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\r\nPARLIAMENTARY DEBATES
\r\nSINGAPORE
\r\nOFFICIAL REPORT
\r\n\r\nELEVENTH PARLIAMENT\r\n
\r\n| PART\r\nII\r\nOF\r\n\r\n SECOND SESSION | \r\n\r\n VOLUME\r\n87 | \r\n
\r\n\r\n
The House met at\r\n12.00 noon
PRESENT:
\r\nColumn: 3422
Mdm Halimah Yacob (Jurong).Column: 3423
\r\n\r\nMr Lee Hsien Loong (Ang Mo Kio), Prime Minister.\r\nColumn: 3424
\r\n\r\nDr Ng Eng Hen (Bishan-Toa Payoh), Minister for Education, Second Minister for Defence and Deputy Leader of the House.Column: 3425
\r\n\r\nMr Viswa Sadasivan (Nominated Member).Column: 3426
\r\n\r\n\t\r\n\tPERMISSION TO MEMBERS TO BE ABSENT\r\n
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\r\n \r\n \r\n \r\n \r\n \r\n\r\n\t\t \r\n
\r\n \r\n
\r\n (2011)
\r\n (2011) Mr Lee Kuan Yew \r\n Mr Yeo Cheow Tong \r\n Mr Sin Boon Ann \r\n Mr Teo Siong Seng \r\n Mr Wee Siew Kim \r\n \r\n \r\n \r\n \r\n\r\n
\r\n\r\n \r\n \r\n ABDULLAH TARMUGI \r\n \r\n \r\n \r\n Speaker \r\n \r\n \r\n\r\n Parliament of Singapore \r\n
\r\n\r\n\r\n\r\n\t\r\n
Order read for consideration in Committee of Supply [Allotted Day].
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[Mr Speaker in the Chair]
\r\n
The Chairman: Supplementary Estimates of Expenditure for the financial year 1st April 2010 to 31st March 2011, contained in Paper Cmd. 2 of 2011.
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As there are no amendments, I propose to take the Heads of Expenditure\r\n\r\n
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\r\n\r\nen bloc. I will first take Heads B, C, D, E, F, G, I, K, P, Q, R, U, V and Z of the Supplementary Main Estimates.\r\n\r\n\r\n\r\n
Question, \"That the sums stated for the Heads of Expenditure as shown on page 7 of Paper Cmd. 2 of 2011 stand part of the Supplementary Main Estimates\", put and agreed to.
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Question, \"That the sum of $2,773,456,820 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Supplementary Main Estimates of Expenditure for the financial year 1st April 2010 to 31st March 2011, contained in Paper Cmd. 2 of 2011\", put and agreed to.
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Resolution to be reported.
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Question, \"That the sums stated for Heads B, L and Q as shown on page 9 of Paper Cmd. 2 of 2011 stand part of the Supplementary Development Estimates\", put and agreed to.
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Question, \"That the sum of $280,807,100 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Supplementary Development Estimates of Expenditure for the financial year 1st April 2010 to 31st March 2011\", put and agreed to.
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Resolution to be reported.
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Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.
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The Minister for Finance (Mr Tharman Shanmugaratnam): Mr Speaker, Sir, I beg to report that the Committee of Supply has come to certain resolutions.
\r\n
\r\n First Resolution reported –
\"That the sum of $2,773,456,820 shall be supplied to the Government under the Heads of Expenditure for the public services shown in \r\n\r\n
Column: 3428
\r\n\r\nthe Supplementary Main Estimates of Expenditure for the financial year 1st April 2010 to 31st March 2011 contained in Paper Cmd. 2 of 2011\".\r\n\r\n\r\n\r\n
Second Resolution reported –
\r\n\r\n\r\n\r\n
\"That the sum of $280,807,100 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Supplementary Development Estimates of Expenditure for the financial year 1st April 2010 to 31st March 2011 contained in Paper Cmd. 2 of 2011\".
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Mr Tharman Shanmugaratnam: Mr Speaker, Sir, I beg to move, \"That Parliament doth agree with the Committee on the said resolutions.\"
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Question put, and agreed to.
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Resolutions accordingly agreed to.
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[Mr Speaker in the Chair]
\r\n\r\n\r\n\r\n
ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 2011
\r\n\r\nTO 31ST MARCH, 2012
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(Paper Cmd. 1 of 2011)
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Order read for consideration in Committee of Supply [2nd Allotted Day].
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[Mr Speaker in the Chair]
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Head N – Ministry of Foreign Affairs
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ASEAN
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Mr Michael Palmer (Pasir Ris-Punggol): Sir, I beg to move, \r\n\r\n
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That the total sum to be allocated for Head N of the Estimates be reduced by $100.
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The ASEAN Charter came into force on 15th December 2008. According to the ASEAN website, the Charter is meant to serve \"… as a firm foundation in \r\n\r\n
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\r\n\r\nachieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance.\"\r\n\r\n\r\n\r\n
Recently, however, certain member countries of the ASEAN have been in the news for the wrong reasons. As a result of a dispute between Thailand and Cambodia over the ancient Preah Vihear temple, gunfire has been exchanged between the troops from both countries. The international community have expressed their disappointment at the fighting that erupted and this has again called into question the effectiveness of ASEAN.
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I believe ASEAN managed to redeem itself with the recent conclusion of a ceasefire agreement reached between Thailand and Cambodia which was obtained as a result of the hard work of other ASEAN member countries. The ceasefire is currently being monitored by Indonesian observers while Thailand and Cambodia attempt to settle the dispute through diplomacy and mediation facilitated by ASEAN member states.
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In other areas, ASEAN continues its engagement with the international community and particularly its partners: China, the United States, India, South Korea, Russia, Australia and New Zealand. Most recently, the East Asia Summit was held after the ASEAN Leaders Meeting with some 16 countries taking part in the Summit. Within ASEAN, the ASEAN Leaders’ Meeting, the ASEAN Defence Ministers’ Meeting and the ASEAN Foreign Ministers’ Meeting continue to keep the channels of engagement open between ASEAN member countries.
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Given this background, may I ask the Minister to comment on the following issues:
\r\n\r\n\r\n\r\n
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\r\n\r\n(i) What developments took place and what progress was made by ASEAN under Vietnam’s chairmanship?
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(ii) What is the state of relations between ASEAN and its dialogue partners such as Japan, China, South Korea, Russia, Australia, New Zealand and the US?
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(iii) How does the Minister see ASEAN developing under the Indonesian chairmanship?
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(iv) How has the East Asian Summit developed and how will these developments impact on ASEAN?; and
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(v) If the Minister could tell us a bit more about the recent dispute between Cambodia and Thailand and ASEAN’s role in getting the parties to agree to a ceasefire?
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Ms Sylvia Lim (Non-Constituency Member): Sir, the tension between Thailand and Cambodia over the Preah Vihear temple flared up once again in February with mutual attacks across the disputed border, resulting in casualties and deaths on both sides. This is the fifth time that Thailand and Cambodia have engaged in low-level military conflicts since October 2008. This conflict has shone the spotlight on ASEAN as a grouping that exists first and foremost to maintain the peace between member states. This dispute is a test for ASEAN's credibility. But what role can it play in such bilateral disputes and what are the limits?\r\n\r\n
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Since its founding, ASEAN has adhered to the twin principles of non-interference in the affairs of member states and a consensus building decision-making approach to guide its members' interaction with each other. How did these principles impinge on the grouping's ability to settle disputes between members since dispute settlement could be viewed as interference? Does the\r\n\r\n
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\r\n\r\nconsensus-based approach effectively give each state veto power?\r\n\r\n\r\n\r\n
On the more general issue of creating an ASEAN community by 2015, it would be instructive for the Minister to provide an update on the progress of the three planks, namely, the political security community, economic community and socio-cultural community. I note, in particular, that the ASEAN's Socio-cultural Community (ASCC) is to achieve solidarity among the ASEAN nations and peoples by forging a common identity and building a caring and sharing society. The ASCC blueprint of 2009 sets out some bold objectives and activities to achieve these goals, including teaching of common values and cultural heritage in school curricular and supporting the learning of ASEAN languages.
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Will the Minister share what progress has been made towards forging a common identity and better understanding among the peoples of ASEAN states? It is also not too clear how ordinary Singaporeans are being engaged in this process.
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Malaysia
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Mr Michael Palmer: The relationship between Singapore and Malaysia has improved considerably since Prime Minister Najib Tun Razak took office.\r\n\r\n
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Following talks between Prime Minister Lee and Prime Minister Najib, the Points of Agreement signed in 1990 were modified and considerable headway has been made on two large issues. They were the railway line and the Customs and Immigration Checkpoints and the Iskandar Malaysia project.
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Agreements appear to have been reached without much difficulty between the two Prime Ministers. Where no agreement could be reached, they have \r\n\r\n
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\r\n\r\nagreed to refer the matter to the International Court.\r\n\r\n\r\n\r\n
May I therefore ask the Minister if he could provide us with an update on the status of our relations with Malaysia?
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What is the progress on the issues concerning the Points of Agreement?
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What is to become of the unresolved issue of the development charge?
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What are our chances that the issue of the development charge will go in our favour?
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What is the status of the Iskandar Malaysia project? What is Singapore’s interest in the project and how are we assisting to make the project a success?
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Indonesia
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Ms Indranee Rajah (Tanjong Pagar): Mr Chairman, Indonesia is our largest neighbour. We have extensive economic and diplomatic relations with them. Over time, our relationship with them has had its ups and downs. I would like to ask the Minister for an update on the current state of our diplomatic relations with Indonesia and for MFA's views on the current political and economic climate in Indonesia. In particular, what steps have both countries taken on a bilateral plane to strengthen the economic and counter-terrorism cooperation? Also, if I may ask the Minister, what is the state of play with regard to the Extradition Treaty, the Defence Cooperation Treaty and the sand ban?\r\n
Myanmar
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Dr Teo Ho Pin (Bukit Panjang): Mr Chairman, Sir, the release of pro-democracy leader Aung San Suu Kyi and the recent National Elections in November 2010 set key milestones in the political development of Myanmar. As a member \r\n\r\n
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\r\n\r\nof ASEAN, Singapore hopes that democracy in Myanmar will result in economic development and improvement of quality of life for the Myanmar people.\r\n\r\n\r\n\r\n
Sir, Singapore has successfully implemented the Singapore Cooperation Programme to provide technical assistance and human resource development to developing countries. To date, the training programmes have benefited many people in developing countries. Human resource development provides a key impetus in building capabilities of a country to progress. Thus, I hope that the Ministry will consider expanding the Singapore Cooperation Programme in Myanmar to further enhance the bilateral relations of Myanmar and Singapore.
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Sir, I wish to ask the Minister the following questions:
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(i) What is the state of relation between Singapore and Myanmar? and
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\r\n (ii) Can Singapore consider providing more technical assistance to Myanmar?
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12.15 pm
Dr Lam Pin Min (Ang Mo Kio): Sir, Myanmar is a country with more than 45 million people of at least 135 different ethnic groups. Its democracy activist and Nobel Peace Laureate, Ms Aung San Suu Kyi's recent release from house arrest has brought much optimism and anticipation that democracy can be expected soon in the military-controlled Southeast Asian nation. I would like to ask the Minister for his assessment of the political situation in Myanmar and the roles ASEAN Member countries can play to expedite to national unity and the implementation of the Roadmap to Democracy outlined by the government of Myanmar.\r\n
US-China relations
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Mrs Josephine Teo (Bishan-Toa Payoh): Sir, Prime Minister Lee Hsien Loong in his \r\n\r\n
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\r\n\r\nJanuary commentary in Bloomberg Business Week said the US-China relation was the most consequential relationship in the world today. He also noted the significant frictions in that relationship, notably over exchange rates. The Prime Minister made three visits to the United States last year. He also made an eight-day working visit to China. Newsweek magazine recently gave Prime Minister the title \"the middleman\", saying that Singapore managed to carve out a role as a friend to all the big powers in the region. I would like to ask the Minister for his views on US-China relations, the implications on Singapore and what opportunities he sees for small states like us to secure our interests in the international arena.\r\n
Singapore-China relations
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Dr Teo Ho Pin: Mr Chairman, Sir, Singapore and China have excellent bilateral relations for 20 years. During this period, both countries have regular high-level visits of our political leaders. The people-to-people exchanges have also increased drastically, thus cementing strong ties between the two countries.\r\n\r\n
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As China continues its strong economic growth, it will provide more opportunities and exert more influence on the surrounding region. Small countries like Singapore will need to establish our niche to stay relevant in a more competitive world. Thus, it is crucial for Singapore to continue to strengthen the strong foundation laid and explore more creative ways to engage China in win-win situations.
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Sir, I recently went on an official trip to China. From the interactions with various Chinese leaders, I can sense that China is very keen to leverage on Singapore's brand name to expedite their economic development. At the same time,\r\n\r\n
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\r\n\r\nI also observed that China has developed many competitive capabilities which may pose serious challenges to non-productive countries. Therefore, it is necessary for Singapore to identify new areas of cooperation with, and add value to the economic expansion of China.\r\n\r\n\r\n\r\n
Sir, I wish to ask the Minister the following questions:
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(i) What is the state of relations between China and Singapore?
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(ii) Will the economic and military growth of China affect diplomatic relations in future? and
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(iii) When are the two pandas coming to Singapore?
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The Chairman: Mr Sin Boon Ann is not here. Mr Michael Palmer.
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Middle East
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Mr Michael Palmer: Sir, the hottest topic in the world news over the last few weeks has been the turmoil and conflict in the Middle East. This began in Tunisia with the desperate act of a young unemployed man on 17th December 2010. Mohamed Bouazizi set fire to himself when officials in his town prevented him from selling vegetables on the streets of Sidi Bouzid without permission. This set off protests about jobs in the town. It had a domino effect which no one could have foreseen. It triggered a much wider series of protests and clashes with the police throughout the country. The protests and problems in Tunisia are far from over. However, the initial protests led to the resignation of President Zine el-Abidine Ben Ali and his government.\r\n\r\n
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Tunisia was only the beginning. What followed was a series of anti-government\r\n\r\n
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\r\n\r\nprotests and clashes throughout many Middle Eastern and African countries. The next government to fall was that of President Hosni Mubarak of Egypt.\r\n\r\n\r\n\r\n
The significance of the protests and ultimate fall of President Mubarak's government is far greater than the events in Tunisia. Egypt is the most populous Arab state and can help determine the thrust of Arab policies – whether towards Israel or Iran or in the perennial quest for Arab consensus on issues that matter. Further, there are concerns among many western governments that the Muslim Brotherhood, the country's fundamental Islamist opposition movement, might exploit the situation to take control.
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As we speak, the latest country to come under the siege of protests is Libya. As many would know, Libya's ruler of some 40 years, Colonel Gaddafi is in denial. He recently said in an interview that his people love him and there are no protests. The reality, however, is that Libya is on the brink of civil war, one in which many lives will be lost at the hands of a ruthless dictator.
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The anti-government protests have led to a spike in the price of oil above the US$100 mark. This will ultimately have a long-term effect on the price of most goods and further aggravate inflation. Closer to home, our direct investments in the Middle East and Africa have also taken a hit.
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In light of this, may I ask the Minister to share his views on the following questions:
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(i) Have recent events that occurred in Egypt leading to the resignation of President Mubarak destabilised relations between Egypt, Israel and the United States?
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(ii) The success of the protests appear to have had a knock-on effect in many \r\n\r\n
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\r\n\r\nother Middle Eastern countries. Libya is a stark example. What are some of the short-term and long-term effects we can envisage arising from these protests? \r\n\r\n\r\n\r\n
(iii) Have these uprisings had an impact on Singapore and, if so, how? and
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(iv) Will the socio-political architecture in the Middle East change in the long term? If so, how will that change affect Singapore and the region?
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Ms Indranee Rajah: Mr Chairman, a young Tunisia vegetable seller set himself ablaze but the whole of the Middle East caught fire. I would like to add on to the questions that the GPC Chairman had asked. I would like to ask the Minister for MFA's assessment of the recent developments in the Middle. In particular, I wish to know whether these developments are likely to have any direct impact on Singapore and the region. If yes, then in what way and to what extent.\r\n
The Senior Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman): Mr Chairman, Sir, the Middle East has been a very interesting region that has attracted economic interest from Singapore over the last couple of years. However, we are often subjected to global forces beyond our control. Of particular concern are the untold events unfolding in the Middle East in the last couple of months. As mentioned by my colleagues, from Tunisia to Egypt to Bahrain, to Libya, now to Yemen. The uncertainty in the region has many implications, particularly on oil prices which in turn will affect us directly.\r\n\r\n
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I would like to ask the Minister for his assessment of the current situation in the Middle East and the extent this impacts Singapore. How will this affect our current strategy of engaging the Middle East? While as a small country, we are not able to do much to influence what is \r\n\r\n
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\r\n\r\nhappening in the region, how can Singapore show support to the international community in managing the crisis in the Middle East? Also, what are the important learning lessons for our young Singaporeans from the unrest that we have seen in the Middle East?\r\n
Consular services for Singaporeans
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Ms Ellen Lee (Sembawang): Mr Chairman, Sir, I would like to touch on the topic of consular services for Singaporeans – how to ensure that Singaporeans know where to find consular services when overseas.\r\n\r\n
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Sir, many more Singaporeans go abroad for holidays nowadays and this is proven by the media reports that visitors spent a record S$90 million at the recent NATAS Travel Fair held in February 2011.
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Singaporeans are venturing all over the globe. They no longer go to popular places like Europe, Asia, China, Bhutan, Africa, North or South America alone but also to other exotic, hard-to-reach and not commonly heard of places, such as the Inca Trail in Peru.
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With the recent spate of natural disasters in Australia and Christchurch in New Zealand and the political turmoil in Egypt and Libya, Singaporeans are exposed to various risks which are no longer over the loss of their passports or wallets, evacuation when illness or death happened or when one is arrested by the local law enforcement agency, amongst others. Yesterday's Straits Times published two letters, one from a grateful father and uncle whose daughter and niece respectively were not contactable after the earthquake struck in Christchurch in New Zealand, and another from an equally appreciative and relieved lady who was evacuated after nine horrifying days in Egypt when the revolution erupted. All three had received\r\n\r\n
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\r\n\r\ninvaluable and timely assistance from the MFA and their consular officers there.\r\n\r\n\r\n\r\n
These are good examples that highlight the importance of keeping in contact with MFA when Singaporeans travel abroad. Besides the MFA hotline and its webpage, has the Ministry intensified its efforts to ensure that all Singaporeans travellers know how to contact MFA's consular offices abroad? Would it be timely now to make it compulsory for all local travel agents to include an advisory on how to access MFA's overseas consular services to all outbound Singaporean travellers?
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Dr Lily Neo (Jalan Besar): Mr Chairman, Sir, this is a much globalised world. There are more Singaporeans working and studying overseas and there are increasing numbers travelling overseas every year. The overseas trips made by Singaporeans are expected to exceed 20 million per year. As mentioned earlier by my parliamentary colleague Ms Ellen Lee, let me draw Members' attention to yesterday's Straits Times, a Singapore family showed their gratitude on MFA's assistance in locating their children when the earthquake struck Christchurch recently. \r\n\r\n
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Does MFA face a greater demand for consular assistance? In view of our limited resources, how are we coping with this increasing demand? Is there a need to review our present facilities and to further strategise for a better coverage by our existing overseas missions? Perhaps, we might expand their range of scope to the neighbouring countries of their missions. Is there a need to further expand our reach to countries where we do not have Singapore embassy by appointing more local foreign representatives?
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How does MFA keep track of Singaporeans overseas? And is there a need to increase the use of Information \r\n\r\n
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\r\n\r\nTechnology to enhance the efficiency of our foreign missions in lieu of our limited resources? For instance, is there a need to provide better information, increased use of IRAS registration of Singaporeans travelling abroad and so on?\r\n
The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Mr Chairman, I thank Members of the House for their questions on foreign relations.\r\n\r\n
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In the last year, we have been able to expand and consolidate Singapore’s external space. Peace in our region, the good relations that we enjoy with our major trading partners and the FTAs that are in place have helped our economy rebound robustly from the global financial crisis.
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It is, however, not a static environment. The world is relentlessly moving towards a messier, multipolar reality. Regional and international institutions are evolving in response to a changing configuration of political, economic and cultural power in the world.
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In a fluid situation, it is crucial to strengthen ASEAN. A strong ASEAN enjoying good relations with all the major powers is at the core of Singapore’s foreign policy.
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Mr Michael Palmer asked about the progress of ASEAN under Vietnam’s chairmanship last year and the prospects under Indonesia’s chairmanship this year.
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The key achievements last year were the adoption of the ASEAN Connectivity Master Plan and the decision to admit the US and Russia into the East Asian Summit (EAS). We also strengthened ASEAN’s engagement with some of our Dialogue Partners by separately convening Summits with Australia, New Zealand, Russia and the UN. In addition, ASEAN Leaders and President Obama met a second time in New York last September.
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\r\nConnectivity covers all aspects, not only air, sea, land and electronic connections, but also trade and investment agreements, harmonisation of procedures and border clearances. We are concerned not only with connectivity within ASEAN but also ASEAN’s connectivity with other countries. To underline the importance of connectivity, ASEAN Foreign Ministers travelled by road last year from Mukdahan in Thailand, crossed the Mekong, through Laos, through some of the most heavily bombed areas during the Indochina War, crossing the Ho Chih Minh Trail, to Central Vietnam for our retreat in Danang. And it was good to see how with peace, local communities are flourishing, villages have become towns, and towns have become cities.
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12.30 pm
In January this year, as part of the celebration of 20 years of dialogue partnership with China, we crossed the Mekong near the Golden Triangle, trundled on fairly good roads over mountainous terrain in Northeast Laos before entering Xishuangbanna in Yunnan. From Jinghong, we caught a flight to Kunming to find Foreign Minister Yang Jiechi warmly welcoming us at the tarmac, standing in the cold. The following day, we reviewed the overall bilateral relations between ASEAN and China which are very good. And next year, we are planning a similar journey from Myanmar to Guwahati in Assam to mark 20 years of dialogue partnership with India. ASEAN Foreign Ministers are doing all this to send a message to ourselves and to others that we fully intend to link up within the region, and between the region to our neighbours.
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The land links between ASEAN and China are improving by the day. Next month, China hopes to start work on the high-speed rail between Kunming and Vientiane. The Thai government has \r\n\r\n
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\r\n\r\nagreed to have this rail extended to Bangkok, and China would like this high-speed rail to go down the Malay Peninsula to Singapore.\r\n\r\n\r\n\r\n
ASEAN’s land links to India are also improving. These land links to India and China will be hugely beneficial to our economic development. What we must make sure is that air, sea and electronic links are also improved so that all countries in ASEAN, including archipelagic ASEAN, benefit from the growth of China, India and other countries farther away.
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The enlargement of the EAS opens a new chapter in ASEAN’s relations with the major powers in Asia. This is a challenge for ASEAN because big power rivalry can pull us apart if we are not careful. For example, while some international attention is helpful for peaceful management of competing territorial claims in the South China Sea, internationalisation of bilateral disputes will be disastrous. ASEAN can only stay in the driver’s seat if it is friendly to all passengers and take into account their interests.
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Mr Michael Palmer and Ms Sylvia Lim asked about the effectiveness of ASEAN in resolving bilateral disputes like the one between Thailand and Cambodia over land near the Preah Vihear Temple, and whether we are on track to achieving the ASEAN Community in 2015.
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Following armed clashes, the most recent a few weeks ago, Cambodia raised the matter to the UN Security Council, without Thailand’s support. The UN Security Council, after discussing it, passed the matter back to ASEAN to resolve, and this became a crucial test for ASEAN, because if ASEAN showed itself to be impotent, then all our grand pronouncements would be laughed at and come to naught. An emergency meeting convened by the Indonesian Foreign Minister, Pak Marty, in Jakarta on 22nd \r\n\r\n
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\r\n\r\nFebruary succeeded in brokering a ceasefire which will be observed on both sides by unarmed Indonesian military personnel within an ASEAN framework. ASEAN can help create an environment more conducive to bilateral negotiations between the two countries, and continuing ASEAN involvement is probably necessary. \r\n\r\n\r\n\r\n
Ms Sylvia Lim asked whether ASEAN’s principle of non-interference in domestic affairs might not make such helpful activities more difficult, and whether every ASEAN country, in fact, has veto power over the ability of ASEAN to make progress in such matters. Well, it is a balance. While we acknowledge the importance of not interfering lightly in each other’s internal affairs, there are times when showing interest in the affairs of a fellow family member is not only necessary, but morally correct. For example, in the ASEAN Charter we have provisions to establish an ASEAN Human Rights Commission, which has been established. Some say it is toothless, and it may be toothless, but it certainly has a tongue, and the tongue has moral force. When we first embarked on this many years ago, there were fundamental objections from some ASEAN countries that we should never have such a Human Rights Commission. But little by little, as we took into account each other’s concerns, we were able to move forward. While ASEAN may work on the principle of consensus, ASEAN also works on the principle of peer pressure, and peer pressure can be very effective. And it is not easy for an ASEAN member country to take a rigid position when all the other nine countries are in opposition. And in Jakarta this time, even though the Thai position was initially against having observers being involved, in the end they relented and allowed Indonesia to send observers to both sides.
\r\n\r\n\r\n
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\r\nAs for achieving the ASEAN Community in 2015, that is on track. 2015 is not the magic date when things happen dramatically, but it is a red line which administratively we draw across all our plans for integration – political, economic and socio-cultural. I share Ms Sylvia Lim’s hope that the importance of ASEAN will be more deeply felt by our citizens, especially the young, and we need a multi-pronged approach including lessons about ASEAN in schools, sports and cultural activities, and greater use of ASEAN symbols. For example, the ASEAN flag will fly side by side with national flags at all diplomatic missions of ASEAN countries overseas from this year, probably from ASEAN Day this year, 8th August, the day before our National Day. Campaigning for ASEAN hosting of the FIFA World Cup in 2030 is a project which we hope will unite us in a common purpose. It is a long shot and we may fail, but just the enthusiasm and working together will bring us together.
\r\n\r\n
\r\n Mr Michael Palmer asked about the state of our relations with Malaysia, in particular, the progress of the Points of Agreement(POA) and cooperation on the development of Iskandar Malaysia.
\r\n\r\n
Our relations with Malaysia saw a breakthrough last year. Through the joint statements of 24th May and 20th September 2010, and the exchange of letters in September 2010, the two Prime Ministers agreed on the implementation of the POA which had been outstanding for almost 20 years. On 1st July this year, KTMB will vacate from the Tanjong Pagar Railway Station and relocate its operations to the Woodlands Train Checkpoint. This is a firm deadline. A schedule of implementation has been drawn up and work on some aspects of the implementation has already started. Several developments along the main railway line including the redevelopment of Silat Estate and the expansion of One \r\n\r\n
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\r\nNorth business park at Buona Vista will begin after 1st July.\r\n\r\n\r\n\r\n
The only outstanding issue in the POA is the development charge issue mentioned by Mr Palmer. Both sides hold different views on whether the development charge is payable on the three original POA parcels in Tanjong Pagar, Kranji and Woodlands. We have agreed to treat this issue separately from the implementation of the POA and refer it to arbitration under the auspices of the Permanent Court of Arbitration. In this way, the development charge issue will not hold up the implementation of the POA. But it is not appropriate for me to comment on our chances because the matter is before arbitration.
\r\n\r\n\r\n\r\n
Other initiatives agreed between both sides in the Joint Statement of 24th May 2010 include the joint development of a rapid transit system link between Johor Bahru and Singapore as well as Singapore's handing over the waterworks under the 1961 Water Agreement to the Johor authorities free of charge and in good working order on 31st August this year. In addition, Khazanah and Temasek will set up a 50-50 joint-venture company to undertake the development of an iconic project in Iskandar Malaysia. Khazanah and Temasek are looking to launch this project in May 2011, and the details of the project are matters to be resolved between them.
\r\n\r\n\r\n\r\n
With the POA settlement, a new chapter opens in our bilateral relationship with Malaysia. We can look forward to more cooperation in different areas bringing economic and other benefits to Malaysians and Singaporeans.
\r\n
Ms Indranee Rajah asked about our relations with Indonesia. Under President Yudhoyono, Indonesia enjoys political stability, steady economic growth and growing global stature. From the\r\n\r\n
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\r\n\r\nbeginning, Indonesia’s leadership has been critical to ASEAN’s development. This year, under Indonesia’s chairmanship, we can expect ASEAN to take a major step forward in the role it plays internationally. As a member of the G20, Indonesia participates actively in the reshaping of the global architecture.\r\n\r\n\r\n\r\n
Singapore’s relations with Indonesia are very good. Although the Indonesian Parliament has yet to ratify the Extradition Treaty and the Defence Cooperation Agreement, which were negotiated as a package and signed by the two governments, both sides have agreed to put this issue aside for now and not let it affect bilateral relations. As for the supply of sand, the ban on exports remains in place. However, like the Extradition Treaty and the Defence Cooperation Agreement, this has not affected our overall bilateral relationship.
