Speech by Minister Lawrence Wong at the Debate on the President's Address
May 17, 2018 22:00
Mr Speaker, I support the motion of thanks to the President.
The President’s speech laid out the priorities of the government – I will focus my remarks today on how we can build a better city; one that’s more innovative, inclusive and resilient.
We often think of cities as buildings, hardware, and infrastructure. But cities can also be thought of as living organisms. In nature, it is survival of the fittest. Likewise cities must evolve and adapt to survive in an ever changing world. There’s no such thing as status quo – we are either improving or we are declining and going backwards. There are countless examples of cities that once were centres of economic activity, but are no longer relevant today. At the same time, many emerging cities are working hard to leap-frog the competition, and get to the top. So the choice for Singapore is simple – adapt or perish.
We see that from our own history. Over the last 700 years, Singapore’s fortune has waxed and waned. The ancient seaport of Singapura thrived in the late 13th century. It was described in the Malay annals as the first great Malay trading port. But by the 15th century the port had declined and the city had been depopulated. Then the arrival of the British in 1819 set Singapore on a different trajectory – which is why we are commemorating the bicentennial next year. Post-independence, we’ve succeeded against tough odds, and moved from third world to first. So what’s next for our city?
Innovative Global-Asian hub
In answering that question, we have to also reflect on our fundamental purpose. As Mr Gan Thiam Poh said yesterday, Singapore’s raison d’etre has been and will continue to be that of a trading hub serving the region and the world. But in today’s world, it’s not just about trading in goods. It’s also about the flow of people, talent, finance and other services. It’s about being at the centre of action, the centre of research, knowledge-based and innovation activities across Asia and the world. That is why in his Budget speech this year, Minister Heng Swee Keat talked about anchoring Singapore as a Global-Asian node of innovation and enterprise.
We are taking bold and decisive steps to realise this vision. We’re all familiar with the plans for the new Changi T5 and Tuas megaport. These are not just individual projects; they are the catalysts to transform major parts of our island. In the East, we are reviewing how the entire area around the expanded Changi airport can be renewed and put to better use. For example, we can develop new industries especially those related to the aviation sector. These activities can also benefit from linkages with the nearby Changi Business Park and SUTD. Likewise in the West, we are looking at new industry clusters that can be located next to the Tuas port, and leverage on synergies with the port. These will also be connected to broader developments in the West, including the Jurong Innovation District and the Jurong Lake District. In the North, we are stitching together multiple developments, from Woodlands to Sembawang and Seletar, as well as the upcoming Punggol Digital District. So it’s an entire Northern Corridor, which can anchor new businesses and investments.
The point is that we are not just doing more of the same. Each new development will be better than the one before. Each new project will push the boundary and pilot innovative solutions to make our city more attractive and to further enhance our quality of life. This is what we have been doing all the while. Look at what we have done in our HDB towns. Our newest town is Punggol. The blueprint for Punggol was launched in 1996 and then we had to slow down due to the financial crisis. But we improved and upgraded the plan; relaunched it in 2007. Now Punggol is almost complete, and it’s a beautiful waterfront town. The new flats are very popular with young couples.
The next HDB town is Tengah. It’s a “forest town” which we have designed, and the first batch of flats will be sold in November this year. We will improve on what we’ve done in Punggol so that Tengah will be even better with new concepts of urban living, e.g. with smart home solutions, eco-friendly features, and even Autonomous Vehicles to provide shuttle services around the estate. Besides launching Tengah, we’re now already looking at the next new site, and that is Paya Lebar, after the Air Base relocates to Changi. The site is bigger than AMK or Bishan; so there are huge opportunities for further urban innovation, for a better quality of life for Singaporeans.
