Rising Expectations of Singaporeans: PM Lee

Introduction

I would like to thank all MPs who have contributed their views and suggestions on the President’s address and the addenda.  This is an important debate at a significant moment for Singapore.  We are facing new challenges domestically and internationally.  We are reaching out and handing over to a post-independence generation.  We have a new team taken over, developing fresh ideas.  Your inputs, representing the inputs of Singaporeans, are essential for getting the best possible solutions and proposals for Singapore. 

What is it ultimately that we are striving for?  Put it simply, a better life for all, to build a land of opportunity in Singapore and to strive not just for economic growth or higher incomes, but to build a nation where everyone belongs, where each person has a role to play, and where all can live with dignity.  

Whither Singapore?

We have gone from Third World to first in one generation, from almost nothing, we created something unique, and we’ve succeeded beyond our wildest expectations at many levels.  The generation who built today’s Singa­pore can take great pride in what they have achieved.  They seized many opportunities which came their way and created new ones too, and they left Singapore far better than when they started out on their working lives.  Now, it’s over to the post-independence generation. 

Mr Inderjit Singh reported how he spoke to some young people in California and they said, ‘Oh, opportunities in Singapore have dried up.  America is where the milk and honey is.’  Is that really true?  Not for a moment do I believe that, far from it. 

If a post-independence Singapore with nothing could represent opportunity, all the more a bustling, cosmopolitan city today opens so many more doors and so many more avenues for the young, the adventurous and the resourceful.  There is so much more which we can now do because we have the resources and organisation, we have the wherewithal, and the discipline.  We have valuable assets in our education system, in our healthcare system, in our housing estates, in the arts, in the public services, in a city where the people are warm and gracious, and conducive to nurturing the human spirit.  And in the economy, there are so many chances to grow existing businesses and to start new ones.  I do not know what businesses these young people whom Inderjit met have started, but if you just look around Singapore, you have OSIM, Breadtalk, 77th Street, Scanteak, Raffles Hospital - run by one of our NMPs – all doing well.  Many of these are projects started by young entrepreneurs who saw opportunities in Singapore and went for it. 

We are still a young nation and there will be opportunities aplenty in our long journey ahead.  If we lose the zest, the drive to go and seize new opportunities, then we will lose that hunger, that never-say-die attitude, the conviction that the best is yet to be, then we will stagnate, go downhill and back from first world to third in less than one generation.  We will decline as quickly as we have risen, and history is full of examples of cities which have risen, prospered, seem to be ahead of everybody else, and then gone back down again. 

I was in Chile last November for the APEC meeting and I made a side trip, visited a city called Valparaiso, a port on the west coast, beautiful city, mountains curved around the bay, houses all the way up.  It was a cosmopolitan bustling city in the early 1900s because at that time, ships sailing from Europe to the west coast of America had to go round South America so when they went round Cape Horn which was quite a difficult journey.  When they sail up the west coast of South America, Valparaiso was the first port of call.  The sailors docked, come off and do R&R.  And so it became a booming city.  But in 1914, the Panama Canal was built, ships no longer went that way, and the city declined.  There is still a city there, it’s a very nice place to visit.  It’s a world heritage site so every building is conserved.  But it is not the centre of Chile or the region.  It has lost its past glory and its relevance to the world. 

The same thing has happened in Bahrain in civil aviation.  If you remember in the 1960s and 1970s when we used to fly to Europe, you would often stopover in Bahrain.  Then jumbo jets came along, and we have direct flights to Europe.  Bahrain lost its business and it stopped being a transfer hub.  But Bahrain didn’t go downhill because it reinvented itself as a centre for financial services, recreation and entertainment in the Gulf region.  It’s connected to Saudi Arabia by a causeway, and on weekends, thousands of Saudi Arabians flock to Bahrain for shopping, entertainment and recreation.  Dr Tony Tan was there last year in December attending a conference.  He was in the Ritz Carlton and he told me it’s like a mini-United Nations.  All sorts of people from all over the world are there, including six Singaporeans who worked in the Ritz Carlton here and went there with their families.  So, Bahrain reinvented itself and found a new living.  The lessons for us are quite clear. 

We faced similar challenges like Valparaiso and Bahrain.  Longer-range airplanes affect us too. Europeans going to Australia may over-fly Singapore instead of stopping at Singapore.  They may fly through the Middle East instead of Singapore.  In the port sector, other ports in the region are coming up.  The Thais have been talking about the Kra Canal or the Kra land-bridge.  So PSA has to watch the situation carefully and make sure nobody moves its cheese away. 

But we are taking decisive steps to defend our hub status.  Changi and PSA have gone through painful cost cutting and retrenchments, and they have strengthened their customer focus.  SIA is going to turn the threat to an advantage, using longer range planes to fly to LA and New York, and buying the new Airbus A-380, so that they can connect more passengers from Changi to other regional hubs.  This will anchor our position as a hub.  It all boils down to our mindset.  When we see obstacles and challenges, do we curl up and die, or do we set about tackling them and see new opportunities for ourselves? 

