Category Archives: Business & The Economy

Some 9,990 Workers Laid Off in 2011, Says S’pore MOM Report

SINGAPORE, April 26 (Bernama)

Amid more moderate economic growth, layoffs of workers increased slightly in 2011, pulled up by a rise in the fourth quarter of the year.

Against a larger employment base, the overall incidence of redundancy in 2011 continued to decline to a new low. Meanwhile, the rate of re-entry into employment improved for the second successive year.

These are the key findings from the “Redundancy And Reentry Into Employment, 2011” report released by the Ministry of Manpower’s Research and Statistics Department here today.

In the whole of 2011, some 9,990 workers were made redundant, up slightly from 9,800 in 2010.

This translated to 5.5 workers made redundant for every 1,000 employees in 2011, down from 5.7 in 2010.

Workers from the manufacturing sector remained the most vulnerable to redundancy, with 11 workers made redundant for every 1,000 in 2011.

This was significantly more than in services (3.8 per 1,000) and construction (4.2 per 1,000).

With a decline in layoffs in construction from 1,350 in 2010 to 1,050 in 2011, its share of redundancy fell from 14 per cent to 11 per cent.

Manufacturing’s share dipped slightly from 46 per cent to 45 per cent, with a marginal decline in workers affected from 4,490 to 4,460.

Reflecting their growing share of the workforce, layoffs in services increased from 3,960 or 40 per cent of workers made redundant in 2010 to 4,430 or 44 per cent in 2011.

Layoffs fell for clerical, sales & service and production & related workers but rose for professionals, managers, executives & technicians (PMETs).

While the share of redundancy taken by production & related workers declined from 50 per cent to 48 per cent over the year, they were still the highest among the three broad occupational groups.

They remained more vulnerable with 7.3 workers made redundant among every 1,000 workers, compared with 5.5 among PMETs and 2.6 among clerical, sales & service workers.

PMETs accounted for 42 per cent or 4,170 of the workers displaced, while the remaining 11 per cent or 1,080 were clerical, sales & service workers.

While layoffs increased slightly over the year for both residents and nonresidents, the increase was smaller for residents (1.3 per cent) than non-residents (2.9 per cent).

Consequently, the residents’ share of redundancy fell over the year by 0.4 percentage point to 57.4 per cent in 2011.

This was lower than the residents’ share of the workforce at 67.2 per cent in 2011.

Restructuring of business processes for greater efficiency (34 per cent) and high labour cost (30 per cent) were the top two reasons for redundancy.

They were followed by reorganisation of businesses and high operating cost excluding labour cost (each around 25 per cent).


Oops, The Economy Broke: Reasons for Singapore’s Inflation Scare

By Ryan Ong

25 April 2012, Wednesday

Yahoo! Finance

Did you have breakfast this morning? I sure as hell didn’t. Or rather I did, but then I read the news and upchucked four hot cakes from sheer shock. The consumer price index was at 5.2% in March, and may hit 6%. Our inflation’s growing faster than my waistline, and I’m Singapore’s most popular model…for the “Before” pictures in weight loss ads. But what’s causing our economy to bloat like Steven Segal after 40? Read on and find out:

How Bad Is Our Inflation?

The consumer price index (CPI) checks the price difference of a market basket of goods over time. So a CPI of 5.2% suggests, in a very simplified way, that most of what you buy will cost 5.2% more.

Unless you’ve gotten a matching raise in your pay, it means you now have less money. And apart from everything costing more, the inflation eats into your bank savings. Your bank’s interest rate(even for fixed and structured deposits) are nowhere near the 5.2% inflation. So if you have a savings deposit, you may as well lock your money in a room with a lighter and an arsonist.

The CPF may also lose its efficacy as a retirement fund. The CPF interest rate is 2.5%, and theinflation rate is 5.2%. As a retirement provision, that’s about as effective as a paper umbrella in a tsunami. But of course, the government will take action to rectify this soon.


Hello, government? Is anyone awake in there? Because we need to fix the reasons. Like the…

1. Insane COE Prices

As of April 18, COEs for larger cars hit $91,000. Reuters pointed out that a Toyota Vios, which cost $77,000 at the start of the year, now costs $107,000 (including COE). That same amount could land you a Porsche in some parts of Europe (and a complimentary AK-47 in Russia, because YOU try owning a Porsche in St. Petersburg).

Come August, the government also intends to drop the vehicle quota to 0.5%. This will raise COE premiums even higher; presumably, it’ll match the admissions rate of hysterically giggling car buyers at IMH. Because the bad news is, there will always be situations when a car is necessary; no matter the price. Certain lines of work, along with family requirements, will continue to pressure people into buying cars.

And because the COE is an unavoidable, artificial addition to price (increasing price without adding real value), it’s a major contributor to inflation.

2. Overheated Property Market

Nice try with the new measures, HDB. Sadly, chucking an ice cube at Fukushima would have been a stronger cooling measure.

The ABSD has dissuaded foreign buyers, but it’s channelled demand into the rental market. Foreigners are now pushing rental income to new heights, and that’s led to property speculation (shoebox flats anyone?) Likewise, the cash over valuation (COV) of resale flats is now less realistic than Transformers 2.

And have you seen Sky Habitat?  The property developers forgot to include a disclaimer. Something like:

“Please note that your purchase signifies market collapse, uncontrolled inflation, impaired judgement, or all of the above”.

