PM Lee Hsien Loong delivered his National Day Rally speech on 19 August 2018 at the Institute of Technical Education College Central.

National Day Rally 18

PM Lee Hsien Loong delivered his National Day Rally speech on 19 August 2018 at the Institute of Technical Education College Central.

                                BETTER HOME, BRIGHTER TOMORROWS

Good evening again. My fellow Singaporeans. We have had a busy year, both at home and internationally

External Developments

Two months ago, we hosted the first ever meeting between a US President and a DPRK Chairman, Mr Donald Trump and Mr Kim Jong Un. Singapore was just the host; we were not involved in the discussions. Still, we had a big responsibility to ensure that the Summit proceeded smoothly and safely.

Why did the US and the DPRK choose Singapore to host the Summit? I think they considered us a serious and reliable partner. We are friendly and straight with all parties. And both trusted us to have the infrastructure and capability to provide a safe and secure environment. It was a daunting task, but we rose to the challenge

We welcomed our guests with ‘Uniquely Singapore’ touches of warmth and hospitality. You may have seen the Sentosa cannons, barrels decorated with flowers and olive branches. SDC has good staff. We found and assigned Korean-speaking officers to the North Korean delegation. We packed goodie bags for 2,500 international journalists, with thoughtful items like bottled water and a portable fan to beat the heat. We kept the journalists well fed, with meals and snacks from local sponsors. We even had laksa flavoured cookies.

After the Summit, we held appreciation events for the officers who had worked so hard. I attended several of them. Tonight I want to thank the officers and your families once again, personally. You did not just answer the call of duty. You gave your best and more. Many of you worked 24/7. It was Ramadan, and Muslim officers were fasting. Some officers even had to abort leave plans, and cut short family vacations at the last minute. At the Home Team party, I chatted with a Gurkha Contingent officer, who had been on duty outside the St Regis Hotel. He told me how proud he had felt when a woman leaned over the crowd barrier to tell him: “Thank you for keeping Singapore safe.”

I would also like to thank all Singaporeans who made an extra effort to show what Singapore could do. We received postcards from a class of Primary 2 students from Methodist Girls’ Primary School (MGS). The kids had written to thank Singapore for having “lighted the world” by hosting the Summit. They reminded us that “when Singaporeans work together, we can do great things”. I am heartened that even our eight year olds followed the news and knew what we were doing.

Organising the Summit brought us all together, supporting and cheering one another on. We have every reason to feel proud of ourselves. Well done, Team Singapore.

External Environment

We hope that the Summit has helped to defuse tensions on the Korean Peninsula. But Korea is not the only trouble spot in the world. The world situation has become much more uncertain. Openness, globalisation and free trade, have all come under pressure. The US used to promote free trade, and the free movement of people. But now, many Americans are questioning the benefits of this approach. They feel that other countries are taking advantage of them. Thus, the US has made “rebalancing trade” a top priority, rebalancing country by country, rebalancing item by item. It has unilaterally imposed tariffs on imports from other countries – the EU, Canada and Mexico, and especially China. These countries are retaliating, imposing their own tariffs on US exports like soybeans, bourbon, blue jeans and Harley-Davidson motorcycles. They want to inflict maximum pain on Trump’s supporters, who grow or make these things, hoping to force the US to back off.

This tit-for-tat affects business confidence, undermines the multilateral trading system, and threatens global prosperity. There are no winners in a trade war. Small and open economies are especially vulnerable. And Singapore will suffer collateral damage.

Beyond economics, world peace and security, and stability are at risk. The trade frictions have eroded trust, and sharpened tensions and rivalries between countries. The US and Europeans have long been firm friends and allies, but now, they are arguing fiercely over trade and defence spending. China and the US have the most important bilateral relationship in the world. They are interdependent and they also need to work closely together on global issues like climate change. But the Trump Administration has named China as America’s “strategic competitor” and President Xi Jinping has warned that China will punch back and will not “turn the other cheek”.

This is an unprecedented situation. Henry Kissinger recently told the Financial Times: “We are in a very, very grave period for the world”. We cannot be confident that the major powers will continue to work with one another, and that the existing international system which has held the world together for so long will still hold. We do not know whether after a while new rules and norms for international cooperation will form, or whether there will be prolonged tension and suspicion, mutual rivalries and hostile blocs. We are therefore at a turning point. We hope all countries will act with restraint and wisdom, overcome the current challenges, and find a new way to move forward together.

Malaysia

In an uncertain world, ASEAN is all the more important to us. We have to strengthen ASEAN and work on our relationships with all our ASEAN partners, especially our two closest neighbours, Indonesia and Malaysia.

Indonesia will hold elections next year. They have just decided on the Presidential candidates. They will be preoccupied with election campaigning for the next few months.

I have worked well with President Jokowi. We have wide-ranging and mutually beneficial cooperation with Indonesia. I hope this will continue. In October, President Jokowi will be hosting me to our annual Leaders’ Retreat, this time in Bali. We will be discussing ways to do more together.

Malaysia has just had its General Election. For the first time ever, it has changed its governing coalition, from Barisan Nasional to Pakatan Harapan. Malaysia has a new generation of leaders, a combination of young talent and experienced hands. Of course, Prime Minister Mahathir is not new to us. We have worked with him before, the last time he was PM for 22 years until 2003. That is when this picture was taken, which is why I look with more black hair.  We completed several important projects with Malaysia under Dr Mahathir, including the Second Link at Tuas and the Linggiu Dam in Johor. We have worked with some of his coalition partners and Ministers too. Anwar Ibrahim was my counterpart as Dr Mahathir’s Deputy and also Finance Minister. Home Minister   Muhyiddin Yassin was the Johor Menteri Besar when we built the Linggiu Dam.

