The core questions in this Budget are: How do we earn a living for ourselves and our country, and how do we take care of each other?
Let us take a look at our Budget position. This year, we have a Budget of about $70 billion. Out of that, $14 billion comes from our net investment income, which means that for every $5 we spend, $1 comes from savings; from the income from our reserves.
The top four revenue streams of our Budget are: net investment income, corporate tax, GST and income tax. This year, the No. 1 income stream out of these four is net investment income.
That was not the position a few years ago. Out of these four, how many of them are really under our control? Net investment income depends on the status of the world economy. Corporate tax and income tax will be similarly cyclical according to the world economy. Is this a sustainable position going forward? I always joke with some friends that our corporate tax rate and income tax rate are not set independently by the Minister for Finance, who has to watch like a hawk what our competitors are doing. Some have commented that we are running a surplus. What if the economy turns soft and we don't realise the full amount that we have budgeted for the net investment income, but instead we need more money to help fellow Singaporeans if the economy turns further south? How much can we afford and how much more do we have? One programme like Workfare costs us $600 million or $700 million. So if the revenue comes down and the needs go up, I am not so confident that the $1.9 billion surplus we have budgeted for will necessarily come true.
Some members in the House say that this Budget is a political Budget, that we spend less this time due to the political cycle.
Then there is a suggestion that we are ignoring the short-term pains of the economy. Is that so? If that were so, why did Finance Minister Heng Swee Keat announce targeted measures to help specific sectors like the offshore and marine sector, or the $700 million we pushed into the construction sector?
If that is so, why do we spend money to increase U-Save rebates to make sure that even though prices may increase on average, we will take care of the lower-income first?
Managing our economy is not like turning the thermostat in an air-conditioned room. The competition across the world is intense. Some countries lose their footing, get into a downward spiral and never recover. Our job is to keep ourselves on a steady path, making sure that we address the short-term pains while establishing the conditions for our long-term success. It is never either or. It is always both.
Next, there is a lot of focus on what this Budget has that is new. But what is ongoing is also important. Every time we make a commitment to spend, it has a long tail, which means that there are future commitments that we need to adhere to, to keep our word to our people. Every time we have a long tail, it eats into what in budgetary terms we call the white space for the future, which means that the more we commit upfront with the long tail, the less degree of flexibility we have in going forward to meet contingencies and to seize opportunities. We must all bear in mind that many things are still ongoing: Workfare, U-Save rebates, the commitment that we have done for SkillsFuture and so forth.
Let me speak on how we earn a living. In NTUC, we have three priorities for this year: jobs, jobs and jobs. Jobs for those people who are displaced today. Jobs for those people who might be displaced tomorrow. Grants and subsidies alone won't create jobs, especially sustainable jobs. Grants and subsidies enable and help, but the crux of the matter are our businesses, access to markets and innovation, how good our workers are to keep pace with the demand for new skills, how good our regulatory environment is to enable new businesses.
And when we look at our Budget, this is what we see. The ministries of Trade and Industry, Manpower and Education and many agencies are all focused on these four basic issues to support our businesses: enable innovation, enable internationalisation, enable SkillsFuture and enable a more progressive regulatory environment for start-up businesses.
What ties these together is our ability to implement our industry transformation maps well because they cover 80 per cent of our sectors. Implementation is key. The labour movement wants to work with our Institutes of Higher Learning (IHLs) and businesses to strengthen the job placement system for everyone. We want to form the national database; we will integrate the back end so that it does not matter which career centre you go to. We're even prepared to work with agencies like LinkedIn to ensure that we do our placements well and do them faster.
But placements are only for today's unemployed. We have to prepare to help tomorrow's unemployed into tomorrow's jobs, to overcome potential structural unemployment. This is why NTUC is raising $200 million on top of what we have in our NTUC education and training fund to work with our IHLs to come up with national modules, stackable modules and just-in-time modules. This will require a national effort. We need to do much better. I have never been entirely satisfied with our speed to market for generating new modules relevant to industry needs.
Protection. Many of the labour MPs spoke about protection for freelancers and contract workers. These are new forms of employment and we need new mental models to help these workers protect their legal rights, financial rights, help them to plan for their retirement and so forth. That is why the Ministry of Manpower is initiating a work group with businesses and the labour movement to study the implications of such long-term structural changes to our employment market. We have to get this right, to make sure that all working people can have peace of mind.
Finally, jobs for tomorrow will require us to work very hard on productivity. I visit one to two companies every week. There's no magic bullet to raise productivity just by macro policy measures. Each and every business has to re-examine its processes together with workers and management to raise productivity. It is a hard slog but we are committed to this. This is where the 23 industry transformation maps come in. They are the amalgamation of the efforts of the Government, businesses and labour movement. We get this right, we move the needle for 80 per cent of the market. If we don't get this right, there will be no productivity gains and no sustainable wage increases for our workers.