In his address to Parliament during Budget 2025, NCMP Leong Mun Wai acknowledged the short-term financial relief provided but criticized the government’s reliance on ad hoc handouts, arguing that such measures fail to address Singapore’s long-term structural economic challenges. He advocated for permanent policies such as affordable public housing, a national healthcare scheme, a minimum living wage, and stronger family support measures to ensure Singaporeans achieve financial security and resilience without dependence on government assistance.
Mr Speaker Sir,
Even before Budget 2025 was announced, many Singaporeans had expected that the Government would be generous in giving handouts to Singaporeans because this year is an election year. Indeed, about $3.8 billion of Special Transfers will be distributed this year, compared to about $3 billion in both 2023 and 2024.
In recent years, Government handouts have become regular. It has become a national pastime of sorts to monitor the timetable of handouts each month, which is also publicised in the media and in the HDB lift lobbies. Can this really be healthy for our society?
Comments are already circulating on the social media that the new 5Cs of today are cash, CDC vouchers, climate vouchers, CPF top-ups and CHAS cards. I am sure that the first generation PAP leaders would never have allowed this to happen.
While the PAP Government’s vouchers may help many Singaporeans deal with rising costs in the short-term, they are not enough to help Singaporeans in the long-term, or solve Singapore’s structural economic issues.
PSP supports some short-term financial assistance in the Budget to help deal with the high and rising cost of living. However, over the past four Budget debates, we have also argued that instead of giving out short-term ad hoc handouts, we should have long-term permanent schemes to strengthen the social support for Singaporeans.
The schemes proposed by PSP over the years, including a Minimum Living Wage, Affordable Homes Scheme, National Healthcare Scheme with MediShield and CareShield premiums paid by the Government, and Caregivers’ Allowance, will create financial security for Singaporeans, and empower them with the resources to pursue their career aspirations, form families, and build a better life.
On the other hand, is the SG60 Voucher, which will benefit the billionaire living in a Good Class Bungalow and the one-room rental flat resident equally, truly a good and fair use of our fiscal resources?
It is the PAP’s patchwork scheme of handouts and vouchers that will breed dependency among Singaporeans, and not PSP’s proposals.
Budget Marksmanship and Taxes
PSP recognises that it is unrealistic to expect living costs never to increase. But we maintain that the PAP’s current Budget approach, and policies around taxes, reserves, and property prices are the main driver of the high cost of living in Singapore. Long before the Ukraine War and supply chain disruptions, Singaporeans have found it difficult to cope with the rising cost of living. This is a persistent, structural problem caused by the PAP Government.
The Government has collected a lot more revenue from GST, COE, and land sales over the past few years. This will eventually increase the cost of living for Singaporeans.
The Government has collected about $8 billion more revenue each year than its original estimates in 2022, 2023 and 2024. Will it do it again for 2025?
The PAP Government has always claimed that there is tight fiscal headroom But if year after year, surpluses are always bigger than what is estimated, then it really calls into question why the Government decided to inflict so much pain on Singaporeans by raising GST in 2023 and 2024 amid high global inflation.
When I questioned PM Lawrence Wong on budget marksmanship at the debate last year, he said before COVID-19, our fiscal marksmanship was not too bad, and our forecast accuracy was not as good now because of COVID-19. Does the PM expect our budget marksmanship to be better this year, or will we end up having a larger surplus than we anticipated again?
Budget marksmanship is important so that Parliament and Singaporeans have a clear view of the fiscal resources available to us.
During the debate on the Public Finances Motion last year, I explained that the Government transfers a large part of the surplus budget resources arising from the NIRC each year to many endowment and trust funds that are intended for future spending over the long term. This has camouflaged our huge structural surplus budget position.
The same thing has happened this year with about $20 billion parked away. It is also questionable whether so much of today’s resources should be used for certain projects. For example, the Government has parked another $5 billion in the Changi Airport Development Fund, even though over the years, we have already put $6 billion there. We believe such large infrastructural projects should be funded by the Significant Investment Government Loan framework (SINGA) so that we can evaluate the commercial viability of such projects better.
Our country’s fiscal position is extremely strong, much stronger than what the PAP Government would like to portray.
Yesterday, Ms Foo Mee Har claimed that Singapore could face fiscal vulnerabilities like Hong Kong, if we used land sales to fund our expenditure, like what PSP had advocated.
PSP has only proposed that if a piece of land is sold on a 99-year lease, the proceeds should be recognised as revenue spread over 99 years. It is unlikely to create the fiscal vulnerabilities Ms Foo suggested. I would remind Ms Foo that last year, even SM Lee said our proposition was not unthinkable.
Ms Tin Pei Ling suggested yesterday that we should put back into the reserves what was taken out during COVID-19. She may not realise, but the $40 billion that was taken out has been more than recovered, with official foreign reserves increasing by more than $200 billion since 2020, through the issuance of Reserves Management Government Securities.
The Government’s financial position is strong but ordinary Singaporeans’ financial position is weak. An OCBC survey in November 2023 found that fewer Singaporeans are able to comfortably spend on things beyond the basics.
In March 2020, the Government tabled the Resilience Budget, which was aptly named, because there is a need to make Singaporeans more resilient. But after all the CDC Vouchers and short term schemes from the Budgets of the last five years, have Singaporeans become more financially resilient?