In May, soon after the Malaysian Election, I visited Dr Mahathir in Putrajaya. I also met   DPM Wan Azizah and Anwar Ibrahim. I had good meetings with all three of them. I told Dr Mahathir that I wanted to work with him to take our bilateral relationship forward. He agreed that we should, because we are each other’s closest neighbours.

Dr Mahathir and his team are determined to review and change many of the policies set by the previous Malaysian Government. I appreciate their reasons. But some of their reviews affect Singapore’s ongoing projects with Malaysia, including the High Speed Rail (HSR) and the Rapid Transit System (RTS) Link to Johor. We entered into these two projects in good faith, after careful negotiations, because they benefitted both countries. Now Malaysia wants to defer the HSR. Khaw Boon Wan has met Azmin Ali, Malaysia’s Economic Affairs Minister, to understand Malaysia’s intentions, and to find a constructive way forward. Both the HSR and the RTS Link have 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. Both sides have to carry out what has been agreed to, unless we mutually agree to vary the terms.

Dr Mahathir has also said that he wants to review our 1962 Water Agreement.  This is not a new issue. It had come up before, when Dr Mahathir was previously PM. You know Singapore’s view – the Water Agreement is sacrosanct. We must proceed strictly in accordance with its terms. To avoid any misunderstanding, Foreign Minister Vivian recently reiterated our position in Parliament. So that is why I am giving one sentence here. The full statement – look it up on the internet.

We have worked well with Malaysia over the years. We have done substantial projects with successive governments and brought tangible benefits to both Singaporeans and Malaysians. I hope that with Dr Mahathir and his new team, we can build on our deep partnership, look ahead, and make further progress together. Ultimately, the fundamentals of our relationship with Malaysia have not changed. We are closely bound by ties of kinship and history, geography and economics. We need to work together to tackle common challenges. When our interests diverge, we must find constructive ways to resolve our differences. If Singapore-Malaysia relations stay stable and close, we can pursue win-win cooperation and each focus on our own domestic priorities. We have many of them. So do the Malaysians.

Domestic Developments

Although our external environment has become more uncertain, Singapore’s economy is still growing steadily. Efforts to transform our economy are making progress. Our businesses, including SMEs, have been improving their productivity and expanding both in and outside Singapore. Our workers, supported by unions and employers, are working hard to upgrade their skills, and to seize new job opportunities. We are on the right track. The economic restructuring will lay a strong basis for our future growth.

Earlier in my Chinese speech, I spoke about cost of living pressures – what causes them, what the Government is doing, and how you can stretch your own dollar. I explained how we are helping people cope with water and electricity bills through U-Save rebates. I described our changing lifestyle, how handphones, infant formula, and eating out, among other things, have impacted families, and what you can do to lessen your burden and what the Government is doing.

Beyond these, three major expenditure items – housing, education, and healthcare – affect our cost of living in a big way, at different points in our lives. When young couples buy an HDB flat, it is your first financial commitment. When you start a family and have children, preschool fees can add up. When you grow older, medical bills can be unpredictable and significant, and can be a burden on your family.

Therefore, housing, education and healthcare are three areas that the Government is very focused on. We will spare no effort to ensure you can afford them. I have often spoken about education at National Day Rallies, and last year I spoke quite a bit about preschool education. This year, I will talk about healthcare and housing, starting with healthcare.

Healthcare

Singaporeans are indeed spending more on healthcare. Partly because we have more advanced treatment options and better equipment, more sophisticated equipment. But a bigger reason is because Singaporeans are living longer, and growing older, which means we are likely to have more episodes of illness and more medical problems to treat.

How have we kept healthcare spending affordable for Singaporeans? We have our 3Ms – MediSave, MediShield and MediFund. At the same time, Government provides heavy subsidies – up to 80 percent in our hospitals, and also for primary and long term care. This framework has worked well for many years. It has produced good healthcare outcomes. It has held national healthcare spending low and also kept healthcare affordable for you.

In recent years, we have made further changes to help you with your medical costs. First, we upgraded MediShield to MediShield Life. A big move to protect Singaporeans from unexpected large medical bills – big ones. The payouts are more generous, and there is no lifetime claim limit. You enjoy lifelong protection, even if you have pre-existing conditions or you were previously uninsured. If you suddenly have to go to the   hospital or undergo a major operation, MediShield Life will help you. Last year alone, close to 200,000 Singaporeans benefitted from MediShield Life, and the payouts amounted to over $800 million.

Second, for outpatient expenses, we introduced the Community Health Assist Scheme (CHAS). At GP clinics, your CHAS card entitles you to generous subsidies, especially for the lower income. Dr Lily Neo, who is a GP, told me that after the CHAS was introduced, she saw more elderly patients. She said that our old folks are very resilient and generally put off seeing the doctor until they cannot tahan anymore. But because of CHAS, they now come to her earlier, which is better and she can treat them before their conditions worsen.

CHAS has worked well. As we grow older, more of us will have chronic conditions, like diabetes or high blood pressure or cholesterol. But we can continue to live a full life if we manage these conditions – by taking good care of ourselves, eating healthily, taking our medications regularly and following up with our family doctor. I think all of us will appreciate a little bit of help with the regular medical bills for such chronic conditions. Today, CHAS covers middle and lower income Singaporeans. We will now extend CHAS to all Singaporeans with chronic conditions, regardless of income. The benefits will continue to be tiered according to income. MOH will announce the details later on.

