[(proc text) Order read for consideration in Committee of Supply [3rd Allotted Day]. (proc text)]
[Mdm Speaker in the Chair]
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[(proc text) \"That the total sum to be allocated for Head T of the Estimates be reduced by $100.\" – [Er Dr Lee Bee Wah]. (proc text)]
Dr Teo Ho Pin (Bukit Panjang): Madam, despite years of productivity push by BCA, the productivity in the construction industry remains low. The industry is still labour-intensive and reliant on foreign workers. The construction industry also suffers from an image problem, thus, making it difficult to attract Singaporeans to work in the industry.
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Based on feedback from the industry, the low construction productivity is attributed to a number of factors: (1) lowest tender award practice, (2) intense competition among consultants, and (3) lack of skilled labour.
First, the award to the lowest bid culture is prevalent in Singapore, especially in the public sector. Thus, contractors will compete and secure jobs at cut-throat prices and, thereafter, cut corners, resulting in poor project management, shoddy workmanship and delay in many projects. Abortive works and building defects are common occurrences in the construction industry. Many construction disputes have also wasted much resource in mediation, arbitration and court proceedings.
Second, the intense competition among architects, engineers and consultants has resulted in low consultancy fees. Thus, many consultants have to secure many jobs in order to sustain their businesses. This situation has resulted in poor consultancy services, such as poor design, lack of coordination and poor supervision of projects.
Third, the transient foreign workforce retards productivity and increases accidents. The poor control of skilled labour has allowed many low-skilled foreign workers to work in Singapore. Many of these foreign workers are mono-skilled, and lack work experience. In fact, some industry practitioners told me that many of our projects were built by farmers. The BCA Overseas Test centres are not stringent in ensuring that only highly skilled foreign workers are granted permit to work in Singapore. I propose that we conduct the skills test at the Institutes of Technical Education in Singapore and raise the standard of skills of construction workers for both locals and foreigners.
Madam, the low productivity of the construction industry is attributed to systemic and culture problems and not due to the lack of mechanisation. Industry stakeholders do not work together to achieve productivity, quality and adopt fair business practices.
Madam, I wish to ask the Minister the following questions: (a) how does the Ministry measure the effectiveness of its productivity initiatives, and (b) what are the key strategies to improve the productivity and quality of the industry?
Mr Charles Chong (Joo Chiat): Mdm Chairman, the Minister for Finance has indicated that the foreign workers' levy will be increased in all sectors from July 2014. With the most significant increases being in sectors where productivity growth is seen to be weak, and where growth of the foreign
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workforce is significant. Er Dr Lee Bee Wah and other Members have raised their concerns of how this will affect the construction industry, and I would like to add to these.
The construction sector easily falls within the twin categories of low productivity growth and significant growth of foreign workforce. The first issue – low productivity growth – results not from want of trying. The Government has for many years already been trying to raise the productivity of the construction sector, and also our TFR – let us be honest about it – with rather limited success. While we must continue to persevere in this, I think the Government should also be realistic in its expectations.
The Minister for Finance has spoken about mandating the use of more manpower-efficient designs, and increasing minimum buildability scores, with the lead being taken by the Government in respect of public sector projects. Now this is certainly a worthy aim. But is there any real incentive for doing this now, when the cost of foreign construction labour is still relatively low in Singapore, and there are urgent catch-up infrastructure projects to be accomplished?
The second issue, the growth of the foreign workforce in the construction industry can also be attributed to the fact that Singaporeans just do not find the construction industry an attractive one, as mentioned by Dr Teo Ho Pin. Although we know it is essential to our collective well-being, we know it is very difficult to find enough Singaporeans willing to take on the manual labour which is often associated with the construction industry.
There is another element in this issue. One, which gives rise to a very real dilemma as we all are aware, there is a housing and infrastructure crunch in Singapore, which needs to be addressed along with the anticipated growth in our population.
Simply put, we need the construction sector to be thriving. We need the construction companies to continue to be around to build public housing and infrastructure projects. We cannot afford at this stage to dis-incentivise the construction industry from contributing in a very real way to the growth of the nation through participation in public sector projects. The further moderation of foreign workforce growth in the construction sector will place further pressures on an already stressed industry. Can we afford to do this? We really need all these projects to be completed urgently. Do we have any contingency
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plans if our targeted productivity figures are not achieved?
Perhaps, one solution might be to consider a different dependency ratio ceiling for public sector projects, as opposed to private sector projects. This could be in recognition of the public sector nature of the project, that is, the fact that it is for the betterment of Singaporeans generally. That is to say that, where projects are taken for private gain, the current DRCs and levies will continue to apply. But if the project is one of public nature, even if it is undertaken by private organisations, perhaps more leeway could be given. In such a case, any foreign construction worker hired for a public project would need to be tied to that project, and cannot be deployed to work on private projects. This proposal achieves two goals. First, it might mean that public sector projects, particularly public sector housing projects, would be completed in a shorter timeframe, and perhaps at lower cost. Second, it might attract more private developers to public sector construction work, if they think that it makes business sense to do so.
I would like to urge the Minister to reconsider. Given the competing concerns of rising foreign construction levies and moderating the growth of the foreign construction workforce, are these really in the best interests of the country, given our public sector infrastructure needs today?
I completely understand and agree with the drive to increase productivity across all sectors. But, perhaps, there are occasions when we have to be pragmatic and less dogmatic in which the productivity drive may need to take a temporary backseat to other pressing and urgent needs.
Mr Zainal Sapari (Pasir Ris-Punggol): Mdm Chair, last year, I made a call for every Government Ministry to champion a specific group of low-wage workers. Kudos to MOM and NEA who worked with NTUC and our industry partners to form the tripartite cluster for cleaners that made some key recommendations on the Progressive Wage Model tailored to the cleaning industry.
I would like to suggest to MND to support the formation of the tripartite cluster for landscape (TCL) modelled after the tripartite cluster for cleaners. The TCL can comprise senior management representatives from NTUC, MOM, NParks, landscape associations and key service buyers. Preferably, it should be chaired by a Minister of State equivalent, to send a strong signal of the
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importance of the work of the committee.
TCL will play a key role in recommending a Progressive Wage Model and uplifting professionalism and productivity in the landscape industry that currently employs an estimated 15,400 workers. The landscape industry is considered one of the bottom 10% occupation, based on median monthly gross wages.
Over the years, not only have wages of the landscape workers stagnated, but we are also losing the institutional knowledge to manage this important sector. Even graduates from Polytechnics are not joining this sector. I believe, with strong support from tripartite partners, we can ensure that the landscape workers will have improved salary packages and be included in Singapore's drive towards inclusivity. Otherwise, it will continue to be caught in the vicious cycle of low wages and inability to attract the necessary talent to professionalise the industry.
The Senior Minister of State for National Development (Mr Lee Yi Shyan): Mdm Chair, let me thank the three Members who have spoken. Let me address the comments made by Dr Teo Ho Pin and Mr Charles Chong on raising construction productivity.
It is now more than two years since we launched the Construction Productivity Roadmap. We set ourselves the target of raising construction productivity by up to 3% every year to 2020.
The Deputy Prime Minister and Minister for Finance earlier announced that the Government would proceed to cut the Man-Year Entitlement (MYE) quota for new projects by another 15% in July this year, bringing the cumulative reduction since 2010 to 45%, as announced last year. This effectively means that while, previously, a project may be allocated 100 workers, a new project of the same scale, starting from July, would only be granted 55 workers.
The 45% reduction in MYE is necessary because in the past five years, the built environment sector has, on average, accounted for more than half the annual foreign worker growth for the entire economy. The sector's share of foreign workers has been disproportionately large. We must try to rein in this growth. We must do things differently.
Fortunately, for the next few years, we foresee a healthy demand for the built environment sector such that our restructuring efforts can take place in a
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relatively favourable environment.
But we must be careful not to allow the tight labour market affect the timely delivery and the quality of our key public projects, including the on-going and new BTO flats construction, and accelerated MRT line construction works.
The next three years are, therefore, a crucial transition period for the built environment sector. Our firms will have to adapt to the tightened labour supply, while seizing all opportunities to mechanise, automate and streamline workflow for higher productivity. This is my key message.
This is why we have further differentiated the two tiers of construction levy. The first tier remains unchanged at $300 for higher skilled workers employed within the MYE quota. This is so that skilled and experienced workers can continue to be retained and upskilled. The second tier has been raised to $1,050 for basic skilled workers hired beyond the MYE quota. This is meant to serve as a \"safety valve\", if you like, so that firms could still have access to workers beyond their MYE, but at a cost that will encourage them to switch to more efficient construction technologies and processes.
How can we, in the next three years, make a paradigm shift to a more efficient industry structure, one that is more professional, better integrated and lean on manpower?
Already, we have a number of our most progressive main contractors, such as Woh Hup and Tiong Seng Contractors, which plan, organise and carry out most of the work themselves. They do not rely on multi-layers of subcontractors to deliver projects. Their hands-on approach gives them clear visibility of project management, work coordination and workforce productivity. The question is how we can encourage more local firms to emulate these progressive contractors so that, as an industry, we can progress to the next level.
Talking to the industry, I know many of our firms felt overwhelmed by the simultaneous reduction in MYE and levy increases. But we must also be acutely aware that the labour-driven growth model in the industry has to change. With these challenges, my Ministry, together with BCA and other agencies, will intensify our dialogue with our industry partners to transit to a more efficient and sustainable industry model.
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One way for us to transit successfully is to beef up our resources to help firms adopt productive methods and technologies. For a start, we are enhancing the $250 million Construction Productivity and Capability Fund (CPCF) in three ways.
First, we will increase our co-funding level from the current 50% to 70% under the Mechanisation Credit (Mech C) scheme for equipment that can achieve at least 30% productivity improvement. This will help firms lower the cost of acquiring or leasing equipment.
For example, to smoothen a concrete floor, a contractor has two choices. He can use a mechanised concrete power trowel operated by one worker, or the traditional manual method which requires at least two workers to complete the same amount of work. The mechanised trowel typically costs $3,000. Under the enhanced Mech C scheme, plus more funding under the Productivity and Innovation Credit (PIC), the final cost to the contractor is less than $300, for a 50% improvement in productivity! In fact, the contractor would also save on wage, levy and accommodation costs by deploying fewer workers on-site.
Second, we are raising the support level for the Productivity Improvement Project (PIP) scheme from 50% to 70%, to encourage the re-engineering of work processes to achieve at least 30% higher productivity.
In addition, the cap for firm-level projects will be raised from $100,000 to $300,000. At the industry-level, projects gaining 40% productivity improvement and are game-changing can enjoy PIP funding of up to $5 million.
Third, we will launch a new Mech C Referral scheme to incentivise main contractors to refer their sub-contractors to CPCF programmes. This, we hope, will accelerate the proliferation of technology use amongst smaller firms.
To-date, we have committed $85 million of the $250 million CPCF, benefiting some 2,300 individual firms, of which more than 80% are small firms. More, however, can be done. We are thus working with the industry associations through regular Productivity Clinics to reach out to more firms.
Let me now talk about another impetus for significant productivity improvement – Buildability and Constructability of our building projects.
To encourage the various stakeholders to come together early, for upstream coordination and integration, we will raise the minimum Buildability
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and Constructability scores progressively for new projects submitted for planning approval from July 2013 and July 2014.
By raising the Buildability score, architects and engineers will need to deliver easy-to-construct design and technologies. An example is the use of prefabricated bathroom units, or PBUs, as it is called. Constructing the conventional bathroom onsite involves 13 different tasks, from plumbing to plastering to tiling. For PBUs, all these tasks can be done more efficiently offsite. Completed PBUs are then transported to the work site and hoisted up for installation. With such a method, contractors can cut down the number of onsite workers from 20 to five, and install the PBUs twice as fast.
At the construction stage, contractors will have to make use of more manpower-saving construction methods to meet the higher minimum Constructability scores. For instance, climbing scaffolds which can mechanically be lifted to the next floor, only require four workers to install, compared to the traditional scaffold system which requires six workers.
To support the adoption of higher Buildability and Constructability scores, the public sector will take the lead. Our Government Procurement Entities (GPEs) with new projects will adopt standards higher than the minimum standard, starting later this year, to lead the way of change.
In addition, from July this year, consultants and contractors with high Buildability and Constructability score records respectively can score higher in the Quality component of their tender bids, giving them an edge over other bids. Under our tender evaluation framework, it does not necessarily mean that bids with the lowest price will always win the tender.
For private developers, who are a key part of the construction value chain, we are exploring, for new Government land sales for private and industrial developments, to specify a new requirement of higher Buildability and Constructability scores. We are also considering making productivity requirements a pre-requisite for existing bonus GFA schemes. BCA and URA will share more with the industry in the coming months.
I agree with Dr Teo Ho Pin that we must continuously raise the skills of our construction workforce. Today, all foreign construction workers typically undergo three to four months of full-time training, and have to pass a one-hour theory test and a four- to five-hour practical test in specific construction trades conducted by BCA officers in the source countries. They will then qualify as
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\"Basic Skilled\" construction workers. There are no unskilled construction foreign workers as such.
Given the large numbers involved, it is more practical to train and test these workers overseas before they enter Singapore. But I agree with Dr Teo that we should find ways to raise the skill standards of construction workers before and after they have joined us.
To retain skilled foreign construction workers, we use a tiered-levy framework that accords \"higher skilled\" workers with lower levy and a longer period of employment. Starting this year, these workers are required to undergo continual education and training (CET) every two years.
My Ministry has also received feedback on how the impending cuts to the S Pass sub-dependency ratio quota in the services sector would adversely affect the engineering, architectural, project management and quantity surveying consultancy firms, which are all part of the built environment sector in the process of restructuring. We heard you.
