused by Covid-19. We have tightened the rules, so that flats go to those who need them most, as quickly as possible. And we are doing more to help younger married couples and parents own their first home. We will get this work done and we will deliver the results. Affordable and accessible public housing will always be a key pillar of our social compact under the PAP government.
46. Our approach to social support also extends to how we will support our people in the face of setbacks. In a more volatile jobs landscape, we can expect more amongst us to be displaced from time to time. Today, we help the unemployed through schemes like ComCare and the Covid Recovery Grant. They provide timely assistance while upholding our ethos of work and self-reliance.
47. But we also know that losing a job is a major setback which can easily destabilise workers and their families. So the Government will consider doing more to support our displaced workers. We know that automatic unemployment benefits can and have often led to negative outcomes elsewhere. Because displaced workers who receive generous benefits find it more attractive to stay unemployed rather than to get back into the workforce. So we want to design a support scheme that provides assurance but avoids these negative outcomes: a targeted re-employment scheme that will reduce the strain on displaced workers to make ends meet, while still encouraging them to continue with their upskilling and job search.
48. We intend to make this shift in our social strategy so every Singaporean can be confident: in this harsh, unpredictable world, we will have your back, and we will support you. We will cheer you on, so you can strive to achieve, do your best, and bounce back stronger.
A New Approach on Caring for our Seniors
49. Strengthening our assurances extends to caring for our seniors too – an urgent need given our rapidly ageing demographics. By the end of this decade, 1 in 4 Singaporeans will be above 65 – Members are well aware. We must adopt a new approach, to care for our seniors well, and in a sustainable way.
50. We embarked on Healthier SG recently to care for our seniors upstream. Healthier SG signals a shift from treating illnesses to promoting health. If we can help our seniors stay healthy, we will reduce the need for medical intervention and hospitalisation downstream.
51. But care for seniors goes beyond physical health. As our seniors age, we want them to be cared for in their own homes for as long as possible, rather than in a nursing home. This way, they can remain active and purposeful in their golden years, surrounded by family, friends, and familiar activities. It won’t be possible for everyone, but I believe that we can make it possible for most.
52. And we will invest in our infrastructure to make this happen:
- Build more Community Care Apartments
- Expand the network of Active Ageing Centres
- Improve access to home-based care services
- Work with community partners to prevent loneliness and social isolation.
We will do all this and more, so we can create a home truly for our seniors.
53. Our seniors must also be confident of meeting their retirement needs. We achieve this through our CPF system, which we will continue to evolve and update. The Government now plays a larger role in the CPF, through higher interest for those with lower CPF balances, the Matched Retirement Savings Scheme, as well as supplementing CPF payouts with Silver Support. We will study enhancing these schemes to better support our seniors, including those nearing retirement who have less runway to work and save.
54. For younger Singaporeans, as long as you work and contribute to your CPF consistently, we will ensure that your needs in old age can be met through the CPF. And for those who do not have the ability to work, we will find other ways to look after your retirement needs. This is our promise to Singaporeans of every generation.
A New Emphasis on Collective Responsibility
55. Now, let me move on to something that underlies our refreshed social compact: we need to be less about ‘I’, ‘me’ and ‘mine’, more about ‘we’, ‘us’ and ‘ours’. It was our sense of collective responsibility that saw us through the pandemic, and it is the same sense of collective responsibility that will carry us through our next bound.
56. A social compact is not just about what Government will do for the people; it is also about what Singaporeans will do for one another. So our refreshed social compact is not just about the Government doing more, and Singaporeans depending more on the Government. Rather, it is about the Government, businesses, unions, workers, the community, and civil society all doing their part for fellow Singaporeans. It is about all of us coming together, to forge a society of opportunities and assurance for everyone.
57. One way to realise this is to nurture a broader culture of philanthropy and volunteerism: where we take responsibility for each other, and especially to help those with less. This goes beyond money: it includes investing time and effort in nurturing others – from mentoring the young to providing those from disadvantaged circumstances with access to networks and opportunities.
58. Another way is to create more opportunities for Singaporeans to partner the Government and one another in policymaking and co-creation. We will continue to involve Singaporeans and other groups in co-designing and shaping our neighbourhoods. We will provide more avenues and platforms for our youth to come up with policy ideas and build the future Singapore, for they are Singapore’s future.
59. The Government will never stop investing in our urban infrastructure, developing our HDB towns by providing more facilities and amenities, and making concerted efforts to become a City in Nature. But ultimately, it is up to all of us to contribute their own passions and energies to turn this city into an endearing home.
60. Becoming the best home is also very much about the intangibles – among them, embracing a more holistic way of life. Be it working out flexible work arrangements; treating ourselves and one another with greater kindness and compassion; knowing that good mental health is a key part of good health overall; or creating a conducive environment for Singaporeans to start and nurture families. We made some moves in the Budget this year, such as increasing paternity leave, and we will consider what more can be done.
61. This project of making a better Singapore has always been, and always will be, a work-in-progress. It has been a relentless effort over the decades. We will never stop improving – not just for ourselves but also for future generations. This ethos of building for the future, rather than burdening or weighing down our descendants, is key to Singapore’s success. The prudence of the previous generation has enabled us to find our way through the Covid crisis. We must do the same for those who come after us. So let us steward our resources well, so that our children and grandchildren will be well-endowed and well-prepared to tackle any challenge the future may bring – be it the climate crisis, the next pandemic, or the unknown unknowns which will come.