Priorities

The President’s address last week laid out this government’s priorities.  In fact, we have already been working at these priorities for some time and we’ve made some progress. 

In external relations, I visited many of the Asean countries and we have renewed the constructive and good relations, which are inherited from Mr Goh Chok Tong’s government.  We are cooperating with our neighbours for mutual benefit and managing the inevitable outstanding issues, which arise between close neighbours.  In Malaysia, our economic cooperation is going well.  We have invested in Malaysian companies, banks, telecom companies.  They have invested in a shipping line and most recently a stockbroker.  We welcome them to invest in Singapore. 

We have outstanding bilateral issues with Malaysia, of course.  We are resolving the reclamation issue amicably through third party arbitration.   We have issues left over from the package which we were negotiating with Prime Minister Mahathir Mohamad which unravelled, and SM Goh is now discussing these issues with Prime Minister Abdullah Badawi.  They have not been resolved yet but SM Goh has agreed with Prime Minister Abdullah on two basic principles.  First, any proposal should be mutually beneficial; and second, these old issues should not hold future cooperation hostage.  These are two very important principles to start off with. 

In Indonesia, we have also been discussing economic cooperation.  That was the main topic of discussion when I visited Indonesia and met President Susilo Bambang Yudhoyono in October.  We have also been addressing the bilateral issues which are outstanding, for example, the extradition treaty.  And again with Indonesia, we have agreed that the bilateral issues will not hold up our overall cooperation.  Most recently, the region suffered a completely unexpected blow because of the tsunamis, and Singapore has been actively rendering assistance to Indonesia. 

We have been working with other ASEAN countries too. For example, with Vietnam, we have a Connectivity Proposal which the Vietnamese have also been keen on.  Under the proposal, the Vietnamese will tap into our networks, while we gain an entry into Vietnam. So our external relations are in good shape. 

Domestically, the new Ministry of Community Development, Youth and Sports has been working actively with young people and developing new programmes.  In the Ministry of Education, major changes are under way.  We are bringing more flexibility into the system and in particular, revamping the teaching of the mother tongues.  One major issue which does not belong to any ministry is marriage and procreation, which Mr Wong Kan Seng has been overseeing.  Many couples are benefiting from the package which we announced last year in August.  These days, I often see people carrying little babies.  I think they must have been conceived before August, but anyway, they pat their baby on the back and say “baby bonus”, and so I hope there will be a bonus baby to come.  It is too early to measure the results of the package but I was told that there have been more consultations at KK Hospital this year. 

Today, I would like to discuss three key reasons why Singapore is a land of opportunity.  Firstly, because we have a competitive economy.  Secondly, because there is a place for all Singaporeans.  Thirdly, because all of us can play a part to build this exceptional nation. 

A Competitive Economy

First, in Singapore, economic opportunities abound.  We are a regional and global node where East meets West.  When MNCs want to set up base in Asia, Singapore is always a prime candidate.  And here, for Singaporeans and others, provided you are prepared to learn, unlearn and relearn your skills, you can find good jobs, hold on to them, start new businesses, grow existing ones, improve yourself, bring up your family and have a fulfilling life.  Why has this happened?  It’s because we have adopted the right economic strategy.  We have invested in our people, built up our infrastructure, opened ourselves to the world, given Singaporeans the incentive to strive, encouraged entrepreneurship, strengthened our competitiveness.  And we have worked together -- the government, the people, the unions, the NTUC -- to create wealth for all. 

As a result, we have weathered the economic downturn.  When the world economy recovered, we rode the recovery and grew more than eight per cent last year.  We have maintained a strong pipeline of investments at a time when there’s strong competition for investments to go to China, India and other places.  We have created many jobs and brought our unemployment back down.  Last year, we created 60,000 new jobs.  It is a big number considering we only have 40,000 babies born a year.  Our unemployment went down in the third quarter to below 4%.  In the fourth quarter, unemployment stayed low and the employment continued to grow.  We have also produced winners.  PSA restructured, made itself competitive, and last year handled a record of more than 20 million TEUs.  New enterprises and activities are starting up.  I described some just now.  We are no longer just an MNC-driven economy. 

But we still need to press on with the restructuring and changes because other countries are continuing to change and we too have to keep on moving to stay ahead.  I will just give you two examples. 

One is Siemens, a German company, which is in Singapore in a big way.  The story was reported in The Economist and I met the CEO-designate recently and he confirmed it.  Siemens has plants all over the world, some in Germany, some in the rest of Europe, some in the former communist European countries, some in Asia.  They needed to bring their costs down in the German plant that is making handphones.  They discussed with the unions, but the unions were not comfortable to move.  So the management brought the union leaders to Hungary, and showed them the actual site, the people, and the preparations made for a new plant to replace the German one.  The union leaders went back and told the workers the management was not just serious about moving, they’re dead serious!  So management and unions worked out new terms, trimmed the benefits, allowed longer working hours and more flexibility into the system.  The workers were happy because their jobs were saved.