\r\n\r\n\r\n\r\n
Last year, Foreign Minister Marty and I exchanged the instruments of ratification for the boundary delimitation agreement on the western part of the Singapore Strait. We have agreed to commence negotiations on the eastern part between Changi and Batam. We also set up several working groups to enhance cooperation in counter-terrorism, cruise tourism, air connectivity, investments and other areas. We are also strengthening our links with Indonesian provinces.
\r\n\r\n
\r\n Dr Teo Ho Pin and Dr Lam Pin Min asked about developments in Myanmar and what Singapore can do to help. Following elections under the new Constitution last year, last November, Myanmar has a Parliament after a 20-year hiatus. The new President, Thein Sein, whom we knew well as Prime Minister before, is in the process of forming his Cabinet. The Army continues to play an important role in the new constitutional arrangement. It was part of the problem, but it has to be part of the solution for the future.
\r\n
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\r\nWe welcome the release of Aung San Suu Kyi who is now free to meet people. We have been in contact with her through our Ambassador in Yangon. We earnestly hope that she will be able to help the people of Myanmar achieve national reconciliation. This requires both hands to clap. Both she and the government have to work together. And I understand that she is in a positive spirit. Over Christmas, I met the actress Michelle Yeoh whom I have known for a long time at a social dinner. She is playing Aung San Suu Kyi in a movie directed by the famous French director Luc Besson which will be released later this year. Michelle Yeoh met Aung San Suu Kyi in Yangon and told me that she was in good spirits.
\r\n\r\n\r\n\r\n
We expect the new government under President Thein Sein to liberalise the economy. In fact, the process has already begun and property prices in Yangon have gone up in anticipation of economic development. On various occasions, we have indicated our willingness to step up our assistance to Myanmar and help build up its administrative capacity through the Singapore Cooperation Programme and the Initiative for ASEAN Integration. I believe other ASEAN countries will do likewise. ASEAN has called for the lifting of economic sanctions by Western countries which, in fact, make reform of the economy more difficult. Over the years, Singapore has trained thousands of Myanmar officials and provided a range of assistance especially in the aftermath of Cyclone Nargis.
\r\n\r\n\r\n\r\n
Mrs Josephine Teo asked for our assessment of US-China relations and the role Singapore can play in this relationship. The US-China relationship is indeed the most important relationship in the world today and it is a relationship which will decide the question of war and peace in Asia, if not the world, for decades to come. Peaceful relations\r\n\r\n
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\r\n\r\nbetween the two powers would help keep the region stable. Deng Xiaoping once said that US-China relations can never be too bad because they share too much in common but they cannot be too good either because there are many areas where there are competing interests. And I think this is the margin within which we can expect the relations between the US and China to evolve in the coming years.\r\n\r\n\r\n\r\n
12.45 pm
\r\n\r\n\r\n\r\n
By all accounts, President Hu Jintao’s recent visit to the US was successful and stabilised relations at a time when bilateral disputes threatened to go into a downward spiral.
\r\n
President Hu and President Obama jointly described the relationship as a \"cooperative partnership based on mutual respect and mutual benefit\". Therefore, we can be cautiously optimistic that this cooperative partnership will continue for a long time and indeed China has repeatedly said it has no wish to be the No. 1 in the world, while the US has repeatedly assured us that it has every intention to stay as No. 1.
\r\n\r\n\r\n\r\n
Human rights will always be an area of contention but it is an area which the Chinese are handling in a more sophisticated way, claiming a reciprocal right to judge the situation in the US as well. The award of the Nobel Peace Prize to Liu Xiaobo has no doubt irritated the Chinese but really has no great consequence as the Peace Prize has become politicised in the eyes of many people in the world.
\r\n\r\n\r\n\r\n
Singapore has an equity interest in good US-China relations and will always weigh in that direction at all regional and international forums. But I am not sure, in my response to Mrs Josephine Teo, whether we can interpose ourselves, because interposing ourselves in between two giants can land us in very tight situations. I think \r\nwhere we can be helpful\r\n\r\n
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\r\n\r\nwe should try to be, and do no harm to that very critical relationship.\r\n\r\n\r\n\r\n
Dr Teo Ho Pin asked about the status of our diplomatic relations with China and how China's growing economic and military strength will affect these relations in the future.
\r\n\r\n\r\n\r\n
Our relations with China are excellent. The official visit by Vice President Xi Jinping in November last year, making Singapore his first overseas visit after being appointed Vice Chairman of the powerful Central Military Commission of the Chinese Communist Party, was an expression of this. Our relations with China have broadened and deepened over the years, and our businessmen are now all over China, finding their own niches. Beyond political, economic and cultural cooperation, our Civil Service and the Central Organisation Department of the Chinese Communist Party also work closely together. The fact that Singapore is the only country negotiating an economic cooperation agreement with Taiwan without the Mainland objecting is also significant.
\r\n\r\n\r\n\r\n
As in previous historical periods, the growth of China's economy will bring prosperity to Southeast Asia. But as in previous periods, China will not be able to establish an exclusive position for itself in Southeast Asia. China is happy to have a friendly ASEAN that is also friendly with other major powers in the world, including the US.
\r\n\r\n\r\n\r\n
Competing territorial claims in the South China Sea are an issue. Such claims should be resolved bilaterally. ASEAN's interest is the freedom of maritime navigation and in seeing that bilateral disputes are resolved peacefully in accordance with international law. In 2002, China and ASEAN agreed on a Declaration of Conduct. Unfortunately, we have not yet been able to agree on the Implementation Guidelines despite many years of discussion and, without these \r\n\r\n
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\r\n\r\nguidelines, we cannot draw up the Code of Conduct. However, we are hopeful that progress will be made this year under Indonesia's Chairmanship.\r\n\r\n\r\n\r\n
As for the two giant pandas, they are scheduled to arrive early next year and will be displayed at the River Safari in the second half of the year. But if they do not produce babies, we will have a diplomatic problem.
\r\n\r\n
\r\n Mr Michael Palmer, Ms Indranee Rajah and Dr Mohamad Maliki raised a number of questions about the ongoing drama in the Middle East.
\r\n\r\n
Let me begin with the evacuation of Singaporeans. During the protests in Egypt, MFA worked with MUIS and our religious student association there, PERKEMAS (Perhimpunan Kebajikan Mahasiswa Singapura Di Mesir), to assist in the departure of 238 Singaporeans, 190 of whom were students in Al Azhar. Ten Singaporeans who were in harm's way in Libya have left Tripoli and we have just received a report of another Singaporean seeking to leave Tripoli, and are working to secure his safe departure. Apparently his Singapore passport has expired. Because of the large number of ASEAN citizens working in the Middle East, and there are millions of them, we have agreed among ourselves to help one another in whatever we can should the need arise. For the recent evacuation from Libya, where we have no Mission, the Malaysian Embassy provided us much assistance, for which I would like here to record our deep gratitude.
\r\n\r\n\r\n\r\n
What we are seeing in the Middle East is history in the making. The downfall of President Ben Ali in Tunisia and President Mubarak in Egypt is not the end of the story by any means. In both countries, the army plays a major role in preventing Islamic extremists from taking over. Reforming institutions and creating new ones will take years. Constitutional \r\n\r\n
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\r\n\r\ndemocracies are not going to be established overnight, if at all.\r\n\r\n\r\n\r\n
In Bahrain, the situation is complicated by the divide between the Sunni ruling class and a largely Shiite population. All the Gulf Cooperation Council (GCC) countries worry that unrest in Bahrain can create a serious rift between Sunnis and Shiites and give an opening to Iran. Bahrain is of course also hosting the Headquarters of the US Fifth Fleet.
\r\n\r\n\r\n\r\n
As for Yemen, it is a divided country with mostly Zaydi Shiites in the north and Sunnis in the south. The Zaydi Shiites are Fivers and they are different from the Jaffari Shiites of the Gulf and Iran, who are Twelvers. The Hadhramaut where most Arabs in Southeast Asia hail from is a distinct region of its own in the south of Yemen. The big fear about Yemen is its degeneration into a failed state that allows international terrorist organisations like Al Qaeda to fester. In fact, Osama Bin Laden's father came from Yemen.
\r\n\r\n\r\n\r\n
Libya is beyond the pale. Ghaddhafi's unleashing of indiscriminate violence against his own people has outraged the world. It is hard to see how he can remain in power for long. What is most worrying is his apparent willingness to bring the whole country down with him. It is right that the UN Security Council has acted against him.
\r\n\r\n\r\n\r\n
It is possible that the unrest will spread to other countries in the Middle East. Since becoming free from Ottoman rule after the First World War, Arab societies have yet to find a clear way to the future and many experiments, like Nasser's socialism, have failed. It is much easier to destroy than to create. Whatever new model thrown up from the present turmoil must be within the framework of Islamic values and take into \r\n\r\n
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\r\n\r\naccount the tribal nature of many Arab societies.\r\n\r\n\r\n\r\n
There are widespread fears by both Muslims and non-Muslims that the Ikhwan Muslimin, the Muslim Brotherhood, will take over in some countries and impose a reactionary form of Sharia, maybe even become a supporter for international terrorism. However, we should avoid alarmist over-simplification. The Muslim Brotherhood itself has developed many tendencies and some are modernist. Turkey, which is not Arabic, offers an interesting model. And, of course, the greatest threat of terrorism is to Muslim society itself.
\r\n\r\n\r\n\r\n
The Middle East Peace Process is bound to be affected. While some Israelis will be confirmed in their view that any peace agreement with Palestinians and Arabs must be guaranteed by ironclad security for Israel, which really means no peace agreement at all, others know that failure to move towards a peace agreement may create an even worse long-term security environment for Israel. For Israel, with which Singapore has strong relations, there are no good options. Not allowing the Palestinian issue from further complicating developments in the Middle East is a major security and foreign policy challenge for the US.
\r\n\r\n\r\n\r\n
Singapore's economic and political links with countries in the Middle East have grown significantly in the last eight years. Bilateral trade last year reached an all-time high of $44 billion, an increase of 17% from the year before. We have to adjust to changes as they take place not as we wish them to be. In some cases, we may have to cut losses; in others, there may be new opportunities.
\r\n\r\n\r\n\r\n
How Egypt moves forward will affect the entire Middle East because of its anchor position. It is good that the Supreme Council of the Egyptian Armed Forces which has taken over power from \r\n\r\n
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\r\n\r\nMubarak has made clear that it will honour the peace agreement with Israel. If Al-Azhar re-opens as planned in a few days' time, our students may be able to return to their studies in Cairo before long. But we do not know how Al-Azhar itself will change as a result of political change in Egypt. For example, the return of Sheikh Al-Qaradawi to Cairo last week where he gave a stirring sermon at Tahrir Square, marked a turning point. Based in Qatar, Sheikh Qaradawi who was imprisoned a number of times by Nasser is one of the most important spiritual leaders in the Sunni world today. \r\n\r\n\r\n\r\n
Our most important economic links are to the GCC countries Although they are not immune to change, it is less likely that the changes in these countries will be disruptive. But we cannot be sure how history will unfold in the longer term. And there are political risks which we have to weigh carefully.
\r\n\r\n\r\n\r\n
In general, Singapore enjoys a good reputation in the Middle East. We are often held up as a model of development by many countries in that region. We cherish the goodwill for us and will work hard to maintain it in a changing environment.
\r\n\r\n\r\n\r\n
Whatever it is, we have to be alive to the upheavals taking place in the Middle East because they are going to affect us one way or another. Already oil prices have shot up. But much more than that, changes in the Middle East can affect the geopolitics of the world, including the evolution of Muslim society in the 21st century.
\r\n\r\n\r\n\r\n
Ms Ellen Lee and Dr Lily Neo asked how MFA can provide better consular services to Singaporeans overseas.
\r\n\r\n\r\n\r\n
Singaporeans are travelling much more than before for work, leisure and education. Over the last 10 years, by air \r\n\r\n
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\r\n\r\nand sea, overseas travel has increased from 4.5 million to 7.3 million, an increase of 60%, not counting land trips to Malaysia which reached almost 24 million last year. As a result, the nature and scope of MFA's consular work has grown both in volume and in complexity.\r\n\r\n\r\n\r\n
We encourage Singaporeans who travel overseas to e-register with us so that MFA can render assistance in an emergency. They can call or email MFA headquarters directly or contact our overseas Missions. We will try to help as best we can although our capabilities are limited. And it is nice from time to time to read the kind of letters that were sent to the Straits Times yesterday. Worldwide, we have 47 embassies and consulates, and an additional 27 consulates run by Honorary Consuls. They are not cheap to set up, so we have got to be careful in the way we establish new consulates. We do not have a presence in many countries and that cannot be helped. It is good that Singaporeans overseas are linking up among themselves, almost in an instinctive way.
\r\n\r\n\r\n\r\n
Sir, these are interesting times. As we move towards General Elections, it is right and natural that we are preoccupied with domestic issues. However, what we do in Singapore must take into account the profound changes taking place around us, in the region and the world. The simplicity of the bipolar or unipolar world no longer exists. We are fortunate to be located geographically, economically and culturally, smack right in the middle between China and India, the two most important centres of growth in the world today. But because our economy links us in a myriad ways to the world outside, every change in the world feeds back to us directly or indirectly. Every domestic policy we debate has an external dimension. If we move with the larger tide, avoiding the whirlpools, we will sail far and our future will be bright.
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\r\n
The Chairman: We still have time for clarifications. Yes, Ms Ellen Lee.
\r\n
Ms Ellen Lee: I believe, in the interest of time, the Minister was not able to answer my query on whether or not it will be timely to make it compulsory for local travel agents to include an advisory on how to access MFA's overseas consular services, especially in such turbulent times and Singaporeans are still travelling for all sorts of reasons.\r\n
Mr George Yong-Boon Yeo: Sir, I would hesitate to make it compulsory because that seems high-handed, and many Singaporeans, when they are overseas, rather prefer not to get in touch with us until they run into trouble. Then they scurry. And, really, in this age of the Internet and Facebook, it is not difficult. I get requests directly from Singaporeans overseas through my Facebook account. I help when I can, but sometimes they are not entirely reasonable. \r\n
During the floods in Brisbane, one person e-mailed me to ask, messaged me on Facebook, if our embassy at Canberra could help clean up her sister's house in Queensland. But I told her we have a small Mission and it is not easy for us to do that. But by and large, the requests are reasonable and where we can, we try to help. I think what is important is that Singaporeans themselves organise self-help groups wherever we are, and make use of the technology available to keep each other in contact.
\r\n
1.00 pm
Ms Sylvia Lim: Sir, I have two clarifications for the Minister concerning the Preah Vihear conflict and ASEAN's role. The solution that was reached in Jakarta – many observers feel that it is a short-term solution. But, nevertheless, it appears to have been reached primarily because of the active intervention of the ASEAN's chair, Indonesia. And Indonesia\r\n\r\n
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\r\n\r\nin this process has committed to sinking its resources to contribute to that. So, I would like to ask the Minister whether he sees this arrangement as something which was customised because of who is currently sitting in the ASEAN chair, or does it somehow set a sort of precedent for future ASEAN chairs that they should be prepared to commit resources as well to assisting in bilateral disputes and if Singapore were to be chair at that time, would we foresee sending out our Police or armed personnel into that kind of situation?\r\n\r\n\r\n\r\n
Second clarification is that the Minister mentioned that the observers were unarmed and they are currently being sent, of course, into an armed conflict, albeit ceasefire situation. So what would be the role as observers? Are they just supposed to take notes and report back?
\r\n
Mr George Yong-Boon Yeo: Ms Sylvia Lim asked an interesting question about the role of the ASEAN chair. The ASEAN chair is a very hot seat. And, frankly, I was quite relieved when we vacated that chair. In this particular case of Preah Vihear, the Indonesian chair did outstanding work, running around contacting all the member countries. I myself had two telephone calls, conversations with Pak Marty, who brokered an agreement. Right up to the last moment, it was not clear that there would be an agreement and details like what the unarmed observers would do and the terms under which they are embedded are still being worked out.\r\n\r\n
\r\n\r\n
Whoever is in the chair has a duty to respond. We were in the chair when the State Peace and Development Council (SPDC) government in Myanmar was shooting monks demonstrating in the streets of Yangon. The Foreign Ministers were in the UN at that time, and we had to convene an emergency meeting and express our deep revulsion at what \r\n\r\n
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\r\n\r\nhappened. We did not wish it. If there were no shooting of monks, we would not have come together in such a way. But we responded to the situation. In the same way, for two to three weeks after Cyclone Nargis, there was a stand-off between Myanmar and the international community. And aid did not go in. It was really criminal because of the prospect of the second wave of deaths from disease and hunger. We, again still in the chair, convened an emergency meeting, got everybody together, persuaded the Myanmar Foreign Minister that ASEAN had to be involved. I remember that lunch vividly. He said, \"Let me call back my headquarters.\" An hour later, he came back and said \"yes\". He agreed to ASEAN's involvement. So a tripartite arrangement was established and that prevented a second wave of deaths in the Irrawady Delta. We never know in the future what new problems there will be and who will be in the chair. But whoever is in the chair has the responsibility to act, and all the rest of us have the responsibility to help the chair.\r\n
The Chairman: Dr Neo, a short one, please.
\r\n
Dr Lily Neo: Thank you, Mr Chairman. I would like to seek two clarifications. The Minister earlier said, with regard to the Middle East, that it is history in the making and that the Muslim Brotherhood may take over in some countries in the Middle East. May I ask the Minister whether this turn of events will affect the national security of our region, especially Singapore, with regard to Muslim Brotherhood taking over? The other clarification is this: does he expect this unrest in the Middle East to affect Singapore's economic outlook, either in the short-term or long-term basis?\r\n
Mr George Yong-Boon Yeo: Mr Chairman, Sir, this is a big subject. The evolution of the Muslim Brotherhood goes back to the early part of the last century \r\n\r\n
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\r\n\r\nwhen it was established by al-Banna who was killed, and later on it came under Sayyid Qutb who was executed. It had a very rough evolution in Egypt and spread beyond. Sheik Qaradawi draws from that inspiration, although I am not sure if he considers himself a member of the Brotherhood. It has been suppressed in Egypt, prevented from forming a political party but, at the same time, allowed a certain space, and his influence has gone beyond. One mutation – one malignant mutation – became al-Qaeda, but there are others which have created moderate movements which hope that Muslim society within the framework of Islam, within the framework of Islamic values, can find a way to the future, be modern, be cosmopolitan, be able to operate modern financial systems, achieve constitutional democratic arrangements, and still be productive and a model for others to follow. I would say, today, we are seeing multiple efforts made worldwide to experiment and find possible ways into the future, and it is still an open question.\r\n
The Chairman: Mr Palmer, we still have about four minutes.
\r\n
Mr Michael Palmer: It is very heartening to hear our improved relations with Malaysia. But Prime Minister Najib is about to embark on a nationwide tour which has raised talk of elections across the border. As usual, Singapore takes a few shots every time a political activity heightens in Malaysia. I was wondering if the Minister would care to comment and see whether this time round, we are going to take similar shots under the leadership of Prime Minister Najib on the other side.\r\n\r\n
\r\n
Mr George Yong-Boon Yeo: Mr Chairman, Sir, we have to take these comments in our stride. What is important is that in Prime Minister Najib, we have a Malaysian leader who is decisive and who wants good relations with Singapore. Settling the POA was not a simple matter. \r\n\r\n
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\r\n\r\nIt took a few years of careful negotiations. A lot of it quiet, a lot of it looking for win-win political and economic outcomes on both sides, and being mindful of the domestic commentary in Malaysia. The key was Prime Minister Najib's leadership and his relationship with our own Prime Minister. I believe this will continue. I once had a discussion with a Malaysian friend. I told him that we are more likely to have our elections before theirs. He smiled. We do not know yet when it is likely to be. And I hope, and I am quite sure, that both sides will win handsomely and that this good relationship will continue.\r\n
Mr Michael Palmer: Mr Chairman, I would like to thank the Minister for his very insightful and clear analysis of the relationship of Singapore and ASEAN in the region and the world for various foreign matters. With that, Mr Chairman, I would like to seek leave to withdraw the cut.\r\n\r\n
\r\n\r\n
Amendment, by leave, withdrawn.
\r\n\r\n\r\n\r\n
The sum of $361,995,800 for Head N ordered to stand part of the Main Estimates.
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The sum of $45,000,000 for Head N ordered to stand part of the Development Estimates.
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\r\n\t\t\t\r\n\t\t\t\r\n\t\t\t \r\n\t\t\t\t\r\n\t\t\t\t\t\r\n\r\n
Head T – Ministry of National Development
\r\n\r\n\r\n\r\n
Affordability of housing
\r\n
Mr Cedric Foo Chee Keng (West Coast): Mr Chairman, Sir, I beg to move,\r\n\r\n
\r\n That the total sum to be allocated for Head T of the Estimates be reduced by $100.
\r\n\r\n
Sir, the subject of housing has been discussed in this House many times. Yet, discussions on this subject continue – in \r\n\r\n
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\r\n\r\nthe coffeeshops, the newspapers and the Internet.\r\n\r\n\r\n\r\n
Singaporeans are understandably concerned with recent increases in the price of resale HDB flats. Parents worry for their children. They feel helpless as resale prices spiked. They asked: \"Can my child ever afford a flat here in Singapore?\" Most of these concerns had arisen over the past couple of years, post-global financial crisis of late 2008. But this is a period of extreme volatility and a confluence of factors had caused the sharp spike in HDB resale prices – low interest rates, high liquidity, lack of alternative investments, and so forth. It would have been good if HDB have had a pipeline of supply to inject into the market at that time. Forecasting is a hazardous business, and that was not to be.
\r\n\r\n\r\n\r\n\r\n\r\n
However, to put the matter in perspective, Singaporeans should be very proud with Singapore's track record on public housing. Going back a little into history, the vision of our founding leaders to sell flats to early immigrants has enabled them to sink roots here. Singapore's high home ownership ratio is the foundation upon which this nation was built. As of last year, about 80% of resident population lives in HDB home-ownership flats. Also, the quality and sterling maintenance of our public flats are the envy of many countries.
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In arriving at where we are today, the way I see it, the Government has abided by three basic policies. Firstly, the public sector, which is the HDB, has been largely responsible for developing flats for the general public. Secondly, we have elected to sell instead of rent out these flats. Because of this policy to sell flats, HDB has also assumed the role of a mortgage loan financier and holds a loan portfolio of more than S$40 billion as of 2010. Thirdly, HDB has sold flats at \"market prices (with a subsidy)\" rather than \"at cost (with a discount)\".
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\r\n\r\nSo there are three basic policies: firstly, the public sector to develop flats for the general public; secondly, to sell, rather than to rent out these flats; and, thirdly, to sell at market prices rather than at cost.
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Can the Minister comment on the effectiveness of these three basic policies? Was Singapore well served by them? How have these policies evolved over time? Would the HDB devolve more public housing roles to the private sector? What is a realistic long-term owned flat to rental flat ratio? Would HDB step back as a mortgage loan provider? Is selling at market prices still the way forward? Sir, I believe that if we re-visit these fundamentals, explain them fully and re-affirm them, then many of the worries and concerns of Singaporeans about the short-term price gyrations of the resale market will be assuaged.
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New HDB flats are built exclusively for Singaporeans (and their Permanent Resident spouses). Singaporeans with high incomes and foreigners are ineligible to buy these flats. So, if the HDB prices these new flats out of the reach of this addressable market, which is Singaporean households, then no one else will buy them. Under such a scenario, would HDB not be forced to reduce the prices of these new flats to be in line with eligible Singaporean household incomes? If the above is indeed true, then the anxiety of Singaporean parents about whether their children can afford their own flats would be largely unfounded. Can the Minister re-affirm the above?
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1.15 pm
Next, I want to talk about universal housing. Mr Chairman, Sir, let me take this scenario I just painted further, and ask the Minister a pointed question. And knowing Minister Mah, I am sure the House will get a similarly pointed reply. Is \r\n\r\n
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\r\n\r\nMND prepared to say that \"Universal Housing\" is a policy objective for Singapore? In other words, every eligible family in Singapore will get to own a flat. Of course, to avoid moral hazards, perhaps we could state unequivocally that all eligible working Singaporean family would eventually own a flat in Singapore. I think if we can say that, the worries of Singaporeans will be addressed.\r\n\r\n
\r\n Sir, if I could do the math for a young couple with household income of $2,000 per month. They can enjoy the Additional Housing Grant of $35,000. If they have worked for five years, then the family would have accumulated a balance of about $28,000 in their CPF Ordinary Account. So that is more than $60,000 in grants and CPF savings. I checked out the website and a new 3-room BTO flat in Sengkang now sells for about $180,000. If we take away $60,000 from $180,000, the balance of $120,000 to be financed through a HDB loan will yield a monthly mortgage payment of $468. So, this family which earns about $2,000 household income, would have monthly CPF contributions that can go to pay the mortgage payment. Deducting from CPF, the monthly mortgage payment is actually only $8 in cash each month. If we include the recently announced Special Housing Grant, the flat will be even more affordable.
\r\n The contention is that many Singaporeans feel that resale flats are unreachable because the resale flat prices have been bidded up with COV, and so forth. But if they have prudent financial planning, if they can wait for the BTO flats, and HDB can assure them that these are forthcoming, then I think we would have addressed most of the concerns of Singaporeans.
\r\n Mr Chairman, Sir, let me next ask some questions on the new Special Housing Grant (SHG). I note and welcome it for low-income first-timers. This was \r\n \r\n
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\r\n\r\n announced by the Finance Minister in this year's Budget. It will cater to families with household income below S$2,250 per month who purchase a BTO flat. However, no details were given at that time. Can the Minister elaborate on the size of such grants that a typical eligible household will receive and how many families in Singapore would stand to benefit from this new scheme?\r\n
Stable property market
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Mr Lim Biow Chuan (Marine Parade): Sir, the Government has taken a series of measures to maintain a stable and sustainable property market, most recently in August 2010 and January 2011. I support these measures taken to ensure stable property market. I will also call on the Government to ensure that the younger generation would also be able to afford the HDB flat or private property. I have conversations with residents who are from the younger generation, and they have worked for a few years. They are keen to set up a family and they always often express their concerns that they cannot or are unable to afford the cost of either a resale HDB flat or private property. Many are unwilling to wait a few years for a BTO flat because they simply wish to start a family quickly. They are also not able or sometimes, not willing to stay with their parents due to this desire for greater privacy, or their parents' flats are too small.\r\n\r\n
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Others say it would appear that despite as several measures to cool down the property market, the prices of properties are still on the uptrend. May I ask the Minister whether there are other measures to ensure that the property market remains stable, that prices do not fluctuate too widely? Or will action be taken to discourage speculation in property market and to discourage the flipping of properties? May I ask the \r\n\r\n
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\r\n\r\nGovernment to consider the publication of data on the unsold or available units in each development on a monthly basis? Just to say we list down the number of available units in each development in the URA website, so that the members of the public wishing to buy properties in development would know the supply available. I have checked the URA website recently and was surprised to find out that as at fourth quarter 2010, there were 65,699 private residential units in the pipeline, of which 32,776 units were still unsold. According to the website, this is the equivalent of three years' supply based on the take-up rate of 11,400 units per year. Sir, how is this information disseminated to the public? Has the data been buried amongst the many other data being published? If the public know about this data, why is there a rush to chase up the prices of property? How about having more land sales, Sir? For the sale of state land, will the Government consider scraping the minimum bid for state land? In my view, if there is a minimum bid for state land, the Government is basically setting the minimum price for the state land which will in turn cause the developers to price the sale price of their properties at a higher price. Could the state consider allowing free market to determine the market prices of state land? Impose a shorter time line for developers to build and sell properties. Impose a higher holding tax or property tax on these developers who have built but not yet sold their properties within six months after TOP. This will be the disincentive for them, so that they will not hold back their properties simply because they have better holding power. For HDB flats, is there a better alternative to the BTO flats? Is there any way we can shorten the waiting time for these BTO flats? Is HDB building more BTO flats to meet the increasing demand?\r\n\r\n\r\n\r\n
Sir, whilst I wish the Government to monitor the supply of private properties and HDB flats, I also wish to caution that \r\n\r\n
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\r\n\r\nthere are many home owners in Singapore. Hence, whatever action taken by the Government should not result in the collapse of the property market. I can still recall a friend of mine who bought his property at $1 million in 1996. He had to sell the property five years later at a price of $550,000, representing a huge loss of $450,000. It wiped out his entire CPF savings which he had built up over 20 years of hard work. A drastic drop in property prices is not something which should be the end result of any measures taken by the Government to keep the prices of the properties stable and affordable.\r\n
Mr Christopher de Souza (Holland-Bukit Timah): Mr Chairman, Sir, the cooling measures introduced recently are timely. However, private property prices remain high, especially for young couples and families. High prices also have a significant effect on Singaporeans who want to buy the property to live in and not as an investment. Therefore, I echo the concerns raised by the hon. Member, Mr Lim Biow Chuan.\r\n\r\n
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Some Singaporeans feel that the cooling measures have not done enough to make prices affordable, especially in private property. What more can MND do to ensure private property is kept affordable, especially for those who do not qualify to purchase flats directly from the HDB? What more can be done to deter speculation in the property market as this hurts real home buyers?
