Economic restructuring, wage credit to dominate Budget debate

Two issues look set to dominate the Budget debate that starts today: The restructuring of the economy and the new Wage Credit Scheme to help raise the income of Singaporean workers.

While some Members of Parliament will call for a less hurried pace of restructuring and more help for small businesses, others worry about the effectiveness of the Wage Credit Scheme.

Mr Ong Teng Koon (Sembawang GRC) is convinced the emphasis on productivity for restructuring is the only way to maintain high-quality and sustainable growth. "The question is: Are we doing it too fast or too slow?"

Mr Ong is among 60 MPs expected to speak during the three-day debate.

Another subject on many MPs' minds is the risk of slipping into welfarism should the Government go too far in expanding its social spending programmes.

These include an additional one-off GST Voucher to help the low and middle income with the higher cost of living, and the raising of the Workfare income ceiling to include more people.

The MPs are concerned that Singaporeans will become too dependent on government support.

This will make for a softer population, said Mr Edwin Tong (Moulmein-Kallang GRC). "We have to be careful not to rely too much on social transfers which are disguised handouts and not pegged to matching effort."

Other major issues MPs will raise include the need for more drastic measures to address people's persistent worry of high prices of HDB flats, and the costs of public transport and health care.

Mr Liang Eng Hwa (Holland-Bukit Timah GRC) will call for a freeze on public transport fares until there is "significant improvements in service level and enhancements".

The Budget, unveiled on Feb 25 by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, sets out the Government's spending plans for the new financial year, starting April 1.

A centrepiece is the $3.6 billion Wage Credit Scheme, where the Government will pay 40 per cent of the pay rise of Singaporean workers for the next three years, up to a maximum gross monthly salary of $4,000. Its aim is to spur companies to raise productivity and, in turn, lift the incomes of Singaporeans while the foreign worker tap is tightened further.

But in the move to be more productive, Ms Irene Ng (Tampines GRC) worries whether Singaporean workers may have to work even longer hours.

"We need to change the mindset that working longer hours means that one is more productive," she said.

Some MPs, including Dr Chia Shi-Lu (Tanjong Pagar GRC), will push for ways to increase the labour force participation rate.

Workers' Party MPs did not respond to queries by press time.

Before the debate, three MPs will raise questions on foreign workers and foreign spouses.

When the debate ends on Thursday, Parliament will vote on the Government's financial policy, and then scrutinise the spending plans of individual ministries.

MPs will file "cuts" - each cut being a call for a reduction in a ministry's budget - and use the opportunity to give their views on the ministry's policies.

chanckr@sph.com.sg