Qantas, an Australian airline, have 35,000 employees worldwide, mostly in Australia.  They are planning to outsource 7,000 of these jobs from Australia.  Their CEO, Geoff Dixon, said ‘Qantas could no longer afford to remain “all-Australian”, we're going to have to get the lowest cost structure that we can and that will mean sourcing things more and more from overseas.’

So the writing is on the wall.  We have read it and we are moving.  I know that restructuring is not painless, but by restructuring, we grow.  By growing, we get resources.  With resources, we can help to ease these pains and help those who cannot cope or those who are in need. 

One group who need help are the workers who are displaced and they do not always find it easy to get replacement jobs.  It may take a long time and even when they find a replacement job, it may not be the same job at the same pay.  And the ones who are especially vulnerable as Mr Teo Yock Ngee pointed out yesterday, are the older workers with the lower skill qualifications.  Overall, we are creating jobs.  We are bringing in the investments, and growing the activities here.  Singaporeans who are coming out from our educational institutions will be able to take up these jobs.  But our challenge is to find ways to create more job opportunities, which are within the reach of these vulnerable workers.

During the economic downturn over the last few years, the Ministry of Manpower introduced the People for Jobs Traineeship Programme.  It was a scheme to encourage employers to take on older workers who are changing jobs from one sector to another.  The results were not bad.  21,000 mature workers who picked up new jobs this way.  Now that the recession is over, the need remains.  So, we are going to modify and improve the scheme and start a new scheme, called the Re-employment Assistance Programme (REAP).  It will have two components.  Firstly, a nationwide programme to redesign jobs in certain sectors – similar to what we are doing for the cleaning industry.  This will enhance productivity through mechanisation or by improving the work processes, and therefore, improve the pay so that more Singaporeans would be attracted to do these jobs.  Secondly, we will have a re-employment adjustment support programme to help the unemployed overcome the barriers to taking up new jobs.  They will receive job referrals, training, as well as incentives to stay on in their new jobs and build stable careers.  You have heard Mr Lim Boon Heng yesterday.  The unions will help us to make this work. 

Even with good growth, a few sectors are not benefiting and this is because they are going through difficult structural adjustments.  Shopkeepers in the HDB estates are one such group.  The fundamental problem is that shopping habits have changed, Singaporeans are no longer shopping downstairs so much.  Both husband and wife are working, and on weekends, they visit big shopping malls and supermarket chains.  And also, many Singaporeans travel extensively, especially during the holiday seasons.  When they are overseas, they shop and as a result spend less in Singapore. 

It does not mean that there is no opportunity for HDB shops to grow and to survive.  They may not be able to compete with the big boys on price, but if they are prepared to reinvent themselves, being small has certain advantages.  They can offer more personalised and customised services.  They can be more responsive than the big retailers. They can know their customers by name, what they like to cook, what spices they like to buy, when their gas cylinder will run out, who they can extend credit to, and therefore, they can find a niche.  But in some housing estates, there will still be an oversupply of HDB shops.  We have to do something about this.  MND is working on ways to help these shopkeepers to upgrade or exit their businesses, and they will be announcing the details by the Committee of Supply. 

Apart from shops, some households are having difficulties too.  Many MPs have spoken about this, especially Dr Tan Cheng Bock, narrating how his residents have difficulty paying electricity bills.  We have many schemes to help them.  But we have to look at this problem rationally, coolly and find ways to help the families who need help in a way which will encourage them to get back on their feet, get back working and looking after themselves.  The supply of electricity should be kept separate from the provision of the welfare.  SingPower is not a welfare outfit.  It provides and sells electricity, so it must have its bills paid or it will not be able to stay in business.  But if a household has difficulty paying its electricity bills, then it has to approach the CCC or CDC, or look for the MP.  And if the MP thinks that his case is worthy and in fact that he deserves help, the MP knows where to find help for this family.  While we sympathise with the cases which Dr Tan Cheng Bock raised, we have to find the right way to help these people. 

Last year at the National Day Rally, I talked about getting pre-paid meters for electricity.  Because the problem with some households is that with credit, they are unable to pay the arrears. Rather than cutting their electricity off, why not install pre-paid meters so they can pay as they use the electricity?  We have been following up on this.  We will be ready to roll out the prepaid meters from May this year and will help families who have their utilities disconnected.  SingPower will work with MCYS to decide who needs these meters most urgently and I would encourage them to go and talk to Dr Tan Cheng Bock because his area probably has more of these problems. 

Apart from electricity, we need to do more to help households who are going to be left behind when we restructure the economy.  I will be talking and elaborating on this more later on.  But it is not just a few poor households who are feeling pressured.  As Low Thia Khiang yesterday said, the households are middle-income but they feel great pressure.  Why is that?  I think there are several reasons.  With a slow economy, bonuses have been down, earnings are lower, they have less money to spend.  Many people are worried about job security, so that causes them to hold back.  Many households are very worried about medical costs or about higher utilities charges.  Most importantly, there is the issue of rising expectations. 