There has also been news of HDB flats reaching the $900,000 mark, and even heartland homes aren’t the low-cost bulwarks they used to be. Until some control is placed on COV, and further cooling measures kick in, housing’s going to keep raising our cost of living.

3. Higher Transport Costs

Government policies have made cars unaffordable, while raising public transport costs. It’s like the person-in-charge Googled: “Inflation and How to Cause It”, and started taking notes.

SBS is already intending to pay bus drivers 16% more, which should raise transport fares. Part of the reason is to, you know, cope with inflation. Then there was Comfort and it’s minions other cab companies; they raised fares as well. To cope with inflation.

Now, take a step back and reread those reasons. Do you see a problem here?

Transport companies are coping with inflation by…contributing to said inflation. That’s like trying to solve groin pain by having doctors take turns kicking you in the nuts.

But hey, at least higher transport costs have had benefits. Like making the MRT more reliable, or making bus captains more polite. And I’m totally not being sarcastic there.

4. Rising Food Prices

Singapore imports a lot of food. Look at our land space; if we planted one shoot of kang kong it would die of claustrophobia. But in particular, the global recession and rising cost of fuel (which affects the import cost of foodstuffs) take a lot of blame.

Where local policies contribute is property. As rent rises, so too do food prices. Supermarkets need to charge more to maintain inventory, and hawkers need to pay their stall rent. The practice of subletting hawker stalls is especially problematic: That’s when a stall holder pays maybe $700 a month for the stall, but charges someone $2000 a month to operate it. Wave at Holland Village, people.

As it is, restaurants need as much reason to raise prices as North Korea needs to launch a missile. But the rental market is heating up, and landlords are basically sharks with legs. As surrounding rents go up, they’ll try to match it, which prompts F&B tenants to skyrocket prices.

5. Absurd Optimism

Inflation seems to be getting worse because of our laid back attitude. We’re taking little action because we can’t seem to acknowledge how bad it is. Here’s a quote from Channel NewsAsia:

However, analysts said Singapore’s inflation rate is not a cause for alarm as the government had already warned that price gains would be steeper in the first half of this year.”

By contrast, that’s like saying you don’t have to be alarmed that your car is going off a bridge, so long as the screaming passengers in the back “already warned” you. Early warning doesn’t mean we shouldn’t freak out.

The Monetary Authority of Singapore (MAS) will probably allow the Singapore dollar to appreciate, as a way to combat inflation. This is effective as a stopgap measure, but it doesn’t address deeper flaws in the system.

Another problem is MAS’ method of measuring core inflation: It excludes housing and private transport. Since these are are a major cause of inflation, the method results in optimistic numbers and homeless Singaporeans. It’s like getting lung cancer, but having the doctor congratulate you because hey, apart from your lungs, you’re fine.

MAS is expected to take corrective action in October. But the immediate solution seems to be crossing our fingers really hard. Let’s all sit back and think happy thoughts, and pretend inaction isn’t part of the problem.

Asia can strive for ethical wealth creation

Beware hubris in Asian triumphalism, says Ho Kwon Ping in this speech delivered last Friday at the Pan IIT (Indian Institutes of Technology) Asia Pacific Conference.

Straits Times: Review | April 12, 2012
THE theme of this conference is entitled Reading The Signposts Of A Changing Landscape. For Asian triumphalists, this is easy: The words on all the signposts are big and clear, and point to a happy posterity.

I’m not so sure.

Not only is the wording on many signposts confused, but also many signposts themselves have not even been erected. And quite a few of them point towards dead-end solutions or quick-sand futures. My biggest fear is that in the rush towards the exuberant expectation that Asia’s time has finally come, we will fall victim to the biggest reason for failure in the history of the world: simple hubris.

The rise of Asia is not predetermined, just as the dominance of Western civilisation for the past few hundred years was not preordained. The rise of European imperialism and then American hegemony was not simply due to economic power backed by military might. It was underpinned by innovative, even revolutionary thinking about the primacy of the rule of law, the separation of church and state, the commitment to an empirical, scientific worldview, and all the institutions which brought about the modern state built on liberal democracy and market capitalism.

Much of the intellectual vigour which propelled the West to supremacy is now spent. In its place is frustration that the old order is not working, but with no clear vision as to what the new order should be.

So is it now Asia’s time to rise to the occasion and in the intellectual vacuum, offer new solutions to bankrupt thinking? Or are we not even capable of the necessary creative destruction of our own taboos and restrictive mindsets, which hobbled us for past centuries and which we need to cast off if we are to lead the future? How is our current economic growth matched by equally vigorous intellectual innovation?

Let us look at the regional landscape.

India for example has managed, despite numerous daunting challenges, to remain the world’s largest practising democracy. But the continuing clash and contradictions between tradition and modernity render Indian political and social relations almost dysfunctional. And while Indian pride in its scientific, artistic and business achievements is fully justified, the continuing inability to lift millions of people out of abject poverty remains a sobering and hopefully not insurmountable challenge.

China, the other great and ancient civilisation of Asia, is today slated to be the second most powerful economy in the world. Its government has, unlike India, lifted its teeming masses from abject poverty. Private capitalism thrives alongside the more dominant state capitalism. But the absence of a dynamic civil society – unlike in India – and its opaque political structure are becoming glaring and, worse, possibly unsustainable.

India suffers from a lack of political consensus; China has too much of it. India has a surfeit of democracy and a deficit of economic equality; China has eradicated poverty but suppressed democracy.