In the same way we have been constantly developing and improving our city centre. We started by renewing our CBD in the 70s to create more office space. Then we extended the CBD to Marina Bay. We started reclaiming the land in the 70s. We launched the Masterplan for Marina Bay in 1983, and then over the subsequent years and decades worked hard at conceiving and developing the Marina Bay that we have today. Next, we will extend the city further to the Greater Southern Waterfront, after the ports move to Tuas. The space is 3 times the size of Marina Bay. But we want the impact to be much more than 3 times of Marina Bay. This is a completely blank canvas for all of us to dream of exciting, new possibilities for our future, and to make these dreams come true
So when we say we are not done building Singapore, it’s not a slogan. It’s a single-minded commitment and mission to keep building and improving our city. I can confidently say that over the coming years and decades, Singapore will be undergoing its most extensive transformation yet. What is our goal? To make Singapore one of the great cities of the world. A truly outstanding city to live, work and play – the kind that people talk about and return to over and over again. A city where everyone belongs; where we are all proud to call home.
An outstanding city is not just economically vibrant but it also needs to be socially inclusive – a place that embraces diversity, where different groups mix easily, and have equal opportunities to participate. Unfortunately, if you look around us this is not always the case in many cities. Often, the downtown area looks good; but other areas are left to deteriorate, resulting in urban slums. From time to time you will see segregation of neighbourhoods – between rich and poor; between ethnic groups; between young and old.
We’ve worked very hard to avoid these problems in Singapore. Every HDB town has a balanced mix of residents across different ethnic groups and backgrounds. Every town has a mix of public-private developments, as well as different HDB flat types catering to diverse needs. Every town has common spaces where residents of different backgrounds get together, socialise and forge shared memories together. We have neighbourhood shops and hawker centres. We have playgrounds and fields where the children grow up and play. Personally, growing up in Marine Parade, I still have very fond memories of the Dragon Playground downstairs next to my block, where children from all the blocks will come down to play together. All of us may not know one another very well, we were from different backgrounds but it doesn’t matter. We all get together to play. The void-decks used to always be animated with activities. It was a real treat for us to see magic shows. There would be pot-luck where the parents would cook, and we would eat together. This special quality of HDB living, I’m sure all of you can attest it’s still alive and well today.
We’ve done well in the last 50 years, but much more still needs to be done. Our housing and urban plans must continue to push back against the growing pressures of inequality and social stratification. We cannot just leave things to chance, but we must deliberately plan for a more equal and inclusive society. That’s why we have been building more rental flats with newer, better designs, alongside the sold flats in various HDB towns. This means that families grow up in the same neighbourhood, and the residents share the same common areas and facilities. Now we are going one step further to integrate rental and sold units within the same HDB block itself.
We are also doing more to help families in our rental flats. Last year, almost 1,000 households moved out of rental flats to become homeowners. They are supported by significant housing grants as well as new programmes like the Fresh Start Housing Scheme. 1,000 households from rental to homeownership – that’s not bad but we must do even better than that. So MND will be working with MSF, SSO and the VWOs to see how best we can support the families in an integrated manner, to help them solve their issues holistically and get back on their feet.
Besides looking out for rental families, we must also take care of the elderly, especially those living on their own in studio and 2R flexi apartments. We don’t want them to feel isolated and disengaged, as Members have highlighted just now. So we are putting a lot more emphasis in the way we design our HDB flats and estates. This means more shared spaces, like civic plazas and community gardens, for them to stay active. It means more community services and amenities – all under one roof, for convenient access. A good example of what we have done is Kampung Admiralty which was officially opened over the weekend. Kampung Admiralty is just one small “kampung” with just over a hundred units, but we will plan for more “kampungs” in other HDB towns.
Another aspect of inclusive development is to continually renew our buildings and infrastructure. We don’t want a situation where certain parts of Singapore are left to degrade and we end up with deteriorated neighbourhoods or towns, inhabited largely by lower-income or elderly residents. This is not just a government matter. It’s a shared responsibility. It requires the Town Councils to do proper maintenance and upkeeping of the estate. It requires residents to take care of the neighbourhood. But the government has and will continue to do its part. All of you are familiar with the programmes we have put in place for estate renewal. You know them by the acronyms – SERS, ROH, NRP, HIP.