These are things we can do something about.  To get earnings up, to get people with money in their pockets to spend, the solution is economic growth.  With last year’s eight per cent growth, the unions tell me, that quite a number of companies are paying bonuses and many of their members are not doing badly.  For job security, we need to manage the process of restructuring, and using programmes such as REAP to help workers to stay in their jobs and give them the reassurance that if something happens to their jobs, we will be able to help them to find new ones.  As for medical costs, Khaw Boon Wan has been studying this since last year.  We are revamping MediShield and we will be announcing the details or next week.  For the mass of the middle or lower income Singaporeans, the Utilities Save scheme has helped significantly to defray their electricity bills.  We cannot help it when oil goes to $50 or sometimes $55 a barrel, but we can do something to help Singaporeans so that they do not feel the pinch quite so much. 

But, rising expectations is the most difficult to resolve.  As Low Thia Khiang says, the standard of living index – not the cost of living index - went up too high.  You compare with your neighbours, you see new products, you want new things, and our expectations therefore run ahead of our ability to pay.  One solution is to tell Singa­poreans to just lower your expectations, settle for the second best.  It is too tough to compete, our future is not going to be that bright, just be satisfied with what you have.  We are not going to do that.  We will aim high but we will aim to bring out the best in our people, get people to compete, get them to fulfil their expectations and to the best of their abilities so that they can have a better standard of living and afford what they aspired to.  That is the best way to do it. 

But notwithstanding this feeling of pressure, in real terms, the standard of living of most Singa­poreans has gone up.  This is a fact which we have to remind ourselves regularly and every time Mr Low Thia Khiang or Mr Chiam See Tong raise it, they are doing me a favour because I get to update my charts.

Taking the last five years, from 1998 to 2003 - these are difficult years including the recession and the Asian crisis - per capita income went up from $35,968 to $38,100, or 5.9%.  The overall cost of living went up by only 2.5%.  In other words, even during these difficult years, your incomes went up faster than the cost of living.  And if you look at the items that make up the cost of living index, food prices went up slightly but clothing got cheaper, housing got cheaper, transport and communications got cheaper.  Education and healthcare got more expensive.  But even for healthcare cost only went up by 11% over five years.  So, overall, there is no basis to say that middle-income Singaporeans are worse off and that price increases have left them with nowhere to turn to. 

If you look at what they own and what they do, you will see how our standard of living has risen.  In 1998, 50% of Singapore households had somebody who travelled overseas.  In 2003, after five very difficult years, 47%  of Singaporeans still travelled overseas.  And they go everywhere, to Australia, Korea, and China, not just along the coast but inland, to very far away and adventurous places. 

At home, Singa­poreans have lots of consumer durables.  We used to look at basic indices such as ownership of television sets and telephones.  Then we stopped looking at these indices because we reached the saturation point.  So then, we started looking at washing machines but they are also at 90-something per cent.  So now, we have to look at ownership of personal computers and handphones, which have all risen.  For air-conditioners, during these five years, the ownership percentage went up from 58% to 72%.  That is part of the reason why electricity bills cost so much because air-conditioners consumes a lot of electricity. 

Singapore’s standard of living is real.  Yes it is high, but it is not a pie in the sky or a castle in the sky, as Mr Low Thia Khiang claimed.  Our policies have resulted in this standard of living and our plans and our approach are the best way to raise this standard of living further.  What is the alternative way of developing our economy?  Low Thia Khiang suggested that we go for welfare for the people, and suggested Finland as a good example of a welfare state. 

Indeed, Finland is a different model, and it is a good example of a welfare state because if you are looking for one which is working, Finland is not doing badly as Dr Loo Choon Yong yesterday told members.  Finland’s model works for Finland, and we can learn from it, but Finland is not paradise.  The Finns enjoy very generous welfare benefits.  Who do you think pays for it?  The Finns - because there is no such thing as a free lunch. 

Our GST, is 5%.  The Finnish VAT - Value Added Tax – 22% on most items, 17% on food, and 8% on public transport, medicines and books.  As for income tax, two-thirds of Singaporeans do not pay, and the highest rate is 22%.  For Finland, it goes between 28-55%.  Our unemployment now is below 4% and young people have no problem finding jobs.  Finland’s unemployment is 9%, with one quarter being long-term unemployed and one-fifth being young people below 25 years old.  And Finland recognises that the problem with the country is that the welfare is too generous and they have to trim back on welfare and retrain the jobless people.  So if Mr Low Thia Kiang is thinking of campaigning in the next general election campaign of making Singapore like Finland, then I encourage him, in the interest of transparency, to be upfront.  Do not just promise welfare benefits but show people the price tag.   Explain how you are going to fund this for the people, how are you going to pay the bill, and who is going to pay the bill.  And if you impose such a bill on Singaporeans, which Singaporeans will stay to pay it?  And which Singaporeans will say, ‘thank you very much, I’m off.  There are so many other countries in the world where the taxes are cheaper’. 