As we reduce demand for foreign workers, we will work with the industry to stabilise unproductive churns of skilled workers while attracting more Singaporeans to join the sector. BCA will continue to enhance its comprehensive suite of manpower development programmes, including scholarships, sponsorships and apprenticeships at the University, Polytechnic and ITE levels to build the local talent pipeline.
For mid-career and mature job seekers, BCA offers workforce training and upgrading programmes to train them for the industry. MND and BCA will work with MOM to explore measures to mitigate the impact of the tightening in S Pass policies.
In the long term, we want a strong core of highly skilled Professionals, Managers and Executives (PMEs), and Technicians and Associate Professionals (TAPs) to form the backbone of our built environment sector.
Mdm Chair, let me now address Mr Zainal Sapari's suggestion of a Tripartite Cluster for the landscape industry to raise productivity and workers' wages. In fact, NParks currently chairs the Singapore Landscape Industry Council (SLIC), which serves a very similar purpose as a Tripartite Cluster proposed.
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The Council has helped raise professionalism of the landscape workers by developing, validating and endorsing training and curriculum content for the landscape industry, including those for WSQ certification, with industry-wide participation.
Mdm Chair, we understand that our built environment sector is under severe pressures of manpower crunch and rising costs. But we also know that unconstrained growth of foreign workers cannot be sustainable, too. We must, therefore, give up the old ways of doing things and we must innovate.
In helping the industry evolve to a new industry structure, BCA will help look for other new resources needed. For instance, BCA will set aside more land for the production and storage of precast, prefabricated components, heavy equipment and machinery. BCA has successfully launched the first Integrated Construction and Precast Hub at Kaki Bukit. We aim to build more of such hubs in future to support the industry's restructuring.
Mdm Chair, let me call on all stakeholders again to work together to help the industry restructure. We need to quicken the pace of change. We need a successful transition.
Mr Png Eng Huat (Hougang): Madam, like many Singaporeans, my family moved into a HDB estate in the early 1970s. It was not easy for many of us, being kampung dwellers, to adapt to a new and strange high-rise living environment. I remember one family brought along the chickens to live with them.
In the early years, HDB did well to ensure resettled residents will not need to adjust too much to living in a concrete jungle. So, there were shops below most of the flats and a new market and hawker centre nearby. To a certain extent, the planners tried their best to transplant our way of life in the kampungs to the HDB estates. Some semblances of kampung life continued in the local provision shop, the corner coffee shops, the wet market, the hawker centre and even the tiny convenience store at the void deck.
But such simple amenities are sorely missed in the new estates. A visit to Punggol East early this year gave me the feeling that future HDB estates will see less and less of such amenities. If you were to take a tour of the older estates today, you will see a world of difference. You will also feel the heartbeat of the
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community around those simple amenities built years ago for the benefit of the residents.
As we embark to remake Singapore, I urge the Ministry to incorporate the heartbeat of old Singapore into the design of new towns. I also urge the Ministry to do the same to existing estates lacking in such amenities in the next phase of estate renewal. Every precinct should house some neighbourhood shops, eateries or even just a small convenience store at the void deck. We must try to preserve what is important to keep our way of life, culture and community growing. Such efforts should not be driven purely by commercial considerations. We must make haste to ensure such old-world charms and traits will not become a relic of an era gone by.
Ms Faizah Jamal (Nominated Member): Madam, Kampong Glam is an area of rich historical and heritage significance for all Singaporeans, particularly for Singaporean Muslims, especially with the presence of the Sultan Mosque as a focal point, dating way back more than a century as the place where people do business, live and play.
In recent years, Kampong Glam has become an exciting place, especially for the younger generation. The presence of many F&B outlets, offering cuisines beyond the traditional local ones, has contributed to the buzz. Unfortunately, this has created some tension with some Muslim business owners there, as well as from the Muslim community at large, unhappy at the opening of karaoke joints and, particularly, the consumption of alcohol in some F&B outlets, especially along Bussorah Mall, directly behind the Sultan Mosque. I acknowledge and I agree that Kampong Glam should be open to free market forces. I am also mindful and I agree that we need to bear in mind the bigger context of Singapore as a whole in which heritage spaces exist.
However, bearing in mind the strong Islamic history and tradition of Kampong Glam dating way back more than a hundred years, I would like to ask the Minister two questions. First, to what extent would MND regulate the types of businesses that unit owners rent their premises to; and second, in particular, would the Ministry regulate the consumption of alcohol so that it is at least restricted to inside the premises of the F&B unit; or if alcohol consumption is allowed outside the premises, at least to where the premises are not within direct sight of Sultan Mosque.
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Mr Yee Jenn Jong (Non-Constituency Member): Madam, much has been said about infrastructure in the land use plan. Liveability is not just about buildable infrastructure. Sustainability of our natural habitat is also important.
Apart from being a habitat for flora and fauna, the natural environment alleviates drainage issues by retaining water and slowing surface run-off and can moderate ambient temperatures. The 2012 Expert Panel on Drainage Design and Flood Protection Measures found that large-scale rapid urbanisation is a key contributor to the recent increase of flooding.
A comprehensive Environment Impact Assessment (EIA) should precede major developments. Many countries already require EIAs before starting projects. By alerting us to the potential hazards that may arise, precautionary measures can be taken. An example is the urbanisation of a grassy knoll to house Ion Orchard. Preventive measures could have been taken if nearby complexes and the authorities were alerted to potential problems arising from the building. Another effect of urbanisation is the increase in ground temperatures due to the loss of trees. EIAs can help us better understand this issue and help planners plan the siting and even method of development.
The Nature Society of Singapore has noted that Singapore has a higher carbon footprint than other developed countries. Naturally, wooded areas help absorb this carbon. If more wooded areas like Bukit Brown and Pasir Ris wetlands go away, our carbon footprints may become larger. I hope EIAs can be a pre-condition for all major developments, and their findings made available to the public.
Ms Faizah Jamal: Madam, my question relates to the major changes to the physical and marine landscape of our island envisaged in the Population White Paper and the land use plan.
On land, it is the proposal to extend the MRT services with a 50-kilometre cross-island line. The fact that this line will cut through the central catchment nature reserve is of great concern to me. This is because it is the last remaining least affected forest area left in Singapore, with some species of flora and fauna that are found not only nowhere else in Singapore but nowhere else in the
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world.
Along our shores, the land use plan proposes massive reclamation works in areas, such as Pulau Tekong and Tuas, possible changes to Pulau Ubin, the coastlines of Kranji, Mandai, Pasir Ris, Changi, Tenah Merah, as well as the southern islands of Pulau Hantu and Pulau Semakau. Reclamation on such a massive scale will lead to serious environmental consequences to these areas and to the marine species. Just to take one example, the valuable areas of rich native bio-diversity like Chek Jawa on Pulau Ubin, which many Singaporeans have grown to know and love, will potentially be lost.
So, my questions to the Minister are: First, has MND conducted any sort of preliminary impact assessment before the decision to include these plans and, if so, which were the agencies involved, what were their terms of reference and what were the results? Just to highlight a few concerns, how will these affect our drinking systems, our rivers, our seas, and the potential flooding problems that might ensue?
Second, are there plans to conduce more rigorous and comprehensive environment impact assessments on these areas in the near future? And if the results show the consequences will be more severe than thought, would the original plans be duly altered?
Third, may the public have access to these studies, for transparency and accountability? And, lastly, would MND consider my call made in my speech on the White Paper debate, for the legislation of compulsory EIAs for all major projects, such as these, to be made open to the public for accountability and transparency as well?
The Senior Minister of State for National Development (Mr Tan Chuan-Jin): Mdm Chairman, we will be developing for our future generations and we will ensure that the needs of Singaporeans are met. This is central to all our developments. But as we ramp up our infrastructure, it is clear that Singaporeans are naturally concerned that some of these developments will have an impact on our natural environment, and, over and above that, our collective socio-cultural heritage and, with it, our personal memories and sense of identity. In our Singapore Conversation, many Singaporeans have talked about it. Our heritage, our environment, arts, culture are all important aspects that we need to pay attention to even as we develop. I understand and fully share these concerns. This is why it is important for us to be careful and deliberate in the process. At the end of it are: what is the correct balance and
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what is the approach that we need to take?
This is where the difficulties start because many of us do have different perspectives. The balance between conservation and development is highly subjective and very much contextual. For example, one may strongly believe that this patch of greenery is very important, or this old school is really precious, and we should maintain it. But somebody else might think, \"It does not really matter; why are we spending so much time, so much resources, dragging our feet on the issue?\" These are the issues which I think we have to contend with.
It is not about who is right or wrong. There are many different views in society. We need to strive to achieve a win-win situation, and while we may not be able to achieve win-win in specific cases, as a system, as a society, that is something that we should endeavour to achieve and it is something that we can work towards.
As a Government, we need to be able to balance these views, to engage stakeholders – Singaporeans who care about the environment, history and heritage – and then to ascertain what exactly we need to do. Our focus is to ensure that every Singaporean, today and tomorrow, will have good homes, good jobs and a good quality of life. Our definition of each of them might vary in some ways, but, at the end of it, it has to be about Singaporeans.
Our heritage and environment clearly form important parts of this equation. It is important to also understand that they also do not exist for their own sake. Within this 714 square kilometres of land that we call Singapore, we have to decide where we are going to live, work, play, which patches of greenery and which area of heritage significance we should maintain and preserve. There are also defence and security needs and the need to be self-sufficient in water. All these different factors are important because they impact our lives. They are Singaporean interests. Within this space, how do we make those choices? Therein lies the challenge that Singapore faces. We have managed it in our own ways, defied the odds in many ways, to find a balance. This balance will continue to evolve. In all planning, we must put our people and our needs first.
We have approached nature and heritage conservation in the following three ways: first, let us identify the land and set aside these areas through land zoning for nature and heritage; secondly, let us assess proposed developments – and I will talk more about this later – how these developments may affect our environment, and consider options and measures to mitigate, adjust, change; thirdly, we make the most of what we have – whether developed, conserved or
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preserved – to make Singapore the best home for all Singaporeans and for all times.
These principles are fundamental. But how judgements and trade-offs are made will be determined by the priority of the needs of our people and their families, and these will evolve with time. As a Government, we will have to make decisions that reflect the collective interests of Singaporeans. There will always be interest groups and it is important to have interest groups. It is a very good development to see that interest groups grow. But sometimes, interest groups are also very focused on particular areas of concern. Not that this is not valid, but it is important to also weigh that against the collective needs and the collective interests of all our people. The positive story is that we are beginning to work closely with the increasing number of interest groups and to tap on their expertise and knowledge, and that is something that we should continue to do.
Let me first talk about our being green for our people. I am not sure whether we are aware of the significance, but this year, we commemorate 50 years of our city's greening efforts since the first tree planting exercise by Mr Lee Kuan Yew back in 1963. Despite our focus – as you can well imagine at that stage, it was about survival, economic, physical security, and so on – our founding fathers had the foresight that Singapore needed to be green, even before it was a fashionable thing to do. In fact, I could imagine Singaporeans wondering why we were wasting time and efforts in this area rather than in other areas which were pressing – housing our people, providing and meeting their basic needs. But it was something we paid attention to. We paid attention to the emissions, the standards of cleanliness for industries, and so on. We have since planted 1.4 million trees to enhance our streets and gardens, and this will continue.
We are committed to retaining about a tenth of our land for nature reserves and parks. This is very significant for a highly urbanised city-state like Singapore, and this is our commitment in terms of land planning. Many experts in other countries have also observed that NParks is placed not in any other Ministry but under the Ministry of National Development, because we see that as integral to the development of our country.
We have protected four nature reserves, representing the key native ecosystems that are found in Singapore, and their biodiversity are among the richest in the region. We have also planned for green recreational areas where Singaporeans live; at least 85% of our homes will be within 400 metres' walking distance to a park. That is our commitment – to provide the green spaces for
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our people.
This year, Singaporeans can look forward to the completion of new parks like Holland Village Park, Woodlands Town Park East and Choa Chu Kang Park extension, adding to 350 parks that we have today. Some of our older parks like Sembawang and Changi Beach Park have been given fresh new looks. These parks will be complemented by more park connectors that will continue to grow across the island, vertical greenery, rooftop gardens and the transformation of our waterways into recreational areas. This represents an awareness of the impact that greenery has on the environment, as Mr Yee Jenn Jong shared earlier, and our commitment to make sure that Singapore remains green.
There will be those who argue that parks and waterways are not natural, and they are absolutely right. In the first place, a city, to begin with, is an artificial construct. In this city, nature and biodiversity can be managed to prosper, and we are putting in resources to do so. Things that we can preserve, the natural tracks that we have, we preserve it. But in other areas, how do we cultivate, how do we adapt, how do we adjust to promote that growth, so that it is growing and thriving?
Fortunately for us, we also have a very active community of volunteers who also understand this. They not only advocate the conservation of nature, they roll up their sleeves to work together with our authorities like NParks, MEWR and PUB to work on maintaining the greenery and to enrich the biodiversity that we find in Singapore. This has allowed us to do more and to do better.
For example, the Eco-Link@BKE is a 50-metre-wide natural platform that will stretch across the BKE. When completed, it will reconnect, after many years of separation, the Central Catchment Reserve to the Bukit Timah Nature Reserve. This is significant. The Kheam Hock Nature Way, which was developed with the community, was also recently launched. These efforts are important because they encourage the movement of birds, butterflies and wildlife between our nature reserves and parks. By 2015, we aim to create 60 kilometres of such Nature Ways, including at Tampines, Yishun-Mandai, and the Admiralty area. Our park connectors and recreational waterways will also play a very significant and complementary role as they criss-cross this island and intersect with these nature reserves.