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My second point, Mr Chairman, is that land is scarce in Singapore. Should we allow PRs to purchase land easily in Singapore? Should we not try to keep Singapore home-ownership land in the hands of Singaporeans? I have many landed properties in my ward, Ulu Pandan. When I make my visits to these estates, Singaporeans tell me that a number of houses on the streets are being bought by PRs. This may cause the value of land to \r\n\r\n
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\r\n\r\nincrease beyond the budget of Singaporeans. Therefore, does MND think it is advisable to make the criteria to buy land as a PR more difficult? After all, land is scarce in Singapore.\r\n
Mr Sin Boon Ann (Tampines): Mr Chairman, Sir, we have had four rounds of measures to cool the property market in the last two years. The most recent one in January must have been the harshest, even more so than the curbs in 1996. The January measure has a more stringent limit of 60% for those who already have one or more housing loans. In addition, today we have a much higher stamp duty of up to 16% on the sale price of the property if it is sold within four years of the purchase.\r\n\r\n
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However, our economy today is more dynamic and diversified. Singaporeans expect strong GDP growth and job creation to continue. With rising inflation and negative real interest rate, people are likely to continue to invest in properties as a hedge against inflation.
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So far, its recent measures have had mixed results. For HDB flats, the curbs seem to be working. Would the Minister update us on the latest figures he has to ascertain the effectiveness of the cooling measures on the HDB market? Are first time HDB buyers benefiting from these measures?
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On the other hand, private home prices went up by 17.6% for the whole of last year but 11% in January, following the new policies. Would the Minister share with us his assessment of the effectiveness of the measures on the private residential market?
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Matching supply and demand needs
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Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, with the recent trend of shoe box units supply in the market, many Singaporeans are rushing to buy these\r\n\r\n
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\r\n\r\nsmall units despite the substantially high price per square foot (psf) of these units. This could be in part due to the fact that the shoe box units are small and the amount of money that they have to pay for the units may not be seen as high. Purchasing a house is not a trivial investment. While recognising that individuals should make their own buying decisions, can more be done to help Singaporeans make informed choices? Do buyers fully understand what they are buying? As reported in today's Straits Times, a recent URA analysis of views of industry researches suggests the market could see a surge of new homes, both public and private, in the next two to three years' time, given the good supply of units in the pipeline. Can more be done to provide more information to buyers to help them appreciate market demand and supply situation to enable them to make better buying decisions, whether for occupation or investment? This will definitely complement information of what they see and hear from the agents, or hear in the marketplace, and ensure that there is a better matching of supply and demand of housing.\r\n
A well-functioning property market
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Mr Ong Ah Heng (Nee Soon Central) (In Mandarin ): [For vernacular speech, please refer to Appendix A *.] Mr Chairman, my topic is on the property market. The local demand for houses in the last two years has been red hot. The Government has introduced several cooling measures, but the demand remains strong. Although the Government has assured that there is sufficient supply in the pipeline, property prices continue to rise. \r\n\r\n
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I am concerned with two things. First, the number of new players rushing into the property market without knowing exactly the long-term financial commitments and the risks of running into \r\n\r\n
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\r\n\r\nfinancial difficulties if interest rate rises. Second, these new buyers may not know exactly what they are buying. Most buyers are not trained as architects or surveyors. They cannot assess the size of flats by reading blueprints. Most buyers rely on show flats that developers put up. These show flats are typically shown in their best conditions; the shortcomings of the property, however, are not represented.
Managing agents
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Ms Sylvia Lim: Sir, residential properties which are badly managed will adversely affect the quality of residents' lives, and may even become safety hazards which cost lives. For example, last November, a fire in an apartment block in Shanghai left 50 dead due to inadequate fire prevention measures. Locally, property management is important in order to prevent and mitigate risks, such as fire outbreaks, electrical outages, and flooding from storms due to poor drainage and faulty water pumps.\r\n\r\n
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In Singapore, businesses offering property management services are not licensed, nor are their owners or staff required to undergo any training in the basics of property management and maintenance. There is also no national accreditation body. Instead, Government's policy is that the industry self-regulates.
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These are gaps which should be plugged. We basically adopted Australia's strata management laws which incorporated the concept of managing agents. However, we did not port over the Australian requirements for regulation of \r\n\r\n
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\r\n\r\nmanaging agents. In Australian states, managing agents are accredited businesses with training requirements for their key staff. Instead, in 2006, SPRING Singapore launched a Singapore Standard on the Performance of Managing Agents for Strata Residential Developments (SS519). SPRING and the Building and Construction Authority (BCA) are promoting the SS519 for voluntary compliance. This standard only covers the basic terms which should be in the fair contract between the managing agent and the Management Corporation Strata Title (MCST).\r\n
However, I understand that today even this voluntary standard is in danger of being reviewed and a Working Group has been formed which may further relax the standard in favour of managing agents. Due to our density of population, the consequence of an incident such as a fire in a building could exact a heavy toll on life and property. Does the Ministry not see the need to at least work towards tightening up the industry via training and, later, licensing requirements?
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1.30 pm
The Chairman: Mr Liang Eng Hwa, you have three cuts. Take them together, please.
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Increased immigration and supply of new flats
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Mr Liang Eng Hwa (Holland-Bukit Timah): Sir, one of the possible reasons for the sharp increase in the prices of HDB flats and the related COVs in the last two years could be that the pace of supply of the new flats was not able to cope with the demand of housing due to increased population in the last 10 years. Many of the new home buyers find the three years' waiting time for a new HDB flat too long and, hence, would rather buy from the resale market, thus leading to the sharp increase in COV and the flat prices. \r\n\r\n
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\r\n\r\nThe perception in some quarters is that the mismatch in supply and demand could have been mitigated if the planning agencies have anticipated the increase in immigration and, hence, stepped up the construction of new flats ahead of the curve. I would like to ask the Minister why the Ministry did not increase the supply of new flats to cater to the increased immigration in recent years, thus leading to the current shortage. Could the HDB have increased the flat supply earlier in anticipation of the increase in immigration and avoided this situation?
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Oversupply of new flats
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Sir, now that we have started ramping up the supply of flats to meet the current demand, will we now end up with an opposite situation of oversupply of flats in three to five years' time when these flats are all ready? While we understand that the working approach for BTOs is that HDB will only go ahead with the proposed BTO project if certain percentage of interest in a project is secured, however, would we end up with a situation where we see potential buyers in the resale market drying up and leading to falling HDB prices? Has the Ministry made the projections on the population and immigration trends in the coming years and whether more or fewer flats are needed than, say, five years ago? There will be 22,000 new BTO flats this year and it will be further supplemented by the DBSS and EC as well as the other private housing from the Government land sales. Are there any concerns of possible oversupply in the near future and would that lead to the softening of the market?
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Finally, I would like to ask the Minister whether the Government would further fine-tune the management of this mismatch, going forward, with the aim to maintain price stability.
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\r\n\r\nInfrastructure in HDB towns
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HDB has been lining up its housing programmes to meet the increased demand in the last two years, launching 16,000 flats last year and will be building another 22,000 flats in 2011. HDB has plans to build more if demand is there, potentially to 35,000 flats by end 2015. Whilst some flats are built at new town locations like Sengkang, there is also a good stream of flats being built at fairly mature estates like Bukit Panjang. In the case of Bukit Panjang town, HDB has since announced or launched five BTOs and one EC project. In addition, URA has also sold sites for private housing and office developments. When completed, the town will see at least 3,800 new residential units with potentially more to come as HDB and URA add more dwelling and office units. The concern of residents there is that the peak-hour traffic and public transport within the town is already congested. With more residential units and population increase, the congestion is going to get worse. Also, this large number of new flats adds strains and pressures to the other amenities. So, I would like the ask the Minister whether the planning agencies, like HDB and LTA, have studied the impact and looked into the enhancement of the existing infrastructure and public transport to cope with the population increase in the town. For example, there are limited traffic access and exits in the town. Are there plans for more links to a nearby expressway? Has HDB studied the existing traffic bottlenecks within the town, for example, at key junctions, and the schools? Can these be improved before the flats are ready?
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A mature town such as Bukit Panjang was built more than 20 years ago. Would the basic infrastructure designed and built some years back be able to cope with the population increase? I understand we \r\n\r\n
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\r\n\r\nneed to increase the supply of flats to cope with increased demand. I hope that the infrastructure of mature estates, where more flats are being added on, be enhanced to cope with the increase in the population. That way, we can maintain or improve our quality of life as these towns expand.\r\n
Supply of flats – Design, Build and Sell Scheme
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The Senior Parliamentary Secretary to the Minister for Community Development, Youth and Sports and Minister for Transport (Mr Teo Ser Luck): Mr Chairman, for young Singaporeans, an HDB flat decides when they should get married and the decision to get married depends on a few factors they are facing today with HDB flats. Maybe the \"3As\" like affordability, adequacy of the supply of flats and annual income. I was no different. It was a discussion I had with my wife when we decided to get married. Timing was of the essence, and the time when you get a flat determines when you get married. We had applied for a flat in Tampines but we never got it. If I had known, I would have followed what the young couples do today – see their MPs in Tampines or in the area where they live. So after three tries over more than a year, I finally got a flat in Woodlands and the waiting time to get the flat ready was about two years. Moving forward to today, I think a typical case of waiting time and from the time they book to the time they get a flat could actually be slightly longer. \r\n\r\n
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I have a story that I want to share. This couple started applying for a flat in 2007; finally, they managed to get a booking after the third try, at the end of 2008. But their flat will be only be ready in 2013. There are some differences in those experiences: firstly, this couple applied for a flat at the same time, same place; and secondly, the waiting time for their flat is five years, which is actually longer. You see, if they are 25 years old, \r\n\r\n
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\r\n\r\nthey can only get a flat when they are 30, and then they procreate and all that, that takes a longer time. The other challenge is that their income may exceed the ceiling. Such a case is not uncommon. I understand the anxiety but we are all aware that young couples are young, Singaporeans are more demanding on the type of flats and waiting times. So I am glad that the Ministry is doing something about it. Also, they are supplying more flats – the DBSS flats – and opening up to raising the income ceiling from $8,000 to $10,000. So the increase in supply of flats is to meet this demand. I would like to ask: how will HDB ensure that there are enough DBSS flats to meet this demand, when would these flats be launched for public sale and what would be the average waiting time?\r\n
Third Child Priority Scheme
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Mr Seah Kian Peng (Marine Parade): Sir, I have a suggestion for the refinement of the Third Child Priority Scheme. Currently, only 5% of new HDB launches are reserved for those who fulfilled the Third Child Priority Scheme. All the rest are given priority to first-timers. I recognise that the needs of both groups are important. What I wish to propose to the Ministry is to consider an increase in the priority allocation to those who have more children.\r\n\r\n
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Sir, I have – and I am sure I am not the only MP here – residents who have three or more children telling me of their lack of success in upgrading to larger flats. This is despite their numerous attempts at both applying for flats under the DBSS and BTO schemes.
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Sir, a flat in Singapore is a chief prized asset of many Singaporeans. I also recognise that there are many market and economic forces at play when it comes to housing policy. But, at the same time, we have never shirked away from using the HDB flat to promote social goals such as racial integration and strong families.
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\r\n\r\n\r\nSir, large families tend to be genuine buyers to provide a better environment for their families – I do not think they are out to profit. They do need more space for their household as they seek to provide a better home environment and more space for their growing children. I would thus like to ask that instead of the current 5%, a higher proportion, say, 10% of flat supply be allocated to those who qualify for the Third Child Priority Scheme. If these are not taken up, they can always be freed for others applying for such flats.
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Affordability and supply of flats
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Dr Ahmad Mohd Magad (Pasir Ris-Punggol): Mr Chairman, Sir, rising housing prices have become a prominent topic of discussion in recent times. With increased inflation and increase in prices of private homes and strong demand for HDB flats, the HDB Resale Price Index has gone up at a staggering pace. Cooling measures were put in place in curbing the increase in prices but market players still forecast that prices of resale HDB flats will grow in tandem with the economy and increased population. \r\n\r\n
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For first-time buyers, the high prices of new and resale flats are increasingly becoming a major financial strain even with existing subsidies schemes in place. In view of the continual increase in housing prices, I would like to know if there are plans to increase subsidy rates for first-time HDB flat buyers in general. I am heartened to note the recent announcement on providing low-income families, who are first-time buyers of BTO flats, with an additional subsidy. While this may provide some relief to such families, I worry that even this additional grant may not be adequate in alleviating their problems in affording a flat should flat prices continue to rise. Furthermore, the household ceiling of $2,250 is rather low. I would like to ask if it is possible to raise the income ceiling to $3,000 so that more needy families, especially those with \r\n\r\n
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\r\n\r\nlarger households, can benefit from this scheme.\r\n\r\n\r\n\r\n
Second, Sir, with regard to the sale of balance flats, I would like to ask if the frequency of this sale could be held more frequently from the current once a year, so as to give greater visibility to this scheme. I would also like to know whether HDB could process applications for sales of balance flats faster as feedback received suggests that applicants are frustrated by the long waiting time and the uncertainty of whether or not they are going to get their flats allocated.
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Income ceiling for HDB flats
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Mr Ong Kian Min (Tampines): Sir, families with incomes exceeding $8,000 are not eligible to buy new HDB BTO flats. This $8,000 ceiling was set more than 15 years ago in 1994. Although there have been calls in the past to raise this, it has been remained unchanged at this level. The reasons given were that the $8,000 limit already allowed 80% of Singaporean families to buy a new flat. And those earning up to $10,000 are eligible for flats under the Design, Build and Sell Scheme (DBSS) and executive condominiums which are priced higher. I believe not all households that earn more than $8,000 can afford or want to spend more on housing. The price gap between new subsidised HDB flats and other housing options is considerable. The loan quantum is also quite different. Many young families also have not saved up the 5% cash required for private financing or have sufficient CPF savings for the balance of the 20% downpayment. Others may have financially draining commitments by having to support elderly parents, younger siblings or handicapped family members. There are also those who are financially prudent and want to live within their means in an HDB flat rather than overburden themselves with mortgage \r\n\r\n
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\r\n\r\npayments that may become unmanageable should a baby or two come into the family or should there be a reduction in family income arising from a crisis. \r\n\r\n\r\n\r\n
I feel that keeping this income ceiling unchanged all these 16 years while earned incomes have risen over the same period is unfair to young Singaporeans who are entering the job market and starting out on their own. In the past, it took a lot longer for household incomes to reach $8,000. Today, for many young professional couples, the income level of $8,000 can be reached within a few years of starting work under the current employment trends and healthy economic climate. The day that the combined income of a young couple exceeds $8,000 should be a cause for celebration and not for worry over housing issues. Such a dampener runs contrary to our ideal of a society where aspirations and hard work are encouraged. Our message to young Singaporeans must be clear: work hard, earn as much as you can while you can. We should not penalise them for achieving success early by disqualifying them from buying a new HDB flat. For the reasons set out, I would like to urge the Minister to consider raising the income ceiling for first-time buyers of HDB flats.
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Sir, my next point is on HDB loans. Currently, only under exceptional circumstances or financial hardship will HDB grant a third concessionary loan. However, I suggest that it may not be equitable for HDB to just base its assessment on the number of loans that an individual has taken. One must also consider the actual length of the loan or loans to assess the amount of subsidy the person has enjoyed. Take for example, a family who buys a 4-room HDB flat with a HDB loan, lives in it for 20 years and then upgrade to another HDB flat with a second HDB loan and lives there for 20 more years, finally paying off the second loan in full. For the term of these two HDB loans which stretched over 40 years, \r\n\r\n
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\r\n\r\nthe total quantum of interest subsidy enjoyed is very substantial. This family would have enjoyed two big delicious bites of the cherry, so to say. Let us compare that to another family who is forced by extenuating circumstances to sell and move out of their home twice over a short period of time. They are counted as having taken two HDB loans. They are deemed to have had their two bites of the cherry, but is the quantitative number of bites or loans a fair measure of the amount of subsidy enjoyed? I would like to propose that in determining whether to grant a third concessionary loan, HDB should take into account not just the number of loans already granted but also the quantum of interest subsidy enjoyed.\r\n
The Chairman: Mr Sin Boon Ann, take your two cuts together, please.
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1.45 pm
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Public housing affordability
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Mr Sin Boon Ann: Mr Chairman, the HDB Resale Price Index has risen at a staggering pace in the last two years. Last year, it went up by 14.1%. Although the Government had introduced a series of measures to cool down the property market, I am concerned that with the current rate of inflation and increasing population needs, there may not be enough to ensure that public housing flats remain affordable to the majority of Singaporeans.\r\n\r\n
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A possible way to ensure that our public housing remains affordable and reflective of the actual earning power of Singapore households is to peg the price of each category of new flats (2-room, 3-room, 4-room or 5-room) to a defined segment of household income (first quartile, second quartile, etc) plus some wiggle room to take into account location and access to facilities and amenities, \r\n\r\n
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\r\n\r\nbased on the common guideline that not more than 30% of a household's income should go towards paying the mortgage and that the mortgage payment should preferably be capped at 20 years.\r\n\r\n\r\n\r\n
Lastly, I would like to ask the Minister to share with us his assessment of the impact of the recently introduced measures on the HDB resale market.
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Sir, I will move on to my second cut.
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Loans for HDB upgraders
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Sir, the various measures introduced over the last two years aimed at cooling and stabilising the property market have surfaced yet again for discussion. One of the main target groups of the Government is to help the first-timers, particularly young couples, to buy their first homes.
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Hence, the lower loan-to-value (LTV) limit of 60% for buyers taking bank loans for a second property is meant to reduce the demand from investors and speculators who may not be the occupiers of the new units.
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However, HDB owners who are upgrading or downgrading to another HDB flat are also hit. If they are eligible for HDB concessionary loans, they will not be affected. However, quite a number of HDB upgraders or downgraders do not qualify for such loans. They may be upgrading due to additional children in the family or taking in elderly parents. They may be downgrading to free up some cash for debts or university fees for their children. Since HDB owners cannot own two flats at any one time, speculation may not be a problem in the HDB sector. Therefore, there is no reason to penalise this group of HDB dwellers with such an onerous LTV. If they do not qualify for HDB loan, they have to go and seek a commercial bank loan for the purchase of the second property.
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\r\n\r\nIn this regard, I hope that the Minister will consider this regulation in respect of the second purchase for this category of people and reconsider this regulation.
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The Chairman: Mdm Ho Geok Choo is not here. Dr Lim Wee Kiak.
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Build-To-Order process
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Dr Lim Wee Kiak (Sembawang): Mr Chairman, Sir, like many other Singaporeans, when I first proposed to my wife, my girlfriend then, it was at the HDB Centre. In 1992, we went through the whole process. It was very smooth and very easy. We registered for an executive apartment in Woodlands and immediately we were put on the queue. We were given a stack of papers, showing all the documents needed, showing all the areas in Woodlands, so we quickly took a bus to Woodlands to take a look at where the areas were. A few days later, we were given a date to go down to select a flat. To our dismay, we saw that we were to make our selection on the fourth day, and my number was quite far behind in the queue. Of course, we did our work diligently, highlighted the units that we wanted and then, everyday, I went down to take a look to see which units were gone, which units were still available. On the fourth day, when we went down, there was only one unit left on our \"wanted\" list. Luckily, the couple in front of us was arguing about which jumbo flat they were taking. So we asked them very politely, \"Sir, you are not taking the jumbo flat. So can I take this unit?\" They said, \"All right.\" So we took that unit. That was our story. Three years later in 1995, we collected our keys. We did not need to ballot and the entire process was very transparent and fast. It is very certain, in the sense that we were put on the queue.\r\n\r\n
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In contrast now, my residents complain to me that they face a lot of uncertainty \r\n\r\n
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\r\n\r\nwhen they apply for a BTO flat. Many attempted a few times before they obtained a queue number that is ahead enough in the queue to be called to select a flat. There is also uncertainty in terms of supply. I would like the Minister to explore how to shorten the entire BTO process as well as to adopt a strategy that can assure some form of success for them. Currently, without any assurance of success, many adopt a strategy to submit multiple applications to different BTO projects at the same time. Does that not distort the demand and result in many times over-subscription for some of the BTO projects?\r\n\r\n\r\n\r\n
Instead of a ballot system, why does MND not consider reverting back to the old queue system but build only when a certain percentage of the flats are selected?
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Can the Minister also do more to help those in the lower-income group to own their first HDB flat by giving them more grants, but on the condition that perhaps we should consider extending the minimum occupancy period to 10 years to ensure they do not cash out the flat too quickly?
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Regulation of estate agents
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Mr Zainudin Nordin (Bishan-Toa Payoh): Mr Chairman, Sir, the Council for Estate Agency (CEA) was established with the intention of raising the professionalism of the real estate industry and to better safeguard consumer interest. Ever since its establishment, much has been done to impose a regulatory framework that binds conduct of the estate agency work, resolving disputes and educating the public.\r\n\r\n
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Sir, the property sector in Singapore is a significant part of our economy with property transactions amounting to billions of dollars annually. For most Singaporeans, housing would likely be the \r\n\r\n
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\r\n\r\nlargest investment they would make in their lifetime. It is not hard to see why Singaporeans demand competent individuals to give them the best possible advice and world-class service. This is why housing agents are important stakeholders of the property industry. Their qualification, capability, professionalism and integrity are vital in ensuring the property industry remains vibrant, dynamic and continues to provide a high level of service to the public. It was therefore somewhat unnerving when I read in the papers about property agents who had past criminal records or who were involved in illegal loanshark activities. We should have cleaned up the industry sooner and the Ministry should have reacted years ago at the height of the property boom instead of waiting till now. However, I recognise that it is better late than never. But I hope that, going forward, the Ministry would be more nimble in responding to market developments in all areas and not just wait until the property market is booming.\r\n\r\n\r\n\r\n
Sir, may I ask the Minister to give this House an update on the CEA's work since it started operations? How has the public benefited from its establishment? Does CEA also oversee its property agents from overseas who come here occasionally to sell projects in Malaysia, Indonesia, Australia, US and the UK?
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The Minister for National Development (Mr Mah Bow Tan): Mr Chairman, Sir, 2010 was an exceptional year for Singapore. We had record growth. Our cityscape was transformed. Marina Bay took off. We had record tourist arrivals. Many new jobs were created, and the list goes on. \r\n\r\n
\r\n While we rejoice at these positive developments, we are also now preoccupied with new worries – worries about inflation, about cost of living, productivity, longer-term growth. Sir, inflation has also hit my Ministry. \r\n \r\n
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\r\n\r\n Members have filed a total of 55 cuts – the highest among Ministries for this COS. This is also the highest number of cuts for MND in the past five years. So I think we have been hit by double-digit inflation.\r\n\r\n
\r\n But I thank Members for their questions because they reflect concerns on the ground and I welcome this opportunity and the time that has been given to me to address these concerns fully. I will respond to them under three broad themes.
\r\n First is stability in the public housing and private property market. This will remain a top priority for us, especially in the current volatile conditions. The second broad theme is security in housing for vulnerable families. This is an area of concern because not all families will benefit immediately from the economic recovery. The third broad theme is sustainability of the recovery. This is a long-term goal. Even as we address Members' immediate concerns of market stability and housing security, we must press ahead to make our homes and economy future-ready.
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\r\n First, let me talk about how we wish to maintain a stable market. Everybody knows the property market was very hot last year due to various factors: low interest rates, high liquidity, and jobs growth attracting many buyers back into the market. Some of these buyers were upgraders and investors. But others were speculators out to make a quick buck.
\r\n High property prices make some Singaporeans happy. But others worry that they have missed the boat, and that prices will go up even further. It is hard for both groups to be happy at the same time. Property prices and economic growth go hand-in-hand. Property prices cannot be expected to stagnate while the economy is powering ahead as it has done. But what the Government can, and will try its best to do, is to stabilise the \r\n\r\n
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\r\n\r\nmarket and moderate price increases amidst this extraordinary economic growth.
\r\n At the same time, we ramped up the supply of private housing through the Government Land Sales programme to meet demand. As at fourth quarter 2010, the latest figures that I have are that 33,000 units of private property remained unsold. This is equivalent to three years of supply based on the average annual take-up over the last five years. And to answer Mr Lim Biow Chuan – I have mentioned this figure many times, URA has included this figure many times in every of its press releases. But I guess when the market is hot, such inconvenient truths are conveniently ignored. Yes, to answer Mr Lim Biow Chuan again, we will be supplying even more under our Land Sales programme. So I agree with him that there is absolutely no need to rush into the market.
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Mr Christopher de Souza and Mr Sin Boon Ann asked about the impact of these measures. Together, the efforts we have made so far have prevented prices from spiralling out of control. I have asked the Clerk to circulate a set of charts and figures, and if Members would refer to Figure 1*. Figure 1 shows that the rate of price increase has reduced quarter-on-quarter and it continues to fall since the first set of measures were introduced in September 2009. Figure 2* shows that \r\n\r\n
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\r\n\r\nthe subsales have been kept in check. Subsales are usually used as a proxy for speculation. In fourth quarter 2010, subsales were 7% of all transactions, compared to 13% in second quarter 2009 when we started to introduce cooling measures when the market picked up strongly.\r\n\r\n
But how the market moves in the next few months will depend on many factors – state of the economy, interest rates, liquidity, and external factors: what is happening in the Middle East, oil prices, etc. So we have to keep a close eye on the market and if there is a need to act, we will do so. Some people say that our measures have added uncertainty to the market. I beg to disagree. In fact, it is very certain that the Government is determined to do whatever is necessary to maintain market stability.
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\r\n I use three words to describe our approach – pre-emptive, calibrated and targeted. Pre-emptive in the sense that we act before the prices run away and before a property bubble is formed. Calibrated – meaning we intend to cool but not to crash the market. We apply the brakes gradually and consistently so that we do not have to slam on the brakes and cause either the car to stall or, worse, people to fall out through the windscreen. The third is targeted – our measures are targeted to hit those who are speculating for short-term gains or those who are inclined to over-borrow to invest in property, it is not intended to affect the first-time genuine home buyers.
2.00 pm
Sir, Mr Christopher de Souza asked if we should restrict Permanent Residents (PRs) from buying landed properties. As he knows, the Ministry of Law already restricts the purchase of landed properties by PRs and foreigners. They have to satisfy certain strict criteria that are imposed by the Ministry of Law. I will relay this request to the Ministry of Law \r\n\r\n
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\r\n\r\nto see whether they can review the criteria to make it even stricter. The point I would like to make is that as far as Singaporeans are concerned, because there is a large public housing market, we will, first of all, assure Singaporeans that they will be able to buy the first homes. Landed property is not a free market. We restrict the purchase of landed properties to Singaporeans and to PRs who fulfil very strict criteria. But we can, of course, relook at those criteria. \r\n\r\n\r\n\r\n\r\n\r\n
Mr Lim Biow Chuan also suggested doing away with the Reserve Price of sites so as not to set any floor to the tender prices. I want to explain that the Reserve Price is set because the Government's duty as the custodian of state land – and as Members know, all proceeds from the sale of land revert to past reserves – we must ensure that we get a fair price for the sale of state land. The Reserve Price is only a guide. It is not a strict criterion. In fact, the Government has awarded sale sites in the past even when the top bid was below the Reserve Price.
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Sir, let me now move on to public housing. With the sharp economic recovery, prices for HDB flats have also risen and caused concern among some Singaporeans. We all share these concerns. But as Mr Cedric Foo suggested in his opening speech, while we tackle the immediate concerns at hand, we must not lose sight of what we have achieved and how we have done so. In a series of articles on public housing in the TODAY newspaper last year, I explained the three key principles which underpinned our public housing programme. Incidentally, I would be compiling these articles into a booklet for wider circulation soon. In these articles, I touched on not just the key principles but also hot issues such as affordability, waiting time, rental flats for low-income families, and so on. In response to Mr Cedric Foo's request, I \r\n\r\n
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\r\n\r\nwould like to reaffirm that these three key principles have served us well and will continue to guide our public housing programme going forward. What are these key principles?\r\n\r\n
\r\n First, home ownership. Today, we enjoy one of the highest home-ownership rates in the world. I have said this many times and I think we probably do not appreciate how important and how significant this is. Ninety percent of those who are staying in HDB flats own their homes. We provide homes for ownership, not rental, so that Singaporeans have a clear, tangible stake in our country's growth. This has been our key commitment since independence. It is a promise that has been delivered. It is a commitment that we will continue to uphold.