Low Thia Kiang mentioned Nokia.  It is a Finnish company, and a very successful one.  In fact, Nokia represents what Singapore wants to be, but it is not what Low Thia Kiang thinks Nokia is.  It is innovative, creative, welcomes talent from all over the world, and it is not based just in Finland.  Its operations are outsourced and spread around the world.  They have major R&D and manufacturing in China, they are starting a plant in India, and their chief designer is an Italian American based in California.  Nokia started off as a paper company, in 1865.  Now, it has totally reinvented itself into a major technology MNC.  If it had remained a purely a Finnish company and had continued being a paper company, it would have gone bust. 

So, if we want to survive and do well, we will have to persevere, reinvent our companies, outsource, and then eventually, we may have a Nokia in Singapore.  Our approach is right -- keep our taxes low, keep our government trim, let people keep what they earn, encouraging them to work hard and do well, and to take Singa­pore forward.  We should persist and fine-tune this approach.  . 

A Place For All Singaporeans

The second reason why Singapore is opportunity is because we offer a place for everyone.  For the young, Singapore offers a good education.  For those in the workforce, whether you are from ITE or the polytechnic or the university, we offer good jobs and the chance to fulfil your potential.  For older people, we offer a society where contributions are recognised and the problems of the elderly are addressed.  For families, this is a safe, secure and great place for raising children and enjoying family life.  For the immigrants, we offer a better life.  For the disabled, there is a better chance in Singapore to still live meaningfully.  And for those who have committed past mistakes, a second chance to make good.  For all, this is a country where you can make a difference, achieve your best, and be proud to call home.  In Singapore, everyone who strives can make good. 

There will always be opportunity to grow.  It is not just an act of faith but it is a cardinal determination.  We will make it so, we want a society which is open, where people can move, where if you are talented, you can move up and be successful.  There must be no social or class barriers which separate people and keep those at the top where they are and prevent those who are outside but with ability to contribute from moving up. 

Because of our meritocratic system and our emphasis on education, we can keep this a socially mobile and open society.  Our schools and institutes of higher learning are very competitive.  Students take it very seriously because they know if that if they study well, they will succeed and they will be able to move up.  We are not going to allow anybody to be trapped in the basement, unable to get out or up.  We cannot promise a lift on every floor but there will be a ladder and if you are determined, you can climb the ladder and rise.  Our modern folklore includes many stories of Singaporeans who have started poor but made good, and many of them are in this House today.  We have MPs like Amy Khor, Lim Boon Heng, Ng Eng Heng, Ong Soh Kim and many others who start from very humble backgrounds.   And there are new stories still being written everyday. 

We have spoken at length over the last few months on youth issues because the future depends on young.  But I know that that the older Singaporeans have felt a little bit left out.  They say, ‘What about us.  Don’t we count anymore?’.   In fact, older Singaporeans do count and they are important to Singapore too.  As Mr Ang Mong Seng pointed out, they have contributed to our success, and we are grateful to them.  He said in Chinese when you drink from the well, remember the source of the water.  They helped bring us here, they have valuable experience and wisdom, and will help to pass on important values to future generations.

Many MPs have talked about the concerns of the aged.   I will address three of these issues.  Firstly, getting around.  Dr Tan Boon Wan mentioned the Lift Upgrading Programme (LUP) and asked for it to be speeded up.  The LUP provides lifts on every floor.  Like all HDB upgrading programmes, it is based on the principle of co-sharing because it costs quite a lot of money, $30,000 per flat in some cases, sometimes even more.  We must make sure that people really want it and so co-payment is a test.  If you are prepared to pay something for it, then the government will build it for you. 

But with an ageing population, it is the most popular item in HDB’s upgrading packages.  I just had LUP polling conducted in my own Teck Ghee constituency.  There were five blocks which were eligible for and all five passed.  Because it is the most important facility, especially if you have at home an old, elderly parent who has had a stroke or is immobile. 

Residents in all estates want LUP to be completed sooner because they are old people, and they want to enjoy it.  We will speed up the implementation of the LUP for residents so that they will benefit from it sooner.  The old folks are waiting. I wish we could do it in 5 years, but it is a massive project and we need time to get it done.  There is a physical constraint.  So we will complete the programme in 10 years, for all the flats and blocks which are eligible, assuming of course that the government’s budget can afford this, which based on present projections, we can. 

Second, we have to get Singaporeans to work longer and retire later.  This is what Mr Tan Siok Ngee talked about earlier.  Our population is ageing, partly because more people are growing old, and also because Singaporeans are living longer.  Back in 1980, which was only 25 years ago, men could expect to live till 70, women till 75.  Today, men can expect to live till 77 and women can expect to live to 81. 

In other words, many will live a further 15 to 20 years after the present retirement age, or maybe even longer. In the newspapers recently, I saw a picture of two old folks celebrating their 100th birthday, eating durian cake.  I would not be surprised if amongst today’s audience, there will be somebody who will celebrate his 100th birthday one day and still be able to eat durian cake.  77 and 81 are not the end.  Medical science will improve; we will take care of ourselves; and live longer on average. 