For those who visit the polyclinic instead of the GP, I have good news too. MOH has been building and upgrading polyclinics and medical centres across the island. For example, in Punggol and Kampung Admiralty amongst others. Punggol Polyclinic opened last November. It focuses on women’s and children’s health, to cater to the young families living nearby. Admiralty Medical Centre is at Kampung Admiralty, where many elderly residents live, and where I recorded my National Day Message. It provides health education, eye checks and fall-risk screening for the elderly, at their doorstep.

I also recently opened the new Ang Mo Kio polyclinic. It is bigger and better, with more and improved services. Here you see, they have a special dentist chair, so you can put a wheelchair patient in and the wheelchair patient does not have to get up and be manoeuvred onto the dentist chair separately. It is a great help for old people. There is a senior care centre offers day care, rehabilitation and home care services, saving elderly and less mobile residents trips to the hospital. My residents, as you can see, are very happy. In fact, AMK Polyclinic has become so popular that the staff told me they are getting “medical tourists”. Not from overseas, but they come from Yishun, and even Bedok and Jurong. All of you are very welcome to Ang Mo Kio. But actually you do not have to worry, because we are building more polyclinics across Singapore – in Sembawang, Eunos, Kallang and Bukit Panjang by 2020 and then a few years later by 2023, in Nee Soon Central and Tampines North. Some of these are to upgrade and improve existing ones. And we will make sure there are affordable, accessible, high quality primary care all over Singapore

Third, we have improved financial support for long term care. We have seen our own parents or grandparents getting old, growing weaker, gradually becoming unable to take care of themselves. They can no longer feed themselves, dress themselves, or move around independently. They struggle to perform these Activities of Daily Living or you call it ADLs. Activities that when you are young, you take for granted. It is a little bit sad, you see it happen. But that is life. One day it will happen to us. So we have the ElderShield scheme. If you cannot do three of these ADLs, ElderShield pays out a monthly sum of $300 or $400, for up to 6 years. MOH has revamped ElderShield fundamentally, and we will soon have CareShield Life. CareShield Life will pay out significantly more – at least $600 a month and it will pay out for as long as you live, not just six years. The scheme will start in 2020. It will cover all Singaporeans born in 1980 and younger. Even people with an existing disability will be covered. The Government will subsidise the premiums for lower- and middle-income families, so that these families can pay their share out of Medisave. If you are older – born before 1980 – you can also to choose to join CareShield Life. It is not compulsory, but you can join and I hope you will do so. Why? Because you will get a generous subsidy to help pay the premiums. The Government will co-pay, so you are getting a good deal. But really because it will give you and your family more peace of mind. It is something which you probably will need. Gan Kim Yong tells me that this is the most difficult of his healthcare schemes to explain to the public. So he commissioned me to do it for him tonight. Young, healthy people cannot imagine themselves being old and disabled. When you are young, sometimes it feels like you will be young forever, but alas it is not so. If you wait until you are older before thinking about disability insurance, by then the premiums will be higher, and you may no longer even be eligible because you may already have conditions and not be insurable.

Singaporeans are living longer, but unfortunately our additional years are not always healthy years.  As many as 1 in 2 of us will, at some point in our lives, no longer be able to perform three ADLs. Just think of the old folks you know, and you will see that this is the reality. This is why I believe CareShield Life can help all of us. It is offered to you. I hope you will take it up.

These are some of the major changes to our healthcare financing over the last few years. We want all Singaporeans to have access to affordable, high quality healthcare. No one should be denied medical care because they cannot afford it and that is my commitment to you.

We have taken special care of elderly Singaporeans. Four years ago, I launched the Pioneer Generation Package (PGP). The PGP was for the group of Singaporeans born in 1949 or earlier, who came of age when the country was in our early years of development. They were a special generation, who sacrificed much to bring up their families. They did not have good educational opportunities. Most started working early, had low-paying jobs, and could not put aside much for old age. They spent most of their working lives in Third World Singapore; only to retire in First World Singapore. Understandably, they were worried about their healthcare needs. We implemented the PGP to recognise the Pioneer Generation for their sacrifices and to support them in their silver years. So far, we have spent more than $1.3 billion of the $8 billion we set aside for the PGP. 450,000 Pioneers have benefitted – and they fully deserve it.

When we introduced the PGP, we knew that Singaporeans a little younger than the Pioneers who would just miss out. We gave those who were born between 1950 and 1959 annual MediSave top-ups – $100 or $200, depending on their circumstances. Nevertheless, a MediSave top up is not quite the same thing as the PGP. We have not forgotten this group. They lived through the tumultuous years of the 1950s and early 1960s. First came the struggle for independence from the British. Domestically, Singapore politics was fiercely fought, over different visions of the colony’s future. In 1959, Singapore gained internal self-government, one big step towards independence. The PAP won the General Election that year, and formed the Government for the first time. Then came the split with the Communists, Merger with Malaysia, and then Separation and unexpected Independence – alone.