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The second principle is home as an asset. Tied to the idea of the HDB flat being a stake in the country, we must allow its value to appreciate over time as the country grows. We therefore allow homeowners to resell their flats at market value. However, to ensure affordability for first-timers, HDB sets the price for first-timers at a subsidy to the market price. In this way, HDB prioritises new flats for first-timers. Because we priced it at a subsidy to the market value, we make sure that it is affordable. To make it even more affordable, we have also introduced, over the years, grants for first-time buyers to make it even more affordable.
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The third principle is homes for the masses. Unlike other countries where public housing is often seen as poor quality housing catering to the poorest minority in the society, HDB's mission is to house the masses so that we can build an inclusive nation. Already, eight in 10 Singaporeans stay in HDB flats, and 90% of them own their homes. New schemes like the Special Housing Grant (SHG), which I will elaborate on later, will help even more low-income households \r\n\r\n
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\r\n\r\nbecome homeowners. Mr Cedric Foo is right in calling it \"universal housing\". He asked specifically whether I can make a commitment that, \"if an eligible Singaporean family remains in the workforce, that family will get a flat eventually\". My answer to him is \"yes, most definitely\". It may not always be a flat of the type, size, location or time of their choosing, but if that family remains in the workforce, has a steady job and plans ahead, it will get a flat sooner or later. Indeed, our policies are specifically tailored to make it possible for every Singaporean who is prepared to work hard and to make prudent flat choices to own his or her own home.\r\n\r\n\r\n\r\n
Sir, these principles of home-ownership have guided us to achieve one of the highest home-ownership rates in the world in a sustainable way. Let me re-affirm that our commitment and our priority is to ensure HDB flats stay within reach of first-time buyers. In this buoyant market, this is a matter of immediate concern and I can understand this. To ensure this, we have adopted a two-pronged approach – one is to raise supply and, two, is to dampen non-urgent demand. And let me explain each of these later.
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\r\n On the supply side, we have ramped up all categories of public housing for households across the income spectrum. When demand started to pick up in late 2009 after the financial crisis, we very quickly increased our planned Build-To-Order (BTO) flat supply by 50%. New flat supply in 2009 was 13,500. Then in 2010, as sentiments soared with the sharp economic rebound, we further increased new flat supply to 17,700 – 13,500 to 17,700 – this is a huge supply because 17,700 is equivalent to half of Toa Payoh. We were building half a Toa Payoh last year. To increase housing options for higher-income households, we \r\n \r\n
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\r\n\r\n also raised the income ceiling for the purchase of new Design, Build and Sell Scheme (DBSS) flats from $8,000 to $10,000.\r\n\r\n\r\n\r\n
Mr Liang Eng Hwa asked specifically whether we could have built more flats in the earlier years. Let me begin by explaining that new flat supply in past years was low – Members can see this in Figure 3* [indicating ] – not because we had constrained supply but because the demand was weak. Take 2006 for example, when HDB offered a relatively lower number of new flats – 8,100. Even then, about 1,100 remained unsold – as shown in the red bar. In fact, there were flats that were unsold and not taken up in the past decade every year. In 2003 and 2004, we even had to cancel some BTO projects because of low application or take-up. In other words, if HDB had built more flats in the earlier years, it would not mean more flats sold but more flats left unsold.
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Some have asked why HDB does not build new flats according to the number of marriages per year. On average around 15,000 marriages are eligible for subsidised housing each year. But the take-up of new flats by first-time buyers was lower than the number of households formed due to marriage over the years. There are two reasons for this.
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First, not every new family buys a new flat from HDB. Figure 4* shows that a significant number of first-timers buy resale flats versus new flats. They do so because they are only interested in a particular location where there are no BTO flats for sale or they cannot wait for the new BTO flats. So, they go for resale flats.
\r\n\r\n\r\n\r\n
Secondly, not every couple who gets married buys a flat immediately. The total annual take-up of new and resale flats was lower than the household formation in the earlier years. This is because home \r\n\r\n
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\r\n\r\nbuyers adjust their purchases, depending on the economic outlook and market sentiments. When sentiments are weak, some buyers hold back. Others turn to the resale market because resale flat prices are low. This was the case in the early to mid 2000s. Conversely, when the outlook improves and prices begin to rise, more buyers come forward – some feel more optimistic and confident about keeping their jobs or having better jobs; others worry that they may miss the boat. This adds up to increased demand as prices pick up. This has been especially stark over the last two years. Given this very volatile nature of housing demand, HDB has to take into account market conditions and sentiments when it plans its building programme.\r\n\r\n\r\n\r\n
In our desire to meet the strong housing demand today, we should not forget lessons of the past regarding the volatility of demand. Mr Liang Eng Hwa alluded to this when he asked if we could have an oversupply of flats in the future, with the current ramp-up. Members will recall that flat demand literally vanished overnight when the Asian financial crisis struck in 1997. The Auditor-General at that time queried the Ministry about the high cost of holding vacant flats. To clear the surplus stock of flats, HDB had to reduce prices, convert large flats into small flats, and hold walk-in-selection of ready-made, unsold flats. Homeowners paid a price for the oversupply then. Members may recall residents in near-empty new HDB blocks in Sembawang, Jurong West and Sengkang expressing their concerns about safety and theft. There was a news article at that time in 2001, where they called these precincts \"HDB Ghost Towns\". To fill these blocks, HDB had to reduce prices. When they reduced prices, some flat owners were not happy because their neighbours had bought their flats at a lower price. Residents from Sembawang, Jurong West and Woodlands petitioned HDB for a price reduction. Mr Cedric Foo would remember \r\n\r\n
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\r\n\r\nthis well because I received one petition from his residents. The low prices also meant that those in mortgage arrears had difficulty selling off their flats and many others were in negative equity. Oversupply is as bad as undersupply. Our continual challenge is to find that \"sweet spot\". Not too much, not too little. We implemented the BTO system to try to prevent overbuilding of flats. We will only build if demand is confirmed for most units in a project. Conversely, if demand picks up, to keep pace with the higher demand, we will adjust the number of BTO launches in a dynamic and responsive manner, as we are doing today.
At the same time, we disallowed concurrent ownership of private properties and HDB flats within the MOP for both subsidised and non-subsidised flats.
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2.15 pm
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Mr Sin Boon Ann spoke about the lower LTV rules for HDB upgraders. Yes, I understand that there are people who want to upgrade for very legitimate and genuine reasons. But I have to explain that the intent of these measures is to dampen non-urgent demand and to prevent prices from overheating. That is why we had to cut back on credit while minimising impact on those who need that first home. First-timers and upgraders who are eligible for HDB concessionary \r\n\r\n
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\r\n\r\nloan can still get an LTV of 90%, and sell their existing flat up to six months after buying their next flat. So, upgraders who are able to get a HDB loan would have absolutely no problems. But a subset of HDB upgraders are ineligible for a HDB loan either because their income has gone up, they are PRs, or they have taken many HDB loans already, this subset of people who need to take a bank loan can still get 80% LTV if they discharge the first loan and show the approval for the sale of their earlier flat. We have tried to narrow the restrictions, such that genuine homeowners, first-timers, and even those who wish to upgrade, are not affected by the new measures. But having said that, I recognise that there will be some upgraders who will be affected, and for that, we seek their understanding.\r\n\r\n\r\n\r\n
Overall, the supply and demand measures have started to show signs of stabilising the public housing market. Resale price growth and transaction volumes have moderated. Quarter-on-quarter growth in resale prices slowed from 4% in the second and third quarters of 2010 to 2.5% in the last quarter. The latest figures for 2011, month-on-month, resale price growth has slowed to 0.6% in January and 0.7% in February. The trend is still downwards. Likewise, quarterly resale volumes fell by 21% to about 6,500 transactions in the last quarter of 2010. The average monthly resale volume in January and February this year has fallen further by another 16%. Again, resale transactions have also come down.
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For the new flat market, our BTO application rates have also shown signs of moderation. In the first seven months of 2010, applications rates averaged six times. In other words, for every flat put on sale, there were six applicants. This decreased to three and a half times in the second six months. The latest BTO exercise in January saw application rates \r\n\r\n
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\r\n\r\nof only two times. Two times application rate more or less means that almost everybody in that list will get a chance to select a flat because there is quite a number who drop out.\r\n\r\n\r\n\r\n
Let me now address the issue of affordability. Mr Cedric Foo, Mr Sin Boon Ann and Dr Ahmad Magad have spoken about affordability of HDB flats, given the recent run up in prices. For the whole of 2010, the Debt-Service Ratio (DSR) for first timers who bought BTO flats in non-mature estates was 23%. In other words, if you bought a new BTO flat in a non-mature estate, you would need to use 23% your income to pay the mortgage loan. What does that mean? Basically, that means you pay no cash, because all of it is paid up by the CPF. This is the average for all the first timers who bought BTO flats in non-mature estates in 2010. This is up 2% from 21% in 2008. In 2008, the figure was 21%. But even then, all this is still well within the affordability benchmark that we use of 30% to 35%. Why 30% to 35%? Again, this is a much stricter benchmark that what is commonly used by others. For example, local banks are prepared to extend credit up to 40% DSR. When I was in Hong Kong, they told me that their DSR benchmark for public housing is also 40%. Here, we are talking about a benchmark of 30% to 35%, with an actual figure of 23%.
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Yet, some buyers maintain that flats are \"unaffordable\". Why is this so? I can only speculate. But I guess that some would define \"affordability\" relative to flat prices in the past. So we hear, from time to time, comments such as \"My parents paid only $30,000 for their flat 30 years ago, now today I have to pay $300,000\", or some such figures. The question is: are we comparing apples with oranges? The flat their parents bought 30 years ago is not the same flat that they are buying today. Lifts at every floor, sheltered \r\n\r\n
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\r\n\r\nlinkways, MRTs – many of these facilities were not available in the past.\r\n\r\n\r\n\r\n
Secondly, as HDB caters to 80% of the population, it has to offer a range of flats for different budgets, as shown, if Members would look at the figure on the screen [Figure 5* ]. Take a first-time buyer looking for a 3-room flat. If you look at the 3-room flat column, he can choose to pay $150,000 for a new flat in Woodlands or $330,000 for a resale flat in Queenstown. If his family income is $3,000, look at the $3,000 row, he can comfortably afford the 3-room new flat in Woodlands at $150,000, or Punggol at $185,000 or a 4-room new flat priced at $250,000 in Yishun. But if he wants to buy a 5-room flat in Sengkang priced at $385,000, he would find it a stretch. He would find it unaffordable if he has no other savings. Those figures are only based on the loans that he can get from HDB based on DSRs of 30%.
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Sir, HDB has a flat for every budget but each buyer must consider the trade-offs between price, size of flat, and location, and then choose a flat that best suits his budget.
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Let me illustrate this with an actual example. Mr A and his fiancée, both 22 years old, have worked for about two years and have a household income of around $2,800 a month. Taking advantage of HDB’s Fiancé/Fiancée Scheme, they selected a 3-room flat from the October 2010 BTO exercise at Bukit Panjang. The subsidised flat cost them $190,400. On top of the price subsidy, they were given an Additional Housing Grant (AHG) of $25,000. They used this amount to fully cover their 5% down-payment, so they did not have to come up with any cash at all. The Government gave them AHG, which went straight into the downpayment. With the grant and their CPF savings which they have built up, they needed a loan of $148,800 from \r\nHDB. This loan will have to be repaid with \r\n\r\n
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\r\n\r\na monthly instalment of $596 per month, which is 21% of their salary. Their CPF Ordinary Account contribution is $644, and they can service the mortgage fully through CPF, without any cash outlay. They need not pay cash for their downpayment and monthly instalments. And they now have a new flat. Mr A’s case is not unique. Eight in 10 new flat buyers needed to use 25% of their monthly income or less to pay for their flats last year. After their CPF contributions, they pay little or no cash for their mortgage payments.\r\n\r\n
\r\n What can flat buyers look forward to in 2011? Plenty of housing options for different first-time buyers. First, HDB is going to offer up to 22,000 BTO flats. This is the largest supply of BTO flats in recent years. Of these, we will be offering 14,000 new flats in the first half of 2011. This will be spread in different locations all over Singapore – east, west, north, and etc.
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To answer Mr Liang Eng Hwa, I assure him that there will be plenty of new flats available in all these areas. I also want to reassure him that the ramp up of new flats will not have a negative or adverse impact on the infrastructure in the towns because the various agencies, HDB, URA and LTA, will be taking this into account as part of their town planning exercise. Let me reassure him of this.
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Some other specific points. Mr Seah Kian Peng asked if we could set aside more flats for couples with more children. Yes, there is a scheme called the Third Child Priority Scheme. Should they have three children or more, 5% of new flats are set aside for these families. So far, the number of flats set aside for these families are more than enough to cater to buyers who are eligible for this scheme. In fact, I am told that half of those who were eligible for the scheme and were asked to select under this scheme, did not do so. So, there are enough flats available \r\n\r\n
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\r\n\r\nunder the scheme. But we will monitor this closely and expand it if necessary.\r\n\r\n\r\n\r\n
Dr Ahmad Magad asked whether we can increase the frequency of the sale of balance flats exercise. This is a separate exercise to sell those flats that have not been selected under the BTO exercises, or flats which are unsold as a result of previous exercises. I must remind him that the main source of new flat supply is still BTO projects in non-mature estates. These balance flats are only sold when HDB has accumulated enough flats from previous sale exercises. They are always in great demand, because they are either near completion or in mature estates. There will always be long queues and high application rates. Because of the large numbers, HDB takes quite a long time to process them for eligibility and so there can be a long delay in the selection process. Home buyers who wish to have greater certainty should continue to heed the advice of HDB, which is to apply for BTO flats in non-mature estates, and these are launched every month.
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Second, higher income earners can also look forward to a greater supply of DBSS flats and Executive Condominiums (ECs). I announced last year that we are going to launch more sites this year for DBSS flats and ECs. We have raised the income ceiling from $8,000 to $10,000, for DBSS. This year, we are going to offer land sites for about 4,000 DBSS flats and 4,000 ECs – 8,000 flats in total. Again, a very significant amount.
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Mr Teo Ser Luck asked when the DBSS flats would be launched. Developers would typically take six to nine months to launch the projects after tender award. We sold about five DBSS sites and eight EC sites in 2010. So, 13 sites in all in 2010. This year, I believe these sites are going to be launched. In fact, they have already launched the first \r\n\r\n
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\r\n\r\nDBSS project – Adora Green in Yishun – where the new income ceiling will apply.\r\n\r\n\r\n\r\n
Third, and this is new, we will raise the income ceiling for 3-room BTO flats in non-mature estates from $3,000 to $5,000. Currently, the income ceiling is $3,000 and we are going to raise it to $5,000. Why? We want to provide lower- to middle-income households with more housing options.
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We have also increased the number of 3-room flats offered by 1,200, or a 50% increase over last year, to cater for this larger group of buyers.
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2.30 pm
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Mr Ong Kian Min asked about raising the $8,000 income ceiling. Let me say that I believe that this remains relevant because it caters to about eight to 10 households in Singapore. This is still generous by any measure. Our housing subsidies are not limitless. We have to work within the budget that we have and that is the reason why our subsidies are targeted to offer more help for the lower-income such as AHG and the Special Housing Grant, which I will talk about later. Nevertheless, we recognise that the households or families with higher incomes may need more housing options and this is why we have extended options to the DBSS flats as well. So, last year, the income ceiling for purchase of DBSS flats was also raised to $10,000. We will regularly review the housing subsidies for different groups and ensure that they remain relevant and always within the constraints of the housing budget.
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Dr Lim Wee Kiak related his own very interesting experience about purchasing a flat in 1992. 1992 was the time when demand for flats was low. If he had tried to buy that same flat in 1997, I think he would not have had such a similarly pleasant experience. He asked if we could revert back to the old queue system. In fact, the system in 1992 was actually a balloting system – I do not know whether \r\n\r\n
Column: 3497
\r\n\r\nhe realised that, but I have checked it was actually a balloting system. For those who think that the queue system would offer greater certainty, I would like to remind them that, when the demand was high, the waiting time in the queue was as long as seven years for a flat. This was around the period 1996/1997. The fact is, no matter what system we use – a queue system or a BTO system – if demand is overwhelming, there will always be the constraint and problem about how to allocate a limited supply. The solution to that is a combination of increasing the supply and managing the demand. This is what we are trying to do. So, with a significant ramp up in supply and with the improved selection process that I will talk about later, I believe that most flat applicants will be able to select their flats sooner and collect their keys faster.\r\n\r\n\r\n\r\n
How do we intend to shorten the BTO process? I think Mr Lim Biow Chuan also asked this. I have earlier announced that the BTO process is going to be streamlined so that flat buyers can collect the keys to their new homes six months earlier. We are talking about a normal waiting period of three years. Buyers of projects which are launched from this year – mid-2011 onwards – will generally have to wait two-and-a-half years from booking to collection of keys, instead of three years. This is as much as HDB has been able to shorten the waiting time because there is still a physical constraint in building those flats. But they will try to shorten it as much as possible and they have managed to shorten it by six months, which is considerable.
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I have also asked HDB to look into shortening the time it takes to start selection for the BTO flats. Currently, it takes about nine weeks from the launch of a project to the start of selection. As Mr Lim has pointed out, applicants do not know if their current applications are successful and they apply many times subsequently. If we can shorten this \r\n\r\n
Column: 3498
\r\n\r\nselection process, then applicants will be able to know the results of their previous application, and they can then decide, \"yes, I want to apply\" or \"no, I do not need to apply\".\r\n\r\n\r\n\r\n
With effect from March, which is this month, the time from launch of BTO projects to start of flat selection will be shortened to four weeks. From nine weeks to four weeks. With this, flat applicants will be informed of the queue number in their current application before the next launch. This will make a big difference. But I need to caution that shortening this BTO process also has its trade-offs, like everything else. HDB will have to shorten the application period from two weeks to one first. We also have to do eligibility checks concurrently with the balloting. It works like this: as you ballot, HDB will do the eligibility checks. It may happen that some applicants receive ballot numbers and are told, \"please come and select\". But later on, when HDB has completed the eligibility checks, it may say, \"Sorry. You are not eligible.\" Applicants may then be disappointed. So, we seek everybody's understanding that this move will benefit most BTO applicants but some may be inconvenienced. I hope the buyers understand this.
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To improve the BTO process further, I will ask HDB to provide more information to facilitate better forward planning by flat buyers. What do I mean by this? Today, flat buyers are told where the next BTO projects are allocated about one month ahead. In the press release for this month, it will state that BTO projects will be launched next month in certain locations. As a result, some flat buyers apply for multiple projects because they are not sure about the projects in subsequent months. I have asked HDB to increase the visibility of upcoming BTO launches, from the current one month to two or even three months ahead. If we can do this, we can help flat buyers make more informed decisions.
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\r\n\r\nUnder a balloting system, I recognise that some applicants may be less lucky and may not be able to select a flat after multiple tries. Today, our records show that the majority of first-timers get a chance to select within two or three tries, if they had balloted consistently. But there are some who may not be so lucky. This is consistent with a balloting system. Apart from additional chances, HDB will offer balance flats on a case-by-case basis to deserving cases. This will include those who have applied multiple times unsuccessfully for BTO flats in non-mature estates and are in urgent need of housing. To date, HDB has made such an offer to about 400 households but only 30% of them took up HDB's offer. They say, \"yes, I am in urgent need of housing\" but when the offer is made, 30% of them said \"yes\" and 70% said \"no, I am not in urgent need of housing after all\".
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While there are \"unlucky\" applicants, there are also applicants who repeatedly reject chances to select for various reasons – low floor, facing school, and so on. In 2010, over one in three first-timers invited to select a flat did not do so. There is nothing wrong in being choosy. It is understandable that each wants the best for himself and his family. Where it is possible, we can allow it. But being selective also means that their needs are not so urgent and, therefore, they should be prepared to wait a little longer for their ideal flat.
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I have had many appeals, emails and so on from people who have been \"unsuccessful many times\". They always say, \"I am in urgent need of housing. Please give me priority and allow me to select directly.\" Invariably, when we check, we will find that either they had been invited to select a flat and had given up the chance, or they are very selective in their applications. They only select certain areas and types of flats – The \r\n\r\n
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\r\n\r\nPinnacle@Duxton, Dawson, Waterway in Punggol. Over three years, they probably applied five times when we had more than 30 BTO exercises.\r\n\r\n\r\n\r\n
We had a case of a Madam T. She was very lucky. She applied for five sale exercises in the last three years and she was invited to select a flat on four occasions. She did not select any of the 467 flats she was offered in these four exercises. Why? I am not sure. There were 300 applicants who similarly rejected multiple chances to select a flat in 2010 alone. We have asked HDB to see if we can tighten the details of procedures to give genuine flat buyers with urgent needs a much better chance than applicants like Madam T.
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With the significant ramp up in BTO supply, the improved selection process, shorter waiting time and so on, most flat applicants should be able to select their flats and collect their keys sooner.
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I know Singaporeans, especially first-timers, are concerned that flat prices have risen too fast due to the sharp economic recovery. With the measures that I have outlined, first-timers will be able to get on the first rung of the public housing ladder. I urge flat buyers to exercise prudence, choose a flat within your means and when the time comes, do not give it up.
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Let me now talk about how we will structure the market to make it work better. Besides stabilising the property market, we will make structural improvements so that the market works better for developers and buyers.
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First of all, estate agents. The Council for Estate Agencies (CEA) started operations in October 2010. Mr Zainudin asked for an update of the CEA's work. One of its first tasks was to license about 1,400 property firms and about 31,000 salespersons in the industry. CEA's regulations apply to all estate agencies \r\n\r\n
Column: 3501
\r\n\r\nand salespersons who operate in Singapore, regardless of the location of the property being sold. Members will appreciate that this is a massive effort given the huge numbers involved. \r\n\r\n\r\n\r\n
I appreciate Mr Zainduin's concerns about the quality of salespersons and I wish to assure him that CEA is strict and rigorous in its licensing. It is important because homes are a very big ticket item, and we must safeguard the interests of home buyers and sellers as well as uphold the reputation of the industry.
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While a few bad hats have been featured in the papers, I think it is only fair that we recognise the many good and diligent salespersons earning an honest living. Not all are bad hats. A couple who had sold their 3-room flat in Hougang to upgrade to a larger flat in Woodlands wrote this letter to compliment their agent. I quote, \"He honestly told us that our case was delicate as we were upgrading with very little resources ... he kept stressing that everything must be verified and approved before proceeding to sell. Otherwise, we will sleep in the void deck!\" This is the kind of standards and agents whose reputation we must uphold in the industry because they know the consequences, rules and regulations, and they make it an effort to explain this to their clients.
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Going forward, CEA will focus on raising industry's standards and promoting public education for flat buyers and sellers. Salespersons will be required to take mandatory development courses so that they are up-to-date on the latest regulations. CEA will also conduct seminars and publish consumer guides for home buyers and sellers.
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Ms Sylvia Lim asked about the regulation of managing agents that currently manage strata residential properties. My Ministry, together with BCA, will be reviewing the Building \r\n\r\n
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\r\n\r\nMaintenance and Strata Management Act this year. And this is one area that we will be studying as part of the review.\r\n\r\n\r\n\r\n
As for developers, Mr Ong Ah Heng asked how we can help buyers make better decisions. The URA will be introducing enhancements to the Housing Developers (Control and Licensing) Act and the Housing Developers Rules to give buyers better access to accurate and timely information about the market and also about the property that they are buying. We are considering new guidelines on show flats and sales materials. Firstly, for show flats, some of the guidelines will include having site plans drawn to scale, and not having show flats misrepresent the actual size of the units.
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I remember I visited a showflat in Hong Kong where the developer, apart from the usual tricks like removing walls, putting tape on the floor and putting glass instead of solid brick walls, went one step further. It had put in a substandard-sized bed into its rooms. When you walk into the room, you saw a master bedroom with a bed and there appears to be plenty of walking space.
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Lo and behold! That was actually a substandard-sized bed. If a full-sized bed was placed there instead, you would not be able to close the door! [Laughter.]
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2.45 pm
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Our guidelines aim to pre-empt such practices from emerging here. I am not saying it has happened here but let us pre-empt such practices.
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The second key area of enhancement is to require developers to provide the prices of units on sale as well as the transacted prices of the units in a more timely manner. This is what Mr Lim Biow Chuan mentioned in his speech. All these changes we are going to make will allow \r\n\r\n
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\r\n\r\nbuyers to have more comprehensive, more accurate and more timely information so that we can make the market work better as a whole. URA will be embarking on a public consultation exercise before finalising the proposals.\r\n\r\n\r\n\r\n
Sir, in conclusion, the Government recognises the importance of the property market. It is both an engine of growth and also a provider of homes for Singaporeans. Good homes, comfortable homes, homes for Singaporeans. Its stable growth is necessary to ensure that our economy and our homes are sustainable for the long term.
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I would like to assure Members that we will take all necessary steps to ensure its stability, and for the general masses looking to buy a place to stay or for long-term investment, I would urge them to look ahead, think carefully and choose wisely. For the first-time young couples, rest assured that the Government will help you set up your first home.
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HDB rental flats
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Mr Cedric Foo Chee Keng: I would like to discuss the subject of rental flats. This House has heard from Members that many residents are appealing for rental flats. The queue for rental flats seems to be getting longer. Anecdotally, many of these appellants for rental flats had owned HDB flats before but they had subsequently sold, sometimes not just one but two, previously owned flats because of financial difficulties or other hardships.\r\n\r\n
\r\n As Minister Mah said, a high home-ownership ratio has distinguished Singapore from other states. This is particularly important when Singapore was newly independent back in 1965. I would argue that in the context of nation building, 46 years is but a brief history in \r\n\r\n
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\r\n\r\ntime. On that count, Singapore is still a newly independent state and we still have many new citizens in our midst and I believe that we would do well to continue to strive for a high home-ownership ratio. It is heartening to hear the Minister affirming this goal for Singapore. In 2009, URA did a survey and 95% of the respondents stated that they prefer to own their accommodation, while only 4.9% prefer to rent them. This demonstrates that Singaporeans still aspire to own their homes rather than to rent them. Home ownership has many advantages other than creating a sense of belonging for the populace. As our country progresses, the value of flats will appreciate gradually over time and this value can be unlocked in old age whether through downgrading, renting out a room or the Lease Buyback Scheme. All good things to have provided one owns the flat and do not sell them prematurely.
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Mr Chairman, Sir, the Minister announced last year that HDB will be building 7,000 more rental flats over the next three years to increase its stock to 50,000. I understand from HDB's annual report last year that about 2,000 of such flats have been completed. This means that another 5,000 will come on-stream in the next two to three years. This may be necessary as interim housing to alleviate hardships but, as a long-term objective, I feel strongly that Singapore's social fabric would be weakened if we allow our home-ownership ratio to drop as we build more rental flats.
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Rental flats are heavily subsidised as we all know. I feel it is much better for MND to channel such subsidies into higher housing grants to aid home ownership rather than through the rental system. Therefore, I was particularly heartened when the Finance Minister announced the Special Housing Grant (SHG) which is over and above the Additional Housing Grant (AHG). These \r\n\r\n
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\r\n\r\ngrants, taken together with Workfare, and other measures the Government has put in place to help lower-income Singaporeans, will help them own their homes. Sir, I am reminded regularly of the plight of families when their flats are sold and they have no choice but to appeal for rental flats. I can see how disruptive it is, especially for the school-going children. They often had to withdraw from their present schools, only to start all over again in a new estate and the uncertainty looming over their heads about when they will get this rental flat. Now, this state of affairs is often presented as fait accompli when they visit their MPs.
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Would the Minister consider setting up a Home Ownership Promotion Unit whereby HDB counsels potential HDB lessees who are contemplating selling their flat? Its role will be no different from the Health Promotion Unit. In some instances, it may be prudent to avail to certain families a higher SHG in return for a longer Minimum Occupation Period (MOP) so that they do not sell their flats prematurely. Would the Minister consider such an idea?
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Dr Ahmad Mohd Magad: Mr Chairman, Sir, the Government has announced that it will increase the number of rental flats from 45,500 to 50,000 units by 2012. It is apparent that the HDB has made commendable efforts to boost the supply of rental flats by building new ones and converting some existing flats. This in turn has enabled the waiting time for rental flats to be shortened from 21 months in 2008 to an average of nine months now.\r\n\r\n
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Introduction of other options such as Interim Rental Housing has further helped in narrowing the gap between demand and supply. I would like to know how the waiting could be further reduced for \r\n\r\n
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\r\n\r\nfamilies, especially those who are truly in need of a rental unit of their own.\r\n\r\n\r\n\r\n
Sir, interim housing options may be useful for some families. But for others, this can potentially cause quite serious problems. Single parents with young children worry and feel insecure when they are out for work, as their children are at home with another family whom may be considered strangers. For such families, Interim Rental Housing may not be a viable option as they wait for a rental flat to be allocated to them. There are also cases involving large families with grown-up children of different genders. It is awkward to pack the entire family like sardines in one room. Can I ask the HDB to extend greater flexibility by granting whole rental flats to better meet the needs of such families?