This makes it essential for our workers to work longer.  You cannot afford to work for 40 years and then retire for 20 years.  Because if you are going to do that, then when you are working, you must save up at least one-third of your income so that for the next 20 years, you can keep the same standard of living as you used to have - not counting your family.  And if you live for more than 20 years, which a significant number of people will, then financial security at old age becomes a problem.  In fact, many Singaporeans who are still healthy can continue doing productive work, even past 62, although not necessarily in their old jobs. 

We have raised the legal retirement age over the last decade from 55 to 60 in 1993, and then in 1999, we brought it to 62.  But what matters is not the legal retirement age, so much as the effective retirement age, which is the actual age at which people stop working.  For women, effective retirement tends to be early because many leave the workforce in order to look after their households.  For men, the effective retirement age has gone up but it’s still well below 62.  About half retire before 62 and half continue working at 62 and beyond. 

So many people retire early.  There are many possible reasons.  Some workers want to call it a day earlier.  Some people maybe have struck a fortune and want to smell roses.  Others cannot cope with the job anymore and maybe the company does not offer other jobs which are suitable for people of that age.  Some may have been retrenched when business went bad, especially in companies with seniority-based wage structures.  So, our goal is to raise the effective retirement age further.  We cannot do this simply by raising the legal retirement age.  Beyond a point, it can be counter-productive because it will make our labour market more rigid, put more costs on businesses, and reduce our competitiveness and hurt our employment.  Also, just raising legal retirement age will give workers the wrong impression that they can simply continue in existing jobs, with existing pay and benefits even though they are getting older, slower and not quite the same as they used to be. So, we have to examine the deeper issues, such as job redesign, flexibility of wage structure and other benefits, as well as the mindset of workers and employers.  And then we need to come up with a set of comprehensive, holistic measures to tackle these problems. 

I also agree with Mr Lim Boon Heng who spoke on this at length yesterday that we need a national consensus that older Singaporeans ought to be able to work longer if they want to do so.  It is important to have policy statements, to have the unions advocate this, but it is not enough.  The employers have to be brought in, they have to be convinced to support this effort and their concerns will have to be properly addressed.  The employers need to change their mindsets, to use older workers where they are adequate, and to free up younger workers to be more productively employed in other jobs. 

I have asked the Ministry of Manpower to set up a Tripartite Committee to recommend measures to help older workers to work longer, and to support the raising of the effective retirement age.  It may involve raising the legal retirement age, but we should make this adjustment only when we are convinced that it is necessary and right to do so, and then only when we have prepared the ground and we are ready to do so.

A third issue which old people worry about a lot is medical costs.  Several MPs have pointed this out. Madam Halimah Yacob devoted her entire speech to this.  Healthcare costs are a major worry for Singaporeans.  Many people have told me that they would like to have better insurance protection against large medical expenses.  In fact, they would like to have insurance protection against all medical expenses.  Unfortunately, this does not work.  If we rely too heavily on insurance for comprehensive medical coverage, we will face very serious problems of over-consumption, over-prescription, waste, and ever higher insurance premiums.  America is a prime example where insurance has led to very serious problems, and not lower medical costs or more affordable medical care.  In America, if you have insurance, you pay hundreds of dollars a month.  If you don’t have insurance, you are in a deep hole and one quarter of Americans do not have medical insurance. 

Our 3M system – Medisave, MediShield, and Medifund – is sound system but it needs to be improved.  The MediShield part particularly needs to be revamped and we will do so.  We will improve the MediShield to give better catastrophic medical insurance and to cover the large hospital bills better, and as I said just now, Khaw Boon Wan will announce the details of the scheme next week.  But even with the enhanced MediShield, even with Medisave and even with very heavy government subsidies which go into our hospital wards and polyclinics, there will still be some needy patients who cannot afford to pay.  Maybe they did not have CPF and so did not have MediShield, or maybe they are beyond 80 the age when MediShield stops.

So, to complement the MediShield changes, we will also increase Medifund.  In this way, we can target our help on the most needy patients.  The Medifund endowment is now $1 billion.  We will aim to double this to $2 billion.  It will take some time to get there, but as a start, this year, we will inject $100 million more into the Medifund.  These changes to MediShield and Medifund will make sure that as healthcare costs go up and as our population ages, all Singa­poreans will have their basic medical needs taken care of. 

Engaging Singaporeans In Building Our Home

The third major and unique opportunity which Singaporeans have is to be able to play a part in building our own home.  You have a say in the country that you live in, in the community you live in, you can get involved in running your country and in shaping public policies.  There is a very strong desire amongst Singaporeans to do that, and the government encourages this and will facilitate that, because it is a key way to commit Singa­poreans to our country, and to run this country better.

I should mention by the way, in answer to Mr Chiam that it is also the reason why the opposition has got nowhere – because in Singapore, the people who have ideas and drive, who are not satisfied with the way things are, can get involved to change things for the better. They do not have to make speeches at the Speakers’ Corner, or mount street demonstrations, or join the opposition.  They can actually make a difference and in fact, join the PAP, become an MP and speak as a PAP minister or backbencher and get things done. 