For those born in the 1950s, these were indelible, formative experiences that shaped them for life. They were too young to participate in events but most were old enough to sense the electricity in the air, to share the excitement of the changes, to feel the hope of a brighter tomorrow. They saw the posters and banners that festooned the streets, and were stirred by the rallying cry “Merdeka.” One word that meant so much – liberation, freedom, independence. One word that expressed the determination and the passion, the ambitions and aspirations, of a people who were roused and on the move. And seldom were the people more roused than on 3 June 1959, when Mr Lee Kuan Yew, newly elected Prime Minister, addressed a huge rally at the Padang. As he told the crowd from the City Hall steps: “Once in a long while in the history of a people there comes a moment of great change. Tonight is such a moment in our lives… We begin a new chapter in the history of Singapore.” Most memorable was his call to action, captured in this clip. You have seen it. You have heard it. But it is still electrifying.

This group born in the 1950s are the Merdeka Generation. In Chinese, 立国一代, and in Malay, of course, Generasi Merdeka. There are 500,000 of the Merdeka Generation today. I am proud to be one of them.

Having lived through the battles and upheavals of the Merdeka struggle, and seen how their parents have scraped and slogged for them, when the Merdeka Generation grew up, they understood instinctively what was at stake. They accepted hardships, made sacrifices, answered the call of duty, and worked with their leaders to build a better tomorrow. The men were among the earliest batches called up for National Service. They were the first of the SAF – the Army, Navy and Air Force. Many, especially girls, did not complete their education. They came out to work early, to support the family and younger siblings. Some joined the workforce amidst economic uncertainty and high unemployment, as the British Forces withdrew from Singapore. All started working when wages were still low. Together with the Pioneer Generation, the Merdeka Generation contributed to building Singapore, to making Merdeka – Independence – a success.

Compared to the Pioneer Generation, the Merdeka Generation are better off. They were born later, and benefitted from an extra decade of economic growth. They were generally better educated than the Pioneers, especially the younger ones. The Merdeka Generation earned more over their lifetimes, and accumulated more CPF savings, because in the early 80s, wages increased sharply. CPF rates also went up significantly. But of course, the cohorts that came after them did even better. As we improved the education system, year by year, more of the younger cohorts earned diplomas and degrees, and found higher skilled and better paid jobs. People stopped dropping out of school because they needed to work. They could afford school. They could get the education. They could invest in their children for a lifetime, and therefore, they earned more, and saved more

Most of the Merdeka Generation today are in their 60s. They have either left the workforce, or will soon be retiring. Many have similar healthcare concerns as the Pioneers. They are looking at their CPF savings and MediSave accounts, worried about having enough for their medical needs as they grow older. I think we owe something to them.

The Government will work out a “Merdeka Generation Package”. The Merdeka Generation Package will help this group to meet their medical expenses. We will announce the details next year. It will cover similar areas as the PG Package. For example, outpatient subsidies, MediSave top ups, MediShield Life premium subsidies, and payouts for long term care. The benefits will not be as large as for the Pioneer Generation, who had much less advantage in life. But the Merdeka Generation Package will go some way to relieve their healthcare worries. More importantly, it will show our appreciation for the Merdeka Generation and their contributions.

Recap

In summary, we are making big changes to our healthcare financing framework. We have strengthened the 3Ms, and introduced MediShield Life. We will soon enhance CHAS and introduce CareShield Life. We implemented the PG Package. We will set aside a significant sum to implement a Merdeka Generation Package. This is not yet the logo but it is a first approximation, courtesy of my very good team from Nanyang Polytechnic. Our schemes are now more comprehensive and inclusive, and Singaporeans can have more peace of mind that their healthcare needs are well taken care of. By the way, if you look carefully at this, you will find this is a yellow CHAS, which is a different colour from the orange ones and maybe there is a hint down there.

Housing

Apart from healthcare, many Singaporeans are also concerned about housing. But unlike healthcare, housing is not a simple matter of keeping prices down. Because house prices affect different people differently and the same person differently, at different times. When you want to buy a house, you want prices to be low. When you own a house or want to sell it, you want prices to be high. So, it is not possible to please everybody.

Still, Singapore’s housing policies have been uniquely successful. We are the only major city in the world where nearly every young couple getting married can afford to buy their first home immediately. In other major cities, young couples can only hope to rent a flat, and the monthly rent can cost up to 40% of their household income. And in some cities, you do not rent a flat, you rent a space. Or sometimes a tube, because that is all you can afford. Whereas in Singapore, you buy a flat, you pay for most of your flat out of your CPF, and the flat is yours.

Take Yong Kuang and Sabrina for example. They got married recently, and bought a four room BTO flat in Punggol. They paid a nett price of $345,000 for their four room flat, after HDB housing grants. This was less than five times their annual income.  As a rule of thumb, housing costing about five times annual income is what is counted as affordable and in this case, they had it less than five times. Having worked for some years already, they had saved enough in their CPF for the down payment. Now their monthly CPF contributions are enough to pay their instalments. So they have not had to pay any cash out of pocket for their flat, either for the down payment or the instalments.

Yong Kuang and Sabrina’s story is not unusual. 80 per cent of us live in public housing. It is the Singapore norm. It is not just for poor families, like elsewhere, but for a wide range of Singaporeans from all walks of life. Public housing in Singapore is really “national housing”. This did not happen by chance. We made it happen through sound policies, unwavering political resolve, and the strong support of Singaporeans. Our founding fathers started the Home Ownership Scheme in 1964. They wanted every citizen to benefit from the country’s growth and prosperity, and to have a valuable stake that would be theirs that they would defend, if necessary, with their lives. As a result, generations of Singaporeans have been uplifted by home ownership.