Our green efforts have been noticed by experts. Peter Newman, who is a Professor of Sustainability at Curtin University, said that he was looking for an innovative edge in Biophilic Cities and he thinks he has found it in Singapore.
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Now, what are Biophilic cities? They are cities that contain an abundance of nature in close proximity to large numbers of urban dwellers, where its people feel a deep affinity with the unique flora and fauna found in these cities.
Do take a look at his videos which are posted on Youtube. You will be amazed. It reminds us about how much we have done in the last 50 years. While many cities have lost their biodiversity and greenery to urbanisation – and remember many of these cities have a hinterland to talk about – we do not, but, yet, we are able to maintain this and build up these efforts, not to just be a Garden City, but to really be a city in a garden.
Can we be greener? We can be, but there will inevitably be the trade-offs that I have talked about earlier. We need to be green, we need to look after our heritage, our environment, and to cater space for water sustainability to live, work and play. We truly appreciate the emotive value of these places, but we also have the wider needs of our population to contend with. So, how do we strike that balance? Our commitment is to make sure that greenery is part and parcel of our landscape.
Ms Faizah Jamal and Mr Yee Jenn Jong asked about the Government's process to assess the environmental impact of development projects.
Currently, agencies within the Government collectively evaluate the possible impacts of all development proposals, including traffic, drainage, biodiversity and air and water quality. In particular, agencies will require major development projects to undergo an Environmental Impact Assessment, especially when they are near to sensitive areas, such as nature reserves, nature areas and maritime and coastal areas. Based on these studies, the Government will examine whether the project can proceed and the potential impacts mitigated by modifying the scale or scope of the development works. These EIAs will be gazetted and will be available for public viewing, and we will involve the various stakeholders to tap on their expertise and concerns.
MND's recent Land Use Plan has indicated areas where reclamation may take place in future. These areas are part of our longer term plans to provide additional physical capacity in our country. In fact, a lot of Singapore is reclaimed. But firm decisions on reclamation are only taken after the EIAs are conducted.
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Now, there is the question of whether we should have EIAs for every single development. The truth of the matter is that in every patch of green, you will find life. But does it mean that we should do an EIA on everything before development can take place? We do not believe so. The planning process is in place for development proposals to be assessed.
NParks routinely carries out surveys of all the areas of greenery in Singapore. And in their assessment, the biodiversity of land zoned for housing and other developments generally do not come near to the richness of our nature reserves and nature areas which we have set aside. EIAs do take up time and resources. As such, we should apply them selectively to projects that may most adversely impact our protected natural spaces as well as coastal and maritime environments.
Just as a quick point, Mr Yee Jenn Jong mentioned about the report on flood mitigation. I would highlight that in the report itself, the expert panel did not say that large-scale rapid urbanisation is a key contributor to the recent increase of flooding in Singapore. Urbanisation has led to increased storm water runoff – this is what the report says in its Executive Summary – and we need to introduce measures to mitigate the effects of such urbanisation. However, the effects are often complex and require further modelling and analyses supported by higher resolution data. The additional analyses should also include an assessment of whether the runoff coefficients traditionally used in Singapore are appropriate given the high intensity of rainfall, compared with the areas where the runoff coefficients were derived. The final report elaborates a bit further.
What is important is we do pay attention to these things and some of the other concerns about ambient temperature and so on, which is why the commitment to make sure that Singapore remains green.
Let me talk about our built heritage. Like our greening efforts, we put in effort to conserve what built heritage that we have and we will continue to develop and emphasise this. Since the 1980s, the URA has conserved over 7,000 buildings in more than 100 areas, including historic districts like Chinatown, Kampong Glam and Little India. We will continue to conserve more significant older buildings when there is an opportunity to do so, but at the same time, you also have to weigh that against the other needs that will arise over time.
Our built heritage is valuable not just for the architectural significance of the buildings. It is also the memories that we attach to the activities that used
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to take place there. Many of us have personal memories of these spaces as well. On the hardware side, conserving is not that difficult. It is actually the software side. What do we do with these spaces? How do we try to maintain, as highlighted by some Members, the memories and activities? How do you preserve that sense of the place?
These issues are important and they are also very subjective in many ways. That is why public participation and discourse are important to help us in the Government and the authorities to evolve our approach in managing them.
Where possible, we will maintain the original use of the old buildings. But where we are not able to do so, planners in URA try to find workable win-win solutions to provide flexibility to owners, whether in usage or intensification, as long as they retain the key exterior elements of the building. For example, two of our historic buildings, the City Hall and the former Supreme Court, will be converted into a state-of-the-art National Art Gallery. This is in prime district but we decided that it is best to preserve it in this way, and not only that but to promote arts and culture at the same time. We all look forward to its opening in 2015.
The concept of adaptive reuse can apply to heritage areas as well. Many historical sites and areas have been conserved in terms of their buildings but I think it is important to also look at the use, as highlighted by Ms Faizah Jamal earlier.
What are the policies in place? URA plays an active role to manage the use. We zone these heritage areas for commercial and mixed use – shops, residences, institutions, restaurants and so on. Activities that are not so compatible with these areas, such as nightclubs, drinking joints, massage parlours and the like, will be discouraged in some of these places. We will pay attention to that. But more importantly, this is where the community and the ground-up effort need to take place. We believe that it is best that the community discuss and collectively shape the character of these areas. Ground-up ideas are most welcome and we will support this process because we believe that the local community and those who are passionate about the concerns are best placed to determine what might work best, rather than have the Government impose its views from the top. We will facilitate that conversation and evolve that common space.
In this context, I am pleased to note that some stakeholders at Kampong Glam and Chinatown have taken the initiative to refresh and enliven these
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historical areas. What we hope to see, in terms of pilot projects, are that Haji Lane and Ann Siang Hill/Club Street will also be car-free on weekend evenings to allow pedestrians to freely stroll along the street and enjoy the various activities and programmes in those areas. We hope these pilot projects will be successful and we can continue this in other forms perhaps elsewhere.
We will support these ground-up initiatives to make our city more vibrant. This is more art than science, and we can experiment and still retain the distinctive character of these areas.
As pointed out by Mr Png Eng Huat, our focus on heritage and history has to go beyond just historical districts. It has to go into the heartlands, where we live. Our heritage and identity really start with the place we grew up in and the place that we are living in. This is where we need to strengthen it through good planning, design and actively collaborate with residents.
In recent years, HDB has launched the Remaking Our Heartland programme to rejuvenate our housing estates without losing their historical character and social memories. For Dawson estate in Queenstown, HDB launched a \"Call for Heritage Items\" exercise in 2008 to encourage residents to share stories and donate personal items. I do not know whether you remember Tah Chung (大众) Emporium in that area. I remember it well – I used to go there when I was young. Apparently, there was a Tah Chung (大众) Emporium discount card.
Story boards have been put up along the Alexandra Canal Linear Park to recount the transformation of this estate. Now, it is not the same obviously as preserving the entire old estate, but it goes a long way to capture a slice of history which many of us relate to, and to provide that continuity with our past.
In Yishun, a Heritage Garden was installed to recall the history of Yishun, and heritage panels were also installed along MyWaterway@Punggol. Similar initiatives to commemorate heartland heritage will be rolled out in the next phase of the programme at Hougang, East Coast and Jurong Lake.
This is where I will make a personal plea to all Members in this House. Can you imagine if all of us were to do this in our respective estates? My RC Chairman in Ping Yi Gardens actively discussed it, found an old resident who lived in that area and she took out old pictures. He interviewed her about what it was like in Ping Yi Secondary School previously and what was in that area.
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Can you imagine what it would be like if all of us began to create our own little histories of the places we live in, mobilising our residents and engaging history buffs, experts to guide us in the process? That is about building history at the local level. I think there is a tremendous potential to help us relate to the place that we live. That is part of nation-building as well.
In the planning of new towns, HDB will also incorporate the area's heritage. For example, in Punggol, we will retain Old Punggol Road as a pedestrian trail to connect Punggol's Town Park to the seafront at Punggol Point. For Bidadari, the HDB is studying the feasibility of retaining some of the beautiful mature trees in the area and incorporating the existing memorial garden into the new Bidadari plans. It is about retaining the spirit of the place.
One project that all of us are familiar with and is close to my heart is the former KTM railway land. The Rail Corridor reminds us of our close ties with our friend and neighbour, Malaysia. It joins up seven HDB towns from Bukit Merah to Woodlands – almost a million residents live in those areas. Even before development plans are firm, the Rail Corridor has already begun to take on a life of its own to connect people, to connect communities.
Earlier this year, I participated in the Green Corridor Run, a scenic 10.5-km run, and it ran from Tanjong Pagar Railway Station to the old Bukit Timah Railway Station. It was a privately-organised event – over 6,000 people took part. People were just happy and joyous to take part in the run or walk. As I said before, it is about connecting people, connecting communities. How do we maintain that spirit even as we develop? Many people have come forward with ideas.
URA's plans for the Rail Corridor have been enriched by many ideas by many Singaporeans, many residents, students, professionals, interest groups and people who have surfaced ideas about how this could be further developed so that we retain that element of community space. That will be the next step, as we master plan the Rail Corridor, to see how do we incorporate the public feedback, and how do we, importantly, in response to the desires of many people, retain a continuous green corridor as a key planning parameter in the planning, design and development of the Rail Corridor. This is a unique space, not just only in Singapore, but in the world.
Celebrating our heritage requires many agencies. Certainly, it involves MND and MCCY. There is a lot of scope for us to work with the National Heritage Board (NHB) and other agencies to curate and tell the story of our places and
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buildings. NHB is active, for example, in studying how heritage elements in Bukit Brown will be commemorated. NHB has also worked with agencies and members of the community to develop many interesting heritage trails that feature national monuments and heritage sites, not just in historic precincts in the city centre, but also in the heartlands. This is where, again, as Members of Parliament, we can also think about developing local trails for our people, and for people to begin to see the significance of the place that they live in.
Heritage has to be fully participated. People need to be fully involved and it must be driven by the people as well. Let me share an example. For the Singapore Memory Project, people from all walks of life have shared over 700,000 memories about Singapore. Thanks to the work of Dr Imran Tajudeen from NUS, old wooden carvings from the former Malay Village will be reused at the new civic centre in Geylang Serai. For the Comprehensive Marine Biodiversity Survey, which I visited and was tremendously inspired, there was a lot of work done by the local and international community. Many volunteers, academics, NGOs and the private sector have provided significant time and resources to document the fantastic array of flora and fauna found in our waters. There are many more of such inspiring examples. I would like to take this opportunity to thank the many Singaporeans and many volunteers who have stepped forward to work on these issues and in these areas. And through Our Singapore Conversation, we will continue to welcome feedback and views on how we can build our common sense of identity and belonging through heritage and nature conservation.
At this juncture of our history, as we come of age and as we find it as an inflexion point in many ways, we need to figure out how to balance all the different conflicting needs that we have and skillfully weave them together. We need to develop our infrastructure but we also need to preserve and to guide our development in a sustainable manner.
There will be times that the Government will make difficult decisions. There will be times when the Government perhaps should be stepping back so that the community can step forward. Very often, both Government and people need to step forward together to find the solutions. The truth is that we will not always reach a consensus, not just between the Government and people, but also between different groups who have different interests. But what is important, and something that I personally found, is there will be common spaces, and it is about how we focus our energies to create something special together. Ultimately, what we create, what we keep is only meaningful when there is community appreciation, when there is ownership by our people and there is participation by our people. Let us find those spaces, and they are there,
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so that we can work together to build more memories and build more gardens and, importantly, to build something that we can all be proud of in this place that we call home.
Ms Faizah Jamal: Madam, Singapore obtains about 90% of its food needs from other countries. So, I am glad to note AVA's statement in the Forum Page of The Straits Times recently that Singapore aims to be self sufficient in fish, eggs and leafy vegetables. I also note that HDB intends to build more than a hundred multi-storey car parks with rooftop gardens where the new facilities will allow residents to plant their own vegetables. However, with the proposed increase in population, as envisaged by the White Paper, my questions to the Minister are as follows:
First, what are the measures which will be taken to enhance the initiatives mentioned above?
Second, is the Ministry looking at other countries besides the ones we have already been sourcing from for our future needs and, if so, what are these countries and for what sort of food supplies?
The second part of my question relates to genetically-modified food. On 10 February this year, The Straits Times reported that genetically-modified salmon created by a Singaporean scientist, Prof Hew Choy Leong, would be made available for consumption as soon as the Food and Drug Administration (FDA) of USA approves the application. My question for the Minister is three-fold:
First, bearing in mind that there is genuine scientific concern about the hazards that genetically-modified (GM) food poses on human health and the environment, would Singapore still take the lead from the FDA and similarly approve the sale of GM salmon in Singapore?
Second, would the Minister consider compulsory labelling for this item so that consumers who may not be in favour have a choice when making their purchase?
Last, has there been any updates since my Parliamentary Question last May on the review by the Genetic Modification Advisory Committee on GM
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food, and when can the public expect all GM food to be labelled in Singapore?
Mrs Lina Chiam (Non-Constituency Member): Madam, Singapore's growing population and reliance on imported food make us extremely vulnerable to changes in the global political and economic situation. In times of hostilities or global food shortages, Singapore needs a surer source of food.
Apart from the diversification of food sources and increasing stockpile, we need to develop strategic partnerships with friendly nations. Ideas like vertical farming and growing food on HDB rooftops are credible mitigation to shortage of food, but they are, at most, experimental. The supply from growing food vertically will not solve our problems from prolonged periods of threat.