All of these programmes are scoped carefully to ensure they are fiscally sustainable. SERS – Selective En bloc Redevelopment Scheme - as the name implies, is done on a very selective basis. ROH – Remaking our Heartland, which is for town-wide enhancement, have largely completed 6 HDB towns, and consultations are ongoing for 3 towns now. The Neighbourhood Renewal Programme (NRP), which is for neighbourhood facilities, is ongoing for blocks built up to 1995. The HIP, or the Home Improvement Programme, for enhancement or for retrofitting within the unit itself, is being completed for the flats that were built up to 1986. The selection of the flats will be done as soon as possible so we can complete this batch of HIP.
Many of you have asked for extension of these programmes – you would like to know when ROH can be done for your town; or when HIP can be extended to the newer flats. We do want to renew and rejuvenate our HDB towns in an orderly fashion. But as I’ve explained before, upgrading projects are expensive, and span many years. So we are studying this carefully to make sure we have the resources to follow through on any future commitments.
The need to maintain and renew our HDB towns is also linked to the issue of the end of lease. We’ve made very clear from the outset that the HDB lease is 99 years. There’s no doubt about that. 99 years is a long time. It covers two generations. The oldest HDB flat today is around 50 years, and the vast majority have more than 60 years remaining. So this is not an immediate issue. Yet some have already called for automatic lease extensions; or for HDB lease top-ups by private developers.
It will be easy for me to give you a politically expedient answer now and try to wave away the problem. But there are serious trade-offs and ramifications to consider. Take the issue of lease extension. It sounds easy to do, but it’s not a straightforward matter. First, we should not assume everybody wants it. Second, as all of us who run Town Councils know, much more maintenance is needed for older flats. Imagine a flat beyond 99 years, and how much more maintenance is needed and how costly it would be for residents.
More importantly, despite our best efforts at planning, we are still severely constrained by space in Singapore. If there is no more land to recycle for future public housing, then what will happen to our children and grandchildren? How will they have access to subsidised housing in the future?
So this is a complex issue, and I’m glad many members who spoke about this recognise this. Several MPs and Members have offered suggestions including Ms Cheryl Chan and Mr Alex Yam. Mr Leon Perera also spoke about this, and I look forward to the WP’s suggestions on this matter, because he said the WP is studying this matter very seriously, and we look forward to receiving their suggestions as well. In fact, we welcome views on this matter from all parties and all Singaporeans as well. I recognise that it’s a matter that all Singaporeans care about, and we want to listen to your views and feedback. Ultimately, the government must grapple with these difficult questions, study the matter, and do the responsible thing.
Our duty is not just to the current generation who already own homes, but also to the future generations – those not yet voting, those not yet born, those whose lives and future depend on us making the right decisions now on their behalf. At the end of the day, we want to ensure every generation will be able to have an affordable and quality home in Singapore.
We still have time to do this work as I emphasised earlier. But for now, what’s important is that we do not speculate, we do not spread mis-information which can impact on the market, and this is critical. Recently there was some speculation that the government would stop the use of CPF entirely for the purchase of HDB flats. It started from a media report highlighting a suggestion from an academic. He later clarified that the article did not fully reflect his views. Yet the information continued to circulate online and through WhatsApp groups. Just earlier this week, a resident came to me, showed me the phone with a screenshot of the article and said,” Is the government going to stop the use of CPF?” So let me be very clear about this. We are not stopping the use of CPF for HDB flat purchase. Even for older flats, CPF can still be used but under certain conditions to safeguard the retirement adequacy of homebuyers.
There has also been concern about the impact of lease expiry on HDB prices. But there is still value in older HDB flats – value which can be unlocked for retirement. If you look at transaction data over the past year, real transaction data over the past year, an older 4R flat with less than 60 years remaining would sell for around $300k (median price) and a 5R flat would sell for around $400k. These are for non-mature estates. For flats in more popular locations, prices can be significantly higher – more than double the price which I just mentioned earlier. So a 4R with less than 60 years remaining can sell for more than $600k, and a 5R flat can sell for more than $800k. Not pretend data, not theoretical data, but transactional data over the past year. So the transacted price depends not just on length of remaining lease clearly, but also other attributes – factors like location, the storey height, and the condition of the flat, these are all very relevant.
