Day 1 of Budget 2021 debate: 5 key themes

SINGAPORE: Members of Parliament (MPs) and Nominated Members of Parliament (NMPs) on Wednesday (Feb 24) discussed the Budget 2021 initiatives presented by Deputy Prime Minister Heng Swee Keat last week, as well as listed a number of suggestions for consideration.

This comes a week after Mr Heng, who is also Finance Minister, delivered his Budget speech, in which he laid out Singapore’s path of recovery from the COVID-19 pandemic.

Mr Heng had said that as Singapore’s economy reopens, the focus of Budget 2021 will shift “from containment to restructuring”, but there will be targeted support for the hardest-hit sectors as the global battle against COVID-19 is far from over.

READ: Emerging stronger from COVID-19 crisis the focus of Budget 2021

Here are some of the key themes highlighted by various speakers on the first day of the debate:

HELP FOR VULNERABLE WORKERS

MPs pointed out that the measures in this year’s Budget will help to alleviate some issues faced by workers, but noted that two segments of workers could require more help, especially during the current pandemic.

MP Koh Poh Koon (PAP-Tampines) noted that measures outlined in the Budget would ensure that workers have “good jobs and job opportunities”.

At the same time, Dr Koh noted that vulnerable worker groups have been severely impacted by the COVID-19 pandemic, and may also face additional pressures in the new economy.

“Ensuring that those in the lower wage rungs get a fair wage must be a manifestation of a more inclusive society. There will always be a group at the lower end of the wage ladder that we need to continually support,” he said.

“It is something that we will always have to keep working on,” he added.

READ: MPs suggest better pay for essential low-wage workers, unemployment insurance during Budget debate

While there is a need to start at the “right” wage level, there is also a need to ensure wage progression, Dr Koh said.

This can be done by narrowing the wage difference between the 20th percentile and the median income - or 50th percentile - of wage earners, and implementing "vocational" Progressive Wage Models to cover other lower-wage workers in job roles that are distributed across multiple sectors, he added.

MP Henry Kwek (PAP-Kebun Bahru) touched on senior employability in his speech. He noted that senior workers he has spoken to have expressed their concerns over how they fit in Singapore’s future economy, or how they can overcome ageism. 

While the Government has implemented “forward-looking policies” for senior workers such as the Special Employment Credit and the Retirement and Re-employment Act, it is hard to fully remove ageism despite regulations, Mr Kwek pointed out.

“Many companies, especially in the midst of (the) COVID (pandemic), are unwilling to take on the risk of hiring, or even retaining senior workers. These issues will get more serious as we continue to restructure, and as our workforce continues to age,” he said.

To help tackle the issue of ageism, the gig economy could come in handy, Mr Kwek pointed out.

Rather than helping seniors polish their resumes for a full-time job, the Government could consider identifying the “portfolios of skills” they have, explained Mr Kwek. These skills can be applied to part-time or micro-jobs within a variety of industries, he said.

The Government can take the lead in creating a gig economy for the elderly by doing three things, said Mr Kwek. These include: Creating micro-jobs for seniors starting with those in the social services, creating a national digital platform and app, and equipping seniors to do these micro-jobs through SkillsFuture.

READ: Budget 2021: Jobs Support Scheme extended for worst-hit sectors as part of S$11 billion package

RECOGNISING CONTRIBUTIONS OF HEALTHCARE WORKERS

MPs also welcomed the announcement in the Budget that salaries for nurses and other healthcare workers such as support care staff will be enhanced. 

At the same time, they noted that wage increases are not the only way of helping healthcare workers.

READ: Budget 2021: S$5.4 billion boost to SGUnited to support hiring of 200,000 locals

Calling the announcement “long overdue", MP Darryl David (PAP-Ang Mo Kio) said he also hopes that the Government will continue to enhance the career prospects for nurses and healthcare professionals. 

In particular, he noted the difference between “enrolled” and “registered” nurses, and suggested that the Government could consider putting in place a progression ladder for "enrolled" nurses that takes into consideration their job experience.

Mr David also pointed out that the Government should consider enhancing the work environment and conditions for nurses. 

“Singapore has traditionally depended heavily on foreign nurses ... to supplement our pool of local nurses … I believe the reasons as to why Singaporeans are generally unwilling to enter the profession perhaps go beyond just wages alone,” Mr David noted.

“Perhaps they are deterred by the long working hours, the stress from having to deal and manage different patients, their family members and expectations, as well as potential disruptions to family life arising from irregular work shifts.”

In order to enhance the attractiveness of such roles, the Government can consider implementing mandatory leave and paid holidays as additional benefits for local nurses so that they can take a break from being on the frontline and recharge from time to time, Mr David suggested. 

MP Faisal Manap (WP-Aljunied) said he was “heartened” that healthcare workers’ salaries would be enhanced, but stressed the need for adequate remuneration.

“We have been able to attract nurses from other countries to come and work in Singapore. They make up for the shortage of local nurses. However, if remuneration levels are not considered adequate, we face the potential of our nurses being drawn to foreign shores,” he said.

“This will make it even harder for us to handle the ageing population.”