Take for example, a first generation resident in Ang Mo Kio. His four room flat would now be about 40 years old, and can fetch more than $400,000 in the resale market. In a good location, probably more. When he bought the flat 40 years ago, how much do you think he paid for it? $25,000. Even accounting for inflation, this is a huge appreciation. This is how we have enabled many Singaporeans to have a substantial asset to your name, even lower income households. In fact, if you take our homeowners who are 90 per cent of the population, and you look at the poorest one-fifth of homeowners, each have on average $200,000 of wealth in his or her HDB flat. $200,000 of wealth. That means you take the value of the flat, you subtract off his mortgage unpaid and he still has $200,000 to his name. This does not happen anywhere else.

Young couples buying a flat today probably would not see such a huge appreciation as the Ang Mo Kio resident who bought the flat 40 years ago, because our economy is maturing and it cannot grow as fast anymore. But you still get a good headstart because the Government helps you out with a subsidised flat or housing grants, and often both. And as long as our economy grows, the value of the flat will go up for many years, just not as dramatically

Why 99 years?

The oldest flats in Ang Mo Kio are about 40 years old. Sometimes residents ask what will happen to their flats as time passes and their leases run down. Will their flats still hold value? What options do they have? Why are their leases for 99 years? Can they be longer? Actually, 99 years is a very long time. Let’s say you buy a new flat from HDB in your early 30s. At the end of 99 years, you will be 130+ years old – and probably would not need this flat anymore. If you have children, they will also be very old, almost as old as the flat itself in their 80s or 90s. And if you have grandchildren, your grandchildren will already be grandparents. So, 99 years is a very long time.

In particular, when you retire, after living in your flat for 30 or 40 years, it will still have a good 60+ years of lease left. That is long enough for it to retain substantial value, and be a good retirement nest egg as you can see with the Ang Mo Kio example I gave you just now. You can continue living in the flat, rent out a room for income if needed, and one day, pass on the flat down to your children. Or you can right-size, sell it and move to a smaller unit. Or you can go for Lease Buyback and return the remaining lease to HDB, then use the money you get back for retirement. I explained how all this works in a previous National Day Rally, 2014. If you look up the clips on the YouTube, you will still find them there. But we can make things better. We can do several things to help residents monetise their older flats. We can expand the Lease Buyback scheme. We can do things to improve the liquidity of the resale market. That means to make it easier for people to buy and sell old flats, and MND is working on this.

What if you had bought a resale flat instead? Well, our oldest flats are at most 52 years old, so you have at least another 47 years left of your lease, which is still a long time. Very few of today’s HDB owners will outlive their leases. HDB estimates that it will happen to less than 2 per cent of households, including those who have bought resale flats. So it is not likely to happen to you. It could happen, but not likely. It could happen to your children if they inherit your flat. But this should not be a problem if your children buy their own BTO flat, with its own 99-year lease, as many do. Because then an inheritance for them would be a gift and a bonus. And even if you have to return your old flat at the end of its lease, do not worry because the Government will help you get another flat to live in. It may be a BTO flat from HDB with a fresh 99-year lease, if you are eligible for another one. It may be a resale flat on a shorter and cheaper lease. Or it may be a 2R Flexi flat for retirement. There are different options, depending on your needs and what you can afford. But whichever option you choose, you will have to pay for the lease. This is only fair, because you bought the original flat knowing when the lease would run out, and knowing that the flat would then have to be returned to HDB.

There is one fundamental reason why HDB leases are for 99 years and that is, we need to be fair to future generations. Let me explain. HDB sells the flat to you for 99 years. You own it, and you can pass it on for one or two generations. After that, the flat returns to the state, the Government redevelops the land, and builds new flats for future generations. This is the only way to recycle the land and ensure that all our descendants can buy new BTO flats of their own. If instead the Government had sold you the flat on freehold, that means 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. Those lucky enough to have a flat, they become flat owner. Those not lucky enough to inherit a property would get nothing. So our society would split into property owners and those who cannot afford a property. I think that would be most unequal, and socially divisive. So, that is why 99 year leases are not just for HDB flats. In fact, for private housing also, the Government only sells land on 99 year leases.

There is also a practical reason why we cannot extend the leases easily. If you look at older buildings today, some look rather worn down, even before they are 50 years old. Some condominiums are like that, private property. After a century, I am sure the mechanical and electrical systems will be obsolete. The concrete will have deteriorated in our tropical climate. And even if we could fix all that, the recurrent maintenance costs would be very high. So it is better to let the leases expire, take the blocks back, demolish them and rebuild afresh. We may keep a few blocks which have historical or heritage value, or sentimental reason, or to remind people what the old days were like, but these should be the exception. For the others, we can rebuild newer, better, more liveable flats, blocks, and townships, more suited to what our grandchildren and great-grandchildren will want to live in. Today if I offer you to live in a 100-year old flat, I do not think there will be many takers because you want the mod cons. You want the lifts. You want the power supply. You want the modern sanitation. You want the convenience. You want the finishes, the styles. You want to be up to date. I think our grandchildren will also want to be up to date. It is better we take back. We rebuild. Singapore progresses while keeping an essence of its history and soul.  That is why when the leases expire, the flats will have to return to the state.