Whatever the price you get from the sale of the flat today, the sales proceeds would be more than sufficient to purchase a smaller flat for retirement, for those who are interested in right-sizing. For example, if you sell a flat now, a 5R, you can purchase a 2R flexi flat from HDB with a 40-year lease for around $100k; or a 3R resale flat for around $250k, depending on location. And people are doing that. I’ll give you an actual example that happened recently. Mr Abdul Aziz Bin Haji Hamdan, who is 67 years old. Originally owned a 3R flat in Marsiling with around 60 years of lease remaining. He decided to right-size to a Studio Apartment in Kampung Admiralty with 30-year lease. He sold his 3R flat for $250,000, and purchased a Studio Apartment for just over $100,000. So he has more than $140,000 left in cash and CPF proceeds, to supplement his retirement savings.
For those who prefer to stay in the same place, there’s also the Lease Buyback Scheme, where you sell part of the remaining lease to HDB; or the option of renting out a bedroom. So the monetisation schemes we have are in place, and they are working; we will continue to review and enhance the schemes, and help our elderly unlock the value of their flats for retirement.
Buying and selling a property can be a complex undertaking, and it’s easy to get carried away by market sentiments. Just not too long ago, there were people speculating in older HDB flats hoping to get SERS benefits and not explicitly saying that they were doing that. Now the reverse has happened, and there are people overly anxious about how much their older flats can fetch in the resale market. So my advice to Singaporeans is this. Don’t buy or sell based on speculative information. Look at the facts. If you are in the market for a home, do your homework carefully, and choose something that fits your needs.
We will make the resale market work better for potential buyers and sellers. In fact, I was just reminded of this in recent MPS. One resident came to me to seek help for more time to sell their flat because they couldn’t get the price that they were looking for. Right after that, another resident came and said, “I need a flat urgently, please give me a direct allocation of a flat from HDB.” I told her, “I can’t do that. You’ve got to ballot, but if you want a flat so urgently, why don’t you go to the resale market?” But she immediately said, “Resale market too expensive.” So on one hand, sellers find it hard to sell, but on the other hand, buyers are saying that prices are still too high.
So we need to find ways to better match the buyers and sellers in the HDB market. We have started with the HDB resale portal, which has simplified and speeded up the resale transaction process. We will continue to do more. We will provide more information on the available flats in the market – be it new flats or resale flats. So that we can help buyers and sellers transact more smoothly. And we can help Singaporeans make more informed housing decisions that best suit their needs.
Besides the public housing market, we are also watching the private housing market. The property market, like any other asset market, will go through ups and downs. The Government can’t control or fix prices. But neither do we take a completely hands-off approach. We recognise that there may be over-borrowing in a very low interest rate environment, and that sharp price changes that run ahead of fundamentals can be destabilising to the broader economy. And so we have put in place various measures over the years. We will continue to monitor the market trends closely and make use of various policy levers to ensure a stable and sustainable property market.
Mr Deputy Speaker sir, Singapore is a nation of homeowners, and so it’s understandable why housing remains a top concern for all our people. My assurance is that the Government will continue to provide affordable and quality homes for all Singaporeans – both now and into the future. We will make sure that in every town, we have a range of housing and amenities for all ages; more shared spaces for all to enjoy; and a place where every Singaporean feels that they belong.
Resilience in our Urban Development
Besides being more innovative and inclusive, we also have to incorporate resilience in our urban development. What will happen to the world in the next 50 years? No one can predict. But we can be sure that there will always be crises and threats, and even black swan events. So we have to build resilience into our city and urban systems.
One big unknown is whether the planet can continue to sustain continued economic activities. If the world does not do enough to tackle climate change, Singapore will be at risk of coastal inundation due to sea level rises.
So we need to start making preparations now to strengthen Singapore’s resilience against climate change. One specific project that we are doing is a polder development in Pulau Tekong. The dike system in the polder is designed to cater for sea-level rise, and the dike can be raised and upgraded more easily compared to traditional reclamation. Concurrently, we are also studying how best to safeguard Singapore’s long-term coastal protection needs. We are undertaking detailed modelling and engineering studies for this purpose. So that we can identify and recommend appropriate protection strategies. They may include use of dikes, pumps or other technologies, but the most important thing is to be prepared. So this is just one example of how we are building resilience into our system, and there are many more things that we will need to do to be a more resilient city.