Indian thought leaders realise that democracy has not reduced inequality nor improved the lives of the overwhelming majority of Indians. Chinese intellectuals recognise that the current, systemic problems of political governance, glossed over by rapid economic growth, are unsustainable and brittle. But both don’t know how to really move forward beyond recognition of the need for drastic reform. Intellectual innovation and political power are simply not integrated.

Japan’s social cohesion stands in stark contrast against China and India, but that same homogeneity and social conservatism have left it stranded in genteel decline, with no new thinking to break Japan out of its stifling insularity.

South Korea, Taiwan and Singapore are probably the best examples of societies which grew rapidly due to what political scientists call ‘developmental authoritarianism’ and have successfully transited to liberal democracy. But their models of development are not easily transplanted to larger, more diverse societies.

South-east Asia has largely recovered from the debilitating financial crisis in the late 1990s which nearly crippled its private sector and brought down its banks. But internal contradictions remain unresolved in Thailand, Malaysia and Indonesia and are, arguably, growing steadily.

Fortunately, Asia as a whole is not likely to experience its equivalent of an Arab Spring, largely because rapid economic growth has papered over the social fissures which burst open in Arab society.

My intention is not to denigrate the very real achievements of an ascendant Asian civilisation. But neither can I accept the facile self-congratulations of the Asian triumphalists who seem to think that our success in this century is now inevitable. There is much to do, for all of us who believe fervently that Asia’s time has come but that we cannot afford to be complacent. Asia requires profoundly different and diverse, innovative thought leadership if its economic rise is to result in a sustainable, new paradigm for civilisational progress.

In particular, Asia needs to inculcate a virtuous cycle whereby business, political and social leaders all interact to create new norms of economic, social and political behaviour as well as values. Simply following what used to work in the West is no roadmap for future success.

One good example is the dire need of a replacement for the highly individualistic, American form of capitalism which, at its best, enormously rewarded risk-taking, but at its worst, created monstrous inequalities based on speculative gambling of other people’s money. Capitalism is not universally identical; it is shaped by history and culture, resulting in, for example, the Scandinavian variant or the German model. The American model may not be broken, but after the debacle of the past few years, Asia should not blindly adopt it.

As Asia’s economies continue their dynamic growth, we need to delve into our own history and culture for inspiration in creating an Asian variant of capitalism. One such source can be the webs of mu-tual obligations which serve as a common, recurring socio-ethical tradition of Asia. This communitarian characteristic of Asian culture can, if thoughtfully enhanced, nurtured and developed, replace the highly individualistic, Darwinian ethos of American capitalism.

Communitarian capitalism can be an Asian form of ethical wealth creation, where the interests of the community of stakeholders in an enterprise – the owners, the employees, customers and suppliers – and of course the larger community would be a higher consideration than simply return on capital.
In other words, communitarian capitalism would be stakeholder-driven and not simply shareholder-driven.

One of the contradictions of globalisation is the starkly worsening income inequalities across the world, and particularly in Asia. As members of the Asian business elite, we have a choice to either be part of the solution or part of the problem. There is no middle way; no waffling position where we claim credit for generating growth but deny responsibility for the contradictions of growth. This waffle unfortunately is what most Asian business leaders are doing today; hiding their heads under the sand – or figuratively, a fine layer of gold – and thinking that if they simply stick to what they are good at doing – creating and consuming wealth – they are part of the invisible hand of productive capitalism. But that is just not good enough because, as we have seen, unfettered capitalism is not an absolute good, and often businessmen deepen its imperfections.

On the more positive side, history has seen how many institutions we take for granted today as part of a modern and progressive society, such as liberal democracy or universal suffrage, arose out of the demands of a rising business class – the bourgeoisie. Asia’s rising middle class needs to play the same historic role as their counterparts in Europe several hundred years ago.

Thought leadership need not be in grandiose or visionary ideas but can be small, practical solutions to real problems. For example, as a tiny country, Singapore has no pretensions of being a global thought leader. We have simply and quietly created solutions to our own unique set of changing circumstances. But along the way, our successful experiments have been watched by many far larger societies.

Singapore’s approach to social security and public housing, launched many decades ago, has been universally hailed as revolutionary. In the field of sustainable resource management for cities, Singapore is probably one of the leading examples in the world. In social engineering of public behaviour for the common good such as punitive pricing for traffic congestion, or a ban on smoking in public areas, some of our experiments were once viewed sceptically – even ridiculed – in the Western world but are now widely replicated in some of these societies.

Across Asia, there are many more examples of innovative, inspiring thought leadership covering a wide spectrum of fields. But it is not enough. We need some fundamental paradigm shifts in mindsets, particularly about political and business governance, if Asia is to achieve its future. The blank signposts lie at our feet. It is now our job to write messages, and point them in the right direction. Generations after us will either blame or thank us for what we do or, more disappointingly, choose not to do.

The writer is chairman of the board of trustees of Singapore Management University and executive chairman of Banyan Tree Holdings.

What Teens Worry About: Drugs, Sex and … Future Salaries?a


By Dan Kadlec

You might think teens have it easy. But they worry about a lot: bullying, getting into college, fitting in, finding a date. Now add earning enough money to the list.

Just 56% of teens aged 14-18 believe they will be as well off financially as their parents, according to a Junior Achievement and Allstate Foundation survey. So much for the optimism of youth. That’s down from 89% in the same survey one year earlier. In another major shift, the survey found that teens are pushing back the age at which they expect to be financially independent; more now say they will be at least 25 years old before they are on their own, compared to 20 in the earlier sample.

