SINGAPORE — Prime Minister Lee Hsien Loong will address several key issues that “are on people’s minds” in this year's National Day Rally (NDR) speech, including housing, medical expenditures, and the cost of living. Stay tuned for the latest announcements:

FAIRNESS FOR FUTURE GENERATIONS

Why are HDB leases set at 99 years? The fundamental reason, said Mr Lee, is the need "to be fair to future generations".

He added: "If instead the Government had sold you the flat on freehold - in perpetuity - sooner or later we would run out of land to build new flats for future generations. The owners would pass their flats down to some of their descendants, many generations into the future.

"But those not lucky enough to inherit a property would get nothing. Our society would split into property owners and those who cannot afford a property. That would be most unequal, and socially divisive."

HDB UPGRADING

Every HDB flat can expect to undergo major upgrading twice during its 99-year lease period, with the new Home Improvement Programme 2 (HIP 2) rolled out for ageing units at the 60- to 70-year mark.

At the same time, the HIP scheme — which currently covers flats built up to 1986 — will be extended to blocks constructed up to 1997. This works out to another 230,000 benefitting from the programme, allowing estates like Pasir Ris, Yishun, Tampines and Jurong to qualify for upgrading, Mr Lee announced on Sunday.

MERDEKA GENERATION PACKAGE

Mr Lee has unveiled a new scheme to help those born in the 1950s to better meet their medical expenses - the Merdeka Generation Package. Details will be announced next year.

Though benefits in "Merdeka Generation Package" will not be as large as those for the Pioneer Generation launched in 2014, it will cover similar areas such as outpatient subsidies, MediSave top ups and payouts for long term care.

Mr Lee said: "The Merdeka Generation Package will go some way to relieve their healthcare worries. And more importantly, it will show our appreciation for the Merdeka Generation's contributions."

CHAS EXTENSION

The Government will extend the Community Health Assist Scheme, or Chas, to all Singaporeans with chronic conditions, regardless of income, Mr Lee has announced. "The benefits will continue to be tiered according to income. The Ministry of Health will announce the details later," he added.

Under Chas, lower- to middle-income Singaporeans and pioneers can receive healthcare subsidies from participating general practitioner and dental clinics.

TIES WITH MALAYSIA

Addressing questions over the fate of two major infrastructure projects with Malaysia for the first time, Mr Lee noted that the Kuala Lumpur-Singapore high speed rail and Rapid Transit System (RTS) link to Johor are both governed by legally binding bilateral agreements. 

"These set out clearly the duties of each party, and what happens if either party wants to change or to terminate the agreements," he said. "Both sides have to carry out what has been agreed to, unless we mutually agree to vary the terms."

On the 1962 Water Agreement, however, Mr Lee said it is "sacrosanct" and both countries "must proceed strictly in accordance with its terms".

Malaysia has criticised the agreement for being unfair, and said it could be reviewed - a suggestion which Singapore has repeatedly rejected, pointing out how Putrajaya had lost its rights to review the price of water in 1987. 

Despite the recent disagreements, Mr Lee said Singapore has worked well with Malaysia over the years, and expressed hopes that both countries can continue to take their deep partnership forward.

He added: "Ultimately, the fundamentals of our relationship with Malaysia have not changed. We are closely bound by ties of kinship and history, geography and economy.

"We need to work together to tackle common challenges. And when our interests diverge, we must find constructive ways to resolve our differences.

"If we keep Singapore-Malaysia relations stable and close, we can pursue win-win cooperation and each focus on our own domestic priorities."

GLOBAL UNCERTAINTIES

Turning to concerns about the US-China trade war, Mr Lee said there can be no winners in such a conflict and warned that small and open economies like Singapore will suffer "collateral damage".

More broadly, he noted that the world was at a "turning point", given growing doubts about the relationship between the major powers, and questions about the longevity of the existing international system. "We hope all countries will act with restraint and wisdom, overcome the current challenges, and find a new way to move forward together," said Mr Lee.

FB LIVE: NDR2018; PART 2

PM Lee is delivering his English speech, having spoken earlier in Malay and Mandarin.

HAWKER HERITAGE

Singapore will nominate its hawker culture to be included in the United Nations Educational, Scientific and Cultural Organisation's (Unesco) Representative List of the Intangible Cultural Heritage of Humanity, Mr Lee said.

He added: "Hawker centres are important not just to keep the cost of living low. They are a cultural institution, a unique part of Singapore’s heritage and identity. The Unesco inscription will help to safeguard and promote this unique culture for future generations. It will also let the rest of the world know about our local food and multicultural heritage." 

Backgrounder: A history of Singapore's hawker culture. 

ELECTRICITY TARIFFS

Calling electricity tariffs a "more complicated issue", Mr Lee pointed out that the current tariff - 23.65 cents/kwh - is lower than that a decade ago, when it was 25.07 cents/kwh. "Unfortunately, we all remember vividly when the electricity tariff goes up, but when the tariff comes down, we forget quickly," he added.

In late June, utility provider SP Group announced that electricity tariffs for the next three months will go up by 6.9 per cent on the back of higher cost of natural gas for electricity generation. It was the third consecutive rise.   

In the previous quarter, citing rising cost of producing electricity, SP Group increased tariffs by 2.8 per cent, or 0.59 cents per kWh — on the back of a 6.3 per cent increase in its preceding quarter.

Mr Lee cited two reason the Government could not fix electricity tariffs: "First, we are not an oil producing country. Fixing electricity tariffs will mean costly subsidies. This is not financially sustainable in the long run.

"Second, if we do this, it means that those who consume more electricity will receive more subsidies."

WATER PRICE HIKE

Mr Lee said the Government has tried to keep inflation low and prices stable, but pointed out it was not possible to prevent prices from increasing. Citing the recent water price hike as an example, he said the increase had been put off "as long as we could".

Water prices have gone up by a total of 30 per cent in the last two years, following two rounds of price hikes in July 2017 and July 2018. 

Added Mr Lee: "In the end, we had to do it because the cost of producing clean water has increased significantly over the years. We also need to build more NEWater factories and desalination plants to produce more of our own water in Singapore."

COST OF LIVING

Speaking in Mandarin next, Mr Lee cited four reasons why Singaporeans are feeling cost of living pressures - housing and education costs faced by young families, concerns about healthcare and education expenditures among the "sandwiched generation", lifestyle changes and price increases due to inflation.

He assured: "The major expenditure items which Singaporeans are most concerned about are housing, healthcare and education. The Government looks at these very closely. We will make sure that housing, healthcare and education are affordable, so that Singaporeans do not have to worry about them."

NEW M3 FRAMEWORK

In his speech in Malay, Mr Lee praised the work of three institutions - the Islamic Religious Council of Singapore (Muis), self-help group Mendaki, and Mesra, the People's Association's Malay Activity Executive Committees Council - and announced that they would be pooling resources and coming together to better serve the Malay-Muslim community.

"This new collaboration and unity is a positive development," he added. "As the Malay saying goes 'together like a bunch of betel leaves, united like a bundle of lemongrass."

FB LIVE: NDR 2018; PART 1

BACKGROUND: The NDR is considered to be the most important political speech of the year. Mr Lee will start speaking in Malay at 6.45pm, followed by Mandarin before his English speech at 8.15pm.

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