We have come a long way in engaging and involving the population.  First of all, the Government now looks for views on a whole wide range of policies – taxation, cloning, pension plans, whether we should have a casino.  We put Singaporeans in charge of many things, such as our standards of censorship.   Let the people who know the issues contribute their views and let the people who want to get something done, do it.  And our decisions are influenced by these views.  As Dr Geh Min pointed out, Tanjong Chek Jawa is a prime example.  We cannot always individually acknowledge the feedback and suggestions made by Singaporeans, but be assured that we have heard them. 

Second, we have devolved functions and responsibilities which the government previously carried out to the community.  So, for example, we set up Town Councils to let residents to take ownership over the management of their estates and get MPs to take charge.  It has done a lot of good.  Whatever residents ask for, they must ask themselves if they are prepared to pay.  We set up Community Development Councils (CDCs) to provide the platform to engage more volunteers, professionals, and people from all walks of life to do things for the community, and in the process to bond our people closer.  And we also encourage and support self-help groups and VWOs, to advance their charitable causes for Singaporeans who need help. 

We have achieved in Singapore, one of the highest rates of “home ownership” in the world.  I think for the next phase, let us try to nurture a stronger sense of “community ownership” in our people.  Instead of relying on the government to take charge all the time, let’s devolve more functions to the people.  Let the community take a more active and leadership role in deciding how Singa­pore looks, feels and operates.  When something goes wrong, do not as a first instinct asks what is the government doing about it.  Instead ask what are we doing about it.  And there are three areas where we are going to take a further step promoting engagement.

First, in the tertiary institutions, we plan to corporatise our universities and turn them into non-profit organisations.  It is an excellent opportunity for greater civic participation in running our universities.  Greater autonomy will make our universities more responsive to changes in the environment, and the needs of our society.  And more importantly, it will foster a greater sense of ownership among the larger university community.  Then the university Council, the management, the faculty, the students and the alumni will all play bigger roles shaping the culture and ethos of the university.  This is how US universities work, and something our universities should also strive to nurture. 

I was talking to our universities International Advisory Panel last week and asking them how this worked out in America.  One of them told me that in Yale, in any given year, 50 to 60% of the alumni make some financial contribution to their universities.  If you take the proportion of alumni who give maybe every two or three years, the percentage is even higher.  It is not just the money.  It is also the fact that the alumni feels for the institution, will care for it, will make the effort to make sure that it remains a good institution.  That is what makes a strong civic society.  I think Singapore has a long way to get there.  But other American universities which started off as state universities, like Berkeley, in a quite short period of 35 years, have also managed to develop this culture of giving.  I asked the advisors how they did it.  Well, they said, the state government made a threat, ‘I'm paying less, so you better raise your own money’.  I am not sure that we will take that approach, but given time, we will be able to get Singaporeans to care and to build these networks in our society. 

A second area where we will do something on devolution and engagement is lift upgrading.  I said just now that we are going to have a 10-year programme.  I know that some MPs have been suggesting allowing Town Councils to use their sinking funds to do the lift upgrading.  Mr Chiam See Tong asked a question in this House sometime ago and we had said no, because the sinking funds are for the cyclical maintenance of the estates, not for upgrading.  But we have re-examined the issue.  Different Town Councils have different amounts of sinking funds.  Some of these Town Councils will be able to use part of it for lift upgrading and still carry on with their cyclical maintenance.  So, we will amend the law to allow Town Councils to use part of their sinking funds to carry out LUP, subject to certain guidelines which MND will announce later.  Of course, the residents will still have to co-pay and you still have to vote.  This is one of the reasons why we can speed up the LUP, at the same time it will give Singaporeans more say over the upgrading of their estates.  

Thirdly, we will give our CDCs more responsibility for social assistance.  We are going to have structural unemployment.  We have to do all we can to help those who are left behind who cannot cope, and yet in such a way that we do not encourage even more people to queue up and ask for assistance when they do not need it.  The best way to do this is to entrust the responsibility to those who know the people best, who know the community best and that means the community leaders and the voluntary organisations who are on the ground.  We provide them with the resources, the authority and the responsibility. 

Already the CDCs are administering many welfare and job schemes and overall, the results have been positive.  Last year, the CDCs helped 35,000 hardship cases, and granted nearly $40 million of help.  They are sieving out the difficult cases and targeting the assistance where it is truly need.  So, when somebody comes and says he needs help, one grassroots leader will visit the house and see what it is like.  They will know whether this person is spending his money drinking, whether he is looking after his family, or whether he just bought a large screen TV, which sometimes happens.  The CDCs then target the help and put people back on their feet.  So, we will rely more on the CDCs, to help us come up with schemes for social assistance, to implement these schemes, and to make the necessary judgements on the ground. 

To support the CDCs, we will start a new endowment fund, which we will call the ComCare Fund. We will do this by restructuring and topping up an existing fund, which is the Community Assistance Fund.  The ComCare Fund will be similar to Edusave, the Lifelong Learning Fund, and the Medifund.  It will start off with $500 million, and over time we will build up to $1 billion.  And the income can then fund the social assistance programmes run by the CDCs. 