We believe that Singapore could ask the Government-linked companies to develop and invest in mega farms in various neighbouring countries. These neighbouring developments could be a test-bed for innovative farming methods. Over time, we could develop the logistics supply chain to bring this produce back to Singapore, instead of depending on peace-time procurement system. If we make these direct investments, we would likely have priority over other customers in the purchase of food.
Mr Lim Biow Chuan (Mountbatten): Madam, many residents of rental flats in my constituency are either low-income or elderly citizens. I meet and chat with them frequently when they come for my ComCare dinners. Whenever I find out from them that they or their children have done better in their jobs and have received pay increases, I feel happy for them. Unfortunately, their happiness is short lived as they would come back to see me weeks later to seek help because the rent of their HDB flat has increased due to their wage increase.
Madam, I find the Government's actions quite contradictory. We go to great effort to help the lower income by WIS, by giving them rebates for their conservancy charges and by helping to pay for their utilities. Yet, when these residents make improvements to their lives by earning more, HDB would tax their wage increase by increasing their rental. Surely, this is a disincentive for the residents to work harder and to be more productive.
I urge the HDB to immediately freeze the rental increase for HDB rental flats. We should encourage these low-income residents to work hard and to be allowed to keep their well-deserved salary increase. Eventually, they will want
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to break out from the poverty cycle, because they can see the tangible benefits of higher salary by working more productively.
Ms Lee Li Lian (Punggol East): Madam, Minister S Iswaran told Parliament on 5 March 2013 that there were 11,736 foreign spouses of Singapore citizens who were on LTVP and LTVP Plus. Eleven thousand seven hundred and thirty six may not appear to be a huge number compared to our total population. However, we should not look at it as just 11,000 individuals but 11,000 families or families-to-be. Singapore citizens whose spouses hold LTVPs are disqualified from applying for rental flats under the HDB's public rental scheme.
On 25 February 2013, the Senior Parliamentary Secretary, Dr Maliki Osman, said in Parliament that the HDB rental scheme treats a citizen married to another citizen differently from a citizen married to a foreigner. He also said that HDB will consider the merits of each case and exercise flexibility to help those truly in need.
Madam, I have seen such cases every week at the Meet-the-People sessions in Punggol East. These families who seek rental housing are typically those already in need and not financially well off. While the Government would like to exercise flexibility, it must also understand that such flexibility creates uncertainty and instability for such families.
Minister Khaw Boon Wan said on 2 March 2012 that he was mulling over how to help groups faced with special circumstances and he specifically mentioned foreign spouses. He said that he had not forgotten these groups. I hope that the Minister has started to think deeply about this issue and can share with us from the appeals that HDB receives. Under what conditions or criteria have the HDB granted a rental flat to a Singapore citizen with a foreign spouse? If not, what other alternatives are there for them?
Mr Png Eng Huat: Madam, although the Government will continue to encourage all Singaporeans to own their homes, there will always be a group of Singaporeans who are unable to do so for various reasons. For these Singaporeans, the only option left is either to rent from the open market or HDB. For families with household income of $2,000 and below, renting a flat from the open market is not a financially prudent thing to do. The latest median rent for a 3-room flat ranges from $1,750-$2,400, depending on location. For some of
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these families with young children and belongings, renting just a room is also not a conducive arrangement.
Another group of Singaporeans who needs assistance in housing are single parents with children born out of wedlock. For low-wage earners in this group, renting a room is already a strain on their pockets, as the children grow and the need for bigger space arises. Renting a small flat from the open market is virtually out of reach.
A third group of Singaporeans are the elderly with no or very little income. Some have no children while others cannot depend on their children. In the above examples, some of the families are waiting for their BTO flats while some are technically homeless. Some are finding it hard to make ends meet renting room from the open market while others are living on the goodwill of their relatives and friends to house them temporarily. Some families are barred from renting because one of the partners may have sold a flat or two due to previous broken marriages. Some are barred because the children are born out of wedlock and they do not constitute a family nucleus. Some basically do not qualify because of the household income ceiling.
Budget 2013 has promised to do more for Singaporeans and to build a more inclusive society. I welcome the move by the Government to provide temporary housing for first-timer married couples with or without children. I would like to ask HDB what other measures are there to help Singaporeans, some of whom are caught in between policies to find a place to call home, whether on a temporary or long-term basis. Can HDB look into relaxing the income ceiling criteria for families with children for a start? Can HDB relax its family nucleus criteria for single parents with young children born out of wedlock as well?
The Chairman: Mr Muhamad Faisal, please take your two cuts together.
Mr Muhamad Faisal Bin Abdul Manap (Aljunied): Madam, in my previous cut on the housing resale levy value, I have depicted the circumstances in which lower income families have been requested to sell off their property. This sets in place a 30-month long debarment period for flat owners who intend to rent a flat directly from the HDB.
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I recall one of my residents who came to seek my help at my Meet-the-People session. He is a low-income earner with five young children under his care. He was left stranded and homeless and his family had to resort to sleeping in a tent by the beach after he had exhausted all of his sales proceeds on renting a flat from the open market.
Officers from the Ministry of Social and Family Development subsequently picked him up and his family was placed in a community shelter. During the 30-month long period in which he was unable to rent a flat from the HDB, he built up another series of arrears as a result of his tight financial situation where the bulk of his proceeds went to servicing his rental commitments. Today, even though he has been allocated a HDB rental flat, he is still struggling to pay off the arrears he accumulated during the 30-month long period. The family remains trapped in the debt cycle.
The case I have illustrated is not unique. In fact, many Members of this House would have come across similar cases during the course of their work. We can and should do more for the lower income Singaporeans. I would like to call upon the Minister to consider exempting the lower income families from the debarment policy, or at least reduce the debarment period for renting a HDB flat from the current 30 months to a period not exceeding 12 months, preferably between 10 and 12 months. Such a move would be most welcomed by many lower income families.
Madam, many Members in this House have written countless letters to the HDB on behalf of their respective constituents on many related issues, such as rental housing, waiver of housing levy or the lowering of rental fees.
During the course of my work as a Member of Parliament, I familiarised myself with the generic responses offered by HDB to my residents. Allow me to cite two examples. In situations where an appeal by elderly Singaporeans for a rental flat is not successful, HDB will cite the support of his children whilst advising him to stay with his children as the basis for the rejection. In the event of soured relations in the family, HDB would advise the family to seek counselling to resolve their outstanding issues. Under circumstances where an owner has just sold his flat due to his outstanding arrears or a broken marriage, the 30-month long debarment period would be cited as a basis for not granting a HDB rental flat. HDB would also remind the residents of the proceeds from
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the sale of his previous flat.
Such responses in themselves are not wrong, but I urge the Ministry to exercise more care, greater due diligence and demonstrate a greater level of compassion for each individual appeal.
Each appeal letter represents a hope and a bond of trust that residents have in place in the judgement and abilities of the Ministries and its officials to alleviate their most immediate problems. More care should be given and more time should be spent in assessing cases and the nature of the appeal. Each family is different and the situation of members in each family is unique, and, hence, more time and flexibility need to be exercised when assessing the eligibility and merits of each appeal.
Under such a circumstance, voluntary welfare organisations (VWOs) and Family Service Centres (FSCs) on the ground, equipped with the relevant resources and human expertise can work with the Ministries to better assess the needs of each resident. This can add a human face and a compassionate touch to the lives of our people when they deal with agencies and bureaucracies.
I call upon the Ministries to enhance their collaboration and engagement with the HDB, VWOs and FSCs and seek their advice and professional assessment during the process of determining the validity of a particular appeal.
The Chairman: Mr Faisal Manap, your time is up. Your call for action is heeded, I am sure. Mr Gan Thiam Poh.
Mr Gan Thiam Poh (Pasir Ris-Punggol) (In Mandarin): [Please refer to Vernacular Speech.] Madam, the commercial and industrial rentals form a substantial component of business cost and businesses will pass on this cost to consumers. I urge HDB and JTC to take a more active role in controlling the rental for these properties. A good example is NEA's active co-management of new hawker centres to keep food cost affordable.
I would like to appeal to the Government to consider up to 30% rental rebate as well as freezing rental revision for HDB and JTC tenants for the next three years while businesses undertake measures to improve on productivity and to ease inflationary pressures arising from rising rental cost.
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The Senior Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman): Madam, many Members spoke on the challenges faced by low-income and vulnerable families. I understand their concerns intimately as I spend a lot of time working with and helping these vulnerable families improve on their quality of life.
Recently, one Mdm J approached HDB for a public rental flat. She was a childcare teacher and her monthly income was $1,800, exceeding our $1,500 income ceiling. However, she was a divorcee and had to raise four school-going children without support from family. I discussed her case with HDB. We waived the income ceiling and gave her a 2-room public rental flat. Whilst she waited, HDB gave her interim rental housing. HDB also referred her to the Community Development Council (CDC) for skills upgrading. This way, she could raise her income and, one day, realise home ownership for herself and her four kids. Helping Mdm J and her children was not just about giving a roof over their heads. It was about stabilising the family. It was about ensuring the children's needs are met and they are not further disadvantaged by the family's circumstances.
Mdm J's case is not unique. We have seen many such cases. Each day, I go through many housing appeals. I do this because I know circumstances vary. To help, we have to understand the individual's circumstance, so we can better assess the needs.
This Government has always been committed to helping the weak and vulnerable victims of circumstances. For them, we give support to ease their situation, and, over time, this has increased, along with our resources to do so, as a country. If they have children, we want to ensure that their children are not denied education and opportunities. They will lift their families from poverty and avert an inter-generational problem. This is why we do not just give some hand-out or benefit without making the effort to properly understand their circumstance, and take a hands-on approach to provide practical help and meet their long-term needs. Let me elaborate on this Government's approach in helping low-income and vulnerable families.
First, we support low-income families to achieve home ownership. We believe that home ownership will increase their self-worth and provide a better stable environment for their children to be raised in. A low-income first-timer household earning $1,500 or less can own a brand new 2-room flat in a non-
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mature estate for around $50,000. How? Well, we give a substantial market discount and price our 2-room flats affordably. On top of this, we provide them an additional CPF housing grant of $40,000 and a Special CPF housing grant of $20,000. They can fully pay for their flat using CPF. They do not need to fork out additional cash. And if they have two or fewer children and would like to focus their resources on raising their children well, they can join the HOPE scheme and receive, among other benefits, a $50,000 CPF housing grant.
Second, for the minority who cannot afford to own a flat, we provide public rental flats. These flats provide basic and good housing. Last year, we increased the supply of these flats to 50,000. We are ramping this up to 60,000, a significant 20% increase.
Third, in administering the public rental scheme, we have in place rules to focus help on the vulnerable while ensuring that we do not encourage imprudent behaviour or erode the work ethic. However, in the application of these rules, we will consider the merit of each case and exercise flexibility and compassion to help those in dire need.
Mr Lim Biow Chuan and some other Members have raised concern over the rental \"cliff\" that tenants face when their income increases to above $800. Emeritus Senior Minister Goh first alerted us to this two years ago. Since then, we have fixed it. For these tenants, HDB waives their rent increase, so that they continue to pay the lower rent, for one tenancy term of two years. They will not suffer a net loss in income. At the end of two years, if their income increase is still insufficient relative to the rent increase, HDB will continue to suspend the rent increase. As a general rule, no one in HDB's 1-room and 2-room rental units will see their wage increases taken away by HDB through rental adjustments. We have already fixed this problem and should you come across any such case, let me know immediately and we will solve it.
Market rents have increased significantly, but we have not adjusted the public rental structure since 2006, and we have no plans to do so. However, we need to maintain a fine balance between keeping rental rates low, so as to provide support and not discourage improvements in income through work and, on the other hand, adjusting rental rates where appropriate to reflect its relation to real costs, and encourage tenants, who are able, to progress on to own a flat when they are ready.
Ms Lee Li Lian, Mr Png Eng Huat and Mr Muhamad Faisal Abdul Manap suggested that we relax our rules to allow more to qualify for public rental flats.
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We have and will continue to review our rules from time to time. More importantly, let me assure the Members, that in our administration of the rules, we will be sympathetic and responsive to those in need.
We set an income criterion of $1,500 per month, so that we can focus our help on the bottom 20th-income percentile. However, we do not apply the criterion rigidly. We go through each case and are prepared to offer rental flats to help those in financial difficulties, even if their income exceeds $1,500, like in the case of Mdm J earlier.
We have debarment for certain cases, to deter Singaporeans from cashing out on their HDB flat, depleting their cash proceeds and seeking further Government subsidies through public rental flats, thereby competing with those who are truly needy. Nevertheless, again, we have applied this rule sensibly and it does not prevent us from lifting the debarment to help victims of misfortune, or allocating them interim rental housing while they wait for their public rental flats.
As public rental flats are heavily subsidised, only Singapore citizen households qualify. We recognise the needs of low-income citizens with foreign spouses, and do consider them on a case-by-case basis, but the priority goes to Singaporeans. We do hope that Singapore citizens planning to marry foreign spouses will also be responsible in planning and providing for their spouses, including their housing needs.
Often, it is so much easier to say \"yes\" than to say \"no\". Saying \"no\" can make us appear heartless and unsympathetic. We do administer our rules with a heart. However, while we try our best to help, we must be clear about the relative priority of different needs.
There will be instances where we have to be firm and say \"no\". For instance, a middle-aged couple approached HDB for a public rental flat. They were not in financial hardship and had, in fact, just sold their flat and secured cash proceeds of almost $200,000. They could have bought a 2-room flat or studio apartment but chose not to. HDB was not able to accede to their appeal for a rental flat because there were obvious cases that were more deserving and truly needy compared to them.