Judging from the conversations that PSP has had with many Singaporeans, the answer is no. That is why PSP believes there is an urgent need to reimagine our budget approach and public policies. Our objective is to empower Singaporeans so that they can be financially resilient without relying on ad hoc handouts.
How can we do this?
Reimagination of Budget and policies
We need to better utilise the Net Investment Return Contribution (NIRC) and our budget resources to benefit Singaporeans so that they can become truly resilient.
The NIRC amounts to about $27 billion in 2025. However, as I have explained before, budget resources amounting to about 80% of the NIRC is not spent in the same year but parked in endowment and trust funds. There are more and more of such funds and there needs to be more scrutiny over the use of these funds, as many will not directly benefit Singaporeans in the short-term.
Instead of parking funds in endowment funds and spending on Special Transfers that do not create long-term financial security for Singaporeans, we can fund PSP’s four main policy proposals.
Firstly, we have proposed the removal of land cost from public housing under the Affordable Homes Scheme (AHS) and the construction of quality rental flats for young Singaporeans under the Millennial Apartment Scheme (MAS).
We can implement the AHS without reducing the Reserves unlike what Minister Indranee has repeated claimed, but will empower Singaporeans in the following ways:
Singaporeans of all generations will enjoy affordable public housing.
As AHS flats cost less, Singaporeans will not have to deplete their CPF balances to pay off HDB mortgages. They will have adequate CPF savings for retirement without having to downgrade to smaller flats in retirement.
Yesterday, Mr Henry Kwek suggested that our schemes will “put downward pressure on resale values”. This will not happen because Singaporeans who sell their AHS flats will have to repay the land cost with accrued interest to the Government. This will maintain stability in the resale market and allow Singaporeans to continue upgrading to private property if they choose to do so.
Mr Kwek pointed out that many of his residents see their HDB flat as a key pillar of their retirement planning. I would like to point out that it is the PAP’s inaction on lease decay that threatens resale values and some Singaporeans’ retirement planning.
PSP’s AHS will empower Singaporeans and free them from such concerns.
Our second proposal is to effectively create a National Healthcare Scheme by having the Government pay the MediShield and CareShield premiums for all Singaporeans.
Again, the National Healthcare Scheme will empower Singaporeans the following ways:
- All Singaporeans will be able to enjoy a basic level of benefits when they need hospital treatment or certain outpatient treatments, free of charge, paid for by the State, without having to worry about rising insurance premiums in the future.
- Singaporeans will have more MediSave balances to pay for other healthcare costs not covered by MediShield Life, freeing up their cash for other uses.
Our third proposal is to introduce a gross Minimum Living Wage of $2,250 a month. We also support progressive wage increment up to the median wage of $4,500 more or less in line with the Government’s Progressive Wage Credit Scheme.
These policies will empower lower income Singaporeans with the financial resources to attain a minimum standard of living in our high cost of living environment, more quickly than the Government’s Progressive Wage Model. Singaporean workers will also enjoy further wage increments when they improve their skills.
Our fourth proposal is the PSP Family Plan, which will reimagine our policies to support families.
During the Population White Paper debate in 2013, SM Teo Chee Hean said, and I quote, “I hope our birth rate can increase to at least 1.4 or 1.5, which was our birth rate not so long ago, around the late 1990s and the early 2000s.” unquote.
We are not sure if SM Teo still has these hopes, but PSP certainly does. That is why our PSP Family Plan is a whole of society approach to better support family formation. Our two most important proposals are the Enhanced Job Sharing Scheme and the Caregiving Allowance Scheme. These proposals will benefit all parents, including single parents.
The Enhanced Job Sharing Scheme will empower parents to opt for flexi-time work, which will allow them to remain in the workforce while spending more time to care for the child. At the same time, employers will benefit from retaining their workers with children and employing more workers with Government subsidies.
The Caregiving Allowance Scheme will pay one parent or grandparent an allowance of $1,250 per month if they are full-time caregivers of children below age 7. This will empower families to explore different childcare arrangements and strengthen extended family bonds.
Conclusion
Mr Speaker Sir,
Singaporeans have worked hard to build Singapore from Third World to First in the last 60 years. However, more problems have emerged in the lives and livelihoods of many Singaporeans in the last 20 years.
We do not want a First World Singapore where the next generation has to live in smaller and smaller flats that are also more and more expensive relative to their income.
We do not want a First World Singapore where public transport only seems to get more and more crowded, expensive, and unreliable.
We do not want a First World Singapore where a small group of elites and foreign billionaires coming here to pay lower taxes get to enjoy large Good Class Bungalows, play golf at country clubs, and drive around on congestion-free roads in their Bentleys and Lamborghinis, while the elderly and destitute sell tissue paper at hawker centres.
We want a Singapore where Singaporeans are no longer financially stressed, can form families when they are ready, are free to pursue their careers and starting businesses, are freed from worries about healthcare and retirement costs, and can enjoy a fulfilling retirement life looking after their grandchildren as a choice.
That is the First World Singapore we should aspire to create, this SG60. That is the First World Singapore that PSP will fight for.
We urge Singaporeans to think beyond the short-term, and dream bigger than the PAP Government.
Notwithstanding our reservations, PSP will still support Budget 2025 to provide Singaporeans with the short-term assistance that they need until the long term schemes are in place.
Thank you. For Country, For People.