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Alignment of rates for HDB rental flats
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Mr Lim Biow Chuan: Mr Chairman, HDB has a policy of aligning rentals based on the total household income of residents. If the household income of the residents is less than $800, the rental for a 2-room flat will be between $44 and $75. If the household income is above $800 per month, the rental for a 2-room flat will be increased to between $123 and $165. This is regardless of how many persons live in a rental flat and how many people in the flat are not working and dependent on the said household income. Sir, this policy ought to be reviewed.\r\n\r\n
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I have come across residents whose income is in excess of $800 but have to provide for family members who are either physically handicapped or suffering from some other illness. In such a case, even with an income of above $800, they can hardly make ends meet. The cost of looking after a physically handicapped person or a person suffering from some illness like cancer can be very high. I have written multiple appeals for these residents but to no avail.
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\r\n\r\nMay I urge HDB to exercise compassion for such cases: allow rentals to be computed based on the per capita income of the household. Thus, the rental for a resident who has to provide for more dependants in the household living in the same flat should be reduced to the lowest rental rate. This would be fairer than the current policy of aligning rental based on the entire household income without considering the living and medical expenses of the family.
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The Chairman: Mr Teo Ser Luck. Please take your two cuts together.
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Rental housing
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Mr Teo Ser Luck \r\n\r\n(In Mandarin): [For vernacular speech, please refer to Appendix A*.] I read Minister Mah Bow Tan's comment two days ago in Zaobao. I grew up in Hougang, just like the Minister, at Lowland Road in Hougang. The living conditions that were common of low-income families then were that we fetched our own water and attended neighbourhood schools. My family had four members: the four of us cramped together in one rented room. We lived in the rental unit for 10 years and moved into a 3-room flat near the same area when HDB built new flats. We lived and grew up in the HDB flat for more than 15 years before moving out only after we graduated from university and a few years after my sister and I started working. \r\n\r\n
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This reflected the progress of the entire nation. As the country progressed, our lives improved. This was a step-by-step, progressive way of improving ourselves. We were not in a hurry to improve our living conditions. We did not realise that we were poor. Nobody told us that we were poor just because our monthly income was less than $1,500. We thought that this was how life should be. We lived within our means and never \r\n\r\n
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\r\n\r\nconsidered spending beyond. There are some Singaporeans who do not have the means but yet still try to upgrade their flat; they treat it as an investment. When there is a recession, they will run into difficulty. Sometimes, people feel that HDB is being too harsh when their flat applications are rejected. I feel that what HDB has done is prudent. They exercise greater due diligence on HDB applications to ensure applicants could afford to service their loans on a long term. On a case by case basis, flexibility is given. HDB is just like what parents do to their children, with good intentions.\r\n\r\n\r\n\r\n
(In English): Sir, let me relate an encounter with a family just before the Lunar New Year period. Number eight has a very significant meaning to me because \"eight\" sounds like huat, or \"to prosper\" (in Hokkien ). There was this family that came to see me, and told me that they had to vacate their flat in about a month's time. Once we crossed over into the new year, they had to vacate their flat. It is a family of eight and they need to shift out of their flat soon because of financial difficulties and they have no place to go. We did not know what to do. We asked them if they had applied to the HDB, and if they had tried to ask HDB for a flat, a rental flat or even to look at the allocation of a new flat or consider a resale flat. HDB told them that their appeal was rejected. We thought that that was common but we felt that with the grassroots and the community leaders, we could perhaps work with HDB. And this was a case where HDB went out of their way to accommodate. HDB offered them a temporary rental flat in Bedok. I think the waiting time was about five to six months. Subsequently – and this was after they got a temporary flat – they thought that they would be shifting to Bedok and that HDB could somehow delay or give them another temporary rental extension of five to six months before giving them the keys to their temporary rental flat in Bedok in five to \r\n\r\n
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\r\n\r\nsix months' time. They then decided that they would prefer to be in Toa Payoh because it is more convenient.\r\n\r\n\r\n\r\n
HDB went out of their way and managed to get it for them. So, we thought the case was closed but the last I heard, they wanted a bigger rental flat. They said the flat that was offered to them could not accommodate the eight people in their family. I did not hear any more updates but I am sure HDB will assist them. Such family appeals are not uncommon. The fact remains that they have to know how to live within their means.
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The other point we have to note is that we still need to help them. They may have made a wrong choice earlier and did not know what they could afford, or simply found the easier way out and tried to make a return out of their flat. Most of them are from the low-income group, some of them have big families and, unfortunately, some of them are really choosy.
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We need to make sure that we fill up these cracks and no genuine ones that need help fall through these cracks. But we also have to take note that there will always be constraints in the supply of flats and we still need to tighten the rules, otherwise, we are opening up a can of worms.
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In view of the situation, I would like to ask the Minister to provide an update on the rental flat situation. What is the demand for the rental flats now and have we built enough to meet this demand? How long is the rental queue today and how long do families with genuine needs have to wait? Among these, how many were rejected? What type of families or individuals get accepted or rejected? How does HDB assess its appeals? And, lastly, for families who have sold their flats and now need to upgrade or find another flat, \r\n\r\n
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\r\n\r\nhow do we help these families who are no longer eligible for subsidised flats?\r\n
3.00 pm
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Help for the low-income
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Mr Ang Mong Seng (In Mandarin ): [For vernacular speech, please refer to Appendix A*.] Mr Chairman, for the past 50 years, HDB has made great achievement in providing public housing. Currently, it has provided over one million units under its home ownership policy. Over 85% of our citizens live in HDB flats and 94% own their own property.\r\n\r\n
\r\n Many Singaporeans need more space when they are young, so they buy bigger apartments. By the time they retire and the children have their own families and apartments, they do not need the big apartments anymore. They may consider downgrading to smaller apartments. Many retirees have no income and face the problem of \"money not enough\". They are cash-strapped although they may own a 4- or 5-room apartment with a market value as high as $400,000-$500,000. Some seniors wish to downgrade to a smaller unit such as a Studio Apartment or a 2-room flat. The remaining proceeds can be used for their old age. For example, when downgrading from a 4-room apartment to a Studio Apartment, they get to save $300,000. They can withdraw $1,000 per month for 30 years. This enables them to have a place to stay as well as cash to spend. This is indeed a \"one stone killing two birds\" solution.
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With rising housing prices, Singaporeans especially low-income families may consider buying a smaller apartment, for example, a 2-room apartment first to reduce their financial burden. I would like to ask the Minister whether HDB has any policy or plan to assist these low-income families and retirees or whether there is any special arrangement available for \r\n\r\n
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\r\n\r\nthem. Will HDB build smaller apartments such as Studio Apartments or 2-room apartments? Do we have any measures to assist those low-income families to own their own flat?
The Chairman: Order. I propose to take the break now.
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Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.
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Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.20 pm.\r\n\r\n
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Sitting accordingly suspended
\r\n\r\nat 3.02 pm until 3.20 pm
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Sitting resumed at 3.20 pm
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[Mr Speaker in the Chair]
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Debate in Committee of Supply resumed.
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Head T (cont.) –
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Home ownership for the low income
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The Senior Parliamentary Secretary to the Minister for Trade and Industry and Minister for Information, Communications and the Arts (Mr Sam Tan Chin Siong): Mr Chairman, before this Budget, the Government had already given the Additional Housing Grant (AHG) for families that do not exceed the income ceiling of $5,000 a month, to buy their first flat. The maximum amount of the AHG is $40,000.\r\n\r\n
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For this year's Budget, we learnt that another grant was introduced called the Special Housing Grant (SHG) to help families earning up to $2,250 a month and are buying a Build-To-Order (BTO) flat for the first time. This SHG gives another grant of up to $20,000 to eligible families. This means that families qualifying for AHG and SHG will receive \r\n\r\n
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\r\n\r\nup to a total of $60,000 in grants to buy their first HDB flat. This is a very generous move to help low-income families realise their dream of owning their homes. I notice that in total, the Government will provide $175 million in grants each year to help low-income families own a flat. This is not a small amount.\r\n\r\n\r\n\r\n
Sir, an HDB flat is a valuable and appreciating asset, even as it caters to the basic needs of providing a roof over our heads. As Singapore economy grows, the value of our flat goes up and many Singaporeans see the direct results of the resale value of their flats. Therefore, helping Singaporeans own a flat gives them an important asset and a stake in our country.
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Sir, I would like to ask if the Minister would consider helping a group of low-income households who seem to have fallen through the cracks between an HDB housing loan and a rental flat. From time to time, I receive feedback and complaints from residents at the Meet-the-People sessions about the inability to buy HDB flats as the HDB will only give them a lower housing loan due to their low-income base. While the income is low for them, they say, it is not low enough for them to qualify for the rental flats. I am sure HDB has good reasons to approve a certain loan quantum to certain households based on their credit risk. But that remains a possibility that some of the households approved for a lower housing loan might generally be not able to afford an HDB flat because they are not able to pay the difference between the selling price and the housing loan. For them, the ownership of a home remains a dream.
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I would therefore like to ask the Minister to consider how the Government can help these families achieve home ownership in a very prudent and manageable way that they do not over-stretch themselves financially.
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The Chairman: Mdm Ho, take your two cuts together, please.
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Housing for low-income families
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Mdm Ho Geok Choo (West Coast): Mr Chairman, the Budget proposes a Special CPF Housing Grant to help low-income families make a first-time purchase of a BTO flat, on top of the Additional CPF Housing Grant and a subsidised loan. I am pleased to see that as housing prices rise, the Government is expanding subsidies to maintain affordability.\r\n\r\n
\r\n While I applaud this leg-up which the Government is giving to low-income families, I would say that grants alone do not address the underlying reasons why some households cannot afford to buy their own flats. A holistic approach has to be taken by a number of Government agencies to help those less well-off.
\r\n The HDB needs, too, to address construction costs. Otherwise, we would be handing out more and larger grants, chasing ever-higher costing flats.
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Mr Chairman, I have to voice my concerns, too, that grants could lure low-income families into believing that they are financially ready to buy their own homes when they might not in fact be. The risk is that they could over-stretch their finances and fall into loan arrears.
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Thus, I find it heartening that HDB is tackling the problem another way – which is to continue to supply smaller flats to provide more affordable housing choices. HDB is building 3-room flats and 2-room flats under the BTO scheme. Would the Government tell us the take-up rate of such flats among low-income families? How successful is this scheme with low-income families?
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Ineligibility for subsidised housing
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Mr Chairman, several families sold their HDB flats in the property boom for \r\n\r\n
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\r\n\r\nprofit and they now find they cannot afford another flat after using the proceeds. They are not eligible for a subsidised HDB flat for a period of time. What is the number of households currently in this situation?\r\n\r\n\r\n\r\n
To minimise such cases, there is already a seven-day cooling period for homeowners before they confirm the sale of their flats. I suggest that HDB also requires at-risk HDB owners to attend an advisory session before they are allowed to sell their flats.
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At present, HDB officers already meet sellers and verify their eligibility to sell their flats. At these meetings, the officers can counsel at-risk flat owners about the wisdom of selling their only home. The officers should ask pragmatic questions about how the owners plan to buy their next home. These suasion methods will help such families think harder about the intended flat sale.
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Those who have already sold their flats face the prospect of becoming homeless because they have little recourse to owning another HDB flat. I propose that HDB, on a case-by-case basis, allow such households a shorter debarment period and a subsidised loan to help them re-apply for another flat. In such cases, HDB can stipulate the minimum occupation period be at least 10 years.
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In the meantime, such households need housing. They may not qualify for HDB rental flats and they cannot afford to rent from the open market, or flats in the Interim Housing Programme might not be available. I propose that the HDB rent out some vacated SERS flats to these families until their housing situation is sorted out.
\r\n
Dr Ahmad Mohd Magad: Sir, anecdotal data suggest that there is an increasing number of families who have sold their \r\n\r\n
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\r\n\r\nflats twice but are unable to afford another flat from the open market due to cash flow or other financial problems. There are also others, for one reason or another, who are no longer eligible to purchase another subsidised flat. \r\n\r\n\r\n\r\n
In place of considering such cases on a case-by-case basis, could the HDB consider allowing this category of homeowners a third bite of the cherry with, perhaps, stricter conditions and impositions put in place such as requiring such buyers to live in their flats for 10 years before they are eligible to sell them off, or to sell the third flat back to HDB at their original purchase price, or at a price determined by HDB if they must sell their flat sooner than the 10-year occupation period?
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Importance of the flat
\r\n
Mr Wee Siew Kim (Ang Mo Kio): Mr Chairman, home ownership has an important place in Singapore society. The high rate of home ownership is a result of deliberate long-term policy to ensure that Singaporeans have a stake in the country. As the country prospers, up goes the value of real estate.\r\n\r\n
\r\n\r\n
For over 80% of Singaporeans, real estate actually means the HDB flat. In many instances, it is the single biggest asset he owns – which explains why the flat is so very important.
\r\n
3.30 pm
I want to discuss the plight of a small number of HDB flat owners who have fallen into arrears on their loan mortgages and run the risk of having their flats compulsorily acquired (CA).
\r\n\r\n
\r\n One can debate financial prudence, long-term planning and the need to take personal responsibility, but when \r\n \r\n
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\r\n\r\n confronted with a potential CA case, these discussions may well fall into the proverbial \"closing the barn door after the horse has bolted\" category.\r\n\r\n\r\n\r\n
When it comes to an issue like home ownership, there are factors beyond just the financial aspects that need to be considered. The HDB does not have the luxury of behaving just like any other private sector developer. In many of the CA cases I have come across, there are sad human interest stories. Often times, the elderly and young are involved. These are the categories for whom roughing it out is not a viable option.
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Prior to the final act of repossessing the flat, can we be assured that the \"having a roof over their heads\" issue is settled? The list of options will probably have to extend beyond the advice to stay with relatives and friends; or to rent, as in many cases, these options are not viable. We already have the interim housing scheme which I heard is already meeting the needs of some 1,600 families. But interim, by definition, is short term. Could there be interim scheme plus, that is, a longer-term solution, maybe even dormitories? Although I fear to think that refugee camps-like enclaves will spring up in Singapore, we do have to find innovative ways to provide spartan-level housing for the down and out. Moral hazard notwithstanding, can I have the assurance that in CA cases, the needs of the young or elderly are attended to?
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Besides compulsory acquisition, what are the other alternatives? Can the Government own the flat and lease it back – Rentalfare as opposed to Workfare? Maybe in such cases they have to surrender the upside from the proceeds of an eventual open market sale to the HDB.
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Mr Mah Bow Tan: Mr Chairman, Sir, we know that even as most Singaporeans rejoice in our extraordinary economic recovery, there are some families who are \r\n\r\n
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\r\n\r\nnot able to ride on this growth. So, the question before us really is how can we cater to these families? How do we bring housing security to these families? This is why the issues that have been raised by Members are very important.I will now talk about the housing safety net for needy households who do not have family support and who cannot afford a flat currently despite their best efforts. I am talking about the HDB’s public rental flats. They are our final safety net for housing.
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Mr Teo Ser Luck asked for an update on the rental flat situation. This is a safety net that we have strengthened continuously and we will continue to do so. There are two ways in which we have strengthened this safety net. The first is in increasing the supply of rental flats. Compared to 2007, HDB will be building another 7,000 rental flats by 2012, almost 20% more, and that will bring total supply to about 50,000. If there is a need to build more, we will. We will continue to monitor the situation closely. So, that is the first way – increase the supply. But like all things, if you increase the supply and do not manage the demand, you often find that increased supply will generate increased demand, and it will overwhelm the safety net. So, we have also tightened the eligibility criteria for rental flats, so that we focus only on the neediest families – the families who really do not have other housing options. Because of this, the number of eligible applications that we have received every month has decreased from about 300 a month in 2008 to 190 in 2010, which is about one-third, reduced by 30%.
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Dr Ahmad Magad asked if the waiting time for rental flats can be further reduced. I am pleased to inform him that with our two measures, HDB can now allocate rental flats more quickly and in a more targeted manner to the neediest \r\n\r\n
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\r\n\r\nfamilies. The average waiting time for rental flats today is now eight months, and it was 21 months two years ago. It has come down from 21 months to eight months. I expect that this will decline further because there will be more rental flats coming onstream in the next year. \r\n\r\n\r\n\r\n\r\n\r\n
The assistance that we give, the subsidy that is inherent in a public rental flats, is very substantial. Although the total sum of the subsidy may not be so well-known, there is an implicit recognition of it and that is why there is very high demand for rental flats. Rental subsidies, if we take the average stay of a family in a rental flat which is about 10 years - the total subsidies for the whole 10 years, it can be about $100,000. Last year, HDB received 14,000 appeals from 7,000 appellants for rental flats. There are a lot of repeat cases. Of these, about 90% had sold their flats and had received substantial proceeds, or they had family who could support them, or they could not meet the basic eligibility criteria for rental flats. Hence, their appeals were not successful.
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\r\n I cannot stress enough that there is a need to safeguard these heavily subsidised flats for truly needy families, who have no other housing options. Because if we do not, no matter how strong the safety net is, it is going to collapse. If all the 7,000 cases, who are appealing today, are all granted rental housing, I do not think we will be able to cope. That said, I have put in place an appeals process for cases that Members may come across that merit special consideration. Such cases are put before an Appeals Committee for further review. This committee is headed by my Senior Parliamentary Secretary and also includes a panel of MPs. There is an independent assessment of the merits or otherwise of the case.
\r\n Mr Lim Biow Chuan asked if HDB rental rates could be aligned to per capita \r\n\r\n
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\r\n\r\nincome. The public rental rates today are already very low, ranging from $30 a month for a 1-room flat for somebody who is at a very low or no income to $240 for those with higher income, who have applied for bigger flats, or have already bought and sold his flat and on compassionate grounds, HDB grants him a rental flat. Not every case fits into the standard norms. HDB has a process where HDB will exercise flexibility on the rental increase for families who are really in genuine financial difficulty. The difficulty that HDB often faces is how to assess whether there is genuine financial difficulty. Many a time, we come across appeals and we know the person is really not too badly off but they come to try their luck. HDB will put each appeal through a process and get them to submit relevant documents, and so on. The bottomline is that HDB cannot open up the rental scheme to all and sundry that comes in and applies for it. I hope Members appreciate that.\r\n\r\n\r\n\r\n\r\n\r\n
Next, I want to talk about promoting home ownership. I have spoken many times at length about the advantages of home ownership over rental flats.
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Even for HDB's public rental tenants, HDB should help them work towards home ownership, where possible for them. We know that families are work-capable and if they are work-capable, they should not be resigned to rental housing for the rest of their life. We must help them in various ways: to improve their skills-level and incomes, so that they too can join the ranks of home owners in Singapore.
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We all know of many people who have risen successfully from humble beginnings in a rental flat. My Senior Parliamentary Secretary, Dr Mohamad Maliki Osman, is one of them. I have asked him and he gave me permission to tell his story. Dr \r\n\r\n
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\r\n\r\nMaliki grew up in a 1-room rental flat in Toa Payoh, with his parents and eight siblings. Dr Maliki and his two elder brothers used to sleep along the corridors because there was not enough space in the flat. Despite the hard times, Dr Maliki remembers that his father always paid his rent and utility bills promptly. In those days, there were no rental rebates and U-Save rebates. He paid his bills promptly. But Dr Maliki’s father eventually saved enough and bought a 3-room flat in Toa Payoh in the late 1970s. He tells me that he still did not get his own bedroom, but he slept in the living room now. He moved from the corridor to the living room. He finally bought his own place and had his own room, when he got married. I did not ask him if it was private property or HDB flat, but I guess it was an HDB flat. I believe Dr Maliki’s personal experience of social mobility has shaped his dedication to social work and service to other Singaporeans. But his story is not unique, and that is the beauty of Singapore. There are many like him who have worked hard and achieved home ownership and more over time. Since 2007, 1,350 rental tenants have moved out of rental flats into their own homes. This is the Singapore story of hope of social mobility that we must try to uphold.\r\n\r\n\r\n\r\n
Many Members have asked questions about the Special Housing Grant (SHG) that Minister for Finance has announced in his Budget speech. Mr Sam Tan, Mdm Ho Geok Choo and Mr Ang Mong Seng asked in a more general way, how the Government can do more to help low-income households own their first flat. Indeed this is what we intend to do.
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First, HDB has increased the supply of smaller flats – 2-room and 3-room flats – by 37%, one-third more, to 4,800 units in 2011. Mr Ang Mong Seng was asking this specifically. This will give more choice to lower-income families who wish to buy their first homes and also for the elderly who wish to downsize, monetise their \r\n\r\n
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\r\n\r\nexisting flats, and keep the money for retirement.\r\n\r\n\r\n\r\n\r\n\r\n
The next thing we will do is to introduce that new Special CPF Housing Grant (SHG) that Minister for Finance announced in his speech. This new SHG is going to further help low-income families buy their first flat. This grant will range from $5,000 to $20,000 for families with household incomes up to $2,250.
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Let me elaborate on the policy objectives and features of this grant. Firstly, it is going to be a targeted subsidy for low-income families. So, that is the reason why we have set the income ceiling for the SHG at $2,250 a month. At this level, we will be benefiting about one in four Singaporean households.
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Secondly, for progressivity, the SHG will be tiered. The lowest tier will be $5,000 and go up to $20,000 based on household income. The cut-off for the highest tier of SHG is set at $1,500. This incidentally coincides with the income ceiling for rental flats, and that is the reason why we set it at $1,500 to provide the highest level of SHG. That will mean that low-income first-timers, who are eligible for rental flats, can now look forward to buying their own flats with some help.
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3.45 pm
Thirdly, the SHG is meant to help this very targeted low-income group to own their basic flats for financial prudence. That is the reason why the SHG can only be used to buy standard 2-room and 3-room flats in non-mature estates. Specifically, families that are earning $1,500 and below may only use the SHG to purchase 2-room flats. So at incomes of $1,500 and below, you will get $20,000 but you can only buy a 2-room flat. It cannot be used to buy resale \r\n\r\n
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\r\n\r\nflats, premium flats – Dawson, The Pinnacle@Duxton and the Punggol Waterway. It cannot be used to buy flats in mature estates.\r\n\r\n\r\n\r\n
Regarding Mdm Ho Geok Choo's concern that families may buy flats that they are not financially ready for, HDB's credit assessment will continue to apply to prevent this. All of these schemes – the AHG and SHG – will still be subject to credit assessment. It is only prudent that we do so and that will prevent people who are really not ready to buy a flat, to be tempted to do so just because there is a grant available. So we still need them to repay the loan if they do take it.
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What does all this mean, in terms of total housing grants for a household? Let me add it all up and take the House through. First of all, there is the Additional Housing Grant that we announced a few years ago and we last enhanced it in 2009. Households earning up to $5,000 today already enjoy an Additional Housing Grant of between $5,000 and $40,000. If Members look at that Chart* there [indicating ], they will see that it is stepped. It is $40,000 at the maximum level and it goes down to $5,000. I have not shown another level of grant, which is the CPF Housing Grant, which is used to buy a resale flat. That is not in this chart. Neither have I included the implicit subsidy that is inherent in a new HDB flat. So these are only the AHG and the SHG. The SHG will now provide extra help on top of the AHG to low-income households. Households with income of $1,500 and below will get $20,000 SHG and $40,000 AHG. So, in total, they will be getting $60,000. And if you go progressively down that stepped ladder, those earning between $1,500 and $1,750 will get $50,000 in grants (AHG plus SHG), and so on. It will be staggered progressively so that a household earning $2,250 will get $35,000, the total of AHG and SHG. If you look at the red line, that is the new CPF grant scheme, both \r\n\r\n
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\r\n\r\nthe Additional Housing Grant and the Special Housing Grant, that will be made available to low-income as well as middle-income families.\r\n\r\n\r\n\r\n
Let me now take the House through a concrete example of how SHG can help lower-income families move towards home ownership. This is a real example. Mr Rosli and his wife, living in a 1-room rental flat in Bukit Merah since 1996, have two children. Mr Rosli is the sole breadwinner. He earns about $1,000 a month, with a job that pays him CPF. Currently, he is paying $110 in cash for rental every month. With SHG, he can now realise his dream of owning his own home. He will get $20,000 SHG, and $40,000 AHG. Together, he will get $60,000 in grants. The flat costs him $100,000, so he needs a loan of $40,000. The monthly instalment for that $40,000 loan is $181. His current CPF Ordinary Account contribution is $186 – that means he can pay for the loan totally with his CPF contribution. He does not need to have come up with any cash outlay at all. So from a situation where he had to pay $100 for a 1-room rental flat, he is now going to buy a 2-room flat that he can call his own and he does not have to pay any cash. That is how the SHG is going to help low-income families like him, and how we can finally help them realise their home-ownership aspirations.
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Let us also be aware that housing grants alone cannot be the panacea – the solution for all problems faced by low-income families. I think Members who have spoken have cautioned us on this and it is a valid concern. The problems that are faced by low-income families – those applying for rental flats, those that we see in our Meet-the-People Sessions – are complex. So we need to take a more holistic approach to help them. I will ask my Senior Parliamentary Secretary to\r\n\r\n
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\r\n\r\nelaborate on this later. He chaired a special Workgroup last year to look into the overall needs of these families.\r\n\r\n\r\n\r\n\r\n\r\n
Sir, let me reassure the House that the Government will look after the low-income families, but the help we give should not be a lifetime of rental housing. Social mobility and the hope of home ownership is an integral part of the Singapore story. We will give hope of a better life to successive generations.
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Sir, I will now ask Dr Maliki to elaborate on the other parts and to respond to other Members' concerns.
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Dr Mohamad Maliki Bin Osman: Mr Chairman, Sir, thank you for allowing me to share the findings and recommendations of the MND-MCYS Workgroup on Assistance for Vulnerable Families.\r\n\r\n
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First, let me talk about the definition of vulnerable families. Who are these vulnerable families seeking help for housing? Broadly, these families fall into two categories: first, divorcees with young children; and, secondly, low-income families who ran into financial difficulties and sold their flats without planning for their next homes. These are the cases that many have highlighted in this House. As Dr Ahmad Magad and Mdm Ho Geok Choo highlighted, these families are likely to have enjoyed housing subsidies for the earlier flats that they have sold, and are no longer eligible for another subsidised flat. As such, they are caught in a very tight bind. Members of Parliament often appeal for rental flats to be allocated for these families.
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\r\n I can appreciate the difficulties that they face – a sense of instability, especially when they have very young children. But how can we help them without inadvertently sending the wrong signal to other families that they do not need to plan for their own housing?
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\r\n\r\n From my experience in social work and from the appeals that I have seen, I recognise the need to address the root cause of such problems. The MND-MCYS Workgroup agrees that the sustainable way to help vulnerable families must lie in addressing their underlying problems. Beyond housing, their problems can include unemployment due to education, prison history, family conflicts, and sometimes gambling problems. Securing regular employment with CPF contribution is often the key to getting families out of their vulnerability and to secure a longer term home.Let us look at addressing the root problems. Many of these families have the potential to be home owners again but need time to build up their capabilities and finances. The Workgroup has therefore recommended a two-pronged strategy to help them.
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First, holistic social support. The Workgroup recommends to strengthen inter-agency collaboration to help these families work through their problems. This would include joint case conferences with Family Service Centre (FSC) social workers and HDB officers to discuss holistic intervention plans, including childcare arrangements so that parents can seek employment. HDB is also working on a protocol with the Subordinate Courts to help low-income divorce cases, especially those with custody of children. Divorce, in itself, is already a traumatic experience for these children. This is often made worse when parties have not made proper post-divorce housing arrangements. Therefore, the intention is for HDB to provide the Courts and the parties in the divorce proceedings with more information such that their divorce settlement takes into consideration decisions on post-divorce housing needs, particularly for the parent with custody of young children. With more information, they can better decide how their matrimonial flat should be dealt with, \r\n\r\n
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\r\n\r\nfor example, whether one party should retain the flat or sell the flat and how the proceeds can enable them to own another flat. These are complex issues that require difficult decisions, depending on the circumstances of each case.\r\n\r\n\r\n\r\n
The next strategy is to address the issue of Interim Rental Housing support. Families may take some time to sort out their personal issues and build up their finances. Therefore, the Workgroup has recommended that MND and MCYS look into strengthening the interim housing options. First, the geographical spread of Interim Rental Housing (IRH) sites could be increased to make it easier for employment arrangements. This also minimises the disruption of changing schools for children, which is a key concern raised by families when offered IRH as a temporary housing option. Second, the tenancy period and rent structure under IRH could be adjusted to allow families more time to transit to permanent housing, such as allowing them to remain in IRH until their flats are ready.