Likewise, we have had cases of elderly couples seeking public rental flats because they do not want to live with any of their many married children. The solution to their situation should start with exploring family support, and HDB
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facilitates by referring them to the Family Service Centre (FSC) for family counselling, should they face relationship issues.
Fourthly, we make sure that we help vulnerable families holistically and fundamentally, to prevent entrenchment and help them get out of their problem situation. Rental assistance can only provide immediate relief to housing needs, but does not resolve underlying social problems. We have to complement it with upstream social intervention, to support vulnerable families in employment, training, financial management and their children's education. This is to give them a leg up, and help them progress on to owning a flat when they are ready.
MND and HDB work closely with other Ministries, the local advisers and social agencies like the FSCs and CDCs on this. Mr Muhamad Faisal Abdul Manap suggested that HDB collaborate with Voluntary Welfare Organisations (VWOs) to assess housing appeals holistically and thoroughly. We agree, and HDB is already doing this. For individual cases which have multiple social problems, HDB also participates in case conferences with other social agencies to jointly work out sustainable solutions.
Community initiatives can play a vital part, too. Coordinated by the South East CDC, I piloted a scheme in my constituency mobilising local resources, such as the grassroots and FSCs in the locality, self-help groups, resident-volunteers and HDB, to help vulnerable families with dependent children stabilise their situation and build capacity to cope. These families are residing in interim rental housing and, as the House knows, this is housing for those with little family support and no housing options.
For each case, social workers work very closely with HDB officers to help the families chart out their respective housing pathways aimed at attaining permanent housing. Adults are assisted with relevant training and employment assistance to improve their income earning potential. Childcare needs are met to enable mothers to work. Grassroots leaders befriend the families, ensuring that they attend monthly parenting workshops on budgeting and family development. Residents in the neighbourhood volunteer to supervise the children in their homework on a nightly basis, while self-help groups provide heavily subsidised weekly tuition classes.
From crisis and vulnerability, we provide stability and hope to these families through support from the community and Government. This scheme has been running for a year and we have reached out to 200 families in need,
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with two in five successfully moving out into longer term housing solutions. We are heartened by the progress and will continue to help more.
However, getting these families back onto the path of resilience cannot be achieved solely through the social support infrastructure that the Government and its community partners have put in place. It requires families to also take the initiative and responsibility in sustaining their own efforts.
Let me conclude that public rental flats provide a safety net and we hope these families see it as a temporary safety net. The Government and social agencies together hold this net, to catch those who fall, and then, with a stretch, help them bounce back. We will not allow anyone to fall through the cracks. But too much slack, and the net will only enmesh and entrap.
Thus, even as we exercise flexibility and compassion, we need to guard against entrenchment, and keep the hope of home ownership and progress alive for rental tenants. Our job is not just to house, but also to enable and empower those who are in need, so that they can provide for a stable home and better future for their children. If they are able to secure jobs with CPF contribution, grow their incomes and build up their savings in a sustainable manner, home ownership is or can once again be within their reach.
I will now address Mr Gan Thiam Poh's concern on rent burden in light of the rising cost of living. Mr Gan suggested that we should also play a more active role in controlling the rents of shops and factories in our HDB towns and industrial estates to prevent higher rental costs from being passed on to consumers. HDB's commercial and industrial properties are let out on three-year term tenancies via open bidding. This is a fair and transparent system. Since 2009, HDB has assisted tenants who face more than a 10% rent increase during renewal, by staggering the rent increase over a three-year tenancy term. As a result, rent increases for HDB's commercial and industrial properties are at a substantially lower pace compared to the industry. HDB will continue to monitor the market situation closely and roll out additional measures where necessary.
Ms Faizah Jamal and Mrs Lina Chiam asked about the food security plans in place for Singaporeans. Let me give an update. MND chairs an Inter-Ministry Committee on Food Security to coordinate and look into holistic measures to mitigate our food security risks and vulnerabilities.
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Our approach to food security is multi-pronged. As a small country importing most of its food, diversification of our sources of food is our key strategy. This is supplemented by some local production of key food items, such as eggs, fish and leafy vegetables, and stockpiling, to ensure a resilient food supply.
We work closely with the local food industry and conduct overseas trade missions to explore potential sources of food in the region, such as Vietnam and Myanmar, and further away, such as South America. We also provide funding, via AVA's Food Fund, for companies interested in exploring contract farming overseas – for example, fish and rice farming in Vietnam and Cambodia respectively.
To raise local production, our farms can tap on AVA's Food Fund to upgrade their capabilities, carry out R&D, and adopt new technologies. For example, Sky Greens Pte Ltd successfully applied for the Fund for the construction and installation of the vertical farming system which was co-developed with AVA. We need to look for more of such innovations to help boost productivity as our land is scarce for farming.
Key to our food security is also Singaporeans' food intake habits. While we may culturally be accustomed to eating fresh or chilled meats and live seafood, we need to be open and accepting of food alternatives or substitutes like frozen meats which are in no way nutritionally inferior to fresh meats. AVA's efforts at encouraging greater consumption of frozen foods have seen some progress, and the consumption of frozen chicken, for instance, has increased from 51% to 60% over the last 10 years.
Even as we open up our new food sources, we must ensure that imports do not carry food safety risks or diseases. AVA has a rigorous food safety system that takes care of food safety from \"farm to fork\". It consists of overseas source accreditation, certification, inspection and testing of imports upon arrival in Singapore, a traceability system and consumer education efforts on food safety. AVA also ensures the safety of Genetically Modified (GM) foods through risk assessments before they are allowed into Singapore.
Ultimately, the Government, industry and general public must play our parts so that we can continue to enjoy peace of mind when we tuck in to our
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favourite foods.
The Chairman: We still have some time for clarification. Er Dr Lee Bee Wah.
Er Dr Lee Bee Wah (Nee Soon): Madam, I would like to seek a clarification on the housing scheme for singles to purchase a new BTO flat. There were a lot of enquiries when I was at the coffeeshop yesterday. My resident was asking, would there be any built in Yishun area? The second question is that, there are some of them who say that their salary is going to be beyond $5,000 after this increment. They are asking when will this review be done because they are eagerly looking forward to purchasing their own flat. The third question is that many also mentioned that they would prefer to buy 3-room flats because they have parents that they want to look after. I would like to seek the Minister's clarification on these matters.
The Minister for National Development (Mr Khaw Boon Wan): Madam, like Er Dr Lee Bee Wah, I had a lot of queries, too, when I had my Sembawang event yesterday. They were largely positive and appreciative. I appreciate their patience because they have been waiting for decades and now that there is an opening, they were positive in their feedback to me. Some of their questions were very similar other than the question on whether there will be BTOs in Yishun.
We are planning the whole BTO programmes for the rest of this year and also going forward. As always, I would like to spread them out, whether it is Studio Apartments for the seniors or Studio Apartments for the singles. And also other flat types. I am quite sure that at some stage, there will be some BTO offerings which singles can apply to for those who want to stay in Yishun.
The second point about salary, I gave an interview to the journalist which was quite well reported today. My explanation is a simple one – in policy making, we cannot hope to launch a perfect solution from day one when you offer it because no matter how carefully you planned it, you can never capture all situations. And the worse thing is to try to design a perfect solution that satisfies all. It may take you years, and then it will be very slow in implementing.
My approach is to be clear where you hope the end point can be. We do not know how long or how far we can reach that point. But let us start off cautiously and progressively open up towards the end point. That I think is a much better approach than to open up in a very liberal manner, only to
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disappoint many at first stage and then you are forced to tighten up which, I think, will upset many.
This first step of opening up to those earning below $5,000, I personally find it a reasonable step because what does $5,000 mean? I received a couple of emails which were negative. They said \"Only a few can enjoy this scheme\". That is not true, Mdm Chair.
Among working singles above 35, excluding retirees, $5,000 is between the 80th percentile and 85th percentile. Put it in simple English, more than 80% of singles above 35 years old earn below $5,000. That is not \"only a few singles who will be eligible\". It is fair that we open this up to these 80th percentile singles and then we see. If the demand is manageable, I will certainly want to raise the income ceiling.
That is my approach and I hope to get the singles' understanding and patience. When you open up and set too high a salary ceiling, what it means is when you have to ration and hold ballots, then it is luck-of-the-draw and you may end up offering many units to those who are earning $10,000 or whatever, while depriving those who are earning, say, $4,000 or $3,000 who may need it more badly and have less options.
As for the 3-room flats in order to live with parents, I understand their wish. Some, in fact, emailed to me and say, \"Can we have 5-room flats?\" One step at a time. Let us do the 2-room flats because let us assess the demand. Then we slowly liberalise from there. Immediately, for those who want to stay with their parents, they can already do so, apply as a family unit to the 3-room, 4-room, 5-room flat BTO launches that they are interested in.
The Parliamentary Secretary to the Ministers for Health and Transport (Assoc Prof Dr Muhammad Faishal Ibrahim): Madam, I refer to the story of Mdm J where she progressed from the interim rental flat to a more permanent home. I would like to ask the Senior Parliamentary Secretary for the proportion of Singaporeans who live in interim rental flats who have progressed to a more permanent home, as well as the average time period they take to progress from the interim to the permanent home.
Dr Mohamad Maliki Bin Osman: Madam, I thank Assoc Prof Dr Muhammad Faishal for the question. As we know, interim rental housing is really for families who have no other housing option; as some had illustrated, they have had to stay on the beaches. We introduced rental housing in 2009 to
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make sure that no Singaporean is without a roof over his head.
Many Singaporeans find their own alternatives first and, by the time they have exhausted the goodwill of friends and family members, they then come to us and we offer them interim rental housing (IRH).
Since the introduction of the IRH scheme in January 2009, HDB has referred more than 7,200 families in need to temporary housing or interim rental housing. As at December 2012, about 3,750 families, less than half, had stayed in IRH. This means that not everyone of those families took up the offer, which means that they still had other options. So, when we offered them, they would explore other options, too. Our offer of the IRH is one of the potential options for them to get housing and we offer them with support from other social agencies.
Of these 3,750 families, about 2,200 have since moved out – that is, more than 50% have moved out. Of these 50% of them, about 1,100 have moved to rental flats. About 20% of them, 440 families, have moved on to home ownership flats. They are capable of having home ownership flats. Some 30% have found other alternative accommodation.
How long does it take for them to stay in the IRH? It really depends on each case because, sometimes, it takes a while for us to work through. The illustration given earlier in my main speech, we worked with the social service agencies and engaged social workers to help these families understand each case's circumstances.
For those who are capable of owning a home because they do have substantial CPF savings and maybe they do not have good income at the moment, we take some time to get them to go into employment which will allow them some time to increase their savings so that they can then afford a BTO flat subsequently.
For those who have got issues with debarment, it takes some time for us to work through those issues. As far as the average period is concerned, it really depends. But we allow for the IRH tenancy on a six-monthly basis so that the families do not also get entrenched in the IRH system. The IRH rental rate is still lower than the market rate and we allow lower rental rates simply because we understand these are families in need.
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Mr Seah Kian Peng (Marine Parade): Madam, I have a few clarifications. The first one is concerning the Parenthood Priority Scheme. First, I want to thank the Minister for introducing this and also for taking up my proposal to extend it to married couples who are expecting. There are many good initiatives in this year's COS announced by MND and HDB. It is very important that we now invest more resources in communicating these new initiatives to all Singaporeans and to every Singaporean family. And specifically for the Parenthood Priority Scheme, I have one suggestion. If we could have some leaflets at the Registry of Marriages, for example, to tell them that this scheme exists. There is one part about housing options, the other part is about boosting TFR. Anything that we can do to help so that as many Singaporeans can benefit, we should.
My second clarification is to the Senior Minister of State Mr Lee Yi Shyan about the Enhancement for Active Seniors Programme. Again, another excellent piece of news. We are all delighted that this is all coming across to all HDB houses nationwide. My suggestion is whether we can consider modifying some of these in future to include vulnerable and elderly families in private estates. I understand there will be differing views but I think if we can just look at, say, elderly and vulnerable families in private estates. We can look at it on a case-by-case basis. We can look at tweaking some of the subsidy levels, maybe not immediately, but something which I hope the Ministry could consider in future.
Mr Khaw Boon Wan:\tI would take the first query and then Senior Minister of State Lee can take the second one. As always, Mr Seah Kian Peng puts forward very thoughtful and useful suggestions, suggestions which any sensible chap should say, \"yes\" to, and therefore, I say, \"yes\".
Mr Lee Yi Shyan: Madam, I refer to Mr Seah's suggestion. As we were rolling out the EASE programme in the early phase, the response shows that it has good reception among the elderly families. In the HDB situation, we try to bundle it with the HIP when possible so that it would minimise the kind of intrusive work that you got to do within the household.
In order to benefit more seniors, we are now rolling out EASE nationwide. So, interested families and qualified families can call, and the HDB will respond. At the same time, we are also working with hospitals and family service centres to surface the kind of vulnerable families, as the Member has said, to give them priority and to put up some fixtures for them. Whether we can go to the next stage of taking care of some elderly in the private estates, I think we will
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consider, but it will also be a matter of our capacity, as well as funding, and whether we want to park EASE as it is, in the current form, or we can work with the other Ministries to roll this programme out.
Mr Gan Thiam Poh: Madam, with news of record resale prices that we heard about last week, the public still feel very uneasy about the high prices. My question to the Minister is what can HDB do to cool down the resale market? Despite the fact that we have introduced so many rounds of cooling measures, the public still finds that the resale market prices seem to be out of control. Will HDB consider re-introducing poster-price system used in the past as part of the measures to regulate the HDB resale market? The next question is, will HDB also consider regulating the rentals of HDB flats?
