Singapore must transform economy, develop its people and strengthen social compact to stay successful: DPM Heng
SINGAPORE: To remain successful, Singapore must keep planning for the long term, stay open and connected to the world, while continuing to foster trust in the society to stay united, said Deputy Prime Minister Heng Swee Keat on Friday (Feb 28).
In a wide-ranging speech in Parliament that wrapped up three days of debate on Budget 2020, Mr Heng said that it remains the Government’s mission to enable all Singaporeans to enjoy the "fruits of growth".
Singapore has made "good progress" in this area over the years, but there are now “complex new challenges” that need to be tackled, he said.
These include pressure from technological and demographic changes, as well as the “growing inequality of starting points” as the Singapore society matures.
“Our response to these challenges will define us,” he said.
READ: If situation deteriorates significantly due to COVID-19, DPM Heng says will make case to tap on reserves
A growing number of societies have responded by turning inwards from the world but for Singapore to stay successful, it must have the courage to take a different path, said Mr Heng.
The minister laid out three areas in which Singapore is doing so.
TRANSFORMING THE ECONOMY TO BE GLOBALLY COMPETITIVE
Amid tectonic shifts that are underway in the global economy, Mr Heng, who is also Finance Minister, said that Singapore must move fast to secure growth and jobs in the next phase, or face irrelevance.
As such, the Committee on the Future Economy was formed in 2016 as the country embarked on an “urgent journey” to transform its economy.
Various moves have since been made, from positioning Singapore as the global-Asia node for technology, innovation and enterprise to tap on the region’s growth, building up the capacity of local enterprises to helping industries to transform with 23 roadmaps.
While painful, these are starting to bear fruit, said Mr Heng.
Productivity has grown in the last three years, and local firms are entering new markets.
Despite the economic headwinds, Singapore attracted S$15.2 billion in fixed asset investments last year, reflecting continued confidence in the country.
More and better jobs have also been created, said the minister, citing how an average of more than 41,000 jobs are added each year and that the local unemployment rate for December 2019 has stayed low at about 3.2 per cent.
Singaporeans have benefited from these jobs, he added, pointing to how real incomes have risen by about 3 per cent each year for the median full-time employed local worker.
“At its heart, economic transformation involves the courage to brave transitional pains as we change the way we do things,” he said.
“If we can all move forward with the can-do spirit of initiative and partnership that we have shown in the past weeks, I am confident that we will build strong firms that can grow and compete in the global arena, and create good jobs for all Singaporeans.”
Similar moves have also been taken to counter “profound structural changes”, such as an ageing population and rapid advances in technology, in the labour market.
Mr Heng described these efforts as a “three-prong tripartite approach, with the Government, workers, and enterprises working in close concert”.
The first involves having the Government invest in “critical enablers of skills upgrading and in career support”, such as institutes of higher learning and various job schemes like the Adapt and Grow initiative and Professional Conversion Programmes.
More has been done in Budget 2020, with a new mid-career support package for workers in their 40s and 50s, as well as a special SkillFuture Credit top-up of S$500 for Singaporeans aged 40 to 60 this year.
The SkillsFuture movement also helps workers to take ownership of their own learning and growth, making up the second prong of the approach, said Mr Heng.
Lastly, enterprises will need to step up on their own transformation, as well as redesign jobs and upgrade their workers, said Mr Heng. More help in this area was announced in Budget 2020 in the form of a new enterprise credit for firms.
Noting concerns raised by Member of Parliament (MP) Ong Teng Koon on how it may be difficult for SMEs to have workers away for training, Mr Heng said: “There is no better time than now. Many businesses are already making use of the downtime they are experiencing to accelerate their efforts.”
STRENGTHENING SOCIAL COMPACT
But even amid efforts on these two fronts, Singapore will have to strengthen its social compact to ensure that the benefits of growth reach everyone.
On the vulnerabilities of low-wage workers raised by several MPs, Mr Heng said the S$1.6 billion Care and Support Package, which includes grocery vouchers to provide help with daily necessities, will support these workers and their families.
This new special package builds on existing efforts, such as enhancing Workfare, the Progressive Wage Model and ComCare. The mayors and the five Community Development Councils also have local assistance schemes to support the heartland, he said.
Extra help is also on the way through the enhancement of Silver Support for retirees who had low income in their working years and little to no family support. This will benefit 100,000 more seniors and raise payouts by 20 per cent, he said.
As for middle-class families that are “sandwiched” financially between caring for their children and elderly parents, Budget 2020 has allocated additional help.
These include a S$100 cash payout for parents with young or school-going children, more GST Voucher-U-Save rebates for larger households and Passion Card top-ups for their parents.
READ: Budget 2020: S$1.6 billion Care and Support Package to help Singaporeans with household expenses
Mr Heng said: “Supporting and strengthening families will always be a priority for us, and we will continue to look at how to do so effectively.”
"Overall, the measures that we have put in place over the past decade to provide good jobs for our people, develop them at all stages of life, and support the vulnerable, have made a decisive impact in narrowing the income gap,” he added.
For instance, the Gini co-efficient after taxes and transfers fell to 0.398 last year. This was the lowest since 2001.
But Mr Heng stressed that the work is not done and that businesses and the community have growing roles to play as well.
He noted that in 2018, individuals collectively donated S$2.1 billion through registered organisations, more than double the S$960 million donated in 2008. Each donor gave on average S$660, which is also more than twice the amount in 2008.
Meanwhile, one in two businesses in Singapore is giving back through philanthropy and volunteering.
Mr Heng said: “This is how we should rise to the challenge of inequality in this day and age – by coming together as one people to uplift the less privileged amongst us, with the state providing strong foundations of opportunity and support.”
TACKLING CLIMATE CHANGE
In talking about climate change, Mr Heng said Singapore has always risen to the challenge in the face of adversity.
"We have never accepted our fate or our starting circumstances meekly. Instead, we adapt, innovate, mitigate, and overcome. We turn constraints into opportunities and strengths," he said.
He gave the examples of Singapore becoming a leader in water technology and urban planning, in dealing with its water and land constraints, and the country's manpower constraints constantly pushing people to "automate, digitalise and be more productive".
"Now, we have a plan to address our carbon and energy constraints," he said, adding that the country is meeting the challenge "head-on", with an ambitious plan to tackle climate change.
READ: Singapore targets to halve peak emissions by 2050, achieve net zero emissions 'as soon as viable' in second half of century
"We are not only securing our coasts, but also transforming our sources of food and water, and remaking our entire economy and city for a green and sustainable future," he said.
This year, Singapore will update its commitment to the Paris Agreement and submit its Long-Term Low Emissions Development Strategy to contribute to efforts to mitigate climate change, he said.
"The Ministry of Trade and Industry and Ministry of Environment and Water Resources will prepare our economy and society for the low-carbon transition by working with various stakeholders and partners to reduce our greenhouse gas emissions, and seize opportunities in the circular economy," he said.