The urban transformation plans I have shared are significant in scale and require considerable fiscal resources. Mr Pritam Singh said earlier in the debate that the current government has more financial resources than previous generations of PAP leaders. But he forgot to mention that our fiscal commitments and spending are also at their highest ever levels. Singaporeans today are being provided with more services and support than before.
For now, we are just able to meet all of our spending needs with current resources. But without additional revenues, how are we to meet the growing healthcare needs, as well as the many other proposals that various people, including the WP have been asking for? Both Mr Pritam Singh and Mr Leon Perera have reiterated the call to change the rules and the use of the Reserve, so that we can draw more from the Reserve. Mr Leon Perera said that this is not just a technical issue, but a deep philosophical issue. And I agree with him. But the rules were discussed at length, debated in this House thoroughly, so that we can find the right balance between present and future generations, and we enshrine the rules into our Constitution. This was done not too long ago. And what does it say about us and our mindsets and attitudes if the first thing we do is to relax the rules the minute we need the money? Surely that would be ill-disciplined, imprudent and unwise.
This goes back to the issue of responsible governance. Look at the challenges that other first-world democracies face – their politics have become more fractured, chaotic and unpredictable. One common thread across many of these countries is that they are in fiscal difficulties. Why? Because the politicians pander to the electorate; they spend more than they collect in taxes, and run up unfunded obligations and debt.
Ultimately, the ones who suffer are the citizens, especially the most vulnerable. Singapore is in a different position today. Our fiscal position is strong. But if we succumb to temptation, we change the rules, we chip away at our Reserves, we run the very real risks of compromising the long-term health of our nation. That is not the Singaporean way.
The Singaporean way is to look ahead and prepare for the future responsibly. We level with our people, so everyone knows what to expect and what hard choices we need to take. We work to serve the interests of all Singaporeans, not just for one or two electoral cycles, but over the long-term. That’s what we have been doing and will continue to do.
Earlier, I likened the city to a living organism, where we either adapt or perish. Let me use another analogy. In some ways, our next phase of development is like pushing a boulder uphill. It requires constant effort to keep going up. The moment we relax and let go, the boulder starts moving downhill – slowly at first and then at uncontrollable speed and then it would be too late. The higher up the hill, the greater the tendency for the boulder to roll down. And indeed we are now at the higher point in the hill.
So we need all hands on deck to keep pushing the boulder together, and to reach even higher peaks of excellence. That doesn’t mean that you have to agree with every government policy; if you have an alternative idea or proposal, we stand ready to listen and to review our policies. But please don’t disagree just for the sake of doing so. I recall a speech that Mr Rajaratnam once made – it’s easy to win attention by disagreeing with the government. If the government says ‘white’, and you advocate ‘black’, you will be hailed at the next cocktail reception as an original and bold thinker. But in the end, what’s important is that we all come together with the genuine interest to solve the real and vital problems affecting our nation.
The academic I mentioned earlier on the CPF matter, Prof Walter Theseira, when he clarified his remarks on the CPF issue, also wrote on his FB page and I quote: “it’s easy to make fun of policy-makers and it’s also easy to critique policy. Finding workable solutions that promote the public interest is a lot harder but more than ever, we need to work together to help improve policy in Singapore”. I fully agree with him. This endeavour of building our future Singapore cannot be done by the government alone; it must be a collective effort involving all Singaporeans.
For the MND work, there are many areas where we will want to invite Singaporeans to share their views and perspectives – from major projects like the Greater Southern Waterfront and the Rail Corridor, to the design of new HDB towns, and right down to specific improvements that can be made in your estate and neighbourhood.
We want to build a city that reflects the aspirations, the values, and the spirit of our people. That’s the work we have to do together over the next 50 years. Then when we celebrate SG100, we can look forward to a greener, smarter and even more beautiful city, one that all of us are proud to call home.