Mr Khaw Boon Wan:\tMdm Chair, Mr Gan Thiam Poh's suggestions are a little difficult to implement because the Member is talking about the resale market – both sale and rental. How do I interfere because that is between the homeowners or home sellers and the home buyers or potential tenants? For us to interfere means that we set prices, we determine those prices on behalf of the homeowners and buyers. So, I do have a practical difficulty there. What we can do is to try to cool down the market through various means. That is why there have been so many cooling measures and covering different aspects, including ramping up supply and trying to manage the liquidity flows.
I explained to the media yesterday why is it that there are so many cooling measures. Why not have a big whack and aim to bring about a significant sharp price drop? But is that what you want? Is that what is good for Singapore? Our judgement is that such a move will hurt many. In fact, that will hurt the vast majority and it is far better to try to engineer a soft landing. A soft landing means we need a longer runway; which, therefore, means that we need more time and, therefore, it has to be gentle and it will take several rounds.
That is the approach I am taking. That is our judgement and I think that will benefit Singaporeans much more, without causing unnecessary significant collateral damage to many innocent parties.
The Chairman: As we are reaching the bewitching hour, I will allow only one last clarification, and make it short, please. Mr Baey Yam Keng.
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Mr Baey Yam Keng (Tampines): Thank you, Mdm Chair. Minister said last week that he will continue to explore new technologies to make LUP technically more feasible and also at lower cost. I would like to clarify if the deadline of 2014 for LUP will still apply. Despite that, there will always be blocks which have special physical constraints or there are just too few units to co-share the cost of lift upgrading. For those who are not able to benefit from LUP, will Minister consider other help for these house owners, and whether the Minister can consider pegging the value of such help to the maximum grant extended to each LUP benefiting unit of, I believe, $30,000 each?
Mr Khaw Boon Wan: Mdm Chair, I will be very brief. The 2014 LUP referred to is based on current technology, current costing, and that is a commitment we made and we will deliver on that. I do not want to shut out hope for those few blocks where LUP, based on today's technology, is just not viable. Therefore, HDB continues to explore innovative solutions. I have confidence in technology and that the industry will always come up with better solutions.
Just as not too long ago, we thought many more blocks could not be LUP-ed and it turned out to be not true. So, we are not losing hope but meanwhile I know there are some individuals who particularly, because of medical conditions, are in need, we would try special means, highly focused, just targeted on that family, to see how we can help them, including, if necessary, we would find alternative places for them to stay. Those have to be highly targeted at individual cases, case-by-case; and Members have to alert us to those individual cases and we will be as compassionate as we can.
The Chairman: Mrs Chiam, is that a very short clarification?
Mrs Lina Chiam: Yes, Madam. I would like to ask a clarification from the Senior Minister of State, Mr Lee Yi Shyan. I spoke on Friday about community spaces. Would HDB or MND consider instituting a cap on the floor area of the void decks of any block of flats that can be leased out to centres? Do they put a cap in HDB on the floor area? Also, can I just make one more comment, Madam? That is a comment on Senior Minister of State Tan Chuan-Jin. This is a good comment. I commend the Government's initiative for doing the Garden City because I got comments from tourist friends who said that they can even smell the flowers when they walk along Orchard Road.
Mr Lee Yi Shyan: Mdm Chair, in response to Mrs Lina Chiam's question on common spaces. I think she also commented on the void deck space usage.
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In deciding to allocate to a specific purpose, HDB does consider the common spaces in a precinct, in a few blocks together. We would not advise, even if the needs are very pressing and justified, to co-locate too many services in a very congested manner to take up the entire block, for instance.
This is an interactive process. There are many needs in our society. We need childcare, we need elderly care, we need active corners for youths, we sometimes need dialysis centres and so on. Obviously in the newly planned towns, we can accommodate all these designs. We will try to create common spaces for them. But in the existing ones, we just have to do our part to persuade people, where necessary, to accommodate these needs in their precinct because we live together as a large community.
The Chairman: Er Dr Lee Bee Wah, you may wish to withdraw your amendment.
Er Dr Lee Bee Wah: I would like to commend Minister for having listening ears, a compassionate heart and most importantly a practical approach in tackling the challenges of providing housing in Singapore. Members in the Government Parliamentary Committee and I will be very happy to work together with the Ministry and fellow Singaporeans in the upcoming Singapore Conversation in shaping, in changing the housing policies. Together, we can make a difference. With that, Mdm Chair, I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $808,168,200 for Head T ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $4,447,121,900 for Head T ordered to stand part of the Development Estimates. (proc text)]
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","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head V (Ministry of Trade and Industry)","subTitle":null,"sectionType":"OS","content":"Ms Jessica Tan Soon Neo (East Coast): Madam, I beg to move, \"That the total sum to be allocated for Head V of the Estimates be reduced by $100\".
Madam, during the Budget Debate, we discussed extensively in this House the need for quality growth and inclusive society for a better Singapore for all Singaporeans. I had stressed in my speech that growth is not guaranteed. To have quality growth, we must have growth.
Given the size of our small domestic market, our economy is open and dependent on external markets; for Singapore's economy is one of the most competitive markets globally. We rank second in the World Economic Forum's global competitive report behind Switzerland. Singapore is also the best country in the world to do business as the World Bank Ease of Doing Business index has indicated. We are still dependent and vulnerable to the external markets.
Current uncertainties of the global economies, physical challenges and high unemployment in the US and Europe, coupled with the constraints we are facing with our changing population demographics and labour constraints will impact Singapore's growth. Against this landscape and the need to accelerate the transformation of our economy, can MTI share the strategies to grow our economy, albeit slower? Will there be specific sectoral support and growth strategies? What are the new growth sectors that we can develop to enable quality jobs for Singaporeans?
More importantly, how can we ensure that Singaporeans and Singapore's companies especially SMEs continue to benefit for this growth?
In my speech, I emphasised that we must make every effort to ensure that as many companies as possible, especially SMEs, are able to take advantage of the various schemes available. What measures will be in place to help SMEs restructure and leverage productivity improvements?
Feedback from the industry association in my constituency is that there are too many schemes and the small businesses just do not have time to go and understand the many schemes available, let alone take advantage of them. I
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have reached out to SPRING and the Enterprise Development Centres (EDCs) last year to support our SMEs in the constituency to better understand the various schemes. I am glad to say that they have participated actively with us through outreach programmes like briefings and targeted workshops with our industrial association and the members and advised on business, financials and productivity improvements as well as the various schemes available.
There is continuous engagement and follow up and feedback has been very positive. We are now working to better tailor the support and capability upgrading of these companies. I look forward to the continued support and outreach to the SMEs in my ward and the integrated support from both SPRING and EDC.
As we drive for growth, we also need to ensure that our workers will be able to transition and compete for jobs in these growth areas. I would like to understand what efforts there would be to ensure the development of relevant skills, to support the growth initiatives and to ensure the workers are able to transition and take advantage of the job opportunities.
My next cut on internationalisation. Mdm Chair, given our small domestic market, our SMEs do understand the need for internationalisation than having a global and regional presence to open up new markets so as to increase the potential for growth. However, as we all know, internationalisation is not easy. Apart from ensuring products and services are competitive, companies need to make sure that they have relevant market knowledge, adapt to market conditions and face increased competition. With the uncertainties and the global markets, venturing overseas would cause companies to face increased risks and challenges.
While there is a clear need to innovate and to enhance productivity against the constraints of limited labour, and rising business costs, we all agree that we must improve productivity but this will take time. Can MTI share what key strategies will be taken to help companies scale their businesses and internationalise? Will the Government provide support for venturing overseas in terms of risks reduction and access to financing? Will there be high growth sectors and regions that Singapore companies should seek to expand to, as they focus overseas?
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With the tight labour market, will there be help given to companies to address labour constraints that might curb the expansion of their businesses overseas? For example, industry players have called for flexibility in the application of manpower policies to facilitate efforts in supporting their companies as they bring their businesses overseas. Could foreign employees deployed to overseas operations not be included in the overall foreign worker quota because many of these companies lack local manpower for certain types of businesses established overseas operations as they expand overseas, or there could be just a lack of Singaporeans willing to relocate to certain markets?
With the growing services sector to support knowledge creation activities, greater incentives could also be introduced to encourage greater build up and exploitation of intellectual property (IP) in Singapore.
Another area which we could further promote is branding of both our services and manufactured products. Branding can help differentiate our Singapore-based companies from the competitors and help us sustain our attractiveness as a world-class business hub to better sustain our growth.
As we have positioned Singapore as an attractive market for investments and our strong fundamentals of trust, knowledge, connectedness and quality of life, our changing demographics and workforce, the increasing cost of doing business and growing strength of our regional countries will put pressure on Singapore's companies. So, how can we ensure that Singapore continues to differentiate ourselves and remains competitive to attract companies to operate here? As I have mentioned earlier, the Global Competitiveness Report assesses the competitive landscape of 144 economies and as usual, has put Switzerland at the top of the ranking for the last four years. But Singapore now remains in second position. Other Asian economies, like Hong Kong and Japan, ranked 9th and 10th respectively. It is pointed out in the report that productivity improvements and private sector investments will be key to improving global economies at the time of heightened uncertainty about the global economic outlook.
To stay competitive as an investment hub, the Deputy Prime Minister did stress the importance of productivity enhancement initiatives, but said that Singapore lagged behind in productivity levels, despite our success in attracting
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investments from other developed nations. In Asia, there are other economies like China, Malaysia and India which are also moving up the value chain, with Vietnam and Bangladesh focusing more on high volume and low margin industries. MTI had embarked on a Global Asia Hub strategy for some years now, to make Singapore a compelling destination for global and regional control towers. EDB's Home for Business strategy positions Singapore as a place for companies to deeply root their business, locating key decision makers in Singapore to feel the pulse, spot opportunities and leverage the network of relationships in the region and our global connectivity.
How successful has this strategy been? And how do we ensure that we continue to maintain that? Can MTI share examples of our success and which sectors have been successful in attracting companies to Singapore? Will Singapore continue to remain competitive and be successful in its strategy, given our workforce constraints and changing population demographics?
Ms Foo Mee Har (West Coast): Madam, a recent Reuters survey of 268 listed Singapore companies showed that 57% reported a year-on-year drop in operating profit margin for the first nine months of 2012. This widespread margin squeeze in at least a decade due to manpower shortage, escalating costs and slow growth is worrying. Nine foreign chambers of commerce had raised concerns against tighter curbs on foreign labour and we have heard increasing talks of companies relocating to other countries in search of better growth prospects. I am concerned about Singapore's ability to maintain its international competitiveness.
Yet the Government has maintained its strong stand to balance manpower needs with economic restructuring and productivity imperative. In support of the restructuring journey, the Government has come up with a slew of measures over the last few years, including the $5.3 billion three-year transition package in this year's Budget, to help companies increase productivity, innovation and capability. It is also actively helping companies to seek growth opportunities overseas in view of local constraints.
Madam, it is clear that Singapore's future hinges on our ability to make the transition to higher quality growth on the back of higher productivity. We have set ourselves the stretch target of increasing productivity by 2%-3% per year over the next decade. Yet, we have seen a 2.6% decline in productivity last year,
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and only 0.8% per year growth between 2000 and 2009.
There is a myriad of Government schemes that purport to drive productivity. I would like to ask the Minister the effectiveness of each of these programmes and how performance is tracked and measured. As the Government is taking a long-term view towards achieving our productivity goal − and the Deputy Prime Minister has explained that it is not equal per year − what are the key milestones set in this long journey? I would like to ask the Minister how we can be sure that our restructuring efforts are bearing fruits and we have set the optimal pace to facilitate transformation. What indicators are the Government tracking to ensure Singapore is not priced out of the market, and remain internationally competitive amidst the restructuring?
In facilitating companies to restructure and to offshore lower productivity parts of their operation, how can we be sure about the fine balance of keeping selected functions in Singapore and reduce the risks of companies relocating the entire operations overseas?
Mr Vikram Nair (Sembawang): Mdm Chair, one of the groups that will be facing difficulties in light of the current economic restructuring would be Singapore small, medium and even micro-enterprises. Many of these have expanded over the past few years on the back of the easier availability of foreign labour. As it gets more difficult for these SMEs to get foreign manpower, many may face the question of whether they can survive. In this regard, I would like to focus on what we could do to help these SMEs.
The first area I would like to touch on is Singapore's Free Trade Agreements (FTAs). One of Singapore's greatest advantages for businesses operating here is that it has entered into a number of FTAs with various parties. These include individual, multilateral and regional FTAs. A recent example is the European Union and Singapore FTA. I understand that the EU is Singapore's second largest trading partner, accounting for over 11% of our trade. The EU is also our largest foreign investor with more than 9,000 companies that have set up operations here.
Broadly speaking, I think FTAs will be helpful for businesses. The large corporates are very aware of this, and I am sure Singapore's extensive network of FTAs is an important consideration for large corporates wishing to set up here. However, I am wondering to what extent our SMEs are aware of the
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potential opportunities from these FTAs. These potentially mean that there are large foreign markets and opportunities open to them, if they wish to grow. I am hoping MTI can elaborate on what these FTAs have meant for the average SMEs in Singapore, and whether or not there are, indeed, opportunities they can exploit from these.
The second area I wish to deal with is about some of the SMEs in sectors that may be specially affected by the restructuring, including those in food and beverage, retail and construction. All these industries face the issue of labour crunch. This is because most of these industries have a very large proportion of foreign workers doing jobs which the business operators say they find great difficulty in getting Singaporeans to do.