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\r\n Dr Ahmad Magad asked HDB to consider a third \"bite of the cherry\" to help these families buy a flat again. Mdm Ho Geok Choo asked HDB to shorten the debarment period or provide another housing loan. Our budget is finite. Families must also exercise personal responsibility when they decide to sell their flat. For those who need temporary shelter and are ineligible for rental flats, HDB can refer them to IRH. Ultimately, they should seek employment, build up their savings and buy another flat.
\r\n Mdm Ho Geok Choo expressed concern for the families who cashed out recklessly without other housing plans. Mr Cedric Foo suggested that HDB provides financial counselling to low-income households selling their flats. This is a real concern, and MND has taken a number of upstream measures to address this.
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\r\n Last year, my Minister moved a Bill to disallow the lodging of caveats to claim an interest in the sale of proceeds of HDB flats. This will prevent flat owners from being coerced by debt collectors into selling their flats.
\r\n Since November last year, HDB introduced a mandatory \"7-day cooling-off period\" for flat owners to think through their flat sale decision and future housing arrangements before they commit to sell their flats. In the Resale Checklist to be deposited with HDB, sellers have to state their next housing arrangement. If they intend to buy another flat, they have to work out their estimated sales proceed of their current flat, and submit a financial plan for their next flat purchase.
\r\n The newly set up Council for Estate Agencies will also take action against errant housing agents who mislead flat owners into selling their flats for quick cash.
\r\n Flat lessees who need advice on their housing options can also walk into any HDB Branch Office to meet the housing counsellors. The key is to ensure that flat owners make informed decisions about their housing arrangements.
\r\n Mr Wee Siew Kim asked if there are alternatives to compulsory acquisition for families in mortgage arrears. I want to assure Mr Wee and Members of the House that compulsory acquisition is the last resort taken by HDB. HDB will counsel families on ways to resolve their problem, eg, rent a room or downsize, and extend a host of assistance measures to help the family. Even when compulsory acquisition is inevitable, HDB will ensure that the family has alternative housing available, be it IRH or rental flats. I would like to assure Mr Wee that the needs of the young and the elderly are accounted for.
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\r\n
4.00 pm
Sir, let me give Members an example of a family that I have worked with for six years to illustrate what we hope to achieve in terms of holistic support. Mr and Mrs S used to own a 5-room flat in Woodlands. They fell into arrears in 2005 when both were imprisoned for several years. During their time of imprisonment, grassroots leaders helped Mrs S's mother, an elderly grandmother, to support their three young daughters. To prevent mortgage arrears from accumulating further, HDB helped the family right-size to a small 3-room flat and placed them in the IRH while they waited for their new flat to be ready. When Mrs S was released, we worked with her to find a job as a cleaner earning $800 a month. When Mr S was released, he came to see us, and we also gave him the same help and advice. Mr S now holds a supervisory position in a cleaning company earning $1,500 per month and his wife earns $1,300 a month. Our advice is to hold on to the job that has got CPF contribution. Their eldest daughter is now in the Republic Polytechnic and will be graduating soon. From a vulnerable position, this family has stabilised itself and is now ready to start a new chapter in their lives as they await the collection of the keys to their new flat. They are a good example of how, despite being vulnerable, with the right attitude from the family, coupled with community support and help from the Government, can go a long way in rebuilding their lives.
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\r\n Sir, let me conclude by restating my Minister's assurance that the Government is prepared to provide added help to low income families. But the help we give cannot just be in housing. Many of these vulnerable families were home owners and they can be home owners again. To help these families, we must tackle their root problems so that they do not run into another housing crisis. Solving the \r\n\r\n
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\r\n\r\nunderlying issues will not be easy. It takes two hands to clap. Government assistance alone will not be effective. We must encourage families to take personal responsibilities and work hard, just like Mr and Mrs S. This is necessary to bring housing security and hope to these families in a sustainable manner, ensuring a more stable environment and a better future for their children.\r\n
Estate rejuvenation
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Mr Cedric Foo Chee Keng: Mr Chairman, Sir, the budget this year has provided $10 billion to upgrade homes and rejuvenate estates over the next 10 years. Would the Minister elaborate on some of the estate renewal programmes in store for Singapore? Which estates have been identified as potential areas for rejuvenation and what is the proposed time-frame to complete them?\r\n\r\n
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Sir, the Government has also announced that the Lift Upgrading Programme (LUP) will be completed island-wide by 2014 - three years from now. And also now that the Main Upgrading Programme (MUP) has been replaced by the Home Improvement Programme (HIP) and Neighbourhood Renewal Programme (NRP) respectively, when would both HIP and NRP be completed island-wide? So far, the Ministry has not clarified on this issue. What are the criteria for selecting estates for prioritisation under such renewal programmes?
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Sir, let me move on to discuss Urban Planning, especially for the elderly. The theme of \"people-centric\" urban planning was raised in the last report of URA Focus Group on Quality of Life. URA has said that this theme will cater to diversity while being elderly-friendly. The URA Lifestyle Survey found that 78.5% of the population prefers to stay in regular housing in old age. This highlights the \r\n\r\n
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\r\n\r\nneed for existing HDB estates to \"grow old\" with its residents to facilitate \"ageing-in-place\", so as to maximise the active ageing process and minimise unnecessary dislocations of communities from familiar surroundings.\r\n\r\n\r\n\r\n
Sir, considerations should also be given to ways to \"rejuvenate\" certain estates with larger proportions of ageing residents by introducing younger families to prevent the development of \"grey enclaves\". Elderly-friendly amenities, such as barrier-free movements, transport facilities, access to nursing care, delivery of basic amenities and monitoring of single elderly who live alone, etc, could be relevant considerations in the estate rejuvenation exercise planned for the next 10 years.
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Sir, a variety of options and solutions can be considered for the various mature estates on the island, where both the community and Government organisations can partner one another to devise ways to plan for the next phase of Singapore's urban development. This will have significant implications on whether the 25% of our population will experience a \"grey\" or a bright \"silver\" lifestyle by 2050. Minister Lim Boon Heng has also spoken on this. Can Minister Mah expand on this subject, please?
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Remaking Our Heartland
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Mr Liang Eng Hwa: Sir, the Finance Minister in his Budget Statement announced that the Government will spend $10 billion to upgrade homes and rejuvenate estates over the next 10 years. Besides the more specific programmes like HIP, NRP and LUP, there is also the more sizeable estate improvement plan, known as the Remaking Our Heartland (ROH) initiative. I want to compliment the Ministry for coming up with this ROH initiative. It seeks to rejuvenate and inject vibrancy into HDB living while still preserving the character of each town. \r\n\r\n
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\r\n\r\nThis is particularly welcomed for older and middle aged town that may be home to generations of Singaporeans. Can the Minister share more about what to expect from the areas selected for Batch 2 of the Remaking Our Heartland initiative? And how many residents are expected to benefit from the plan? Can residents from other towns like Bukit Panjang, for example, look forward to ROH 2? If so, when?\r\n\r\n\r\n\r\n
I suggest that the Ministry also use this ROH initiative to enhance mature towns which are seeing significant increase in population due to new housing being constructed. These mature towns will usually need urgent hardware enhancement as well as improvement to the overall ambience due to the increased population. Sir, with 80% of Singaporeans owning homes at HDB estates, we need to continually remake our towns and estates so that Singaporeans would feel a greater sense of ownership and experience better life even as their estates mature.
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Lift Upgrading Programme
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Mr Ang Mong Seng (In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Chairman, the Lift Upgrading Programme (LUP) has been implemented for 12 years. By fitting new lifts in old estates and upgrading the existing lifts, lifts will stop on each level. This will provide a better service for the residents, especially the elderly. When I visited the residents, many applaud LUP and feel that this is indeed the best and the most valuable gift that Government has presented to them.\r\n\r\n
\r\n I have four questions for the Minister. First, there are three more years before the LUP targeted its completion time in 2014. I would like to know if HDB can complete the project on time. Second, \r\n \r\n
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\r\n\r\n how many HDB blocks and units have benefited under LUP? Third, LUP is carried out on a national scale. This is a very extensive project. What kind of technology and installation methods has the HDB used to ensure greater efficiency? Fourth, due to the architectural design, some blocks' lifts are not able to stop on every level. What method does the HDB have to solve this problem? Many residents have complained to me that they have lived in the neighborhood for a long time and they like the community spirit there. They do not want to move out because of this kampong spirit. How can the Ministry help them solve this problem?\r\n
Mr Wee Siew Kim: Sir, there was a time when it was not so easy to convince people of the need for a lift on every level, especially for the residents staying just one floor removed from a lift landing. With the realisation of ageing and its attendant mobility impairment, and as the other benefits of lift upgrading become clearer and more evident, this programme is now popularly sought after, so much so that even with segmented and low rise blocks in which residents bear higher costs of upgrading, the LUP still attracts high levels of support at the polls.\r\n\r\n
\r\n We now come up against the problem of meeting the requests for LUP from blocks which currently do not qualify because of their inability to meet the cost thresholds.
\r\n Increasingly, it is more and more difficult to defer the solution to a day when cost pressures disappear or when technology brings more cost effective solutions. We can see clearly that the mobility impaired and the aged, often pointing to injured knees and their heavy dependence on walking sticks, need a lift on every floor. I happen to have 12 of these affected blocks. Can I ask HDB whether there are other options available besides a daily prayer for costs to drop to \r\n\r\n
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\r\n\r\nthe threshold levels? The need for lifts on every floor is getting more and more urgent for many of my older residents. \r\n
Design and upgrade of HDB flats
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Sir, on my next cut, HDB certainly has many reasons to be proud of its achievements. The latest HDB estates are well laid out and, in many instances, one is hard put to tell the difference between the private and public sector developments. In fact, with the DBSS, the flats are almost like private sector flats.
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\r\n Even with all the improvements that we have observed, I thought it still merits two minutes to emphasise again that aesthetics aside, for the new HDB flats and at the juncture of upgrading for the old HDB flats, the design features must reflect the way Singaporeans live.
\r\n Let me name some considerations that when designing flats, it will give immeasurable joy to the residents as well as incalculable solace and relief to the Town Councils. They are:
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(i) Parking areas for bicycles within the flat, especially with the as yet unsolved problem of bicycle thefts and with bicycling getting more and more popular with the Wellness Programme;
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(ii) Laundry drying areas and racks. How many times have we attended to problems resulting from wet laundry on the higher levels irritating residents on the lower floors! I am sure that if we can design a ledge or other architectural devices that can solve such problems from the onset, it will be well appreciated; o r design features that make it harder for curry and other foodstuffs from being easily tossed over the ledge and soiling the people below; rain splashing onto windows and doors such that water seeps into the interior, especially when rain is accompanied by heavy winds. Some residents will be grateful if they no longer \r\n\r\n
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\r\n\r\nneed to stuff towels under the gaps between the main door and floor to avoid inundation; and for the RCs having intermediate landings strategically located among different levels will facilitate floor parties and allow better interactions among neighbours, especially now that lifts stop at every floor; and\r\n\r\n\r\n\r\n
(iii) New racks for the bamboo poles used for drying. I have received comments that it is actually not physically easy for older people to put out a pole lined with wet heavy laundry on to the bamboo holders. I have seen new designs that facilitate the process of hanging out clothes. We should consider retrofitting such new innovative designs during the flat upgrading.
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I hope such learning lessons can be designed into our new flats, and even retrofitted into the older ones.
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Home Improvement Programme
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Er Lee Bee Wah (Ang Mo Kio) (In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Chairman, the Government is busy improving our estates to improve the quality of people's life. We should not forget the older estates. Although the Home Improvement Programme (HIP) has been going on for some time, the progress is very slow. The HIP started from 2007. Many homes are eligible for this project but those being selected are few. We just hear the loud thunder but did not see the rain coming. In my constituency – Yishun south, there are only eight blocks selected. I believe that with MND's high work efficiency, we definitely can do better. In fact, many homes need major improvements. The early HDB apartments can meet the people's needs at that time. However, our population is ageing; young people then have now become old. They feel that their flats are more and more difficult to maintain, for example, they find it hard to climb up and down to fix the leaking \r\n\r\n
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\r\n\r\npipes. It takes too much energy. Even taking out the bamboo pole to hang clothes out is taxing for them. Some residents have the resources to hire people to do maintenance job for them. When their flats will be selected by HIP does not matter to them that much. However, for those people who cannot afford to do so, they must face all the problems and inconveniences in the flat every day. I hope the Minister can shorten the waiting time for HIP. This will greatly improve these residents' lives. Please do not make them wait and wait.\r\n
4.15 pm
Mdm Cynthia Phua (Aljunied): Mr Chairman, Sir, the Home Improvement Programme (HIP) is a very good programme to help keep our blocks of flats in a habitable condition. We have the first precinct in Aljunied GRC polled in November 2010, and it has achieved a strong support of 91.1% for HIP. This new programme not only upgrades the toilets but also repairs all the spalling concrete in the flat. It is a popular programme. The state of the ceilings of some of the older flats in the older precincts in Aljunied GRC is bad; not only the toilet area but also the condition of the kitchen, the bedroom and the living room are all having spalling concrete. \r\n\r\n
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If the HIP programme is not able to be accelerated, I would like to suggest that the Ministry take up this programme of repairing spalling concrete separately, so that there is no fear that the spalling concrete will drop onto the residents' heads.
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As for back windows of flats, many have changed them a few years back on the advice of HDB. However, the windows, over time, will deteriorate. As there is the risk of killer litter, would the Ministry consider including this as an \r\n\r\n
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\r\n\r\noptional item in HIP to allow the residents to take the opportunity to change the back windows?\r\n\r\n
\r\n The other concern of the residents is that the 10 days that the residents have to stay at home to allow for the water proofing and upgrading of the toilets. Many are unable to take leave to stay at home for the stretch of 10 days. The Ministry may wish to look into breaking the essential work into two phases.
The Chairman: Dr Ahmad Magad, take both cuts together.
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Elder-friendly flats
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Dr Ahmad Mohd Magad: Sir, it is a known fact that Singapore's population is one of Asia's fastest ageing. To cater to this group of population segment, HDB has been building studio apartments for elderly folks which are fitted with elderly-friendly features. All these studio apartments are seeing good take-up rates. The reality is that the majority of elderly folks are still living in homes that are not fitted with elderly-friendly features, such as metal-grab bars in the bathrooms and non-slip floor tiles. An HDB homeowner would practically have to wait until his flat undergoes a Home Improvement Programme before his unit is possibly retrofitted with such elderly-friendly features. This may take years and, in the meantime, may pose significant challenges to the elderly person and his family.\r\n\r\n
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In order to make the concept of ageing-in-place even more effective and sustainable, may I ask HDB to explore the possibility of starting a scheme where HDB residents in estates that have not undergone the Home Improvement Programme that they may apply for a grant to retrofit their homes with basic elderly-friendly features? This scheme can be targeted towards low- and middle-income Singaporeans who are in critical \r\n\r\n
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\r\n\r\nneed of such features now, if they have at least one elderly person in their homes. Residents can be given a choice of basic features they wish to retrofit their flat with, depending on the needs of the elderly person in the home. This will greatly ease the financial strain on such families and help them overcome some physical constraints involved in taking care of an elderly person in the home. I believe it will also help foster a more caring and supportive living environment for elderly folks in Singapore.\r\n\r\n\r\n\r\n
Carparks in HDB estates
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Next cut, Sir. There is an issue of insufficient carparks in HDB estates which surfaced in recent months, with residents who are season parking ticket holders complaining that they faced difficulties securing a lot in the carpark closest to their homes. I do understand that several measures have been introduced to alleviate this problem, eg, the drawing of more red lots, reserved for SPD holders and night parking scheme. I would like to ask HDB for an assessment of this initiative, how successful have these two schemes been and to what extent is the problem of season carpark lots for SPD holders been addressed.
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Sir, I believe that part of the problem involves households owning multiple vehicles leading to a space crunch in carparks. Due to low COE prices in previous years, some families have taken to owning two or more vehicles and bought season tickets for all their vehicles. This may be unfair to other residents who have only one vehicle and are thus unable to find season carpark lots, as those with more than one vehicle will have taken up the available lots. To address this issue, I would like to ask if the HDB could consider introducing a two-tier system, where residents are given preferential season parking tickets to the first car in the household. Holders of the preferential season tickets park in red lots \r\n\r\n
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\r\n\r\nin the multi-storey carparks closest to their homes. Should a resident own a second or third vehicle, he can purchase a secondary season ticket where he can park at night parking lots in any multi-storey carpark in the precinct where he lives, but further away from the flat.\r\n
Parking lots
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Mr Chiam See Tong (Potong Pasir): Sir, there is a cap on carpark lots. During my Meet-the-People Sessions, I encountered many complaints of drivers who have bought season parking tickets but could not find parking lots for their cars. They were fined many times, though it was not their fault. In a way, the HDB is unfair to these drivers. May I suggest that the HDB build at least one multi-storey carpark for Potong Pasir?\r\n
The Chairman: Ms Indranee Rajah, you have three cuts. Take them together.
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Design of HDB estates
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Ms Indranee Rajah: Mr Chairman, my first cut is on the design of HDB estates. In this respect, I would like to ask MND, when designing new HDB estates, to consider providing more open space for community activities. I have new SERS flats in my area and I was planning a large community event. I looked around and suddenly realised that I had no space in which to have a large congregation of people to come together and carry out the community activities. And as I thought about it, I realised that with more and more of the new flats – that is increasingly the case – it is very built up. If one of our objectives is community bonding, then we have to allow for space for the people to come together and to bond. Sir, I would like to ask MND to consider this in the design of the new estates, to provide a sufficiently large area for community bonding activities to take place.\r\n\r\n
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\r\n\r\n\r\nI would also ask that the design should facilitate maintenance and for this, I would echo the call of Mr Wee Siew Kim. In some HDB estates, the architects are very fond of putting in some little ledges on the wall, where every tissue paper, every piece of litter that comes down will get caught and somebody has to climb up and clean it. My preference would be that HDB walls should all be flushed flat because it is the Town Council and the MP for the area who have to look after the maintenance.
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Just as another example, to be fair, these are old flats, but it is an illustration of what happens when a design goes drastically wrong. After the upgrading, for some reason, the ledge had a perfect 45 degree chamfer angle which, of course, means that if you are on this side of the ledge, and the rain comes down, it comes straight down and goes up in another perfect 45 degree angle and hits the MP when she is doing her walk-abouts. So, it was an extremely wet walk-about on that occasion. Hopefully, some of the new designs do not have that. But that is what I meant that the design should facilitate maintenance, and I have a suggestion. I hope that MND will ask all of their architects to come and do walkabouts with MPs so that they will appreciate some of the maintenance issues that we face and that when they design flats, they will be much better.
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Sports stacks
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The next suggestion I have is sports stacks. I firmly believe that in a HDB estate, we need to have space for the residents, especially the young children to be able to play sports. Young children, especially the boys, will play football in the void decks. We do not want them to do that but, at the same time, we want them to have the space to play their \r\n\r\n
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\r\n\r\ngames. And then I realise, of course, there is a limitation of space – we cannot have a separate area for basketball court and a separate area for football. But I thought what would happen if we stack them one on top of the other, like a multi-storey carpark – so one level for football, one level for tennis, one level for basketball. We can make efficient use of space and the booking can be handled by the Town Council. In that way, we have a finite area of space that can be used for more activities for the benefit of the residents. Sir, I would like to ask MND to have a look at this as well.\r\n\r\n\r\n\r\n
Gracious HDB living
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The third topic I have is on gracious HDB living. I think all of us in this House have experienced, at some time or another, the challenges of trying to have HDB residents live graciously.
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We have a first-world economy, we have first-world facilities, we have first-world housing and we do not have first-world habits in our public housing. In fact, we have third-world living habits. We have to deal with littering, graffiti and vandalism. For some reasons, people seem to want to use the lifts as their own personal toilets, and I have not quite understood that concept. You go in, it is wet and I do not understand why they do this. A lot more needs to be done, to get our people who are living in public housing to behave in a manner that is considerate of their neighbours and, generally, we just want to promote more neighbourly living.
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Sir, I noticed that the Finance Minister had projected 30% growth in the next decade. If we could just have 30% improvement in the HDB living habits, I think that would already be a very great achievement, and there is much more that we can do in encouraging HDB residents to live in a way that is considerate to each other.
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Barrier-free accessibility for private estates
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Er Lee Bee Wah: Mr Chairman, Sir, over the past few years, we have made good inroads in assisting the less able to enjoy greater mobility. The Ministry's effort to help our senior citizens and those who are disabled is commendable. We have not only carried out lift upgrading programmes but also barrier-free accessibility (BFA) facilities in HDB estates that would undoubtedly change the lives of many residents for the better. However, the same cannot be said for private estate dwellers, which are also homes to a growing number of senior citizens. These residents too need to enjoy greater mobility. I urge the Minister to extend BFA facilities to the private housing estates.\r\n\r\n
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Last year, I recall bringing up some examples of accidents that had happened to my residents living in Yio Chu Kang Gardens, due to the lack of BFA facilities. I regret to say that because no favourable response has been made to my request, my residents have been made to tolerate the same inconveniences for another whole year. They continue to be inhibited by a flight of stairs that cannot be avoided if one has to make a trip to the nearest bus stop or the market. Elderly people have fallen from this stairway. Hence, I once again appeal to the Minister to consider the plight of these residents and incorporate more BFA facilities in private estates. A safe home is what everybody should have, be it public or private housing estates.
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Concept Plan 2011
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Dr Lim Wee Kiak: The Government has announced three sets of measures to cool a boiling hot property market over the past few months. Now, every time Minister Mah stands on the podium, the developers get a bit worried. Despite these cooling measures, property prices seem to continue to rise. And people are \r\n\r\n
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\r\n\r\nasking: are the current rising property prices a reflection of inadequate housing planning to meet the needs of a very fast growing population due to the increase in Permanent Residents and new citizens over the last few years?\r\n\r\n\r\n\r\n
[Mr Deputy Speaker (Mr Matthias Yao Chih) in the Chair]
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4.30 pm
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Sir, for Concept Plan 2011, is the Government still planning for a population of 6.5 million? Or perhaps we should be pushing for 8 million people, so that we have enough supply? What can the public expect from Concept Plan 2011? When will Concept Plan 2011 be released? Given our limited land, how can the Government optimise the use of the land? What will the Government do to support the needs of a bigger population?
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What is the current percentage of land use for residential, transport, commercial as well as recreational? How will these change in Concept Plan 2011? Will there be any change in the amount of land use for SAF training? Can this be reduced further, since we have advanced simulators that can help our operational units to practise? Last of all, how will all these percentages, in terms of use, change in Concept Plan 2011?
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Liveable city and quality of life
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Ms Jessica Tan Soon Neo: Mr Chairman, with our increasing population and density in Singapore, as we push towards continual growth and progress, how do we ensure that we can continue to provide a conducive living environment and sustain the quality of life for Singaporeans?\r\n\r\n
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We will continue to see growing demands on our limited land, increasing stress on our infrastructure, for example, roads, trains, common living areas. Will our homes get smaller, roads get more \r\n\r\n
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\r\n\r\ncongested, train and bus rides get more crowded, noise levels increase, and amenities in common areas being built in closer proximity? With physical intensification, the chances of conflict increase and tolerance levels will be tested. What measures are in place to ensure that as we drive economic growth and upgrading for Singapore, this is not done at the expense of the quality of living environment for Singaporeans? How will we ensure that we will continue to be able to meet the changing needs of our community and provide Singaporeans with healthy living environment, and personal and social space? While we drive more productive use of land, what are the criteria that are used to assess that living conditions are conducive and the quality of living is maintained?\r\n
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Land and infrastructure planning
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Assoc. Prof. Fatimah Lateef (Marine Parade): Mr Chairman, being a small country, land is scarce and a precious commodity. Thus, Singapore is planned as a compact city. The majority of our housing developments are built at high densities and we even carry out reclamation of land by extending our coastline.\r\n\r\n
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How is the coordination done on land allocation, whether it be for residential, parking, commerical or other social facilities? What are the strategic formulae to ensure our diverse land needs are met for balanced and sustainable growth? Considering the existing network of road systems we have, how does MND and its agencies decide on approval given for certain developments, such as residential high-rise buildings within this network?
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Let me illustrate with an example. In Haig Road/Tanjong Katong area, at least 10 new condominium developments have come up in the last two years. When \r\n\r\n
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\r\n\r\napproval was given to these developers, how were the issues of congestion, road bottlenecks, utilisation, access to the surrounding facilities and amenities taken into consideration?\r\n
Assoc. Prof. Paulin Tay Straughan (Nominated Member): The ideal family structure that manages both childcare and eldercare is the three-generation family. However, as with the emergence of contesting norms and demographic challenges, we have to accept and prepare for a society where older members will grow old in their own homes, either alone or with an aged spouse.\r\n\r\n
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The proportion of singles is set to increase. For those who marry and have children, normative shifts result in the preference for nuclear families, especially among the younger married couples. In addition, with globalisation, many young Singaporeans now have the privilege of working overseas and living away from their parents. Taken together, this means that we have a growing pool of empty-nesters – retirees who are likely to have sufficient set aside for retirement and who own larger homes (4-bedroom HDB flats and better homes) and, therefore, this group enjoys the potential of downsizing to a smaller unit to facilitate ageing-in-place.
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As they grow older, they will need assistance to manage everyday activities to facilitate ageing-in-place. Currently, there is a gap in the market when we look at assisted living facilities. Studio apartments are an excellent option for lower-middle income households. However, for those in the middle- and upper-middle income group, most manage with the help of a foreign domestic worker. It is not cost efficient for these households to try to independently resolve their needs requirements.
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I would like the HDB to consider the idea of an executive condominium \r\n\r\n
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\r\n\r\nconcept for assisted living. These will be like the retirement communities in the United States where elderly residents own their own homes – they could be studios or 1- or 2-room apartments – which are located in a private community with on-site offices to provide for three key needs: healthcare, cleaning and nutrition. These will be affordable because if the HDB takes this up, these homes can be provided at cost. They will not be seen as \"grey ghettos\" because they will be private condominiums with security and maintenance.\r\n\r\n\r\n\r\n\r\n\r\n
With the actualisation of studio apartments, the details and process for administration of these housing types, that is housing types with shorter lease terms, are already in place. We now need to extend the concept to a condominium setting and give older Singaporeans, who can afford better options, feasible options. We cannot depend on private developers to fill this gap as land cost in Singapore is too high. A for-profit model will result in pricing such establishments out of the reach of most Singaporeans. I hope the Government will see this as social enterprise and a service for ageing Singaporeans.
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The hallmark of a truly great nation is one where her citizens can look forward to graceful ageing and ageing-in-place, where community ties will be cherished and nurtured.
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Mr Cedric Foo Chee Keng: Mr Chairman, the results of the URA Lifestyle survey show that 83.8% agree or strongly agree that Singapore is a great place to live, work and play. Interestingly, almost 30% of respondents also identified participation at signature events such as the National Day Parade and Marina Bay Countdown as events that make Singapore special. Marina Bay has endeared itself into an important hub for Singaporeans as a venue associated with celebrations and national identity. To \r\n\r\n
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\r\n\r\ntourists and the international community, the iconic skyline featuring the Marina Bay Sands, Singapore Flyer and even the race route for the Formula One night race have become part of what it meant to visit Singapore. Endearing as it already is, I understand that Marina Bay today will not be the same in one or two years from now. I would like to request the Minister to update the House on the various new attractions that will add to the vibrancy of the Marina Bay.\r\n\r\n\r\n\r\n
Sir, for the Concept Plan 2011, I do have some similar questions as Dr Lim Wee Kiak. We know MND will launch it very shortly. Can I ask the Minister about the planning parameters that will go into this concept plan? What is the assumption, particularly on the resident population, for the purpose of city planning this time round? Would we see some shifts, for example, more \"work activities\" in the east of Singapore and more \"live activities\" in the west of Singapore? How do we tackle the very important public transport needs into the future? Ultimately, how would future Singapore look like? How would it feel to live here in 10, 20 and 30 years' time? Can the Minister share his vision with us?
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Mr Mah Bow Tan: Mr Chairman, Sir, I have talked about helping Singaporeans own their homes and how we can secure home ownership for the low income. Besides these, our longer-term challenge is to remake our heartlands so that they remain relevant and sustainable homes for our people.\r\n\r\n
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Let me first of all share with Members what Remaking Our Heartlands is all about. Today, we have various estate renewal programmes – Lift Upgrading Programme (LUP), Home Improvement Programme (HIP), Neighbourhood Renewal Programme (NRP), and Remaking Our Heartland (ROH) programme. If I had a quiz for Members here, I do not think \r\n\r\n
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\r\n\r\nmany Members will be able to get the acronyms all right. These are very important acronyms because they affect all of us. The most comprehensive effort that we have today is the ROH programme. I recently announced the second batch of ROH programmes for East Coast, Hougang and Jurong Lake.\r\n\r\n\r\n\r\n
Mr Cedric Foo and Mr Liang Eng Hwa have asked what we can expect under ROH. It is a very comprehensive programme. For each of these areas – Jurong, Hougang and East Coast – the plans are going to be very comprehensive and cover four key aspects.