HIP Expansion

There are still many decades before the first HDB leases expire. As the flats grow older, the Government will help you to keep them in good condition. We do this through HDB’s upgrading programmes. We started with the Main Upgrading Programme (MUP) in the 1990s. This one happens to be in my own constituency and you can see each one of these red bars is one lift tower. This is one block, this is one block. It’s a block with seven lift towers at government expense, upgraded MUP and LUP together. Later, we replaced the MUP with the the Home Improvement Programme (HIP). The HIP has been very popular. It is an essential upgrade. We fix up maintenance problems, like spalling concrete, ceiling leaks, and damaged pipes. This is the new toilet after it has been upgraded. We upgrade the electrical supply too. This is a substation. Because more families have air-conditioners, washing machines, computers, and now personal mobility devices (PMDs), needing to be charged.

The HIP scheme is heavily subsidised. The Government pays up to 95 per cent, so residents pay as little as a few hundred dollars for the upgrading. Not surprising that after upgrading, the flat value usually goes up. We launched the HIP 10 years ago. The final batch of HIP flats will be announced by next year. So within a few years, all flats eligible for HIP will have been balloted. Hopefully, passed, executed and upgraded. That means altogether 450,000 flats upgraded under MUP plus HIP.

Now, HIP covers flats built up to 1986. We launched the programme a decade ago. So the flats which missed qualifying for HIP are also now starting to show their age. I know many HDB residents in these younger flats are also hoping for an upgrading. In estates like Yishun, Tampines and Jurong, there are flats built both before and after the 1986 cut-off. So people ask, why next door got HIP, my flat got no HIP. And then there is Pasir Ris, where residents started collecting keys in 1987. So, DPM Teo Chee Hean used to remind the Ministers regularly that Pasir Ris has not had any HIP projects. And I would console him regularly that Pasir Ris flats do not need any HIP yet, they don’t need HIP yet, you are new, very good. But still he said, my residents are waiting anxiously.

Now that the oldest Pasir Ris flats are 30 years old, they are no longer quite so new. Wear and tear is starting to show, so I am very happy to announce that we will expand the HIP and HIP will now include blocks built up to 1997. That means another 230,000 flats will benefit. So Pasir Ris will get HIP, the older flats. And so will Yishun, Tampines, Jurong and a number of other estates.

New HIP II

Beyond HIP, what more can we do as our flats grow older? The expanded HIP will include flats built up to 1997. In other words, the flats will get HIP about 30 years after they were built. After upgrading, these flats should be good for another 30 to 40 years. By that time, the flats will be 60 to 70 years old, and I expect they will be showing their age again. We are determined not to let our public housing degenerate into ragged, squalid slums, which has happened in many other cities. So we should do a second round of upgrading, at about the 60 to 70-year mark. Let us call this HIP II. 60 to 70 years old. HIP II will keep the flats safe and liveable, and also help them retain their value as their leases run down. It should see the flats through to the end of their leases. So in short, every HDB flat can expect to be upgraded twice during their lease. Once when they are about 30 years old, through the MUP or HIP, and a second time through HIP II, when they are about 60-70 years old. The first flats will reach 60-70 years old about 10 years from now. So that is when we plan to launch the HIP II programme. Akan datang.

HIP II is a huge financial commitment for the Government. If you own a private property, you are fully responsible for its upkeep and upgrading. But because HDB is public housing, the Government will upgrade each HDB flat not once, but twice during its lifespan. Furthermore, the Government will help you pay most of the upgrading cost. The first HIP will cost the Government more than $4 billion. HIP II will probably cost even more, because the flats will be twice as old by then. But it is well justified, and we will do it so long as MOF has the money.

SERS

I know what some of you are thinking. HIP and HIP II are fine if I want to stay on in my flat. But what if I want to move out? Can I get SERS – the Selective En bloc Redevelopment Scheme? SERS is a very good scheme for estate rejuvenation. It brings new residents into the estate, often young families, who inject vitality into the community. I have two SERS projects in Teck Ghee, and recently I visited Teck Ghee Parkview. It replaced the BTO blocks which came into the SERS site. The new flats have made a noticeable difference to Teck Ghee – the estate is livelier, more children are running around, more young couples like this one whom I visited. It has cheered up the neighbourhood. Now we have more babies in Teck Ghee, some even able to dance with their mothers. So yes, SERS is indeed one option, if your flat happens to be SERS-ed and selected. But SERS is a very limited scheme. It is meant for selected HDB blocks or precincts, which have high development value which we can unlock. What does that mean? Take Tanglin Halt for example. It is in Queenstown. It is our first HDB township. It was not built optimally. The precincts were not always well laid out. There are low rise flats, the flats have layouts where there are large surface car parks, empty spaces, odd leftover spaces. So if you take it all back and redevelop it completely, Tanglin Halt is being SERS-ed, you can use the space better, you can create denser housing, greener environments. So from something like this, you can go to something like this, 40 years’ change or 50 years change. We are redeveloping Tanglin Halt through SERS, using the space better, and creating denser housing and greener environments. It makes economic sense in such cases for the Government to take back the flats early and redevelop the site. Because there is a lot of value unlocked, we share this value with residents through generous compensation. And with generous compensation, we can make the acquisition compulsory. In other words, HDB decides on SERS, and residents do not get to vote

However, HDB estimates that only around 5% of flats are suitable for SERS. There will be a few more SERS projects to come, but many projects with high redevelopment potential have already been done. Because HDB chose the promising ones and did them first.