What gives? According to USA Today, there is a cumulative effect after so many years of recession and slow growth. Teens have seen family and friends lose jobs and homes; they can’t help but feel vulnerable. The paper reports:

“Many kids were shielded by parents during the downturn, says Rob Callender, director of insights at youth research firm TRU. Moms and dads would do without to avoid taking things away from the kids. As finances dwindled, though, those parents have been forced to level with the kids about their economic reality.”

Teens have also had trouble finding summer jobs, though prospects are better this year. And teens report getting fewer money lessons in school. According to the JA poll, just 24% say teachers instruct them about how to manage money, down from 58% a year earlier. This jibes with a report from the Council for Economic Education, which found that fewer states are requiring schools to test in the area of economics and to offer a personal finance course.

Teens may also be suffering from what many adults acknowledge: parents are horrible role models when it comes to things like saving and budgets. Only half of parents regularly set aside money to save; only 43% set financial goals; and only 24% take specific steps to diversify their investments, according to a T. Rowe Price Parents, Kids and Moneysurvey.

In the JA survey, teens reported a significant drop in parents saving as a result of the recession—21% this year vs. 59% last year. As you might expect, teens are modeling that behavior. Just 56% plan to save some of their income, down from 89% a year ago, according to JA. It’s not just a plan; it’s happening, according to the Pew Research Center, which found that young adults are getting a slower start saving for retirement.

It should come as no surprise then that fewer teens are practicing sound money management skills. JA found a three-fold increase in teens that report not budgeting. This largely confirms a separate survey by Schwab, which found a sharp fall off in teen money management ability. According to that survey, just a quarter of 18-year-olds know how to manage a credit card—down from two-thirds. Less than half know how to check the accuracy of a bank statement—down from 60%.

This all represents a huge setback in the push for a more financially literate population, which many see as our best hope for staving off another financial crisis. In this environment, debilitating teen money myths are sure to persist. Here is how you can do something about it.

Information Videos

Hello, all! Been missing in action for quite a bit, due to the recent Common Tests and what-not’s.

Well, we are back online! And this time, I would like to share with you some videos that would be useful to you.

I have classified them into categories, for easy referencing. So sit back and enjoy! 😀

Advertising & Consumer Psychology:

Social Networking & Its Impact on the World:
3. (This one is on the Digital Life: Today & Tomorrow)
5. (This one is a bit of a mix classification.)


Water & Poverty:
You may share your thoughts with us, by adding a comment! Have an awesome week ahead! (:

Singapore’s inflation at 8-month low

23 February 2012

Singapore: Singapore’s headline inflation rate in January rose 4.8% year-on-year, easing from the 5.5% on-year rise in December 2011, thanks to lower contribution from private transport cost.

The 4.8% rise in the consumer price index (CPI) was the lowest year-on-year increase since May.

However core inflation – which excludes accommodation and private road transport – rose to a three-year high of 3.5%.

The Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) warned inflation will likely remain elevated in coming months.

Analysts say this indicates inflation remains a concern and that monetary authorities are likely to keep policy tight.

Taking away rentals from owner-occupied accommodation (OOA), inflation was 3.5%, according to numbers released by the Singapore Department of Statistics on Thursday.

OOA cost can be removed from calculating headline inflation as it has no impact on the cash expenditure of most households in Singapore as they already own their homes, said the agency.

Housing costs remained a big driver of inflation, up 9.5 per cent from last January. Food prices rose 3.8% from last January, while healthcare costs rose 3.2%. The recreation and others component saw a 3.5 per cent increase.

– CNA/ir/ck

Budget 2012 Plants Seeds for Stronger Social Development: Halimah

SINGAPORE: Singapore Minister of State for Community Development, Youth and Sports Halimah Yacob has described Budget 2012 as one that plants the seeds for stronger social development in Singapore.

Speaking on the sidelines of a community event, she said the Budget measures will ensure continued social mobility because of investments in the low-income group, those with special needs, and the elderly.

Madam Halimah noted that the investments in the elderly are important.

She said: “Not just because we feel compassion, but because then it releases the young people who are working, struggling to take care of their frail, elderly parents, it releases them to focus on their work, and therefore to be productive, to be creative.”

On feedback over the lack of specific measures for middle-income households, Madam Halimah said these families can benefit through higher subsidies in education and healthcare.

She added that the Budget is one that balances social development with economic growth.

She said: “I’m really glad that this Budget focuses a lot on social development, and I think without compromising economic development. Because at the basis, what is fundamental is that there must be growth. Then we will have enough resources to invest in social development. I think this [represents] planting the seeds for stronger social development in Singapore.”


Feedback on Budget 2012 Largely Positive

SINGAPORE: The feedback on Singapore’s Budget 2012 has been largely positive based on early input received by the government’s portal, REACH.

Its chairman, Dr Amy Khor, told Channel NewsAsia on the sidelines of a community event on Sunday morning that many welcomed the measures to help the needy and to enable companies to employ more Singaporeans.

Residents of Hong Kah North marked Total Defence Day as part of efforts to build a more cohesive society.

Mayor of South West District Dr Khor used the occasion to remind them of the need to build a stronger and more inclusive Singapore as outlined in the Budget Statement unveiled by Finance Minister Tharman Shanmugaratnam on February 17

She said it will help manage key challenges like slower economic growth, income inequality and the ageing population.