I understand that even in these difficult sectors, there are some success stories. A few companies were featured in The Straits Times last month, saying how they managed to reduce reliance on foreign manpower and employ largely locals now. I am just wondering if these success stories might be shared with other businesses in these sectors. More specifically, it would also be helpful if the Ministry can elaborate on schemes that are tailored to assist businesses in these sectors, to transition from the heavy reliance on manpower. What other steps can the Ministry take to help companies in these industries become aware of these schemes and take them up?
The last area I wish to touch on is really a look at Singapore's future: how can we create an environment that would allow more SMEs to be set up here? I think encouraging youth enterprise is a very important part of this. I have seen a number of youths in our Universities, Polytechnics, ITEs and even Secondary schools come up with interesting and novel products and ideas. I am wondering if there are any schemes available that these youth could take up to pursue their ideas and become entrepreneurs. I am also wondering if there are any steps taken to make youth aware of any such schemes that may be available.
Mr Chen Show Mao (Aljunied): The demographic trend of our ageing population is highlighted in part of the recent Budget. The Budget has two parts: \"quality growth\" and \"an inclusive society.\" They contain pillars of the Government's economic and social strategies, respectively.
When speaking about the social part of the Budget − an inclusive society − the Budget acknowledges as \"key concerns\" the issues facing older workers and
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retirees.
I hope the Government will similarly keep older Singaporeans closer to the centre of the economic part of the Budget − for \"quality growth\".
Singapore should promote our silver industries, which produce goods and services for the elderly, as a key plank of our restructuring, evolving economy. For example, the Budget refers to funds set aside for Collaborative Industry Projects for productivity growth, where industry-wide collaboration provides the scale that individual firms lack. There is also the Partners for Capability Transformation (PACT) Scheme to foster SME collaboration with large enterprises so as to enable capability upgrading and sharing of best practices.
In addition to productivity growth and capability upgrading, which are the objects of these schemes, could we foster similar collaboration to address the economic opportunities presented by an ageing population, first within Singapore, as a testbed to develop robust and innovative silver products and services, before then exporting them to regional markets. China, in particular, is an economy that is expected to age very rapidly, from 100 million seniors, aged 65 and above, in 2010, to 350 million in 2050.
This will benefit both our businesses and our seniors.
In addition to industry collaboration and collaboration between SMEs and large enterprises, we should also foster synergistic collaboration by firms with companies outside their own industries, and by firms with senior citizens themselves as consumers and key stakeholders to offer co-creative solutions to the challenges of an ageing population – such as Japan has been doing with robotics – so that we can focus on solutions in elder care, elder housing and elder living.
We can be both hopeful and realistic that one day, the popular science fiction saying may very well be true in Singapore: \"Live long and prosper!\"
Mr Teo Siong Seng (Nominated Member): Mdm Chair, in this year's Budget, the Government has a whole package of incentives for businesses, especially the SMEs and micro-enterprises. Such incentives were drawn up to help them become more productive and innovative and lessen the \"pain\".
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While all efforts will be made by the businesses to work smarter and with less reliance on manpower, however, it was disappointing that the current Budget did not adequately address the rising costs of doing business. This afternoon, I would like to raise four points.
One, Pro-Enterprise Panel (PEP) to look into cutting unnecessary red tape and promote inter-agency coordination. We appreciate the Government's efforts in strengthening certain productivity incentives, this being one of the four pillars under the Quality Growth Programme. We look forward to receiving more details on how SMEs could take advantage of such incentives. We strongly suggest eliminating red tape and over-regulated policies. Government agencies should put more trust in the business community and reduce heavy compliance costs. I have previously highlighted this in Parliament a few times: if the carrots are hung too high, how can the rabbits eat them? As I said, 胡萝卜挂得那么高，小白兔能吃得到？
This is where the PEP could play a more pro-active role, as I had mentioned in my speech during the Budget debate on 6 March. PEP should also help to look into streamlining regulatory requirements for businesses. The primary focus of these incentives should be on achieving productivity for the industry as a whole as well as for individual firms. The schemes should be easily understood and widely tapped on by as many firms as possible. I suggest that the Government cluster similar schemes together under one package, instead of having companies approach different agencies with different sets of KPI. In fact, my parliamentary colleague, Ms Jessica Tan, had just brought up the same point.
Second, productivity drive needs a more flexible approach. The productivity journey is a marathon run and not a 100-metre dash. It is not practical to expect immediate KPI for productivity, especially within the services sector which is not uniform. Within the F&B industry, achieving productivity varies from fine dining restaurants, fast food eateries, Chinese and Western restaurants, to humble eating houses. Value-add cannot be and should not be the only measurement for productivity. Thus, we sincerely hope the Government would adopt a more flexible approach when it draws up various schemes, taking into consideration the variations that exist.
While we agree that achieving productivity growth is a target that all companies should aspire to achieve, there is no certainty of success. We appeal
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to the Government to be open-minded about this and be prepared to share part of the risk involved.
Third, JTC to provide affordable industrial land for SMEs. Limited land supply continues to drive up land prices, estimated to have increased by more than 60% over the last two years. Take development charge (DC) rates for land as an example. The latest DC rate for commercial use, which kicked in on 1 March this year, was increased by an average of 23.7%, the highest since September 2007. Given this high cost of developing industrial land, private developers are invariably asking for higher rentals with every lease renewal. Operations of small businesses would be greatly disadvantaged and unsustainable if the rentals are punitive.
We appeal to the JTC to make provision for affordable industrial land, especially for those for SMEs which do not fall within JTC's targeted industry clusters. At the same time, we hope that JTC could consider freezing its rents for SMEs over the next three years.
Fourth, on SPRING and IE Singapore helping SMEs to venture overseas. We realise that the productivity effort has to apply to different levels. Firstly, the bosses themselves have to adopt a mindset change. They cannot be a frog in a well, what we call 井底蛙, but need to hop out to see the world. Overseas trips could be useful for these bosses in opening up their minds. That can be the first level in the productivity journey. We may also bring in overseas trainers to help us enact changes in process or in adopting new business models. If the Government could step in to defray these expenses, it would be greatly appreciated.
Due to the high costs of operation in Singapore, some companies will need to move overseas to countries like Malaysia and Indonesia. SMEs, for example, need to understand these markets if they were to relocate. IE Singapore and SPRING could take on a more proactive role to help SMEs go overseas.
The Trade Associations and Chambers (TACs) can help local enterprises make this transformation to productivity-led growth. We, therefore, seek even greater collaboration with Government agencies on this initiative for a truly effective tripartite collaboration. In China, the Chinese Chambers have set up a Shanghai office to effectively assist members in their China ventures. IE Singapore and SPRING have been helpful and we urge the agencies to continue to fund such overseas effort.
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In conclusion, this is a journey that all of us have committed on and we must succeed in this transformation. Business owners, workers and also the Government all need to coordinate and contribute to this transformation. Government agencies have an important role to help the businesses, while the businesses and workers are bound to go through aches and pains in this transformation. We do urge the Government to be more flexible and pro-business in looking after the SMEs, especially the micro-enterprises which are lacking in resources and capability.
There must be enough trust between Government agencies and the business community. The Government should not always insist on playing the role of goalkeeper. Instead, they should play mid-field and help enterprises to strike the goal.
The Chairman: Ms Tan Su Shan, please take your two cuts together.
Ms Tan Su Shan (Nominated Member): Mdm Chair, as the Deputy Prime Minister puts it, the next 10 years of our restructuring are crucial. Today, I would like to share with the House a few ideas where I believe Singapore can take the lead in our restructuring efforts.
Firstly, I would like to suggest that we maintain a highly diversified industry approach with an emphasis on services. Secondly, I would like to argue that productivity takes time, effort and resources. It requires a change in mindset and education. Lastly, I will again talk a bit about big data and how this can be a game-changer for us.
One, a diversified palate of new growth industries. Singapore's economy is powered by manufacturing, services and infrastructure supply services. I would argue that the future industries we should focus on should emphasise job creation rather than niche areas like animation or biotechnology. Hence, I would agree with the Budget's focus on advanced manufacturing, and I am also excited about JTC's initiative in Advance Re-manufacturing.
Another growth area for us would be in urban services, whether port management, logistics or urban infrastructure. Singaporean SMEs and other infrastructure and service providers should follow Singbridge's example in expanding their businesses overseas, as other emerging markets upgrade their
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infrastructure.
Lastly, we should continue to uphold our high service standards. Hence, I would caution against trying to achieve automated efficiency in everything. There are some things that a machine simply cannot replace. This could be a warm smile, a respectful greeting or a helpful hand. Singapore Airlines has the Singapore Girl who epitomises what it means to give the best in Asian service standards. Our tourism industry simply cannot compete with the best in Asia, if they are forced to survive on too thin a workforce.
Two, productivity and innovation can be managed but it cannot be forced. Despite the many productivity schemes implemented, Singapore's labour productivity growth has been lacklustre since 2010. Some businesses have complained that they are so resource-constrained, they have little bandwidth to focus on productivity initiatives. Also, training workers, acquiring new technology and process streamlining takes time to take effect.
Perhaps, to jumpstart these efforts, MTI could bring in various industry leaders who are examples of high productivity to share their expertise. For example, the Australians are often praised for their high standards of construction. Why not invite them here to share their best practice? I also cite Singapore Business Federation (SBF)'s suggestions to improve productivity through cluster and supply chain development across each industry. For example, retail chains can leverage on shared services from the logistics sector for transport and storage.
Three, big data – the new frontier for innovation and productivity. Digital data is everywhere – in every country, economy, sector, government and organisation. According to a Mckinsey report, 60% of the world's population has mobile phones. Many of us are now using smartphones. As the growth of the Internet economy rises to 8%-10% of Singapore's GDP, it will mean a tremendous amount of data is being created at a scale never seen before. Mining and analysing these big data can open the doors to a new wave of innovation, accelerating productivity and economic growth.
Big data will enable Government agencies to do more with less. For example, Government agencies gather big amounts of data but these are mainly in silos. If this data could be stored in a national registry, shared between agencies, whilst acknowledging our data protection laws, this could reduce the need for a lot of repeat work and drive operational efficiency. Government can use this data to segment our population, customise services based on the
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different segments. For example, we could pinpoint the segments most in need by collecting data on income, healthcare bills, delinquencies or late payments. Using big data can lead to big increases in public sector productivity. For example, the Vancouver police have used analytics to drive the crime rate down by 24%. Similarly, US healthcare experts forecast a $300 billion gain from more effective use of data to help patients make the right decisions for treatment.
Big data can also help companies to create new products and services or help them enhance existing ones. It can also help identify new business models to invest in. For example, banks' payments systems now are being displaced by small start-ups in East London that are using data to link transactions more cheaply. Simply making big data more easily accessible to relevant stakeholders in a timely manner can create tremendous value. Sophisticated analytics can even replace human decision-making with automated algorithms. Many of us in the House would have heard of Watsons.
Global data generated is projected to grow by 40% per annum versus 5% growth in global IT spending. Big data creates value in many ways and Singapore is small and nimble enough to take a leadership position in this. But to do so effectively, we need to address the shortage of analytical and managerial talent necessary to lead this. We need to ensure all stakeholders understand the benefits. We also need to put in place the right infrastructure, incentives and safeguards so as to encourage continued innovation in this field.
Lastly, is anyone exploring the possibility of Singapore being the first country to offer the driverless car?
Allow me now to move on to my next cut on inflation and policy efficiency. Some economists have argued that levies on foreign workers are like a tax on the import of services. It is against free trade and, therefore, bad for Singapore.
Others say businesses that rely on cheap foreign labour receive an implicit subsidy from the Government. The low cost of labour discourages them from upgrading and innovation, and holds down wages for locals doing the same work.
We know the Government does not want an over-reliance on cheap foreign labour. But there are some industries where locals will not fill the gap. These are in lower skilled non-PMET jobs that need to be filled, especially given our
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aggressive growth targets for building new public housing and transport. The National Population and Talent Division (NPTD) has reported that Singapore needs another 150,000 more foreign workers in healthcare, construction and domestic workers due to our ageing population.
Budget 2013 raises foreign worker levies for the fourth time. Will this mean we have to suffer even higher structural inflation caused by rising wages? Wage growth has been higher than productivity growth. This means that higher business cost is either being absorbed by squeezing profit margins or reducing expenses like training budgets. Some may pass on this higher business cost to the consumer, creating yet more inflation. This inflation means workers may demand even higher wages to compensate for their loss in real income. This may bring about a situation where wage and inflation are chasing each other.
Hence, it may be useful to sometimes press the pause button to see if we need to change course, change pace or take a step back. How do we know if the ultimate \"survivors\" of this restructuring will be the right industries? How do we better prepare Singaporeans to take leadership positions in these new industries? In this single-minded pursuit of restructuring, it is inevitable we may lose some good ideas or good businesses in the process. They say it is short-term pain, long-term gain. But let us hope it is not short-term pain and long-term pain, too!
The Minister for Trade and Industry (Mr Lim Hng Kiang): Mdm Chair, let me first thank Members for their comments and suggestions.
Ms Jessica Tan asked about MTI's strategies to grow the economy amidst global uncertainties and our domestic constraints. Given the weak external environment and the tighter labour situation domestically, we expect a modest 1%-3% growth for Singapore in 2013, and a 3%-4% average growth for the rest of this decade. For a country that has enjoyed twice the rate of growth since 2003, this slowdown will be a significant change.
The slowdown would be most acutely felt in our workforce as our population ages and our citizen workforce shrinks over time. Foreign manpower, as a complement to our Singaporean core, must be managed judiciously. To deal with this slowdown, our companies must restructure and aim for higher productivity. Restructuring is painful, but it is unavoidable.
