CONCLUSION

FY2007 Budget Position

Mr Speaker, Sir, let me now summarise the FY2007 budget position. Excluding Special Transfers and tax changes, we expect a surplus of $1.1 billion for FY2007. The GST increase, reduction in corporate tax and other tax changes, taken together, will increase FY2007 operating revenue by $0.3 billion. The GST Offset Package, Workfare, and top-ups to NRF and the endowment funds will cost $2.1 billion. After taking these into account, the estimated FY2007 Overall Budget Balance is a deficit of $0.7 billion. The Government will not need to draw on past reserves as the deficit can be fully financed by funds accumulated since the new Government took office in May 2006. Details of the revised fiscal positions for FY2006 and FY2007 can be found in Annex F.

Ready for the Future

Mr Speaker, Sir, this Budget is about our future. It will build on our strengths, enhance our capabilities, and provide opportunities for all Singaporeans to strive and succeed.

This Budget will sharpen Singapore's competitive edge. We are reducing corporate tax, and providing an environment for enterprise to flourish. Singapore will become the best place to start and grow a business. We will invest in our people, enhance our infrastructure, and create a living environment that will inspire every Singaporean.

This Budget also strengthens our social security system. We are raising the employer CPF contribution rate to help our workers become more financially secure and to provide for their future medical, housing and retirement needs.

We are taking a bold new approach to help those at the lower end of our workforce. Their wages are being held down by globalisation. Our older workers, especially, find it difficult to secure jobs, and many lower-income households struggle to make ends meet. We will reduce their CPF contribution rates to help them stay employable and to increase their take-home pay. And we will supplement their incomes and savings through Workfare.

This Budget strengthens our revenues for the future. We are raising the GST to broaden our tax base. It will give us critical additional revenues that will enable us to improve our social security system, increase spending on health especially as our population ages, and ensure that our income taxes remain competitive.

To help Singaporeans adjust to the higher GST, we are providing a comprehensive offset package. Lower-income Singaporeans will receive much more than the extra GST they have to pay. The middle- and higher-income groups will also benefit from the offset package as well as from the higher employer contributions to their CPF. Most importantly, all Singaporeans will be better off because these decisive moves will grow our economy.

We are setting in place a strong and sustainable fiscal position. The GST increase will give us an additional $1.5 billion each year. Workfare will cost us about $400 million a year. Our increased health expenditures will amount to $300 million each year on average over the next five years, and more beyond that. Expanding continuing education opportunities for all Singaporeans will cost us at least $300 million extra each year in the long term. The corporate tax cut will cost us $800 million per year. The GST increase will help us to finance these initiatives. But we also need to use more of the investment income from our reserves. The additional income from our reserves, together with the increased GST revenues, will give us the resources to enhance our social security system, invest in new capabilities, further sharpen our competitiveness, and meet the challenges of the future from a position of strength.

Mr Speaker Sir, we have every reason to be confident about our future. Globalisation is playing to Singapore's strengths - our openness to the world, our responsiveness to change, our reputation for trust. But what will ultimately determine our success is our people's spirit of enterprise, resilience, and self-reliance. Even as we bolster our system of social support, we must keep these values strong in our society.

Many Singaporeans bear testimony to these values. Like Mabel Ong, now in her mid-fifties. She did not get beyond primary school, but she has always worked. First as a seamstress for many years in garment factories, until her mid-forties when her eyesight deteriorated and she found it harder to sew clothes. She then started working at hotels, as a valet, delivering laundry to hotel guests, and as a food server in restaurants. Two years ago, she took up a friend's recommendation and started work at the Oriental Hotel, checking and issuing mini-bar items for rooms. She does every type of work she can; during lull periods, she volunteers to help out at the linen department. She has also been going for courses, so that she can take on new responsibilities. Recently, the hotel promoted her into a new position they created - 'Mini-bar Supervisor'. As Mabel sums it up in her own words, "Whatever I can do, I will do. And whatever I do, I will try to do well."

That is the Singapore spirit - can do, will do, do well. This is why we will succeed and this is why our future will be bright and prosperous.

Mr Speaker, Sir, I beg to move.