Dr Khor said: “It is also a budget with a heart because it has got targeted schemes to help the elderly, low income and disabled, as well as local companies to help them restructure. It has got stepped-up efforts to give social support assurance to the vulnerable groups, like the elderly, the low income and the disabled. This budget will give them a leg up to help them cope with the challenges and pressures ahead, as well as to help them to benefit and participate in the growth of Singapore.

She said the most-hotly debated issue was the package of social assistance initiatives.

About 40 per cent of contributors discussed the issue, especially on the new GST Voucher to help the needy offset their Goods and Services Tax, as well as the higher Central Provident Fund contribution rate for older workers.
Dr Khor said some suggested that the higher CPF contribution rate be extended to those who are older than 65.

This was followed by measures to help in the restructuring of the economy with about 30 per cent of contributors discussing the issue.

Dr Khor said: “Some of the concerns that they have raised are with regards to worries about higher business such as possible higher business costs and access to labour because of the current tight labour condition. While they welcome the reduction in foreign dependency ratio, the worry is whether the SMEs are able to get the manpower they need.”

Singaporeans can continue to share their views with REACH through a Facebook chat on February 26 from 7.30pm to 9pm and a roving exhibition at the Raffles Place lawn on February 23 and 24.

– CNA/fa

Budget 2012 Speech (Part 7): Budget position

For FY2012, a small basic surplus of $1.3 billion is expected, which is close to a balanced budget at 0.4% of GDP. -AsiaOne

Fri, Feb 17, 2012

Budget position

Mr Speaker Sir, this is therefore a Budget for the future. We are building an inclusive society, founded on higher skills, better jobs for every vocation, and a fair social compact. FY2012 Estimated Budget Position

We are starting off from a position of fiscal strength. For FY2012, we expect a small basic surplus of $1.3 billion, which is close to a balanced budget at 0.4% of GDP. This reflects our operating revenues, but does not take into account the Net Investment Returns Contribution (NIRC) from past reserves. It also reflects the expenditures we will make in FY2012, but not the monies we are setting aside in endowment and trust funds for future spending.

Our NIRC is estimated at $7.3 billion. Taking this into account and the contributions to endowment and trust funds – all of which that I have mentioned earlier – the Overall Budget Balance for FY2012 is projected to be $1.3 billion (0.4% of GDP).


Mr Speaker Sir, at the Opening of Parliament in October, PM spoke of building an inclusive society, and sketched the Government’s vision for a stronger Singapore and better home.

Budget 2012 sets out our directions and takes significant steps towards achieving this vision. We are restructuring and upgrading our economy, so that workers can enjoy higher incomes and every Singaporean family can aspire to move up. We are also introducing new initiatives, and deploying more resources to uplift and support lower- and middle-income Singaporeans.

But we all know that building an inclusive society is not just about government redistributing resources to help the poor. It is about building a society where at its heart, people retain a deep sense of responsibility for their families and seek every opportunity to improve themselves and do better. Where employers treat workers with respect, value their contributions and reward them fairly.

Where the more successful step forward to help others in the community, because they feel for their fellow citizens. And where Singaporeans actively participate in causes that will make this a better society. An inclusive society will only blossom if we grow this spirit of responsibility and community

It has to be about how we go about our lives as Singaporeans, like the people in this video.

[Tan Ai Li, 11. Sani Rosmani, 45. Mumtaz Begum, 40. John Forbes, 92. Mrs Goh Kah Tian, 55.]

Opportunity, improving ourselves, compassion. They define the character of the society we are building, and must be our common purpose as Singaporeans.

Budget 2012 Speech (Part 6): Better Healthcare, from Hospital to Home

Yearly healthcare expenditure will be doubled from $4 billion to about $8 billion over the next five years. -AsiaOne
Fri, Feb 17, 2012

Better Healthcare, from Hospital to Home

I will now move on to the significant measures we are taking in healthcare.

We will double our yearly healthcare expenditure from $4 billion to about $8 billion over the next five years. It is about more and better infrastructure, from hospitals to home-based care. It is about engaging many more healthcare professionals, such as doctors, nurses and Allied Health Professionals, and paying them more competitively. And it is about making it more affordable, including for the middle class.

We will expand bed capacity in our acute hospitals, as well as our ability to provide longer-term care for the elderly both in institutional settings, and at home. But we must also shift from the current concentration on acute hospital care and move towards providing affordable, long term care. Most importantly, we must make it easier and more affordable for the elderly to stay at home, with access to quality care services when needed.

Expand Healthcare Capacity

First, we will expand public hospital capacity. We will increase the number of beds in acute hospitals by about 30%, or 1,900 beds by 2020. This is more than the capacity of the Singapore General Hospital (SGH) today.

Second, we will add another 1,800 Community Hospital beds by 2020, more than a 100% increase from today. Besides the new Community Hospitals that will be co-located with Khoo Teck Puat Hospital and the new Ng Teng Fong General Hospital, we will add two more Community Hospitals in Outram and Sengkang by 2020.

Third, we will more than double the capacity in long term care services by 2020. This includes nursing homes, home-based health and social care services, day care and rehabilitation facilities, and Senior Activity Centres. We will also improve access to polyclinics and introduce new models of care, such as Medical Centres that provide specialist outpatient services in the community.

The Minister for Health will elaborate on this major expansion and broadening of our healthcare landscape in the COS.

