Debate on Annual Budget Statement 2022

MP Sylvia Lim

Ms Sylvia Lim (Aljunied): In the concluding paragraphs of the Budget Statement, the Finance Minister highlighted how various sectors of Singapore society rose to the challenges posed by the COVID-19 pandemic. He applauded the Singapore spirit, as seen from frontline workers to those who set up community care facilities to the footballers and fans at the AFF Suzuki Cup semi-final. He was emphatic that Singapore would always prevail so long as we stood side by side in solidarity with one another. 

There is nothing to disagree with this. That said, two years on into the pandemic, it is appropriate to start evaluating how governments and people across the world responded to the pandemic, not just in terms of the health and economic impacts, but also what lessons or hints can be drawn about a nation’s culture and innovative potential. 

One analysis early on into the pandemic studied how 57 countries around the world responded to the pandemic. This study was published early last year in The Lancet by Prof Michele Gelfand, a cultural psychologist at the University of Maryland, USA and several colleagues. Prof Gelfand divided the countries based on whether they had “tight” or “loose” cultures.

Thus, for instance, countries like China and Singapore were classified as having tight cultures, in that our societies tended to be highly respectful of rules and norms; contrast this with a country like the United States, where people tended to defy them. She observed, unsurprisingly, that loose countries had more difficulties enforcing social distancing measures due to the attitude of the people to rules; this in turn was associated with more COVID-19 deaths and serious illness in loose countries compared to tight countries. 

To be clear, these findings were more about the culture of the people rather than what the state did. For us here, classified as a tight culture, Singaporeans have fared well to comply with rules and guidance; this has contributed to keeping the overall health impacts of COVID in Singapore at a relatively manageable level. 

In talking about Prof Gelfand’s study some months later, CNN anchor Fareed Zakaria went further. He noted that as the COVID-19 pandemic raged on, the development of vaccines shed another dimension on tight and loose cultures. He observed that some of the loosest countries, which fared poorly in managing the pandemic through social distancing measures, were the most innovative and dynamic at developing, procuring and distributing the vaccine. These loose countries included the United States, Britain, Israel and Chile. Mr Zakaria posited that the very traits that made it hard to follow social distancing rules, were the ones that helped generate the solution to the problem. He concluded that these loose countries benefitted from the creativity, risk-taking and rule-breaking that was endemic in their people. Today, it is clear how these solutions have benefited humankind across the globe. 

While Singapore has done relatively well in the pandemic for health outcomes, it would be opportune to do a stock-take of how we did to invent or create solutions for COVID-19. On the one hand, there are some indications of significant breakthroughs. For instance, it was reported that a Singapore team from Duke-NUS had developed a COVID-19 neutralising antibody test kit, which was the first of its kind to get approval from the American Food and Drug Administration. Another example is the COVID-19 PCR test kit developed by DSO National Laboratories, that did not require reagents to process samples. On the other hand, despite some initial hype, the Health Sciences Authority (HSA) has yet to approve for public use any Singapore manufactured vaccine or Antigen Rapid Test kit for home use, arguably two of the most critical resources needed in the pandemic. 

Speaker, a lack of locally manufactured solutions is not just a matter of national pride. We have experienced first-hand how, in a global pandemic, needing to procure supplies from abroad subjects us to market forces and has resulted in supply shortages. 

On a related note, the Budget Statement highlighted that the mRNA vaccine manufacturer, BioNTech, will establish a manufacturing facility here. I also note the recent announcement that work has started on a new vaccine manufacturing facility at Depot Road by Hilleman Laboratories. This facility is part of efforts by the Economic Development Board to strengthen capabilities across the biopharmaceutical manufacturing value chain. These are reassuring developments. 

Nevertheless, we should strive to move up the value chain, to be the owners of such intellectual property. This raises the more general question: what is the state of Singapore’s capacity to innovate? 

According to the Global Innovation Index 2021 published by the World Intellectual Property Office, Singapore ranked overall eighth globally, and has been in the top 10 list for more than a decade. When one drills down further to why Singapore is ranked highly, we see that this is mainly due to its institutions and market and business sophistication. We did not fare so well in the area of Creative Outputs and Knowledge and Technology Outputs. For a high income country, we were ranked especially weak in the areas of Knowledge Creation and the Registration of Trademarks and Industrial Designs. For the 2021 ranking, it is notable that South Korea shot to fifth position and overtook Singapore. The report highlighted that countries like South Korea were particularly active in commercialising and patenting inventions in health-related technologies during the pandemic. South Korea was especially strong in registering patents, trademarks and industrial designs. 

Sir, we should do some introspection on why we seem to be somewhat lagging in the area of Creative Outputs and Knowledge and Technology Outputs. As a high income country, we can contribute more to improve the quality of life for humankind. Do we need to do more to nurture creativity and risk-taking? Are there other inhibitors in Singapore’s ecosystem that need to be addressed?  These need constant review.

Sir, the other point I wish to make today concerns inclusivity of the Budget Statement. Budget 2022 is entitled “Charting Our New Way Forward Together”. If one looks at its coverage, it does indeed provide measures that support a broad church – from business to households and workers. It also imposes increased obligations on the more able to contribute more to the public purse, while accelerating salary increases for many low-wage workers.  

On GST, my Workers’ Party colleagues have explained why we do not think the GST hike is necessary. For my part, I will just make an observation on the household illustrations used in the Budget Statement on the expected impact of the GST increase. 

From paragraphs 286 to 287 of the Budget Statement, and also Annex F-3, there are four household scenarios highlighted. It will be noted that all the households comprise of a wedded couple living in an HDB flat, mostly with children; if the couple is of working age, the husband is always older and always earns more than the wife. There is a further assumption that all household members are Singapore Citizens. 

To be fair, the Ministry may have used them because the scenarios are typical. However, these illustrations may inadvertently alienate Singaporeans whose households do not fit into the traditional structure. They also reinforce the stereotype of the man being the major breadwinner. In addition, these households may experience less severe impacts from the GST increase than other types of households, due to more offsets.

I wonder if the Ministry could, in future, be broader in its illustrations to capture some other types of households. Such other types of households, which are not uncommon, include divorced families, families with a foreign spouse and adult singles living with elderly parents. In addition, from a gender perspective, I feel that there is no need for the illustrations to stipulate the amounts earned by husbands and wives separately. Instead, the indication of the combined household income would suffice. 

By including some other types of households, we can have a fuller picture of the impact of tax changes on different segments of society. More importantly, I believe including them would have an important signalling effect that every household, whatever its composition, is part and parcel of the Singapore compact.

Sir, to conclude, I have spoken today on how the COVID-19 pandemic has tested countries not just in terms of how to contain the virus, but also pointed to the environments which appear to promote the finding of inventive solutions. Singapore would do well if it finds a balance between tightness and looseness. I have also made an observation about the household illustrations used in the Budget, which in my view could be more inclusive.

1 March 2022

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