Budget 2024 debate: Restructuring economy, adopting AI and uplifting lower-wage workers among MPs' concerns
PHOTO: The Straits Times file
PUBLISHED ONFebruary 27, 2024 2:15 PMByClaudia TanFor Singapore's economy to grow, there is a need for restructuring, said Deputy Prime Minister Heng Swee Keat in Parliament on Tuesday (Feb 27).
Speaking on the second day of the Budget debate, he shared that it is harder to achieve economic growth in the coming years.
Some factors contributing to this include protectionism and political unrest, as well as Singapore's maturing economy and shrinking labour force.
"To continue growing the economy, we need structural policies to drive productivity-driven growth and take Singapore forward," he said.
In his speech, DPM Heng, who is also Coordinating Minister for Economic Policies, laid out three prongs of restructuring:
- Sustaining efforts to transform Singapore's economy through shared ownership and leadership;
- Shaping and strengthening a strong innovation ecosystem to enable high-value, cutting edge work, and
- Fostering greater connection and collaboration to establish Singapore as a Global-Asia node for technology, innovation and enterprise.
Besides highlighting the need to restructure Singapore's economy, MPs also raised concerns about the impact of artificial intelligence (AI) on Singapore's economy and social compact, and also made suggestions on how to improve measures to uplift lower-wage workers.
AI's impact on Singapore's social compact
In his Budget speech on Feb 16, Finance Minister Lawrence Wong announced that Singapore would invest more than $1 billion into AI development over the next five years.
The money will be channelled into growing the AI talent pool and securing access to advanced chips to support the growing use of AI, said Minister Wong, who noted that AI is key to driving further economic growth.
MP for Sengkang GRC Jamus Lim, said in Parliament on Tuesday that small and medium enterprises (SMEs) in non-tech and non-professional sectors need to adopt AI or risk falling behind.
Lim added that Singapore should aim to create an environment with AI-enabled businesses and AI-savvy workers, which will attract overseas investments.
On the other hand, MP for Holland-Bukit Timah GRC Christopher de Souza spoke about how AI will affect Singapore's social compact.
Noting the potential benefits and dangers that AI can bring, de Souza said: "I believe we must be careful in how we tread this line in encouraging AI innovation and adoption, while continuing to support our people and their livelihoods."
Through the right assurances and infrastructure, every Singaporean must receive help in realising their core and unique human skills, he added.
"We have a sense of judgement, empathy and values that no AI system can foreseeably replace," he said.
de Souza also lauded the government's thoughtful and proactive approach towards AI governance.
"Singapore's approach has never been to take another country's approach and apply it wholesale. We watch global developments closely and tailor them to our needs," he said.
"We should also study how our international counterparts address the impact of AI on jobs, societies and the social compact, and act decisively so that we can maximise the benefits of AI for Singapore."
Uplifting lower-wage workers
In his speech, DPM Wong shared that this year's Budget contains measures to help uplift lower wage workers.
The co-funding levels for the Progressive Wage Credit Scheme (PWCS) will be raised from a maximum of 30 per cent to a maximum of 50 per cent.
The wage ceiling for PWCS will also be raised from $2,500 to $3,000.
Employers usually receive the payout for the respective year by the first quarter of the following year.
"Support for our lower wage workers is crucial," said MP for Holland-Bukit Timah GRC Edward Chia.
"Most of our workers are employed by SMEs, hence support for SMEs is critical to uplift local workers."
He asked the government to consider shortening the period for PWCS reimbursements to aid SMEs with cash flow issues.