Our Governing Approach
62. Sir, I’ve provided a broad overview of what we hope to achieve through Forward Singapore. Over the next few days of the Debate, my colleagues will elaborate further on specific aspects of the agenda. Taken together, what do these shifts to our social compact mean? In fact, some ask, has the 4G team shifted to the left?
63. It’s not so simple. Our governing approach is not so easy to characterise along the traditional political spectrum of left and right.
After all, we have always strived to appeal to a broad base of Singaporeans. We have always taken care not to base our legitimacy on any narrow social group or class.
64. We also do not blindly copy or replicate the models of other countries. Even the first generation of PAP leaders, who began their political lives as democratic socialists, spoke of a Socialism that Works – for they didn’t want any part of what they already knew was failing in Europe and elsewhere.
65. The countries with more welfarist policies, in continental Europe and the Nordics, have much higher levels of state-financed welfare provisions. Their governments typically spend above 40% of their GDP – compared to 18% in Singapore. To fund such spending, they impose high income taxes, usually much higher than 30%, even for the middle-income groups, with VAT or GST taxes ranging from 20% to 25%.
66. Some may think this is a good model for Singapore, but from our point of view, it is very clear: we will not adopt such a model of comprehensive universal welfare. Instead, we will chart our own way forward, staying true to our core values. While we will indeed do more to strengthen social safety nets, we will move with prudence and discipline, and not end up inflicting heavy tax burdens on everyone. Today, our overall tax burden for the middle-income group is far lower than other advanced nations, and we will strive to keep it that way.
67. More than that, we will ensure that our programmes achieve better outcomes for our people. In fact, we are already doing better than many other countries in areas like healthcare, education, and housing; doing better, not in terms of how much we spend, but in terms of outcomes – the value we achieve with every dollar of public spending. We are doing better, and we can keep doing better.
68. That’s the spirit and intent behind the shifts we are considering – be it skills and continuous learning, social empowerment, active ageing and retirement adequacy, or housing assurances. The changes will benefit Singaporeans from every walk of life – they will uplift the vulnerable, and also advance the well-being of our broad middle.
69. In fact, amongst the more advanced nations, Singapore is one of the few where people in the middle have experienced large increases of incomes in the last 20 years. The middle-income group in Singapore now has higher real incomes – real incomes, after netting off inflation – than in many other places – higher than the US and most European societies, and well above that in other advanced Asian societies, like Japan, Hong Kong, and South Korea.
70. We will continue to sustain real income growth for the middle. This is why economic growth is non-negotiable for us. We already know that our growth rates will gradually come down as our labour force expands more slowly and becomes older, but growth remains essential. If we don’t grow the economic pie, there will be fewer jobs and less scope for social support. So please do not be mistaken. This Government will, and must, always be pro-growth and pro-inclusivity. Securing our economic competitiveness will become more, not less, important in the next phase of Singapore. This is incumbent upon all of us, and upon my team: we will create good jobs and a good future for all Singaporeans.
71. Underlining our governing approach is the core ethic of individual effort, and personal and family responsibility. We want Government actions to reinforce, not negate, individual and collective responsibility. We want Government actions to catalyse more involvement by other members of society – employers, unions, community groups, and non-governmental organisations. Then we can all chip in and do our part collectively, to tackle inequality, rekindle social mobility, and move forward together.
72. Sir, I believe the Opposition and the Worker’s Party in particular broadly agree with and support the Government’s policy directions. They may want us to do more in certain areas, as we have heard in the speeches today, and I’m sure in the coming days, but there is general support for the moves that we have proposed.
73. But there is one fundamental difference. When we plan to spend more, the PAP Government will always tell you plainly how we propose to raise revenues and ensure that our Budget remains balanced over the medium term. The Opposition has offered some revenue alternatives, but their sums do not add up. We don’t need to go through the detailed arguments again. But without the GST – and I’m not even talking about the increase in GST, but the entire GST, which the Workers’ Party still does not support – we will face a huge funding gap. None of the alternatives that the WP has suggested will make up for the shortfall.
74. In this Debate, and over the course of the remaining term of Government, I look forward to hearing concrete alternatives from the Opposition – not just opportunistic or populist ideas to chip away, bit by bit, at trust in Government, but a serious alternative agenda for an alternative Government.
75. That’s how politics in a first-world Parliament should work. I have said this before: I do not assume that the PAP will win the next General Election or that I will inevitably take over as Prime Minister. Every General Election from now on will be about who forms the Government; not just what percentage of the votes the PAP receives and how many seats the Opposition wins. As we develop into a mature democracy, we must have not just a serious Government, but also a serious Opposition that thinks carefully about what it will do as government. Where the Opposition have good ideas, where they can make a contribution to the ideas for improving our country, we welcome them. But we ask that you be upfront about the realities and trade-offs we face as a country, and be honest about your plans, policies, and intentions.
76. Mr Speaker, our world has changed; so too must our way of doing things. Our refreshed social compact will be our compass for the road ahead. Forward Singapore is a bold agenda, and it depends on all of us to realise. Though we will not see change overnight, we can each start to embrace the new social compact today.
77. If we all do this, we can be assured that we, too, will benefit when others feel a deeper sense of responsibility towards us. We can then sustain a virtuous circle of uplift, progress, and confidence; and thus strengthen our solidarity and trust as a nation. The more we put into this new social compact, the more we will receive in return. And society, as a whole, Singapore, will grow stronger and fairer; more just and more united.
78. Faced with the stark realities of a troubled world, my message to Singaporeans is simple: there is no challenge we cannot handle; no obstacle we cannot overcome. Singapore can remain exceptional. We can keep the Singapore Story going. We can move forward together as one people.
Mr Speaker, I support the Motion.