Enhance Affordability

Next, we will enhance affordability of long term care.

We will increase subsidies in our Community Hospitals such that all patients can receive help with their bills. Lower-income patients will receive a 75% government subsidy. Those above the median income, who previously did not receive any subsidy, will now receive a 20% to 50% subsidy. The Community Hospitals that previously had to use charity dollars to offset bills for middle-income patients can now use these resources in other ways – such as providing further help to those in need, or improving the quality of care.

We will also raise subsidies for nursing homes, day care and rehabilitation facilities and home-based care packages so that more in the middle-income group can benefit. Two-thirds of Singaporean households will now qualify for subsidies. As the elderly often do not themselves have income, what this effectively means is that about 80% of elderly will qualify.

Let me illustrate the impact. For a middle-income family with an elderly parent at a private nursing home, the new subsidies will bring down their costs from about $2,800 to $1,700 per month. However, if they opt for a home-based care package, our subsidies will bring the cost down from about $1,400 to $700 per month. Both will be significantly cheaper than before, and home-based care will be about 40% of the cost of nursing home care. This shift should hopefully allow about one out of two frail seniors to enjoy home-based care instead of moving to a nursing home.

Instead of getting external help, some families may prefer to hire a foreign domestic helper, especially when constant attention is required. This may also allow family members to continue working. We will give a $120 grant per month to families hiring a foreign domestic helper to help care for elderly family members who have severe dementia, or are immobile and unable to care for themselves[8]. This is on top of the $95 concession in the Foreign Domestic Worker Levy that all households with elderly persons will continue to enjoy.

[8]: Those unable to perform three or more Activities of Daily Living.

Families with elderly members also find it very helpful to have safety features in their flats. We will subsidise home modifications such as grab bars and anti-slip treatment for bathroom tiles through a new programme, the “EASE” (Enhancement for Active Seniors) Programme. Each citizen household with an elderly member can get home modifications worth around $2,000. They would pay no more than $250 themselves.

We expect this programme to benefit 130,000 households and cost around $260 million over the next 10 years. The Minister for National Development will elaborate on EASE in the COS.

Absorb GST for Long Term Care

GST is currently fully absorbed for Class B2 and C patients in our acute hospitals. I will extend the same benefit to subsidised patients in the long term care sector, extending from Community Hospitals to nursing homes and the range of home-care services. I spoke about this earlier, so that they do not have to pay GST. About 40,000 Singaporeans receiving long term care will benefit.

Medifund Top-up

The enhanced subsidies that we have introduced in this Budget will help many more Singaporeans with the cost of healthcare. However, there will be some who need extra assistance, including not only those with low incomes but also some middle-income Singaporeans faced with high medical expenses. Medifund will help them cope.

I will provide a $600 million top-up to Medifund this year. This will increase the payouts from Medifund by over 20%.

Enhance MediShield

The final plank in our plans to provide better healthcare support for older Singaporeans is to enhance MediShield, which covers them for their major hospital bills. For example, a basic MediShield plan can cover up to 70% of a large Class C hospital bill for a knee replacement. This would reduce the patient’s payment from $6,200 to $1,800, which can be paid for using Medisave.

We will extend MediShield coverage from age 85 to 90, as many more Singaporeans are now living till 90 and beyond. MOH also intends to engage the public on other changes to MediShield, including extending coverage to people who suffer from congenital conditions.

These are worthwhile shifts, and in particular will mean that most Singaporeans will be covered by MediShield for their whole life. But it will also require an increase in premiums across the board

I will therefore provide a one-off Medisave top-up to all Singaporeans currently on MediShield, to help them adjust to the premium increase. As older Singaporeans pay the highest premiums, they will receive a larger Medisave top-up (see Table 2).

[9]: Age at next birthday

The Minister for Health will elaborate on MediShield in the COS.

How Older Singaporeans will Benefit

As all this amounts to a significant package of support for the elderly, let me briefly summarise. Taken together, our strategy of helping the elderly by enabling them to stay at work, helping them unlock the savings in their homes and providing better and more affordable healthcare support will give them peace of mind and a greater sense of security.

a. Older workers will enjoy higher CPF contributions, and reduced income tax bills through a higher Earned Income Relief. Their employers will also receive a Special Employment Credit as an incentive to retain them and reward them adequately.

b. Elderly households who take up the Silver Housing Bonus or the Enhanced Lease Buyback Scheme can gain $20,000.

c. Lower-, and especially middle-income elderly will benefit from enhanced subsidies in Community Hospitals, nursing homes, day care and rehabilitation facilities and home-based care packages. They can gain $480 to $610[10] per month through subsidies for a range of home-based care services, and a further $1,800[11] to add safety features to their homes.

[10]: Based on a home-based care package for an elderly person in a median income household with moderate to severe disability.

[11]: For a household living in a 4- or 5-room flat

d. Older Singaporeans who use long term care services can benefit from GST absorption.

e. Those under MediShield will receive Medisave top-ups to help them pay for MediShield premiums as coverage extends to age 90.

This is therefore a package that will benefit virtually all Singaporean families, including the children who are or will in time be supporting their parents.

Supporting Singaporeans with Disabilities

Let me now move on to talk about what we will do for Singaporeans with disabilities. They are not a very large group in our society – about 3% of Singaporeans, or 100,000 in total. But their lives can be challenging. Parents of children with special needs try their best to cope and bring up their children with the care and love they need. They could do with extra support.