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First, it is the town and neighbourhood centres [indicating slide ]. This is a picture of the East Coast ROH at Bedok Town Centre. Bedok Town Centre is going to be rejuvenated. It will include new mixed developments for multiple uses like commercial, residential and transportation. Hougang Town Centre is going to be another example.
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Secondly, outdoor recreational spaces will be expanded so that residents can enjoy active lifestyles and gather as a community. Members will see the before and after pictures on the screen [indicating].
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Thirdly, existing homes will be upgraded and new housing like this waterfront development in Hougang will be introduced [indicating]. There are so many pictures of Hougang because this is one of three ROH Towns. There are similarly nice pictures in other areas which I did not show.
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Fourthly, as part of the ROH, even as MND rejuvenates all these areas, MND is going to preserve the heritage, or what makes each area special. This is also very important. MND does not want to make \r\n\r\n
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\r\n\r\nevery town look exactly the same in Singapore.\r\n\r\n
To catalyse the growth of Jurong Lake district, MND and two of our agencies, AVA and BCA, will relocate to the area as the anchor tenant in Lend Lease’s development. Lend Lease recently tendered for the site successfully and they are going to develop this mixed-use development. MND and its agencies will be an anchor tenant in their development. When this is completed in 2014, the mixed-use project will feature green spaces and roof gardens. It will inject new lifestyle and retail buzz to the town centre. By the way, it is not the whole building for MND. It is only the top portion of the building [Laughter ]. The other portions are for shops and retail. It will make a big difference to the Jurong Lake District and catalyse the area.
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Apart from the Town Centre, the neighbourhood centres will be spruced up and revitalised. To help residents fully enjoy these developments, MND needs to make sure that there is improved connectivity in the area. This is a very large area. We will improve the connectivity so that residents from as far as Bukit Batok and Bukit Timah can cycle, walk or jog all the way to the Jurong Lake along the new pedestrian and cycling networks that will be built.
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The ROH plans will directly benefit 700,000 residents, who live in the area, \r\n\r\n
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\r\n\r\nand many others who will work, visit and spend time in these areas. We will spend at least $1 billion to remake these areas over the next five years.\r\n\r\n\r\n\r\n
We have also made considerable progress with the first batch of ROH towns. Let me just present the report card very quickly. First of all, Members will remember Yishun was one of them. It is a middle-aged town. Yishun is very different today with the completion of developments such as the revamped Northpoint where MND has co-located a library; the new Khoo Teck Puat Hospital just next to the PUB's water catchment and the ABC Waters works at Lower Seletar Reservoir.
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Dawson Estate, which is one of the older estates, will also see a fresh lease of life with the injection of new generation housing, which will be amidst greenery.
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Lastly, our efforts to build a new town in Punggol, which is our newest town, have begun to bear fruit. When we first embarked on the Punggol 21 plan – that was 1996 – Punggol was just a forested area with a few roads and fish farms. When the Asian financial crisis struck in 1997, the take-up of flats slowed all over Singapore, including Punggol. Many people questioned whether Punggol would ever take off. The Members of Parliament in the area were wondering whether there are enough flats, enough people moving in, would we be able to start the MRT station, and so on.
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But, HDB pressed on and launched new flats when demand picked up. And in 2007, not only did we pursue that or continue with Punggol 21, we updated our vision with Punggol 21 Plus. And HDB worked with PUB to construct a 4.2 km waterway through the town, something that has never been done before. It is a waterway that not only looks beautiful – it would add to the beauty of the town, the aesthetics of the town – but it also serves a very important purpose and that is to connect the two reservoirs.
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By the year end, 23,000 flats will be completed; including developments like Punggol Periwinkle as shown on the screen and the Treelodge@Punggol. Residents of Treelodge@Punggol recently received their keys from Deputy Prime Minister Teo and were very happy. Many of these developments boast HDB’s new housing features like green roofs and podium carparks. Another 12,000 of these flats are going to be completed by 2015.
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Punggol is a good example of the efforts that we have taken to not just build a town but to create green spaces for people to relax, to reconnect with nature even as we become more built-up. The Punggol Waterway Park and Sungei Serangoon Park will be ready by June 2011. And the 17-km North East Park Connector Loop will complete by the end of this year. These are some of the pictures [indicating]. They are not artist's impressions, they are actually real.
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We are going to find new ways of rejuvenating and revitalising our HDB estates. Ms Indranee Rajah suggested incorporating more open spaces in HDB estates and also incorporating or integrating sports facilities at the precinct level. I think these are good suggestions and we will look into them. I will also ask HDB architects to join her in her walkabouts if she agrees to sit with our architects when they do their planning as well so that there will be a cross-fertilisation of ideas between architects and lawyers and MPs. I think it will be a very interesting exercise to see what comes out.
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Let me now talk about another very important and a very major programme that we have been rolling out in our HDB estates, and that is the Lift Upgrading Programme (LUP). The ROH is a very big \r\n\r\n
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\r\n\r\nprogramme. It will rejuvenate selected areas holistically. It will take time to roll out to all the estates. I assure Mr Liang Eng Hwa that the ROH programme will reach Bukit Panjang, sooner or later, depending on the budget but it will reach Bukit Panjang. But, in the meantime, other residents can continue to enjoy and benefit from HDB's other core upgrading programmes. ROH is not the only upgrading programme that we have. There are many others. So let me now talk about some of the other programmes.\r\n\r\n\r\n\r\n
Dr Ahmad Magad highlighted the fact that our population is a fast-ageing one. Therefore, we need to roll out barrier-free accessibility for the elderly Singaporeans much faster. And that is exactly what we have done. We had introduced the LUP in 2001, it was 10 years ago, and we have made very good progress.
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Mr Ang Mong Seng asked about the progress, and let me report to the House what we have achieved so far. To date, 4,900 of the eligible blocks or 96% of eligible blocks have been offered LUP. I am pleased to announce that the final batch of precincts will be selected this year and we are on track to complete LUP for all eligible blocks by 2014. This is the target that we set in 2005 and we are on track and we are going to achieve it.
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It has been a huge, huge exercise – a massive exercise. It costs the Government $5.5 billion for the whole LUP exercise over the 10 years. This is the cost of building the North East Line (NEL) and the Sengkang LRT combined. It involved many man-years of planning, design, consultation and construction. So on behalf of all residents who have benefited, young and old, I would like to thank all those who have helped to make LUP possible – HDB engineers, architects, planners, Branch Offices, Town Council staff, advisers, grassroots leaders, \r\n\r\n
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\r\n\r\nconsultants, contractors and their workers, both foreign and local.\r\n\r\n\r\n\r\n
As we near the end of the programme, it is timely to take stock of the long 10-year journey we have undertaken.
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Over the years, we have significantly increased the number of blocks that will benefit under LUP. We first announced LUP in 2001, as I said. At that time, we set the target of bringing direct lift access to all the high-rise HDB blocks. There were about 4,400 HDB blocks. These were blocks that were built before 1990 because after 1990 we already had lift access.
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Then in 2005, because of the positive feedback and more requests from Members of the House, we extended the LUP to another 900 low-rise blocks, if they could be done within the cost cap. If you recall, at that time, blocks having four or five storeys and below were not eligible for LUP. We changed that in 2005.
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Because of our ageing population, we also committed in 2005 to complete LUP for eligible blocks within 10 years, that is, by 2014, so that elderly residents can benefit from direct lift access more quickly. Every time I go on walkabouts, the elderly senior citizens will ask me, \"When am I going to get lifts? If I wait too long, I won't be around anymore.\" So we try to do it as quickly as possible.
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And this effort to bring direct lift access to as many blocks as possible, as quickly as possible, was not just massive in scale but it also called for considerable innovation. HDB piloted many new technologies so that LUP costs could be lowered and more blocks could qualify. Let me give some examples. Members know in Tampines and Pasir Ris, the blocks are affected by height constraints. So, they cannot go above a certain level. As a result of that, these blocks cannot have a machine room at the higher levels \r\n\r\n
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\r\n\r\nto serve additional storeys. It is capped at that level. In 2006, HDB piloted a new lift system called the machine room-less (MRL) system – in other words, no machine rooms required at all. So, MRL for short. As a result of this, we could now implement LUP for such blocks in Tampines and Pasir Ris. Now, residents here are very happy because the top floors are now able to get the lifts. It is one example. Then there are other things like bubble lifts. They experimented with different types of lifts – bubble lifts, small \"home lifts\" – just to bring down the cost of LUP. Lighter, less foundation works required, less structural costs, and so we could roll out LUP to more low-rise blocks. And we have implemented such lifts in Yishun and Toa Payoh.\r\n\r\n\r\n\r\n
HDB also found that many blocks were not as \"standard\" as they thought and LUP implementation was not as straightforward as they thought. So, again, think out of the box, come up with new designs. For some flats, they came up with what they called a \"long bridge\" solution. A \"long bridge\" solution means that you build a lift shaft and then you build this long bridge to the residents’ flats. These solutions can be found in towns like Pasir Ris, Bishan, and Choa Chu Kang. Then they came up with a \"short bridge\" solution, which I do not have a picture of but it is a variation of the \"long bridge\" solution. Essentially, it means that you bring lift access through the balconies of the apartments, and we have such flats in Jurong East, Bedok, Yishun and Woodlands. I recount all these just to illustrate that this was not a straightforward exercise by any means. It required a lot of money, it required a lot of effort, it required a lot of innovative thinking on the part of everyone concerned and that is the reason why I think it is such a special exercise to bring lift accessibility to all.
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So as a result of all these, we now have a significant reduction in the number \r\n\r\n
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\r\n\r\nof blocks that are ineligible for lift upgrading – from 1,000 blocks that could not have LUP because of cost constraint, technical constraints, configuration, etc, we have now reduced it to around 200 blocks.\r\n\r\n\r\n\r\n
I would like to assure residents that HDB will continue its best to extend LUP to as many blocks as possible. But if in spite of our best efforts we cannot do so, then we will have to think about other options. Mr Wee Siew Kim and Mr Ang Mong Seng asked what these other options are. We will have to study how we can help this group of residents, especially those who are genuinely in need of lift access – those who are frail, those who are handicapped, wheelchair-bound, they really truly need lift access. And if they live in these 200 blocks, what can we do? So we will study how we can help this group of residents. Perhaps relocating them to flats with direct lift access is one way and we will try to target to announce our plans later this year.
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Sir, as the LUP works tail off, we will shift our focus to another key upgrading programme and this will be the Neighbourhood Renewal Programme (NRP) which provides new community facilities for residents of all ages to enjoy, and the other one which is the Home Improvement Programme (HIP).
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In particular, we will focus on the HIP which will provide practical improvements within the flat to enhance living conditions for residents and to support the ageing-in-place of the elderly. There are two categories of improvements under HIP. The first provides essential improvements, such as the repair of spalling concrete that may arise as the flats age, and the replacement of old pipe sockets with new clothes-drying racks. I think Er Lee Bee Wah was very concerned about the elderly not being able to reach out and \r\n\r\n
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\r\n\r\nhang their clothes. This is a new design, and it is going to be provided under the HIP programme under the essential works. Secondly, we will also have a list of optional items which residents can select from the optional items list such as toilet upgrading and this will include the installation of elderly-friendly features such as pedestal toilets, grab bars as well as lever taps which the elderly will find easier to use. So you just need to lift or push down instead of turning your wrist to twist the faucet. Another optional item is the replacement of the main door and the grille gate. This is also a very popular item among residents. So that is the HIP programme.\r\n\r\n\r\n\r\n
Mdm Cynthia Phua, Er Lee Bee Wah and Mr Cedric Foo asked what is the pace of these upgrading programmes. Can we do it at a faster pace? Dr Ahmad Magad was concerned about the elderly having to wait a long time for such elderly-friendly improvements to their flats. We have already doubled the number of projects selected annually for NRP and HIP from seven projects to 14 projects per year in the last two years. Again, these are large programmes, and they really require a large budget and so it has to be done depending on our financial resources. Nevertheless, with LUP coming to a close, we will be increasing the pace for HIP. We will double the number of projects selected for HIP to 28 next year and we will increase further to 35 projects per year by 2014. Over the next five years, this will allow us to offer HIP to about 60% of the eligible precincts remaining after this year's selection.
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Over the next five years, we will be able to offer HIP to 160,000 more households. If we continue at this pace, and if the budget is available, we should be able to finish offering HIP to all eligible precincts in the next 10 years or so.
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Apart from our efforts to support accessibility and ageing-in-place in HDB estates, we are also doing more for private estates. Er Lee Bee Wah has been pressing for more to be done in the private estates, and I am glad to inform her that we will be doing so. We have been working with the private estates to incorporate barrier-free and elderly-friendly features when they are selected for the Estate Upgrading Programme (EUP). Like the HDB upgrading programme, there is a budget that we all work with. There is a certain budget per household or unit. There are cost caps. There are norms. The private estates would usually undergo a consultation exercise to prioritise their plans to make the best use of their budget, and this varies from estate to estate. When an estate is selected for EUP and wishes to use the funds for barrier-free accessibility, they can do so. So, when Er Lee Bee Wah nominates, later on, those estates that she is talking about, we will be able to go into details with her.
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Next, let me touch briefly on car parks. Over the past five years, the season parking demand for HDB car parks has increased along with the car population growth. It has gone up by over 30%. Overall, parking facilities are adequate. Nevertheless, I know that there are localised shortages and some shortages are quite severe.
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Dr Ahmad Magad and Mr Chiam See Tong asked about the measures to cope with this. There are two ways we can deal with this. One is to increase supply. HDB will be building 5,000 new car park lots, including multi-storey car parks for the next two years at a cost of $66 million. One thousand and six hundred lots have already been completed last year and another 1,800 lots will be completed this year and the rest next year.
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\r\n\r\nSecondly, we are going to manage demand. We need to always take this approach of not just increasing supply but also managing demand. One way is to install the electronic parking system (EPS). EPS is able to manage and regulate short-term parking demand in a very effective way. Residents using car parks already implemented with EPS are very happy with this.
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HDB has also grouped some car parks together so that season parking ticket-holders have access to alternative car parks. If you find that this car park is full, you will be able to park in the next adjoining car park. If demand is high, we will give priority for season parking to the first car of the household, as suggested by Dr Ahmad Magad. So, if you have two or three cars, your first car will enjoy priority for the car park nearest to your flat. It does not mean that you will get a car park just next to your flat, but it means that you have a season parking ticket to park in a red lot in a car park which is near your flat. I know that there have been some residents who have asked, \"Can I reserve this lot? It is next to my flat because I am just staying upstairs.\" The answer is, \"Sorry, you cannot.\"
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With these measures, HDB expects the localised parking shortages to improve. In fact, the majority of car parks can cater to the first car of the households. Like all things, there is a limit to the number of new car parks that we can provide in land-scarce Singapore. The more fundamental solution is to work with LTA to facilitate greater usage of public transport by integrating rail and roads with HDB estates.
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Sir, if we take the whole estate renewal effort together, it is a very substantial investment. We are going to spend $1 billion every year for the next 10 years – $10 billion in all. That is the amount of money that the Ministry of \r\n\r\n
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\r\n\r\nFinance has set aside for the estate renewal effort. It is a huge sum of money. Ten billion dollars on a global basis may not mean anything to people. Let us look at the individual household that qualifies for LUP, HIP and NRP together. It could receive up to $55,000 in upgrading subsidies, and that is a lot of money.\r\n\r\n\r\n\r\n
In 2011, around 50,000 households will benefit from these schemes, and a further 300,000 families will benefit in the following five years. These upgrading programmes will help to sustain the value of HDB flats for home owners, ensure that older flats stay relevant to Singaporeans' needs and serve as long-term homes where we can bond with our neighbours and community.
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On the subject of bonding, I agree with Ms Indranee Rajah that we should encourage residents to be gracious neighbours and promote greater community bonding. A lot of effort has been made. We have handbooks on the \"do's and don'ts\" of high-rise living. We have Good Neighbour Awards. But I guess if you are not very socially aware, I do not think you are going to read a handbook on the \"do's and don'ts\" nor are you going to worry about being a good neighbour.
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Sir, I think we will have to do more but it cannot be just the HDB doing it alone. It cannot be just the Town Councils alone. It has to be also the grassroots leaders, it has got to be the People's Association too. In fact, residents themselves must also set the milieu, the standard. Do not just run to the MP or to HDB every time there is a problem. There are mechanisms in place for mediation. There are mechanisms for grassroots leaders to talk to them, visit each other and so on. It is a process that must start with the residents themselves. We will do the basics. We will do the education, we will do the awareness-raising, but I think it has to be a total effort on the part of everybody concerned. Ultimately, we \r\n\r\n
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\r\n\r\nneed the heartware and we need the hardware. For hardware, we will build community spaces. We will make sure that there are RC centres, there are senior citizens' corners and so on. But it is the heartware that will make our estates sustainable, long-term homes and communities for Singaporeans.\r\n\r\n\r\n\r\n
Sir, let me now talk about the longer-term remaking of our city and nation. Several Members have asked how we can support a growing population whilst preserving a good quality of life. That is indeed the key question that we ask ourselves and that we seek to answer under the Concept Plan 2011. This is the national land use planning exercise that we do every 10 years. It is an exercise that will map out our long-term land use strategies and the vision for the physical development of Singapore over the next 40 to 50 years.
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To answer Dr Lim Wee Kiak and Mr Cedric Foo: yes, we are keeping the planning parameter of 6.5 million by 2055 under this Concept Plan exercise. This is the planning parameter we use in the last planning exercise and we are keeping this same planning parameter. It is not a target. It is a planning scenario that we have to use. We need to know what is the population parameter in order to formulate our land use strategies – how many schools, how much land to set aside for roads, for housing, and so on. The actual population of Singapore in the years ahead must depend on other factors – on social factors, on economic factors and on political factors.
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Over the past year, the URA has conducted extensive public consultation and it has heard the hopes and aspirations of Singaporeans from all walks of life. It is now undertaking this challenging task of now reconciling all the different needs of the various agencies and of the people \r\n\r\n
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\r\n\r\nfrom all walks of life – all within this space of 700 square kilometres. Defence, housing, transportation, industry, leisure, you name it. All these various needs to be accommodated within this finite space of 700 square kilometres. All the things that Dr Lim Wee Kiak and Mr Cedric Foo talked about. It is not easy. We will have to make trade-offs. We will have to make trade-offs between different needs and we may even have to be prepared to change the way we live, work or play. With careful planning, we can still enjoy a quality living environment even as our economy and our population expand. We will need to invest significant fiscal resources to achieve this.\r\n\r\n\r\n\r\n
What are the investments we will need to make? First, we will have to invest heavily to expand our land as much as we can by intensifying the use of existing land, by reclaiming more land if we can and by creating underground space. That is going to take up a lot financial resources. This is what Ms Jessica Tan mentioned in her speech in the Budget debate.
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Second, we will have to invest to rejuvenate key areas of our city. We have to make space for new industries, we have to make space for commercial activities and we have to continue to make Singapore relevant as a place for businesses and for global headquarters for the financial sector and for many other business sectors as well.
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Third, we have to invest to build up and to create new HDB estates to accommodate a bigger population as well as to upgrade our existing towns. We will be injecting more housing units across the island, especially in the central and west areas, so that we can improve the job/worker distribution and bring jobs closer to home. If we can redress this imbalance somewhat, we will be able to reduce or mitigate the pressure on our transportation network. It will reduce the \r\n\r\n
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\r\n\r\npressure, although it will not totally eliminate it.\r\n\r\n\r\n\r\n
Fourth, to the extent that we can mitigate it, we will still need to invest in our road and rail network to provide better connectivity for residents.
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Fifth, we will have to invest in new infrastructure to make Singapore a city for all ages – what Minister Lim Boon Heng talked about – one that is friendly to the old, to the young and to the families.
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Specifically to address Assoc. Prof. Fatimah Lateef, Ms Jessica Tan and Assoc. Prof. Paulin Tay Straughan's questions, we will consciously safeguard land for leisure, social facilities and amenities for people. For example, we are going to factor in the needs of an ageing population, and this includes the suggestion by Assoc. Prof. Paulin Tay Straughan for a retirement community or a retirement village. Whether that community or village is to be built by HDB or other public sector agencies or whether it should be better built by private sector agencies is something that we have to discuss. We will have to set aside land for such future housing typologies as well as land for healthcare, for nursing homes, for other facilities that will cater to the elderly. But we can integrate different facilities to intensify the use of land, or we can require greater use of public rather than private transport. Of course, we will not forget our heritage and our collective memories by preserving our collective memories even as we rejuvenate our city so as to keep us rooted to this place we call home.
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A public exhibition to showcase the key ideas and strategies of the draft Concept Plan 2011 will be held towards the end of the year, and we will seek more public feedback before finalising Concept Plan 2011. I welcome all inputs from Members of the House when the draft plan is available.
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\r\n\r\nSir, Singaporeans need not wait 50 years to see change. Our lives will change for the better even in the next five years. Mr Cedric Foo asked about the Marina Bay. Developments around Marina Bay started 10 years ago. Some projects were completed last year and this year but there is more to come within the next two years. The Arts Science Museum has just opened.
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The construction of the new International Cruise Terminal will be completed at the end of this year. The much-awaited Gardens by the Bay saw the completion of one of these jewels – the Flower Dome Conservatory, late last year. The Garden will welcome visitors from June next year but community groups will get a chance to preview the Gardens in the months leading up to its official opening. I have asked NParks to invite advisers and community groups to start to preview the Gardens towards the end of this year, when it is ready, as a soft opening. The Gardens will be a world-class attraction and a premier garden for Singaporeans as well as visitors to enjoy.
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It is not just in the Marina Bay alone that developments are taking place. Our regional growth areas have also taken off. Within the next five years, Kallang Riverside will become our newest waterfront destination. You can expect to see hotels along the riverfront, with panaromic views of Kallang River and the city. The Sports Hub will be completed by 2014. It is going to incorporate a new National Stadium with 55,000 capacity to bring back the Kallang Roar. It will have a 6,000-capacity indoor aquatic centre, a 3,000-capacity multi-purpose arena and a water sports centre.
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The Kallang Airport Terminal Building – the hangars and the Central Lawn which are conserved – will be transformed into a lifestyle destination. \r\n\r\n
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\r\n\r\nPaya Lebar will be transformed into an attractive commercial hub in the fringe of the city to complement the Central Business District. Construction of a new pedestrian mall along Geylang Road is expected to complete by 2013. This new pedestrian mall will be flanked by outdoor kiosks, sidewalk cafes and will provide more space for stalls during the popular annual Hari Raya Bazaar. Later this year, WDA will start constructing its Continuing Education and Training Campus East (CET Campus East). Earlier, I talked about CET West Campus, this will be the location of the CET East Campus.\r\n\r\n\r\n\r\n
In summary, to answer Mr Cedric Foo on how our future city will be like – it will be an outstanding city. It will be one that is high-rise, high-density, yet liveable. It will be vibrant, yet sustainable. It will be cosmopolitan, yet cohesive.
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Sir, our long-term vision is an ambitious one. We want to develop Singapore into an endearing home with a heart and a global city with a soul. By planning and investing ahead early, we believe that we will be able to build a better Singapore for Singaporeans.
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Construction productivity
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Mr Zainudin Nordin: Sir, the productivity of the construction industry is of paramount importance to Singapore as it is an initial component of a growing economy. The Government has taken several steps to help the construction industry improve productivity and strengthen its capabilities through measures such as the establishment of the Construction Productivity and Capability Fund.\r\n\r\n
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Sir, it is common knowledge that the workers in the construction industry in Singapore are mostly transient, made up mostly of foreigners. Very few workers \r\n\r\n
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\r\n\r\nchoose to stay long enough to accumulate the desired experience and skills. In that regard, Sir, I believe new measures have to be taken to encourage construction companies to modernise their building methodologies and upgrade the skills with the aim of raising productivity of the individual worker. As it is the current scenario, Singaporeans are not willing to take up the jobs done by these foreign workers because they did not see much incentives and career prospects.\r\n\r\n\r\n\r\n
It is never enough to rely on Government initiatives to overcome the challenges that are facing the industry. It is a shared responsibility between Government agencies and private sectors to improve the productivity of the construction industry as a whole.
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Sir, the Construction Productivity Roadmap was launched in 2010. Can the Minister share with the House: what has been the progress in improving the productivity? Has the $250 million Construction Productivity and Capabililty Fund been effective in achieving productivity improvements?
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Mr Ong Ah Heng (In Mandarin): [For vernacular speech, please refer to Appendix A*.] Mr Chairman, the majority of Chinese immigrants who came to Singapore in the 1950s and 1960s took up jobs in the construction industry because they were lowly educated and lowly skilled. Even in the 1980s, few Singaporeans are willing to join this industry because the work is very hard.\r\n\r\n
\r\n As Singaporeans become better educated, less are interested in the construction industry. Companies have no choice but to employ foreign workers. With the property boom in the last few years, construction companies are employing more and more foreign workers.
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\r\n\r\n on short-term basis. There is little incentive for construction companies to invest in their workers to improve their productivity.\r\n\r\n
\r\n The construction industry is labour intensive in nature. Can the Minister share with us the measures to attract more Singaporeans to the construction industry? What is the plan to boost productivity?
Er Lee Bee Wah: Mr Chairman, many players in the construction industry is hoping that the Ministry of National Development (MND) will grow the construction industry, just as the Ministry of Finance (MOF) is doing for the accountancy profession which was unveiled at the inaugural Singapore Accountancy Convention last year. MOF had a bold vision to transform Singapore into a leading global accountancy hub for the Asia-Pacific region by 2020.\r\n\r\n
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Many players in the construction industry lamented that they hoped to hear a similar plan from MND. This is especially prudent during this period when efforts are being channelled into producing new good quality housing in the shortest amount of time possible to cater to the housing demand.
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I understand that MND has always endeavoured to build a competent and productive construction industry. I am heartened to note that we are on the right track and I would like to ask the Minister if he can review the plans to grow the construction industry and inject greater professionalism. In addition, I wish to offer a suggestion and that is to make the National Productivity Fund more accessible to the smaller firms, including consultancy firms, to support them to acquire new software and hardware, develop new technologies and talents.
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Very few of us are born great. We all have to start somewhere and we all need \r\n\r\n
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\r\n\r\nopportunities to develop our abilities. To grow our construction industry, big players should not be the only ones splitting the pie.\r\n\r\n\r\n\r\n
Last, but not least, I would like to urge Government agencies to review their regulations as some existing regulations are counter-productive. One such example is the introduction of the Professional Engineer Drill Technique for Design of Piling Works.
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I must declare my interest as a professional engineer. I have voiced my concerns before the implementation and today, after implementation for more than two years, I can tell you that the current practice has resulted in much time and energy wasted. I hope BCA can conduct a review together with other necessary revisions. Every one counts in the productivity drive, including Government agencies.
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The Senior Minister of State for National Development (Ms Grace Fu Hai Yien): Mr Chairman, I would like to thank Members, Mr Zainudin Nordin, Mr Ong Ah Heng and Er Lee Bee Wah for their questions on the construction industry and our progress in increasing productivity.\r\n\r\n
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First, allow me to share with the House the Construction Productivity Roadmap. Whilst we recognise that we cannot replace foreign workers with locals in this industry, we can reduce the number of workers by switching to technology or building up the skill levels of the workers. To incentivise the industry to do so, we have to regulate the demand of foreign workers through the foreign worker levy and the Man-Year Entitlement (MYE) System.
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Second, we will offer financial incentives to encourage progressive firms to adopt technology or upgrade their workforce. We will impose regulatory \r\n\r\n
Column: 3567
\r\n\r\nrequirements and standards on buildability and constructability to drive productivity efforts across the entire value chain and, finally, underlying the success of our efforts is the core competence that is residing in the construction personnel. Hence, we will need to improve the quality of our workforce.\r\n\r\n\r\n\r\n
First, on foreign worker levy. We have recently announced additional levy increases and MYE cuts, up to July 2013. As announced earlier, a new skills framework will come into effect from 1st July 2011 to identify higher-skilled and more experienced workers. Those who are registered under BCA’s CoreTrade scheme, or who have attained supervisory qualifications, will be in the new Higher Skilled category and attract lower levy as compared to those in the Basic Skilled category. The levy differential will encourage the industry to upgrade and retain their skilled workers.
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Since the announcement of the levy changes, there have been concerns that the cost increase would be passed on to consumers. We like to encourage the industry to start the \"brisk walking\" as the Deputy Prime Minister said, and tap the Construction Productivity and Capability Fund (CPCF) for incentives. Progressive firms which adopt technology and productive methods to reduce their reliance on foreign workers will be more cost competitive and better able to meet the challenges. In the end, we believe they will offer their customers better value and gain market share.