As our civil society develops and matures, the government will devolve more responsibilities to the community.  There are many other areas where we want to involve people.  So, I encourage Singaporeans to come forward, work with us to serve the community, shape our society, and take ownership of our lives.

A Small But Exceptional Nation

Singaporeans often forget how exceptional we are.  Sometimes it takes a foreigner to remind us.  The Minister Mentor often receives unsolicited letters from foreigners, people who have lived here, people who have visited here, congratulating him on what a remarkable country Singapore is.  And occasionally I get such letters too. Recently I got one from a gentleman from Germany who had visited Singapore.  He came with his wife and then he wrote me a letter.  And he just wanted to say how well Singapore has done. Let me quote you his letter:

"We would like to tell you that with every visit, we are more enthusiastic about your country.  We have never seen a city or country managed in such an intelligent way. We were thoroughly impressed that intelligent solutions are sought even the small details.  As a visitor, one notices especially the superb service of Singapore Air(lines) and the excellently organised public transport, but the more we come to see and know of Singapore, the more we learn that this intelligent administration extends to all sectors of public life.  The truly impressive thing for us is to see that the population of Singapore lives up to these intelligent standards, that people accept and know how to use the intelligent solutions that government offers them and this is what makes Singapore such a pleasant place to be. " 

Our education system too, may not be perfect. But it is widely recognised as one of the best in the world.  The latest Trends in International Maths and Science Study (TIMMS) found that Singapore pupils, at both Primary Four and Secondary Two, perform much better in both mathematics and science tests than their counterparts in the other 49 participating countries. We are at the top for both Science and Math.  All our communities – Chinese, Indians and Malays – did well. 

In America, people have taken note. About 200 schools, from rural Oklahoma to New Jersey to Massachusetts, now use our math textbooks.  One district superintendent in Oklahoma said, “I don’t care how crazy people think I am; I am going to go out and find something that works.”  She'd noticed that Singaporean pupils are ranked first in the TIMMS, and so she decided to use the Singapore method in her school.  One of the students said “I don’t know where Singapore is, but I like the way they do math.”  Maybe we should sell them Geography textbooks.  This is not just an isolated achievement, because a first class education system is fundamental to our objectives of having an open society, a socially mobile community, and a land of opportunity. 

We did not get where we are today by cruising along.  We mobilised all Singaporeans, we toiled for what we have today.  We sweated blood for every bit of it.  How we fought and overcame the odds are the formative experiences of the older generation.  And there were several defining events – merger, racial riots, confrontation, separation, independence.  We responded by concluding that we should never take our life for granted, that we should take our fate in our own hands, fight and survive. And these are stories which we will tell our children and grandchildren, instincts which we will pass down into the next generation. 

So, what stories will today’s young Singaporeans tell their grandchildren and children?  I can think of at least two episodes.  One was SARS last year –   a deadly disease which terrified everyone.  We mounted a co-ordinated and precise response.  We fortified the hospitals.  We quarantined those who had been exposed.  We took temperature everywhere, even coming into Parliament.  Tan Cheng Bok and others participated in the debate via videoconference.  We had thermal scanners, separating the green faces and the red faces.  We had the Courage Fund.  Many young people took up leadership positions during the crisis, in hospitals, in the ministries, at the grassroots.  And so, we defeated the disease. 

But, "Ju An Si Wei", in times of peace, think of danger.  We have set up a Regional Emerging Disease Intervention Centre (REDI), in cooperation with the US.  They are developing capabilities in avian flu, which is potentially a very serious threat, even worse than SARS last year. 

Our response to the tsunamis is another story to tell.  It has touched many people, including many MPs in this House, I think it is because it showed two things. Firstly, that Singa­poreans are big-hearted. We know that we live in an inter-connected world, and we are all human beings together, and we have to care for one another.  Secondly, that we can rise to the challenge, not just individually, but as a Singa­pore team, supported by a Singapore system.  Our people in the affected areas, in Aceh, in Phuket, in Maldives and Sri Lanka, they knew they were flying the Singa­pore flag, and they have done us proud. 

The older stories of our independence remind us how small and vulnerable Singapore is.  And they spurred us to overcome the odds.  Stories that this generation will tell, teach us that although we may be small, we are a stout-hearted people.  We respond as one during crises, whether it is an internal crisis or an external crisis.   There is a Singapore spirit burning, which will help us accomplish great things.  I can sense it in our servicemen in Phuket and Aceh; in the young entrepreneurs who worked furiously to get new ventures off the ground; in our creative talent making their mark not just here, but in Asia, including some young members in this house; and in the Singapore Lions who played their hearts out to win the Tiger Cup.  With this spirit, we can all play a part to improve our lives, and to build our nation. That is opportunity.  We were an improbable nation unlike any other country.  But by putting our hearts and minds to it, together we have become an exceptional nation, one people with a great spirit.

Source: Singapore Government Press Release 19 Jan 2005