VERS

So what about the flats that do not get SERS? Well, HDB has been studying this intensively, and I have good news to share tonight. More households will be able to benefit from redevelopment before their leases expire. Why? Because the Government has good reason to take back more flats, and redevelop them as they grow older, before 99 years are up. Let me explain. When HDB towns grow older, and the leases in the estates are nearing expiry, we have to redevelop the towns. We want to do this in an orderly way. In the early years, because of the housing shortage, HDB often built in a tremendous rush. Several older estates were built within short periods, especially in the 1970s and 1980s.   Marine Parade between 1974-1976 – within three years. Ang Mo Kio and Bedok, after that, 1975-1981 – within six to seven years. This one is Marine Parade. Therefore, if we do not plan ahead, 99 years later, all the leases in such towns will expire around the same time, and all the flats will be returned to the state within a few years. We will have to find new homes for a lot of people at once. HDB will have to tear down and rebuild the old flats in a hurry, just like when we first built Marine Parade, Ang Mo Kio and Bedok. I do not think that is a good idea. The towns will become construction sites all over again, with cranes all over the place. I think we should redevelop our old towns over 20 to 30 years, rather than within four to five years, progressively. That means starting when the oldest flats reach about 70 years old onwards. So some flats, you redevelop when you get to 70 years old, some 75, some and you stretch it out over 20, 30 years and progressively do things in a measured and considered way. Then, just like with SERS, the estate and the community can be renewed progressively. There will be more new and younger residents moving in and the estate will become more vibrant. Those moving out will have somewhere to go to, and those staying will have rejuvenation to look forward to. This is why it makes sense for the Government to take back flats progressively over several decades, starting from about 70 years onwards, and stage out the redevelopment.

We will need a new scheme for this. Of course, we will compensate the residents whose flats are taken back early. We will also help them get another flat to live in, just like we would if their leases had run out. But the terms will be less generous than SERS, because there will less financial upside. There is social merit in it. There is community merit in it but there is not so much financial upside. Therefore, the scheme will be voluntary. I will call it VERS – Voluntary Early Redevelopment Scheme. So if you don’t get SERS-ed, you can hope to be VERS-ed. Residents in the precinct will have to vote for VERS, just like for HIP. If the residents vote yes, we will proceed. The Government will buy back the whole precinct, all the flats and redevelop, and residents can use their proceeds to help pay for another flat. If the residents vote no, then they can continue to live in their flats until their leases run out.

This is a long term plan. We will not start doing VERS for another 20 years. We need time to work out how to select the precincts, how to pace the redevelopments out, the specific terms of the Government’s offer and so on. We also need to study how to afford VERS for the long term. But I think such a scheme is necessary, so we will start planning for VERS now.

Recap

I have covered quite a bit of ground on housing. So let me do a quick recap. There is an examination later. First, we will expand HIP to upgrade 230,000 additional flats built between 1987 and 1997. This will happen when the flats are about 30 years old, and this will start soon. Second, we will do HIP II to upgrade flats a second time. This is a big project. This will happen when the flats reach 60-70 years old. HIP II will start in about 10 years’ time. Third, we will have VERS to progressively redevelop precincts in ageing housing estates. This will happen from about the 70th year onwards. VERS will start 20 years from now.

Rebuilding Singapore

Eleven years ago, at NDR 2007, I showed a CGI fly-through of what we hoped Punggol would look like one day. Some of you may remember watching it. At that time, Punggol 21 Plus was still just a gleam in the eyes of our HDB planners. Recently, Lawrence Wong showed me a new fly-through of Punggol, this time using a drone – real life, not CGI. Let me show you the video. We start from outer space. We fly in. We proposed to create a Punggol Waterway, to build a town on both sides and if you fly along the waterway, this is what we thought it would look like. And 10 years, and a lot of hard work later, you cross the bridge and it becomes reality. This is HDB housing. There are parks. There are green areas. There are schools. This is a commercial development. It is Oasis (Terraces) – the Punggol Polyclinic is there. This is Waterway Cascadia, another HDB development. And back to the future. This is the Punggol Digital District which is adjacent to the SIT campus, Singapore Institute of Technology. Thank you for joining my guided tour.

What my Government envisioned more than 10 years ago, we have made reality. This has been the story of Singapore for more than 50 years. We said this would be a metropolis — and so it came to pass. We will continue to transform our city, our whole island. We will never let Singapore become a shabby shadow of some past glory, but always keep it a vibrant and attractive place to live. We are creating green corridors, expanding Changi Airport, moving PSA to Tuas, and building a new city centre on the Southern Waterfront. We are planning and building new HDB towns. Bidadari is already under construction. Next is Tengah in the west and later,  Caldecott, each with unique concepts. Later, after Paya Lebar Airbase has moved to Changi, we will redevelop the eastern part of the island. And in 30 to 40 years’ time, we will rebuild our existing towns into the future Marine Parade; the future Ang Mo Kio; the future Bedok, and others. Each development will learn from the previous one and be even better. We are designing each town so that the community remains youthful and vibrant, and the facilities serve a wide range of needs and interests, for now and the future, townships for all ages. Just as we turned Punggol 21 Plus from CGI to reality, we will make these other plans come true. Then future PMs can show them off at their NDRs too. HDB will be very busy. They may have to change their name to HRB – the Housing Redevelopment Board. Indeed, we will never be done building Singapore.

Conclusion

Tonight, I have spoken about major shifts in our external environment. I have described our plans to improve healthcare and public housing. These are fundamental commitments by my Government to you. They are ambitious endeavours, and will require large expenditures. These schemes will stretch over 50 years and more. Several generations, and many General Elections. But we are planting the seeds now – conceiving the plans, investing the resources, building the institutions. The benefits will be felt by ourselves, our children and our grandchildren, decades from now – 10 years before we start doing HIP II. 20 years before we start VERS and if you are 30 years old, and get enrolled in CareShield Life, it may be 50 years before you need the payouts, longer if you are lucky.