As such, Mr Faisal proposed that the Government consider either pegging the salaries of Singapore’s nurses to a weighted basket of salaries from countries of a similar economic status as Singapore. Another possibility would be to use the salary scales of Singapore’s uniformed services as a benchmark, he added.

TOUCHING ON TAXES

MPs also addressed various forms of taxes, including the Goods and Services Tax (GST).

Mr Heng had said in the Budget that the previously announced hike in the GST would happen between 2022 and 2025, and “sooner rather than later”, depending on the economic outlook.

READ: Budget 2021: GST hike to happen between 2022 and 2025

MP Jessica Tan (PAP-East Coast) noted that Mr Heng had said that foreigners residing in Singapore, tourists, and the top 20 per cent of resident households account for more than 60 per cent of the net GST borne by all households and individuals. 

As such Ms Tan asked whether the amount of projected GST increase would be impacted as a result of the COVID-19 pandemic and the decrease in tourists.

“Will (the GST increase) be sufficient to fund the increase in healthcare spending? And if not, then is the Government considering other forms of tax to fund increasing healthcare spending?” she asked.

“If so, I do hope that it would be calibrated and that we would not be implementing a similar cap as we saw in Budget 2016 on total tax relief.”

MP Foo Mee Har (PAP-West Coast) raised the idea of a wealth tax.

“The trend of getting the wealthy to contribute more is gaining traction globally. In fact, the wealthy themselves are stepping forward to give back in significant ways, with philanthropy featuring as a key agenda in their wealth planning,” she said.

Ms Foo pointed out how from “various reports”, a one-off wealth tax may seem “economically efficient”, when structured as a one-off exceptional response to the pandemic. 

“When you consider that selected entities or individuals may have enjoyed outsized windfalls because of COVID-19, it may not be unreasonable to expect them to do more for the common good,” she said.

“I would like to ask the Government if wealth tax is being contemplated and what the considerations for such a tax would be?”

TRANSPORT AND THE ENVIRONMENT

The push for electric vehicles (EVs) and the raising of petrol duty rates was another topic raised by MPs during the debate. 

Mr Faisal touched on the announcement made by Mr Heng on Feb 16 that petrol duty rates would be raised by 15 cents per litre for premium petrol with immediate effect. It was also announced then that the duty for intermediate petrol would also be raised by 10 cents.

“There is no one who would disagree that we must take urgent action in order to address climate change. And I appreciate that the government intends to help all those affected by the increased duties by offering rebates which are expected to defray the increased costs for a year,” the WP MP said.

READ: Rise in petrol duties ‘ill-timed’ with electric vehicles not yet a viable option, says Pritam Singh

However, he questioned the need for the increase in petrol duties to take immediate effect and echoed the call made by Leader of the Opposition MP Pritam Singh (WP-Aljunied) for the government to consider reviewing the hike.

“Such an approach creates a shock amongst vehicle users, especially for those whose livelihood depends on internal combustion engine vehicles,” he said.

“While it is important to set behavioural norms away from a reliance on fossil fuels, this is not an excuse to inflict unnecessary trauma on an already besieged group. By the time the rebates reach the pockets of the drivers, some of them may have resorted to drastic measures already to keep themselves and their families economically afloat.”

MP Lim Wee Kiak (PAP-Sembawang) also questioned the need for the immediate hike in duties, given that some newly announced measures to further encourage the push towards EVs would only kick in down the road.

“Why are motorists penalised or coerced to move into EVs when we haven’t even got enough infrastructures in place?” asked Mr Lim.

READ: Budget 2020: Additional incentives to encourage use of more environmentally friendly vehicles

Mr Lim, who noted that the effect of higher petrol cost would impact all sectors of the economy, suggested that the Government bring forward the road tax rebates and additional petrol duty rebates.

“Car ownership is an issue close to the hearts of many Singaporeans. And I hope those who are planning for policies on car ownership would think deeper and assess the implications before rolling out,” said Mr Lim.

MANPOWER

MPs also spoke on manpower issues faced by businesses.

Newly appointed NMP Janet Ang noted a slew of initiatives already in place to help businesses, but noted that a key challenge for some is the availability of manpower.

“They cannot find enough Singapore workers to take up the roles, especially when it comes to expertise and in-demand skills they need to recover and grow,” she said.

“In the manufacturing sector, the reduction in S Pass sub-Dependency Ratio Ceiling (DRC) announced in the Budget 2021 is worrisome for many of them, especially when Singaporeans may have expectation mismatches and not aspire to those jobs.”

When it comes to professional, manager, executive (PME) jobs, MP Patrick Tay (PAP-Pioneer) noted that there remains “ground concern”  that the reliance on foreign PMEs has led to an “unnecessary increase” in competition in the job market and employment. 

While the qualifying salaries of both the Employment Pass and S Pass holders were recently raised in 2020, Mr Tay said this needs to be regularly reviewed and raised in line with rising median wages of PMETs.

Among other measures, the Government needs to look at ways to further strengthen the S Pass criteria, and also put in continued stricter enforcement against “errant companies with a weakening Singaporean core”, he said.

He added: “To safeguard the Singaporean core and curb discriminatory hiring, we must ensure that Singaporean PMEs have access to a level playing field for jobs while balancing companies’ manpower needs in the immediate and longer term.”