We will provide a stronger helping hand for Singaporeans with disabilities, at each stage of their lives.

Strengthening Early Intervention and Education

Let me start with their pre-school years. We will increase places in centres for children who need intensive early intervention. In addition, in mainstream pre-school classrooms, we will introduce a new programme to provide learning support and therapy interventions to children with mild speech, language and learning delays. Some 2,000 children will benefit from this new “Development Support Programme” when it is fully rolled out.

MCYS will elaborate on this in the COS. We will also make enhancements to our Special Education (SPED) schools, which MOE will speak about in the COS.

Supporting Employment

With better education and a supportive community, more young Singaporeans with disabilities will be able to enter the workforce and remain independent in their adult years.

Chen Min Li is an energetic 23-year-old who graduated from Towner Gardens School, one of our SPED schools. She then went on to complete four years of vocational skills training. She now works in the service crew at Carl’s Junior. Min Li is happy to be able to add to her family’s finances, and according to her supervisors, is one of the most enthusiastic workers at Carl’s Junior.

There are many others like Min Li who want the opportunity to do meaningful work. I will therefore extend the Special Employment Credit to employers who hire SPED graduates, regardless of age. They will get a credit of 16% of the employee’s wages, which is twice as large as the SEC that I spelt out earlier for older workers[12]. With these enhancements, the employer of a SPED graduate who earns $1,000 a month will receive $160 per month in the form of a Special Employment Credit.

[12]: For Singaporean SPED graduates earning up to $1,500 per month, the SEC will be 16% of wages. For monthly wages between $1,500 and $3,000, the SEC is $240 per worker. A lower SEC will also be provided for those with a monthly wage of between $3,000 and $4,000

To help the workers earn more income, I will also extend the Workfare Income Supplement scheme to all SPED graduates who work, even if they are below 35, and double the Handicapped Earned Income Relief for all persons with disabilities (refer to Annex A-4).

Our measures to support their employment will complement what we plan to do under the Enabling Masterplan, such as enhancing vocational training, job placement, and support for continuous improvement in their working years.

Better Adult Care

However, Singaporeans with more severe disabilities will need care throughout their adult lives. This is especially because more and more of them outlive their parents.

They will be eligible for the same enhanced care subsidies that older Singaporeans will receive. Additionally, we will expand places in Day Activity Centres by 25%[13], to allow their caregivers to work or have free time during the day. With our enhancements in adult care this year, a middle-income household can receive up to $5,700 in subsidies to offset 50% of the annual cost of attending a Day Activity Centre. Low-income households will get more.

[13]: 250 additional places

We will also embark on other measures including expanding places in residential homes and providing transport options. The Acting Minister for MCYS will elaborate on these and the other government responses to the Enabling Masterplan Committee’s recommendations in the COS.

Uplifting Lower-Income Families

We know that lower-income Singaporeans have real worries about their day-to-day expenses. And they are concerned about whether their children will do well in school and get a good job.

Our most important solution to help lower-income families is to give their children a high-quality education, and help them keep upgrading their skills as adults so they can take on better jobs. This is a major work-in-progress. We have also taken significant steps in recent years to support their incomes through Workfare, help them own their homes and build up their savings.

More Support for Children from Lower-Income Families

In this Budget, we will provide further financial support for children from less well-off families.

Pre-school Subsidies

We have enhanced our pre-school subsidies significantly in recent years. To provide further support for larger families, we will also introduce a new, per capita household income criterion (PCI) for subsidies.

Take for example a family of five (with three children), earning $2,500 in household income. They will now pay only $20 for each child in child care[14], compared to $110 previously. This is similar to what lower-income families with fewer children would pay.

[14]: Assuming they attend a HDB Childcare Centre costing $620 per month.

MOE Financial Assistance Scheme

We will help more students benefit from the MOE Financial Assistance Scheme by raising the household income ceiling from $1,500 to $2,500 per month. It will mean that 40,000 more students, or twice the original number, will be fully subsidised for their school fees, uniforms and textbooks, and receive a 75% subsidy on their exam fees.

Top-ups to Schools for Discretionary Financial Assistance

We will provide a further top-up to School Advisory and Management Committees of up to $15,000 per year for the next three years. This will give the committees greater certainty of government support and help them introduce new schemes in the school – such as transport assistance for students.

The two enhancements I have just mentioned will also be provided to our SPED schools.

Student Care Fee Assistance (SCFA) Scheme

We will enhance the Student Care Fee Assistance (SCFA) scheme to benefit more families. As student care costs much more than fees and expenses for regular school, we will extend subsidies to a larger group of families than those who qualify for the MOE Financial Assistance Scheme. Subsidies for student care will be extended to families with up to $3,500 in monthly household income. A family earning say $2,500 per month would typically see the amount they pay for student care reduced from $200 to $80 per month.

Top-ups for Education and Social Support

To support the Government’s and community’s efforts, I will also make several top-ups this year.

I will provide a $200 million top-up to the Edusave Endowment Fund to help all children enjoy meaningful enrichment programmes.

I will make a $200 million top-up to the ComCare Endowment Fund to support families in need.

As the community plays a crucial role in helping low-income families, I will also give a total of $10 million to our Self-Help Groups and the CCC ComCare Fund.

