SINGAPORE — Cost of living worries featured prominently in Parliament on the first day of the Budget debate on Wednesday (Feb 22) as several Members of Parliament (MPs) raised concerns that an increased Central Provident Fund (CPF) salary ceiling would reduce people's cash in hand for spending on their needs.

Non-Constituency MP Leong Mun Wai also said that the raised CPF salary ceiling would make Singaporean workers less attractive to employers than foreigners, who are not part of the CPF scheme. 

In all, 27 MPs from both sides of the House, including three Nominated MPs and one Non-Constituency MP, debated the Government's Feb 14 Budget over more than seven hours.

The majority of the MPs supported moves made by Deputy Prime Minister Lawrence Wong to expand support measures such as the Assurance Package.

However, they also highlighted other areas where the Government could give better support, especially for Singaporeans in the "sandwich" class who are looking after both their children and older parents at a time of high inflation.

Aside from the cost of living, MPs also made suggestions related to workplace safety, taxing sugar and helping singles find love.

WHY IT MATTERS 

Wednesday was the first day of a three-day debate on the Government's Budget, which Mr Wong, who is also Finance Minister, delivered last week.

During the debate, more than 50 MPs are expected to speak on issues that matter most to them and their constituencies.

Several political office-holders will also give speeches on the Budget, and the debate will end with a round-up speech by Mr Wong to respond to all the MPs' suggestions.

The first day of the Budget debate gives viewers a glimpse into the issues that will likely dominate the House over the rest of the week.

COST OF LIVING

HIGHER CPF SALARY CEILING

Mr Wong said during his Budget speech that the CPF monthly salary ceiling will be raised progressively to help middle-income Singaporeans save more for retirement, from S$6,000 now to S$8,000 in 2026, to keep up with rising salaries. 

The salary ceiling caps the amount of wages attracting CPF contributions. A higher salary ceiling means a higher amount of contributions both from the employee and employer, among those affected by the change.

In response, MPs said they were concerned that this may put undue pressure on both workers and businesses. 

Mr Liang Eng Hwa, MP for Bukit Panjang, said that the move could put increased cost pressures on businesses making contributions to a worker's CPF.

At the same time, it would reduce the take-home pay of some middle-income households "just when they need the cash to meet the higher cost needs", he added.

Mr Leong from the Progress Singapore Party said that the move may also put Singaporeans at a disadvantage when competing with foreign Employment Pass holders for jobs. These foreign workers are not part of the CPF scheme, which is the national savings plan for retirement for residents.

"The Government should always be mindful that Singaporeans are disadvantaged when competing with Employment Pass holders who are exempted from CPF contributions," Mr Leong said. 

CHANGES TO WORKING MOTHER'S CHILD RELIEF

Mr Wong announced in his Budget speech that working mothers who give birth from the start of 2024 will have a fixed-dollar tax relief, rather than a tax relief pegged to a percentage of their income for children born before that.

For instance, a mother who gives birth to her first child starting next year will be able to claim S$8,000 in tax relief, while a mother who gives birth before that will be able to claim tax relief for 15 per cent of her earned income. 

MPs said that their constituents had expressed "mixed" views on this proposed change, with some saying that it may inadvertently discourage middle-income earning mothers from having children. 

For instance, Ms Hany Soh, MP for Marsiling-Yew Tee Group Representation Constituency (GRC), said that the news may be welcomed by lower-income groups, but for mothers earning more than S$4,500 a month, the change will reduce the amount of tax relief for them. 

"(And) this reduction will become more pronounced as their salaries increase progressively," Ms Soh said. 

Agreeing, Workers' Party MP Louis Chua of Sengkang GRC said that the Government may consider giving a motherhood tax rebate to working mothers earning below a certain income. 

"Such a move can ensure that a larger proportion of mothers will benefit," he said. 

CONCERNS OVER THE 'SANDWICH' CLASS

The "sandwich" class was also a cause for concern, as these people face pressures from both having to raise young children as well as taking care of ageing parents. 

Jurong GRC MP Xie Yao Quan said that beyond the Edusave account under the Ministry of Education and government top-ups, parents should also get a “child development bonus” in cash, for each child.

He also suggested that the older parents of this “sandwich” group and seniors across the board should have more healthcare subsidies, especially in intermediate and long-term care such as in nursing homes.

SUPPORTING BUSINESSES AND WORKERS

DOUBLING OF PATERNITY LEAVE

MPs said that the doubling of paternity leave from two weeks to four weeks is a welcomed move, but they questioned how much of this leave will be taken up, given that it is purely voluntary on the part of employers. 

They also wondered if the lengthened leave could ever be a norm among fathers. 

Mr Chua from WP asked: "Will would-be fathers be in a position to take their full entitlement of the expanded paternity leave and feel comfortable doing so?"

Ang Mo Kio GRC MP Darryl David suggested that other than just increasing the duration of paternity leave, other schemes such as tax incentives should also be introduced for men to encourage them to have a more active role in childcare. 

WORKPLACE SAFETY

Various MPs made suggestions on how to enhance workplace safety, given that 2022 saw 46 workplace deaths, the highest reported figure since 2016. 

The suggestions included bringing in a better safety framework with more inspections by the Ministry of Manpower (MOM), and more streamlined rules.

Holland-Bukit Timah GRC MP Christopher De Souza said that there should be a more systematic way to inform family members if any incident has occurred. 

OTHER PROPOSALS

Some of the proposals by the MPs ranged from calls for the Government to improve the dating lives of singles to taxing sugar. 

Ang Mo Kio GRC MP Ng Ling Ling said that baby bonuses and housing grants may help boost Singapore's low fertility rates, but perhaps, the Government should "go more upstream" in tackling the issue. 

"I hope that the Government will be open to investing money to help singles expand their social circle, and actively encourage our singles to mingle."

West Coast GRC MP Foo Mee Har, on the other hand, suggested that the Government consider a review on whether to raise gambling and alcohol taxes, while at the same time introducing a sugar tax. 

"Taking the cue from the Government’s recent tax moves, it is right that we continue to make our taxes progressive, as in the case of this year’s increase in stamp duties for higher-end properties and luxury cars," Ms Foo said.

 

CORRECTION: An earlier version of this article quoted comments from MPs Don Wee's and Melvin Yong's prepared texts given to the media ahead of time, though they had not delivered their speeches. The quotes have been removed. We are sorry for the error.