Day 2 of Budget 2023 debate: MPs voice concern over property prices, ask for more help for parents and workers

SINGAPORE: Members of Parliament voiced concern over soaring property prices, and asked for more support for parents, workers and local companies on the second day of the Budget 2023 debate on Thursday (Feb 23).

For close to seven hours, 29 MPs spoke in the House on the Budget delivered by Deputy Prime Minister and Finance Minister Lawrence Wong last week.

Some MPs raised questions about excessive competition and the widening income gap between graduates and non-graduates.

“Our younger Singaporeans in Institutes of Technical Education who are soon to join the workforce face a daunting challenge. The starting salary gap between university and non-university graduates continues to widen,” said Mr Desmond Choo (PAP-Tampines).

He suggested strengthening vocational training and apprenticeship programmes for ITE students and graduates, as well as better internship and mentorship opportunities for them.

Mr Leon Perera (WP-Aljunied) warned against having an “unbridled, winner-take-all meritocracy” in Singapore, saying: “We need a concerted policy effort to improve wages, skills, productivity, working conditions, societal respect in trades jobs.”

Ms Carrie Tan (PAP-Nee Soon) asked Singaporeans to “seriously consider a different model of progress”, pointing out that Singapore’s current economic model fails to account sufficiently for sustainability, and for people's well-being.

HIGH PROPERTY PRICES

MPs also voiced concern about the mismatch in demand and supply for homes and surging property prices.

“We need to keep our property prices in check,” said Mr Gan Thiam Poh (PAP-Ang Mo Kio). “Will the Government review and consider boosting the supply of public and private housing even more?”

He was among MPs who asked for the Housing Board to build more homes and he also suggested that the Ministry of National Development considers measures to facilitate the development of more private housing.

NCMP Hazel Poa (PSP) reiterated the opposition party’s stance on the Central Provident Fund (CPF) Housing Grant for resale flats, asserting that such a grant would lead to an upward spiral in prices for such flats by pushing up demand for resale flats. 

“As land cost is determined based on resale transactions. The increase in resale prices would result in higher land costs. The amount that HDB (Housing and Development Board) pays to SLA (Singapore Land Authority) for land would increase, thereby increasing the cost of new flats.”

The potential increase in subsidies and grants needed for new flats will require more tax revenue in an unsustainable cycle, noted Ms Poa. 

CORPORATE TAX AND UNEMPLOYMENT INSURANCE

The Non-Constituency MP also spoke about how more profitable companies ought to pay more taxes.

“We should review the tax incentives and treatments given to companies earning profits beyond S$10 million so that they pay more taxes. For example, if companies earning above S$1 billion in profit, pay just 3 per cent of their profits as taxes instead of the current 0.9 per cent, the additional revenue raised will be about S$5 billion per year.”

The higher corporate tax revenue generated could be used to lower business costs, the cost of living and to offset the higher effective tax rate. Singapore will retain its attractiveness as an investment destination and provide relief to Singaporeans, said Ms Poa. 

Associate Professor Jamus Lim also appealed for taxes for small and medium-sized enterprises (SMEs) to remain low even as the Government implements a global minimum corporate tax rate to comply with an initiative to close gaps in international taxation or the Base Erosion and Profit Shifting (BEPS) framework. 

“Placing the burden of higher corporate taxation on the shoulders of MNCs that are more able to afford it - and who are the primary targets of the agreement in any case - will provide a better business climate for our SMEs to eventually grow and become international companies in their own right,” said Assoc Prof Lim.

He, along with Mr Patrick Tay (PAP-Pioneer), called for unemployment insurance for workers who have been made redundant - a policy that both the National Trades Union Congress (NTUC) and the Workers’ Party have championed.

Mr Tay, who focused his speech on support for mature professionals, managers and executives, said: “PMEs are an increasingly vulnerable group because of rapid economic changes and cycles. 

“The support provides displaced workers the space to upgrade their skills and look out for suitable employment, with the knowledge that they would be able to continue supporting their family’s basic needs during this difficult period.”

HELP FOR SMES

A number of MPs asked for more support for SMEs, with Mr Derrick Goh (PAP-Nee Soon) saying: “Some local businesses have fed back that Budget 2023 is pro-redistribution and seemingly a shift away from pro-business growth. 

“They wonder if this means that they should fend more for themselves and expect less help going forward.” 

He added that Budget 2023 is being rated by many as an “A-grade for families and individuals” but SMEs would score the Budget “a B or even a C”.

The MPs asked for help for SMEs to deal with rising costs and to strengthen their capabilities to hire and train workers, and to step up their game in Environment, Social and Governance or ESG.

“I also urge our government agencies and government-linked companies to support our SMEs by providing more business to them as to benefit almost 70 per cent of the Singaporean workforce indirectly,” said Mr Don Wee (PAP-Chua Chu Kang).

Mr Gerald Giam (WP-Aljunied) noted that higher rental costs may affect the competitiveness of SMEs, which may struggle to afford rent. He urged the government to look for ways to moderate industrial and commercial rental costs for SMEs to benefit a broader base of businesses. 

Several MPs also spoke out for different groups of workers from seniors, lower and middle-income workers, to platform workers and freelancers.

Responding to a call by NCMP Leong Mun Wai (PSP) on Wednesday to raise the Local Qualifying Salary (LQS) from S$1,400 to S$1,800, Minister of State in the Prime Minister’s Office Desmond Tan said until COVID-19, the LQS was increased S$100 each year from 2017.

He added that Singapore needs a “sustainable and systematic” mechanism to set and review the floor wage.

Mr Mohd Fahmi Aliman (PAP-Marine Parade) pointed out that the current LQS of S$1,400 is much lower than the wage level of the lowest 20 per cent of wage earners, which was about S$2,800 in 2022.

“I would like to call on the Government to annually review the LQS to ensure that wages keep pace with wage convergence targets for our lower-wage workers,” said Mr Fahmi, who is a director at NTUC.

DON’T PENALISE SINGLE MOTHERS

Numerous MPs raised the challenges of childcare and sought stronger support for parents, in particular, unwed mothers. 

Ms Cheng Li Hui (PAP-Tampines) asked for more childcare facilities in new housing estates for young couples and flexible work arrangements for parents. 

NMP Abdul Samad asked if the extended childcare leave of two days per year can be extended to parents with children above 12 years old until they complete secondary school. 

Ms He Ting Ru (WP-Sengkang) asked for the enhanced baby bonus and parenthood policies to be extended equally to all parents, including unmarried mothers.

Likewise, NMP Shahira Abdullah said that measures should not penalise single mothers. The parenthood tax rebates and Working Mothers’ Child Relief scheme require the mother to marry the biological father of their child, she said. 

“An ancillary consequence of some of these measures is that a single mother may feel that (she is) penalised so drastically as a single parent in a Singapore system that it is impossible to walk away from a bad or abusive relationship to avail themselves to the budget incentives,” she said. 

Dr Shahira also requested that the additional two weeks of Government-paid paternity leave be started from three weeks in the second half of this year, to the full four weeks from January next year.