Broadening Opportunities for Every Child

The real story, however, is not just about helping families cover their fees and costs in school. What we are providing is a breadth of exposure to every child regardless of family background in a way that few school systems overseas do. We have been building this up across the school landscape, so as to allow every child to discover what they like, and what they are good at.

Muhammad Fairoz is now in Secondary 4 at Yusof Ishak Secondary School. His family has modest means – his father is a factory cleaner and his mother is a housewife. He is doing very well. He has obtained Edusave Merit Bursaries and Scholarships over the last few years, besides the MOE Financial Assistance Scheme. In fact, he has had near perfect scores of 6 academic distinctions every year. He also went to Xi’an on a 10-day cultural exchange programme that was fully funded by the Trips for International Experience Fund that every school gets, plus his Edusave Account.

Fairoz does a lot more in school. He is a tenor in the school choir, which is where his talent was also spotted for the school’s Performing Arts Programme. Last year, he played the role of Professor Higgins in the school’s production of “My Fair Lady”. Now, he wants to go on to do theatre studies so that he can become a stage actor. So that’s how we do it. Give every student the chance to go through varied experiences so that along the way they can discover something they like and that they are good at.

A Fair Tax System

Let me move on now to a broader theme, which involves how the GST affects the poor, and its role as part of a fair system of taxes and benefits.

Our fiscal system is a progressive one, which means that the poor get far more benefits compared to the taxes they pay, and the better-off pay more taxes.

The top 20% of households pay 80% of income taxes collected. We shifted to progressive property taxes last year, and they should become more so over time. Then, there is the GST, which is a flat tax and is therefore on its own, regressive, taking up more of the pay of those with low incomes.

But taken as a whole, our fiscal system has in fact become more progressive over the last decade despite our raising the GST from 5% to 7%. This is because we introduced programmes like Workfare and enhanced our subsidies to help lower-income families. These enhanced benefits are much larger than the increase in GST that they now pay.[15]

[15]: If we add it all up, the average lower-income (2nd decile) household has received $2.40 back in additional permanent transfers for every dollar of additional GST paid over the past five years

These permanent transfer schemes are how lower-income Singaporeans benefit from our fiscal system. Our GST, most of which comes from residents in the upper half of the population by incomes and foreigners, is an important source of revenue that enables us to fund this system of transfers.

In addition, we provided a substantial package of temporary offsets for individuals and households when we raised the GST in 2007. These temporary offsets lasted until last year.

To carry on with these offsets, I will now introduce a permanent GST Voucher to help lower-income Singaporeans. The GST Voucher will provide continuing assurance that our GST does not hurt the poor.

This Voucher will fully offset the 7% GST that the lower half of retiree households pay on their expenses. Many retirees in the upper half will also have their GST offset by a significant amount.

The GST Voucher for other lower-income families (who do not have elderly members) will also offset about half their total GST bills. Further, taking into account the other permanent benefits that they receive through Workfare, housing, education and healthcare, they will get back much more than the GST they pay.

There will be three components to the GST Voucher – cash, Medisave top-ups and U-Save. The amount each Singaporean will get will be based on both their income and the Annual Value (AV) of their homes. This is by no means a perfect system, but it is fair to have both criteria. For example, retirees and homemakers who have no incomes but live in higher-end homes, are generally better off than most lower-income Singaporeans.

GST Voucher – Cash

The cash component will be given to Singaporeans whose incomes fall within the bottom 40%, and who live in HDB flats or the bottom 15% of private properties (those with an Annual Value of up to $20,000).

Those who live in HDB flats will receive $250 in cash each year. Those living in lower-end private properties will receive $100, as long as their incomes are also low (below $24,000)[16]. $100 may not be a large sum, but taken together with the Medisave component of the GST Voucher, it will provide some help for our retirees who live in lower-end private properties. (See Table 3 for full schedule).

[16]: 40th percentile of annual incomes.

GST Voucher – Medisave

The second component of the Voucher will comprise an annual top-up to the Medisave Accounts of older Singaporeans. Those above 65 and living in HDB flats or lower-end private properties will receive this top-up (see Table 4). This would benefit 85% of all elderly Singaporeans.

A 75 year old Singaporean, for example, will receive $350 if he lives in an HDB flat, or $250 if he lives in a lower-end private property.

GST Voucher – U-Save

Finally, the GST Voucher will help lower- and middle-income households through permanent U-Save rebates, to offset part of their utilities bills.

Households living in smaller flats will benefit more. 1- and 2-room HDB households will receive $260 per year, which is equivalent to about three to four months of their utilities bills on average (see Table 5).[17]

[17]: Overall, the U-Save rebates will benefit about 800,000 households (or 75% of all households).

Let me illustrate how the GST Voucher adds up. A retiree couple living in a 3-room flat will receive enough to offset fully the GST they pay each year. They typically pay about $840[18] in GST a year, but will receive $1,240 worth in their GST Voucher. (This is without counting the one-off Medisave top-up they will receive this year, which is not part of the GST Voucher).

[18]: See Annex B-2.

Younger lower-income households (without elderly persons) in 3-room or 4-room flats will also receive a significant GST offset. It should cover about half of the total GST they pay each year.

In total, the GST Voucher will cost about $680 million this year. As I have explained, this will be a long-term feature of our fiscal system and not a scheme of temporary offsets. To ensure that we can provide this GST Voucher irrespective of economic circumstances over the next few years, I will set aside $3.6 billion this year to finance the scheme for the first five years. To do this I will set up a GST Voucher Fund from which payouts will be made in the coming years.