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Source:
www.gov.sg |
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PRIME MINISTER LEE HSIEN
LOONG'S NEW YEAR MESSAGE 2007 |
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An Excerpt |
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The economic outlook is positive. There are
some downside risks, including a slowing US economy, weaker global
electronics demand, and high oil prices. Nevertheless, the global
climate remains favourable. Europe looks forward to another year of
steady growth. |
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In Asia, China and India will remain
powerful growth engines. Japan also expects to continue growing. |
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Barring unforeseen setbacks, we expect
the Singapore economy to grow by 4-6% in 2007... |
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Preparing for the Future |
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Overall, Singapore is in a strong
position. But we must not become complacent and slacken. Instead,
we must capitalise on this strength to move boldly, and open up a
decisive lead over competitors. |
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Now is the time to press on with
restructuring and prepare well ahead for a more challenging
future. |
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This is why we are raising the GST to
7%, and amending the Constitution to draw more Net Investment
Income (NII) from our past reserves. These moves will give us
extra resources to launch new programmes like Workfare and meet
future needs. |
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We will strengthen our competitiveness
by lowering direct taxes when the need arises, particularly on
companies. |
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We will invest in the best education
for all our children, improve our infrastructure and our city, and
grow our capabilities, including through R&D. |
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We will consolidate our social
cohesion at a time when incomes are stretching out. Globalisation
has created prosperity worldwide, but it has also put more
pressure on workers in many countries. |
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They now compete against millions more
from China, India and Vietnam entering the world economy. As a
result, workers are receiving less than a proportionate share of
the increase in their countries¡¯ national output. |
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This is happening in Singapore too. |
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In the last five years, our real
per-capita GDP grew on average by 4.3% per annum, but real average
wages (after adjusting for inflation) grew at only half this rate
¨C 2.1%. |
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Higher-end wages have risen by more
than this. But at the lower-end wages have increased by much less,
and some have even stagnated. |
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This is why we are implementing
Workfare as a fourth pillar of our social safety net, together
with the CPF, the 3Ms (Medisave, MediShield and Medifund) and HDB
home ownership. |
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Workfare will provide long-term,
systematic support for lower-income Singaporeans. We will also
continue with programmes to improve the skills and earning power
of this group, so that they can uplift themselves and their
families. |
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We will also pay attention to the
middle- and higher-income groups. We should help them to provide
better for themselves, rather than make them dependent on state
support. |
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NTUC leaders have suggested raising
employer CPF contributions for the middle- and higher-income
groups. Such a CPF increase will complement the Workfare scheme
which covers the lower-income groups. Then all Singaporeans will
be able to save more for their housing, retirement and healthcare
needs. |
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The government is studying this idea
carefully. Our economy is doing well. The labour market is tight,
and wages are rising. A CPF increase makes sense. |
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But we must not impose too heavy a
burden on companies and impair our competitiveness. Provided the
outlook stays good, we should be able to raise the employer's CPF
contribution rate by 1 to 2 percentage points in 2007. |
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The Government will discuss this with
the employers and unions before making a decision nearer the date
of the Budget Speech. |
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All the favourable developments we
enjoy today came from the hard and difficult decisions we made in
the last three years, such as the CPF reforms, the restructuring
of the economy, and the decision to proceed with the IRs. |
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Had we flinched and put off painful
adjustments, our economy would have lost competitiveness and
stagnated. |
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Singaporeans would have had few
opportunities, high unemployment and far fewer jobs than the over
100,000 we created in each of the last two years. |
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Full Text of Speech |
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Source:
www.gov.sg Media Release 31 Dec
2006 |
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FrontPage Edition: Wed 3 January 2007
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