Very few countries can make such long term plans, and anticipate needs and opportunities into the distant future. But in Singapore, we can, and we will. This Government believes it owes it to you to look ahead, share our thinking with you, pool our ideas, and work with you to make it happen. Our plans will not unfold exactly as we predict, because nobody can tell what will befall us over the next half century. What new technologies will disrupt the world? Will it be a world where countries big and small can work together? Will there be war or peace? But whatever the future brings, we know what Singapore must strive for, to give ourselves the best chances of success. We must have a thriving economy and sound Government finances, to generate the resources to carry out our projects. We must maintain political stability and outstanding leadership, so that we can continue to plan for the future. And most important of all, we must always stay one united people, and work together to build a better Singapore for ourselves.

Building and rebuilding Singapore is not just about satisfying material needs. The human spirit must flourish in Singapore. Recently, the National Geographic magazine published a special issue on Singapore: City of Tomorrow. You can pick up a copy later after the Rally. The issue celebrates ordinary Singaporeans doing extraordinary things, taking the path less travelled, excelling in their own fields.

One of them is Mark Ong, an artist who designs customised sneakers for celebrities and shoe companies under his own brand name SBTG, pronounced “sabotage”. You would never have guessed it, but it works. It all started when he won an online competition in 2003 and overnight had an order for 72 pairs of sneakers. He sold those first pairs for US$300 each, and his earlier works now sell for thousands of dollars. I wish my old sneakers were as valuable. To Mark, this is a dream come true, as he has loved drawing since he was a child, inspired by the art and creativity of his parents. Congratulations Mark.

There are many Singaporeans just like Mark, following their passions, breaking new ground, doing Singapore proud. Let me share with you a few I have come across recently:

This is Dr Azhar Ali, a Senior Research Scientist at the Cancer Science Institute of Singapore. Azhar is leading a team of researchers from Singapore and the US to study lung cancer. The team recently made a breakthrough because they discovered that a slimming drug could help bring lung cancer under control. Syabas Azhar.

These are Darius Cheung and Roshni Mahtani. DPM Teo met them in Jakarta and told me about them. They are husband and wife, both digital entre-preneurs. Each with their own online business – his and hers. Darius co-founded 99.co, a search platform for property that connects agents, buyers and sellers, not just in Singapore but also Indonesia, which by the way has a very lively start up and tech scene and there are many opportunities there. Roshni founded a media company that operates theAsianparent.com, a website popular with many Singaporean parents with young children. Well done Darius and Roshni.

This is Sim Chi Yin. She is an award winning documentary photographer and artist. She was commissioned as the Nobel Peace Prize photographer last year, the first Asian to be chosen, and travels to places like North Korea to pursue her very adventurous projects. She recently joined Magnum Photos, an acclaimed international photographic cooperative. You cannot apply. You have to be invited to join. Chi Yin is not able to be here, but I am happy to have her parents with us tonight.

This is Michael Ker, who gave up his career as a pharmacist to take over his father’s popiah business and carry on his 79-year old family legacy. If you look very carefully these are the popiahs and he also sells kueh pie tee. Michael now travels the world to introduce his popiah and promote Singapore food. All the best Michael.

And, finally, Wong Kah Chun, a conductor and composer. Kah Chun grew up in a Chinese-speaking family. He discovered Western classical music as a young boy at Jurong Primary School. His math teacher was in charge of the school band, and asked him to join it. Through his school band, Kah Chun found his love for music, pursued his music education and won a scholarship to the NUS-Yong Siew Toh Conservatory of Music. After that a National Arts Council (NAC) scholarship to do his Masters’ in Germany. School bands started in 1965. Soon after we became independent, Mr Lee Kuan Yew made school bands a priority. This gave many students from modest backgrounds the opportunity to pick up music. In our first National Day Parade in 1966, many newly formed school bands marched with pride, wearing their new uniforms. This was before Kah Chun was born. Today, aged 32, Kah Chun is the chief conductor of the Nuremberg Symphony Orchestra in Germany – a prestigious appointment. Next year, Kah Chun will be a guest conductor of the New York Philharmonic Orchestra for their Lunar New Year concert. Kah Chun also co-founded Project Infinitude, an initiative to bring music to less privileged and special needs children, in Singapore and elsewhere. He is giving back to society, so that others can discover music just like he did. Here he is with the kids at Child at Street 11, a non-profit organisation that runs a pre-school in Ang Mo Kio. But when Kah Chun comes home to his HDB flat in Jurong West that he grew up in – second floor, still no air con, he gets at night – he says it is still “the best because it is home, and better than any hotel”.

These are just a few of many, many Singaporeans who are pursuing dreams, breaking new ground, and flying our flag high. We rejoice in their successes. They show the world that here in Singapore, passion can indeed be made possible. Our forefathers transformed Singapore from mudflats to a metropolis. Thanks to them, today we are in an immensely stronger position. With what we now have, we can achieve so much more together. 100 years from now, Singapore should stand out not just for its modern skyscrapers and world rankings, but for being a nation of boundless opportunities. A society where every skill and talent is recognised, developed and celebrated and where those who have done well contribute back to society, and help others to do better. As one of the Primary 2 MGS girls puts it: “Singapore may be a small country but we have big hearts”. Let us live up to that ambition. Let us continue to stand tall, chase rainbows, and work together for many brighter tomorrows. Thank you, and good night.