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Since the launch of the $250 million CPCF in June 2010, more than 500 firms in the construction industry have benefited from the Fund, of which 65% are small firms. Close to $7 million has been committed.
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\r\n\r\nTo date, BCA has received over 1,400 applications from 400 firms to tap on the Workforce Training and Upgrading scheme. This covers up to 80% of skills assessment and training course fees for eligible workers. BCA will enhance this scheme to benefit more companies. This funding support will also be extended to cover more productivity-related courses, including those at the PMET level.
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In the area of technology adoption, BCA has approved 10 applications and committed close to $3 million from its Productivity Improvement Project (PIP) scheme. One successful PIP application is Tiong Seng’s development of an integrated pre-casting facility which is highly automated and enables a 24-hour precast production process in a factory environment. In other words: it is covered, it is multi-storey, it also has a part of the building that is reserved for foreign workers' dormitory. It is an integrated facility, with intensive use of land, and it changes construction from what we know – that is, being exposed to sun and rain – into a factory manufacturing environment. We believe that this is really a very good example on how leading progressive firms can show the way to lead the change in the industry. When ready later this year, this facility is expected to reduce the labour required for precast production by 50% to 70% through mechanisation and automation.
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Next, BCA’s Building Information Modelling (BIM) Fund has also started to attract interest from the industry. As mentioned by the Deputy Prime Minister in his earlier speech, BIM enables the integration of architectural, structural and mechanical and electrical (M&E) designs which avoids costly re-work during the construction phase. I have asked for a short demonstration of what BIM can do [ indicating ]. This is using the SAFRA Clubhouse as an example. This is what you see as a perspective of the design.
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\r\n\r\nFirst, the architect will develop the architectural model. The model will then be passed to the structural engineers to develop the structural elements. The mechanical and electrical engineers will then add on systems such as plumbing and air-conditioning, ventilation, and so on.
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And, finally, the software allows the different consultants in the project team to share their design specifications so that potential clashes in design can be avoided and can be resolved early in the design phase, thus, avoiding costly re-work down the road.
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5.30 pm
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To steer the industry towards adopting BIM, BCA will require electronic submissions of architectural, structural and M&E plans using BIM for regulatory approval by 2015, starting with architectural submissions in 2013. The public sector will drive BIM adoption by working towards specifying BIM as a requirement in new building projects from next year.
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To encourage the SMEs and sub-contractors to invest in technology, BCA’s Mechanisation Credit (MechC) defrays the cost of buying or leasing equipment. Two and a half million dollars has been approved for applications from 100 companies, the majority of which are small firms. One such firm is Kong Hwee Iron Works and Construction which purchased a Computer Numerically Control pipe profile cutting machine, which is shown on the right hand side [indicating], that basically automates steel pipe cutting, compared to the traditional manual way of cutting it. So, again, improvement to labour, reducing manual errors and machines get less tired than human beings.
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\r\n Sir, we recognise that there is a need to reach out to more firms and to further incentivise them to make the change. I am pleased to announce that we will raise \r\n\r\n
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\r\n\r\nthe level of funding support under the Mechanisation Credit scheme, the Building Information Modeling (BIM) Fund and the Productivity Improvement Project scheme to provide more assistance to a wider group of firms. BCA will be releasing more details on the revised funding levels.\r\n\r\n\r\n\r\n
We will also enhance the regulatory requirements to bring about changes in industry practices. We will change the \"Buildability Score\" to encourage designers to adopt more productive designs and we will introduce a \"Constructability Score\" to steer builders towards more productive construction methods and technologies. BCA has been consulting the industry on these enhancements and will introduce them in second half of 2011.
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To complement the levy framework, BCA is enhancing the CoreTrade scheme to recognise more trades that support productivity improvements. A total of 10 construction trades will be added to the existing seven trades for CoreTrade registration and this will allow a better paying job, higher value, better career progression, and possibly attractive career options for Singaporeans. But, as I mentioned earlier, the construction industry will continue to depend on foreign workers. Nevertheless, with the CoreTrade and its enhancements, we hope to attract more locals but we also want our foreign workers to be of higher skill, more experienced so that they can better support our construction activities in a productive manner.
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\r\n Sir, since last year, the construction industry has responded positively to our call to improve productivity and we will work closely with all the stakeholders in the construction value chain, namely, the developers, the architects, the engineers, main contractors and sub-contractors, to enhance our schemes and policies. Yesterday, I believe Member Yeo Guat Kwang lamented to the House about the \r\n \r\n
Column: 3571
\r\n\r\n frustrations faced by some of the SMEs and he quoted lyrics from a very popular Hokkien song \"Wa Meng Ti, Wa Meng Ti \", simply translated, it means \"Oh Heaven, oh Heaven, what is your guidance for me?\" But I would like to encourage Mr Yeo Guat Kwang and Members of the House that, instead of lamenting, asking the Heaven, they should say \"Mian Meng Ti, Mian Meng Ti, Meng BCA\" (免问天，免问天，问BCA). \r\n\r\n\r\n\r\n
At BCA and MND, we are very, very convinced that this is the way to go. We have to reduce the reliance on foreign workers and we must improve productivity of this industry. We will be very keen to work with progressive contractors to give them more incentives to lead the way, to lead the industry so that we can create better and productive, as Er Lee Bee Wah said, regionally strong players. That is our dream as well. So, we will help them build up their capabilities, enhance their competitiveness, so that they can lead the rest of the industry.
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By 2020, we hope to see the construction industry transform into one that is highly integrated and technologically advanced, led by progressive firms and supported by a skilled and competent workforce.
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Food supply resilience
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Dr Lim Wee Kiak: Mr Chairman, one of the issues we have now is the very erratic weather system. I guess too many people are asking the sky for too many things. If you ask \"wa meng ti \", that has resulted in droughts, massive floods and hurricanes that are happening. Perhaps we are asking for too much. But these natural disasters have resulted in disruption of food supply and production. It has caused food shortages and put a spotlight on food security for the future. In fact, this has been highlighted even at the United \r\n\r\n
Column: 3572
\r\n\r\nNations level. Some of these food producing countries have banned export of food periodically, including wheat and rice, as their local production cannot meet their own local demand. Such actions have resulted in a spike in food prices and caused food inflation and hardship for the poor around the world.\r\n\r\n\r\n\r\n
In Singapore, we are not spared as well. We import almost all the food that we consume. The sharp increase in world food prices has also affected us. What is the Government doing to mitigate the situation and to ensure that our food supply is resilient? What is the current stockpile policy that we have? Should we review the stockpile policy and make it even more secure and more resilient? Given our limited land size, what can we do to increase our local food production? Someone suggested that, perhaps, on the HDB rooftops now, we should consider expanding it to allow for community vegetable farming and that has the effect of greening the environment as well as producing some food at the local level.
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Mr Zainudin Nordin: Mr Chairman, certainly it is good to see the Government share surpluses with Singaporeans this year through the Budget 2011. However, in recent times, the world was hit by multiple natural disasters globally, from earthquakes to severe weather conditions. These have resulted in several food supply disruptions and crop failures. On the other hand, there is growing demand for food worldwide as population increased. \r\n\r\n
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The United Nations' Food and Agriculture Organisation has warned of the world food crisis after its benchmark index of agricultural commodities prices shot up surpassing the levels of 2007/2008 food crisis. The warning from the United Nations' body comes as inflation is becoming an increasing economic challenge in several countries, including China and India. Singapore is also vulnerable to rising costs of goods \r\n\r\n
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\r\n\r\nand inflation, and it is a fact which is highlighted further by our need to import most of our food from overseas. As such, it is imperative that our Government finds ways to adopt anti-inflationary measures. I would like Singaporeans to recall the events that took place in the year 2008 where prices of commodities, in particular, increased sharply. Then, Singapore had to ensure that there were enough food supplies. We were able to keep prices stable and get enough for us to get through the challenging times. More of the same is required this time, if the Government is serious about coming up with solutions to help lower the cost of living among Singaporeans.\r\n\r\n\r\n\r\n
Sir, may I ask the Minister to share with the House what is the Government doing to help mitigate the situation and ensure that our food supply is adequate and we have a resilient supply of food for Singaporeans?
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Dr Mohamad Maliki Bin Osman: Mr Chairman, I thank Dr Lim Wee Kiak and Mr Zainudin Nordin for asking what the Government is doing to help mitigate the rising food prices and ensure our resilience in food supply. \r\n\r\n
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First, let me address the steady rise in food prices. Food prices have risen steadily over the last few years. In 2010, the overall increase of our food Consumer Price Index (CPI) was a moderate 1.4%. However, we saw food prices rising by 0.9% in January 2011 when compared to December 2010. The recent short-term spike in prices was expected and can be largely attributed to increased festive demand – similar to what we saw during the Chinese New Year months of January 2009 and February 2010.
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\r\n Over the longer term, however, food prices in Singapore are largely driven by the global food situation. The United Nations' Food and Agriculture Organization (FAO) has forecast that global food \r\n\r\n
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\r\n\r\nprices will continue to rise as the effects of recent adverse weather conditions on agriculture worldwide continue to be felt, as highlighted by both Dr Lim and Mr Zainudin. \r\n\r\n\r\n\r\n
As we import over 90% of our food, we are a price taker. We cannot control global food prices and supply directly. Nevertheless, the Government and the private sector have recently introduced measures to address concerns over rising inflation, including food inflation. The Retail Price Watch Group, chaired by the Minister of State for Trade and Industry and Manpower, has been formed to keep a close watch on retail prices and address concerns of any alleged profiteering and excessive pricing of daily necessities and food items. Major supermarket chains like the NTUC FairPrice, Sheng Siong and Dairy Farm Group have also pledged to hold their prices of house-brand items such as rice and flour for the next few months.
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Sir, my Ministry has also employed several strategies to ensure that our own key food supplies remain resilient. Allow me to elaborate on that. To ensure Singapore's food supply resilience, first, source diversification. Our key strategy in ensuring food supply resilience is source diversification. By buying from many sources, Singapore is better buffered against potential food shortages and, to a lesser extent, price volatility. If you look at the map on the screen, you can see that the map shows how diversified our sources of food items like vegetables, fish, pork and poultry are. It is not a picture of the rhyme, \"Old MacDonald Had A Farm\". It is a picture of the various places that we actually import our food sources. For example, in the past, we were very reliant on Malaysia for our leafy vegetables. Today, a large proportion of our vegetables are purchased from other sources such as China and as far as the US. Where we used to import most of our poultry from Malaysia and Brazil, the \r\n\r\n
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\r\n\r\nchicken you buy at your local food supermarkets today can come from places like Argentina and the US. In addition, we are encouraging our local companies to move into upstream sourcing. For example, companies could undertake contract farming directly with farmers for an agreed amount and price of goods. Our companies will then have better leverage over the food production chain. An example is NTUC FairPrice, which purchases vegetables through contracts with Indonesian farms.
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Next, local farming. We are also promoting local farming, which plays an important supporting role in ensuring food supply resilience. However, we cannot expect to be fully self sufficient in food production. What we can do is to achieve some degree of self sufficiency in three key food items, namely, eggs, fish and leafy vegetables. Here is a picture of the Barrumundi fish farmed [indicating], which contributes to our local fish production. Today, we produce 23% of our eggs, 4% of our fish and 7% of our leafy vegetables. There is still some way to go before we reach our targets of 30% for eggs, 15% for fish and 10% for leafy vegetables. Because we have limited land and sea space that can be set aside for local farming, it is therefore vital that we raise the productivity and capability of our farms.
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The Agri-Food and Veterinary Authority (AVA) will support source diversification and local farming efforts through its Food Fund. Launched in October 2009, companies have tapped on the $10 million Fund to explore new food sources overseas, raise local farming productivity, and enhance local farming capabilities. Many of the projects supported by the Fund involve improving farm efficiency by automating labour-intensive processes such as vegetable \r\n\r\n
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\r\npacking, hand feeding of fish and fingerling sorting.\r\n\r\n\r\n\r\n
5.45 pm
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Sir, my Ministry will work with the industry and achieve a resilient supply of safe food for our people. However, our food supply resilience efforts must be complemented by Singaporeans' acceptance of alternative food sources. This may be about accepting that we will buy our food from a different country, or an alternative form, such as frozen meat, liquid and powdered eggs. AVA will continue its public education efforts to create greater awareness and acceptance of alternative food sources.
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The Chairman: There is some time for clarifications. Mr Cedric Foo.
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Mr Cedric Foo Chee Keng: Sir, I would like to thank the Minister for his replies. I would like to raise the subject of rental housing again. If I hear the Minister correctly, he said that the subsidies that the Government provides for a single rental unit amount to something like $100,000 over 10 years. That is a lot of money that goes into subsidising the rental units.\r\n\r\n
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Secondly, if I hear him correctly again, he said that those who are in the queue for rental flats, about 90% of them, had owned an HDB flat before, or majority of them had owned an HDB flat before and had subsequently sold the flat.
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There are two possible responses. One is to build as many rental flats as there is demand for them and I suspect this is a bottomless pit. That is just to meet the symptoms of it. The other way is to look at the root causes. I feel the root cause of this is probably those who have owned a flat before but had then subsequently sold it and they are now in the queue for rental units.
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\r\n\r\nCould we then channel this $100,000 per rental flat subsidies – or even half of that – into higher subsidies to enable first-timers to buy a flat on the condition that they keep the flat for a longer period of time?
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Mr Mah Bow Tan: Mr Chairman, the point raised by Mr Cedric Foo is a fundamental one. Basically, he is saying that instead of channelling the subsidies through the rental route, why not do it through the ownership route. Basically, we already have a lot of subsidies channelled through the ownership route. The question is whether we can do more, provide more subsidies, perhaps a third \"bite of the cherry\", with conditions.\r\n\r\n
\r\n We want to promote home ownership for as many people as possible. To that extent, we have a slew of subsidies in place – both implicit as well as explicit. These subsidies have allowed the home ownership rate to be as high as eight in 10. We also have a second subsidy which allows people to upgrade and this promotes social mobility. If you are moving from a small flat to a large flat, even if you have to pay the resale levy, it is still worth your while to upgrade. On top of that, there are the two housing loan subsidies. The concessionary loan subsidies are also very significant subsidies. If we add it all up, you will find that the subsidies to promote home ownership are very generous.
\r\n What the Member is asking is, having consumed all these very generous subsidies, can we now offer yet another subsidy? This $100,000 subsidy is not an entitlement for those who have already enjoyed subsidies. We encourage people to buy their first homes and have another step in place for them to upgrade.
\r\n The people that Mr Cedric Foo are referring to are those who have already consumed their subsidies and are now coming back for yet another subsidy. \r\n\r\n
Column: 3578
\r\n\r\nThose are the people whom we would not like to see coming to us for a rental flat.\r\n\r\n
\r\n Therefore, in answer to Mr Cedric Foo's question, the home ownership programme is for the majority of Singaporeans. For those who cannot afford home ownership, we will provide rental flats. For the rest where there is hardship involved, that is where the safety net comes in. I do not think we should make the safety net so wide as to bring in everybody. And neither should we have a third subsidy, even with conditions, because the subsidies for home ownership are already generous enough.
Er Lee Bee Wah: I am very glad to hear from the Minister that he plans to finish HIP in 10 years' time, that is, by 2021. I would like to ask the Minister whether he has similar plans for the completion of EUP for the qualified private estates. Every time I go Yio Chu Kang Gardens, residents will ask me when they will get EUP. I can only tell them, \"I will ask Minister\".\r\n
Mr Mah Bow Tan: Like all upgrading programmes, there is a certain budget, and a certain pace at which we will build. We have completed the LUP and now we are going on towards the HIP. The Estate Upgrading Programme (EUP) is ongoing. Every year, we get a certain sum of money from the Ministry of Finance to do EUP and then we choose five or six estates in every batch. The last I heard, Yio Chu Kang Gardens was not in the batch of successful EUP estates.\r\n\r\n
\r\n I encourage the Member to nominate Yio Chu Kang Gardens again for the next round. Who knows, it might be in the next batch. The Member does not have to wait. She does not have to ask me . It is entirely up to the Member. If the estate is old enough and if it requires upgrading, I am sure the Committee that is selecting it \r\n\r\n
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\r\n\r\nwill give it favourable consideration. Please do not be discouraged.\r\n
Mr Liang Eng Hwa: Sir, I want to thank the Minister for mentioning Bukit Panjang in the Remaking of our Heartlands (ROH) programme. He mentioned \"sooner or later\". Somehow, it came across as the \"sooner\" was louder than the \"later\" [Laughter ]. I have a question on lift upgrading for car parks. Many of the car parks in our estates still do not have a lift. I want to ask the Minister whether there is a plan to upgrade those car parks with lifts and, if so, how long will it take? Does this Member need to make an application like he said for the other question?\r\n
The Chairman: The clarification relates to the volume of the answer, Mr Mah.
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Mr Mah Bow Tan: I do not recall speaking louder when I said \"sooner\" rather than \"later\". But, I did say \"sooner\" first .\r\n\r\n
\r\n Perhaps, if the economy continues to do well in the next few years and the Finance Minister is in a generous mood, it will be sooner rather than later. It all depends ultimately on what resources are available, whether it is the Estate Upgrading Programmes, ROH or Lift Upgrading Programmes for car parks.
\r\n We do not have an LUP for carparks. We do have an LUP programme for all eligible HDB blocks. That is the priority and we intend to finish that within the target that we have set. By this year, all the eligible blocks should be selected and by 2014, all of them should be completed. That is where all the resources are being directed. The next priority, of course, is the HIP programme. This is a programme that is very useful and well sought after. We want to make sure that that is done.
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\r\n\r\n On lifts for carparks: yes, when we do certain upgrading programmes for precincts, and especially when we do NRP in the area, we can consider lift upgrading for car parks. It is not an island-wide programme at the moment because we have other priorities. Where there is a need, we will certainly look into it.\r\n
Dr Lim Wee Kiak: Sir, it is an irony that when the economy does well, in fact, sometimes, we see more homeless compared to when the economy is down. When property prices are moving up, in fact, more people are taking the opportunity to cash out.\r\n\r\n
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My clarification to the Minister is: with the new three-letter acronym that is given to this Special Housing Grant (SHG), does the Minister think that we should extend the Minimum Occupancy Period (MOP)? It is very sad that young couples come in now and buy a flat and then after five years they cash out. They will bring their three-year-old to see MPs at the Meet-the-People Session and tell MPs that they are homeless. The key issue now is: how do we encourage them to keep it as a home rather than see this an investment or as a cash-out opportunity?
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Mr Mah Bow Tan: I think the Member has raised a very fundamental point. As I said earlier, our national goal is to promote home ownership. Our national goal is not to promote home ownership, followed by cashing out, followed by coming to an MP to get rental flats. It is not home ownership followed by rental flats. It is home ownership, full stop.\r\n\r\n
\r\n Unfortunately, there are people who take the opportunity to cash out for whatever reason – financial difficulties, repaying loans, and so on. Some do it as part of \"flipping\". They cash out and then they think they can buy another HDB flat to make money. We want to discourage people from cashing out. This is why, as far as the SHG is concerned, we have \r\n \r\n
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\r\n\r\n positioned it as a CPF housing grant. So, even if they sell the flat, they will not able to take the cash out. They will have to put it back into their CPF which can only be used either to purchase another flat or for retirement. \r\n\r\n
\r\n Having said that, I understand where the Member is coming from. We should take this issue more seriously and find ways and means to discourage people who own a flat from cashing out prematurely. I have said it before that this is a concern, so we should be looking for ways and means to discourage people from cashing out. We will be studying this issue in due course.
Ms Indranee Rajah: Mr Chairman, this is actually to provide two clarifications to the Minister. The first on gracious HDB living. I was not suggesting in any way that the onus and responsibility should be with the HDB. Obviously, these habits come from the residents. The thrust of my speech was how can we can get the residents to take responsibility for gracious living. That is the first clarification.\r\n\r\n
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My second clarification relates to the Minister's condition of the MPs sitting in with the architects for the design. I wish to clarify with the Minister that I am more than willing to do so. If I may just take one minute to give the Minister a cautionary tale to what happened to Newton Hawker Centre which is in my constituency.
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I am afraid that I made the architects re-draw it three times before we were happy with the final design. In the end, they gave it to a junior architect who is actually very good because when everybody looks at the design now we will see that it is beautiful. At the end of that he decided he would give up architecture and become a lawyer. So, the upshot of this is we are more than happy to participate, Sir, but the HDB may find \r\n\r\n
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\r\n\r\nitself with a greatly-reduced architectural team and a greatly-expanded legal department.\r\n
6.00 pm\r\n
Mr Mah Bow Tan: All I can say is that the architectural fraternity's loss is the lawyers' gain, thanks to Ms Indranee. But, seriously, it is very important – I cannot stress this enough – that we must try to get our residents to take more responsibility, as the Member said. Too often, we get calls from neighbours saying please come and stop the neighbours upstairs from making so much noise or from throwing curry down or hanging dripping mops. But when they are asked, \"Have you gone upstairs and knocked on the door?\" They say, \"No, we have not.\" \"Why don't you do that?\" They say, \"Oh, no, it's not our job. Town Council does it, HDB does it.\" \r\n\r\n
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There are very sorry tales of disputes between neighbours. You get neighbours from hell who make life really terrible for people. I think when it gets to that stage, yes, certainly HDB, Town Council, and sometimes the Police, will have to come in and do something. But before it reaches that stage, I think there is a lot that can be done by the residents themselves. I think all Members are on the same page as far as this is concerned. But, really, we should flag this issue and it is an issue that will become of greater concern as Singapore becomes more densely populated. I think we will have to find a mechanism to deal with that. We have some ideas and we will be looking at this, together with other agencies, to try to mobilise residents to take more responsibility for this aspect of high-rise living. I will be happy to share this with Members at an appropriate time.
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Mr Ang Mong Seng: Mr Chairman, I am very happy to hear the Minister saying that HDB will be building more studio apartments. I would like to find out from the Minister how long is the waiting \r\n\r\n
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\r\n\r\nperiod. If we apply now, how long can we get a studio apartment?\r\n
Mr Mah Bow Tan: Building a studio apartment is no different from building any other HDB flat. If a person applies now and the building works start now, he can get it in two-and-a-half years to three years. We have stepped up the building of studio apartments over the last couple of years. That means there will be studio apartments available for senior citizens to purchase in the next year or so and they may not have to wait, provided they are not too choosy about the location.\r\n
The Chairman: After a very constructive debate, Mr Cedric Foo, would you like to withdraw the amendment?
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Mr Cedric Foo Chee Keng: Sir, it was good to hear the Minister affirming loud and clear that Singaporeans, so long as they hold on to their jobs, can aspire to own their homes, and the Government is committed to high ownership of homes in Singapore. I want to thank the Minister, Senior Minister of State Grace Fu and Senior Parliamentary Secretary Dr Mohamad Maliki Osman for their replies, explanations and insights in this debate.\r\n\r\n
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With that, I withdraw my amendment.
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Amendment, by leave, withdrawn.
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That the sum of $1,030,798,017 for Head T ordered to stand part of the Main Estimates.
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That the sum of $5,659,240,100 for Head T ordered to stand part of the Development Estimates.
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Column: 3583
\r\n\t\t\r\n\r\n\r\n\r\n\r\n\t\t\r\n\t\t\t\r\n\t\t\t\r\n\t\t\t \r\n\t\t\t\t\r\n\t\t\t\t\t\r\n\r\n
Head V – Ministry of Trade and Industry
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Building capability of companies
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Ms Jessica Tan Soon Neo: Sir, I beg to move,\r\n\r\n
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\r\n\r\nThat the total sum to be allocated for Head V of the Estimates be reduced by $100.
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Mr Chairman, as we have heard in Budget 2011 and the discussions over the last few days, Singapore's economic success over the next 10 years will depend on how companies operating in Singapore innovate and raise productivity to stay competitive to drive sustainable growth. With the constraints and challenges companies face with regard to access to labour and increasing cost of doing business, there will be adjustments required of businesses. These adjustments may be painful for businesses as they may involve structural changes that will take time to materialise. So what I like to ask the Minister is that looking beyond the funding support, can the Minister share the strategies that are in place to assist businesses in Singapore to make the changes required to innovate and increase productivity?
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Funding, while crucial for innovation, is not sufficient and actually what is more important is know-how. There has been much discussion on having much more targeted programmes and in having sectoral level approaches to achieving the intended impact. Can the Minister share the status of these sectoral initiatives? What roles do trade associations and chambers play in these sectoral programmes to help businesses? Because as Senior Minister of State Grace Fu has shared on the construction industry in the previous COS discussion, what drives innovation in construction is that it really requires know-how, investments and the ability for the industry to really take the lead in technology and implementing technology.
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Actually, there is a bigger piece to be played. There is also the whole supply chain. Really, if we want to look at businesses being productive, if we look at BIM, for example, one company doing it will not have productivity. But actually it \r\n\r\n
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\r\n\r\nis the whole supply chain, the whole eco-system of construction companies, their suppliers, their eco-system. I have spoken to businesses and what they have asked for is help to really drive the sectoral-level changes because that cannot be done with one company. So I think that is the thing that will be required in the near future if we really want to accelerate it.\r\n\r\n\r\n\r\n
The Budget has also introduced the $850 million Enterprise Development Fund (EDF) to support enterprise growth in the next five years. Businesses welcome the EDF and are hopeful that the EDF will help them as they expand internationally. Can the Minister share details on the EDF and the criteria and how companies can qualify and tap on the EDF?
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With the increasing role of the services sector in our economy, service excellence is key in ensuring that companies remain competitive and that they are able to raise service standards to continue to win and retain customers. What is the progress that we are making in this aspect? What initiatives are in place to ensure that we can step change and differentiate the level of service standards of companies in Singapore? It is great that we have MBS. It is great that we have great restaurants, eateries and we bring these great entertainments to Singapore. But what is more important is really the experience, the experience of both Singaporeans and visitors when they use these services. I think this is one area that we really, really need to invest and step change that because our whole economic reliance is actually shifting towards services, and that is an aspect that I really like to understand what more are we doing in terms of investing and really bringing that step change and know-how into this space.
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When we talk about leading in the industry and for Singapore to take the lead and we talk about innovation and \r\n\r\n
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\r\nproductivity, I really go back to my point about the whole partnership of industry as well as the Government. I do not like to say this, but I think as much as our Civil Service likes to be able to help and lead the industries, the Civil Service cannot do it alone because they just do not have all the know-how. And, therefore, the partnership with industry, the sectoral approach, both at the services level as well as at the industry level is going to be very critical. Sir, I really like to hear about the progress and the strategies going forward.\r\n
Access to the growth markets of Asia
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Mr Wee Siew Kim: Mr Chairman, riding on a growing Asia is one key strategy for Singapore companies. In recent times, we cannot ignore the growth of China and India. The headroom for further growth is evident and tremendous. However, striking out and thriving in such markets pose their set of challenges and can be rather daunting for smaller companies.\r\n\r\n
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How can MTI assist Singapore companies to strike out and seize opportunities in the growth markets of Asia, especially India and China?
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What are the ways to help the SMEs and larger Singapore companies internationalise as well as build the set of capabilities that promotes survival in foreign markets?
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There is a myriad of schemes like the Productivity Fund, Enterprise Development Fund, the PIC, R&D incentives, etc. But they can all be rather bewildering for many smaller companies. How can the Ministry assist to reach out and help proactively as opposed to waiting for companies to come scampering for help? The MTI should set its mission as helping companies venture into new markets and, hopefully, as some of them find new growth opportunities, everybody succeeds.
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\r\nInnovation could also be a selling and differentiating point. I understand that there are new schemes that help fund test bedding of ideas in Singapore. I support this initiative as we already have the disadvantage of a small local market. This difficulty will be compounded if our companies cannot provide home market track record – making it an even harder sell. Can I plead with MTI to be more liberal in funding such test bedding and not be too fixated by any particular industry sector? One can never know where innovation will take root. In such situations, maybe let a thousand flowers bloom may be the way to go, rather than trying to pick winners.
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The Minister for Trade and Industry (Mr Lim Hng Kiang): Mr Deputy Speaker, Sir, may I seek your consent to move that progress be reported now and leave be asked to sit again tomorrow?\r\n\r\n
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The Chairman: I give my consent.
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\r\n\r\nResolved,
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That progress be reported now and leave be asked to sit again tomorrow. – [Mr Lim Hng Kiang].
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Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.
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Mr Lim Hng Kiang: Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 2011/2012, and ask leave to sit again tomorrow.\r\n
Mr Deputy Speaker: So be it.\r\n
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Resolved,
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\"That Parliament do now adjourn.\" – [Mr Mah Bow Tan].
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Adjourned accordingly at
\r\n\r\nFourteen minutes past Six o'clock pm.
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