Both Ms Jessica Tan and Ms Foo Mee Har asked whether we can stay globally competitive amidst our restructuring, and whether Singapore can
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retain its high value-added activities. The outcome of our efforts will, in fact, have a major impact on our future – what the economy will look like, and what kinds of jobs Singaporeans will have. We are, therefore, restructuring to stay more competitive, not less. But to do so successfully, we must carefully pace and calibrate the changes. While we accept a slower growth trajectory, we aim to create quality growth and higher value jobs for Singaporeans.
MTI's strategies for achieving quality growth are, therefore, two-fold: first, to stay open and flexible to tap global and regional opportunities; and second, to restructure the economy so that our companies and workers can achieve higher productivity and sustainability.
Let me first turn to the strategy of staying open.
Ms Jessica Tan asked about our Global-Asia Hub strategy and, in particular, specific high-growth sectors that Singapore companies could focus on here in Singapore as well as when internationalising. The good news is that the Asia growth story is largely intact, and our Global-Asia Hub strategy continues to resonate with global and regional investors. We also see opportunities for Singapore companies seeking to tap Asia's growth and the continuing economic integration of our region. Let me highlight four sectors as examples.
First, the high-value pharmaceutical sector offers high wages and employs more than 5,700 people, where 80% perform skilled jobs. In 2012, the pharmaceutical value-add grew by 14% to S$13 billion. Biologics is one niche area within the industry that has been gaining momentum. The first biologics facility was set up in 2007; we now have eight, including two first-in-Asia biologics manufacturing investments from Novartis and Amgen. Over the next three to five years, the biologics sector will create at least 500 jobs – highly skilled jobs for chemists, microbiologists, biotechnologists, engineers and technicians.
The second sector is baby nutrition and baby care. This is another growing segment, fuelled mainly by the population boom in Asia and the rising middle class. Singapore has become an established hub for commercial and innovative activities in baby nutrition and baby care. The world's top infant nutrition players, like Nestle Nutrition, Danone, Mead Johnson, Abbott Nutrition and Friesland Campina, have all located themselves here. More recently, Proctor & Gamble relocated its global HQ for Baby Care, including its Pampers brand, to Singapore.
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At the other end of the spectrum from infant nutrition is the silver industry. This is a growth segment highlighted by Mr Chen Show Mao. We agree with him that Singapore can serve as a platform for us to test out products and then to replicate this wider afield in Asia. As we know, Asia is ageing and there is a growing demand for products and services for the elderly. Singapore is therefore well placed to tap into this market. In fact, we have local entrepreneurs who are seeking to tap this growing market.
Sofshell, for example, is a local spin-off from the Institute of Materials Research and Engineering. It has pioneered a responsive soft-shell armour that hardens upon sudden impact and dissipates the force. Sofshell has obtained grant funding from A*STAR and SPRING to develop prototypes for elderly hip protectors. When the elderly falls, the armour will become hardened and that will protect the elderly from hip injuries. Sofshell is also working with IE Singapore to establish its manufacturing supply chain as well as its overseas distribution channels. Global companies too are using Singapore to innovate products and services for the silver industry. We have Siemens Medical Instruments' manufacturing and R&D facility here, where it developed and launched its Ace hearing aid. This is the most discreet product in its hearing aid range. And Procter & Gamble (P&G) and the University of Cincinnati have also partnered Singapore Polytechnic to set up the Live Well Collaborative-Singapore project. This non-profit and independent innovation research centre uses consumer insights to co-create products and services with the industry players.
And the fourth area that I would like to highlight is high-end logistics services, to illustrate the big data that Ms Tan Su Shan talked about. High-end logistics services now extend beyond the physical flow of goods. It uses data analytics capabilities to add value to logistics services. Such services rely on strategic planning as well as solutions development to better manage the supply chain in the whole of Asia. The rise in demand for services in Asia has led top global third party logistics players (3PLs ) such as DHL, UPS and Nippon Express to establish their regional or global functions in Singapore. In particular, the world's No. 1 air express and 3PL company DHL has established its global Services Logistics Centre of Excellence here to develop innovative and specialised logistics solutions for its clients worldwide.
Our Singapore logistics companies are also growing. Pacific Integrated Logistics (PIL) Pte Ltd started out as a traditional freight forwarder and is now a fully integrated logistics solutions provider. PIL first established its international
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presence in Shanghai and Suzhou. With IE Singapore's help, PIL ventured into Chengdu, where rapid infrastructural investments have created a strong demand for logistics services. PIL is also well connected to the South East Asian market, and uses Singapore as its headquarters to serve their customers in Malaysia, Indonesia, Thailand, the Philippines and Vietnam. And by the second half of this year, PIL will also be in Myanmar. Singapore will strengthen our value proposition as an open and connected economy, so that we can continue to attract companies like PIL to site their high value-added functions here and expand regionally.
Ms Jessica Tan asked about the types of assistance available to help our companies to internationalise. The Government offers a wide suite of initiatives to holistically support companies in this area. Senior Minister of State Lee Yi Shyan will elaborate in greater detail, but let me touch on financing, something that Ms Jessica Tan raised.
Last year, IE Singapore launched the Political Risk Insurance Scheme (PRIS) to help Singapore-based companies protect their projects and investments from political risks when they internationalise. Political risk insurance is a useful risk mitigation tool and this scheme will help cover up to S$2 billion in overseas investments over the next three years.
This year, we will work with the Asian Development Bank (ADB) and private insurers to expand the ADB's Trade Finance Programme to enhance trade flows for Singapore-based companies. Many companies already benefit from this programme which currently supports over US$1 billion of trade capacity. Given that our companies are exporting to Asia's emerging markets, demand for such trade financing programmes will continue to be high. IE Singapore will release more details of this scheme later.
Mr Vikram Nair asked about the effectiveness in our use of our FTAs. As we know, over the years, we have developed growing trade linkages with a successful network of FTAs. We have FTAs with all our major trading partners and these FTAs improve market access for our companies particularly our SMEs as they expand overseas. In 2012, more than 1,700 companies benefited from our FTAs, and we expect this number to increase as we expand our FTA networks and make them more user-friendly.
Our companies, including our SMEs, also benefit by having tariff savings from our FTA. And in answer to Mr Vikram Nair's query, we have a system by which IE Singapore tracks companies that can benefit from the FTA and make
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sure they have outreach programmes to reach out to these companies as a cluster as well as individually.
We recently concluded the FTA with EU, our second largest trading partner and largest foreign investor. Once the EU-Singapore FTA (EUSFTA) enters into force, the EU will eliminate its tariffs for imports originating from Singapore, over a period of five years. Therefore, exporters of electronics, machinery or chemicals, including our SMEs, will enjoy improved market access into the EU. As the EU has relatively high tariff rates for processed foods, the elimination of tariffs under the EUSFTA will benefit our food manufacturing companies, many of which are SMEs.
Let me now turn to our second strategic thrust and that is to restructure for productivity and for quality growth. We recognise that there are certain downside risks to this strategy and we must be aware of this. For example, in a tight labour market with limited resources, there will, of course, be some opportunities that we may have to forgo. The second downside risk is the risk of rising structural inflation and rising business cost, given the very tight labour market. We are very mindful of all these risks, especially not to allow runaway inflation or a wage-price spiral to gain traction. Therefore, the Wage Credit Scheme which was announced during the Budget Statement will help the companies defray some of these wage increases, and which will then prevent them from being entirely passed on to the consumer.
In addition, we expect the subdued state of the global economy to weigh on overall demand and this may help contain inflation in the near term. But over the long term, productivity improvements arising from our current restructuring should help to prevent higher costs from fuelling strong price increases. The Government has therefore adopted a multi-pronged approach to manage inflation and will continue to watch the developments very closely.
But the key to managing the whole process is to make sure that we continue to pace and calibrate the changes carefully as we restructure. I acknowledge several Members' observations that productivity changes need time and this is precisely how we have structured our strategy.
Our restructuring strategies are also structured for each sector because we know that we cannot have one-size-fits-all. And therefore, we have taken a sectoral approach in developing plans together with the private sector. Over the last three years, in fact, the National Productivity and Continuing Education Council (NPCEC) has worked and endorsed productivity roadmaps for 12
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sectors, including the retail, the food manufacturing, electronics and precision engineering sectors. Roadmaps for the remaining four priority sectors will be endorsed soon. For each sector, we engaged the industry closely to study their productivity challenges before recommending specific initiatives and targets. And even with the roadmaps, we continue to maintain this under regular review, and continue to engage with the industry players to make sure that the roadmaps continue to remain relevant.
Let me give you an example for illustration so that you can understand the comprehensive way in which we go about developing this strategy. This is the Marine and Offshore sector. As you all know, Singapore is a global leader in the Marine and Offshore sector. Our shipyards command 70% of global market share in offshore drilling rigs and conversion of tankers to production vessels. However, we believe that there is still room to improve, particularly in the land and labour productivity as well as to move the sector up the value chain.
Therefore, transforming this sector will take place in several ways. First, we will improve land and labour productivity through automation and enhancing process workflows. An example is Sembcorp Marine's Integrated New Yard which will be ready by the second half of this year. And with the improved logistics, the redesigned workflows and process automation, manpower requirements will be reduced in the long term for this New Yard.
Second, we have worked with the shipyards to strengthen their supplier base. ST Marine, for example, is one of the largest local shipyards involved in shipbuilding and ship repair, and it procures ship repair services from many of its sub-contractors. With SPRING's support, ST Marine partnered two of its sub-contractors, Glenn Marine Services and Comila Marine Services, to adopt a new method of using wet abrasives to remove paint or rust from a ship's surface. This increased efficiency has resulted in time savings of between 5%-10%.
Third, companies are also encouraged to enhance their design and engineering capabilities, which will allow them to differentiate themselves from their global competitors in the long term. Keppel Offshore & Marine Technology Centre presently has a team of 86 researchers who do upstream R&D on new product designs to augment Keppel's design and engineering capabilities.
Finally, we are also tightening the Dependency Ratio Ceiling (DRC) but will phase these changes over five years. This is to ensure the companies have time to adjust. And we will also allow the shipyards to ride the current upturn in the offshore sector and undertake the necessary changes to maintain their
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leadership position in the long run.
Collectively, we believe these restructuring efforts will result in a 4%-6% Compounded Annual Growth Rate (CAGR) in Value Added per worker between 2011 and 2020. But we will continue to monitor the sector's progress because we believe that the Marine and Offshore sector can continue to play a key role in Singapore's economy.
What we have done in the Marine and Offshore sector, we have also systematically done so for the other sectors particularly in the more challenging sectors such as retail and the F&B sectors. And beyond each sector, we will also find cross-cutting methods to strengthen the linkages between our various sectors.
Members have also raised concerns about how SMEs and micro-enterprises could cope with the restructuring. As Members have heard from Deputy Prime Minister Tharman, we pay particular attention to our SMEs, because they are an important part of our economy. They provide good jobs for some 1.3 million Singaporeans.
The Government continues to be committed to help SMEs to go through this difficult transition period, and many of the assistance measures introduced this year, in fact, have been weighted to benefit SMEs more. This was done consciously and deliberately because we want to help our SMEs. Minister of State Teo Ser Luck will elaborate on the measures later on when he talks about the measures to help our SMEs.
Let me now address Mr Teo Siong Seng's point about industrial properties. As I have mentioned several times in this House, JTC remains committed to provide industrial land competitively, compared to our benchmark range of competing locations. We will continue to do so. On PEP, I think this is a useful suggestion. The PEP has been very effective in the past. We will continue to reactivate it to provide leadership within Government agencies and Ministries to cut red tape, and to reduce compliance cost.
Mr Teo Siong Seng also asked us to adopt a more flexible approach in each sector. I hope I have illustrated that with the example of the Marine and Offshore sector. In fact, we do so for the other sectors too.
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Let me just elaborate on our measures to help the SMEs. In fact, we have embarked on this in a deliberate attempt last year. Last April, Minister of State Teo Ser Luck led a committee of representatives from MTI, SPRING, IE Singapore as well as key industry partners to comprehensively review our schemes in helping the SMEs. Arising from this review, we will be implementing eight strategies to help the SMEs. Minister of State Teo Ser Luck will elaborate on them later on. Let me just highlight one of these schemes.
This is the SME Talent Programme, which was earlier announced in the Budget Statement. The aim of this programme is to create a pipeline of local talent for SMEs. Under the programme, SPRING will match over 3,000 promising Polytechnic and ITE students with SMEs over the next five years. Upon graduation, these students will start their careers with SMEs that can offer them good jobs as well as training. We will work through the trade associations and chambers (TACs) for this programme, since they know the industry best and will be able to identify progressive SMEs that can work and absorb these students. We hope that this will attract more local talent to join SMEs and encourage the entrepreneurial spirit in Singapore. The Government will co-fund the programme, which will amount to more than $70 million over five years.
Mdm Chair, let me summarise the key thrusts of our work ahead. First, we must stay open and flexible in order to tap global and regional opportunities that are still opening up around us. Second, we must persevere in our restructuring to achieve higher productivity and quality growth for all Singaporeans.
We all know that there are no quick fixes in addressing our challenges. The path of restructuring will not be easy but the Government is committed to help our companies face the challenges ahead.
The Chairman: Ms Jessica Tan, you have two cuts. Please take them two together.
Ms Jessica Tan Soon Neo: Madam, the Government has set aside $16.1 billion to support research, innovation and enterprise for 2011 to 2015. The long-term objective is for Singapore to create high value jobs for Singaporeans supported by a research-intensive innovative, knowledge-based and entrepreneurial economy. A common feedback is that R&D is too high level for our companies, especially SMEs to benefit from. Can MTI share how this
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investment and R&D have benefited our companies and Singapore, especially SMEs and Singaporeans? How successful have these efforts been on the economic impact and commercialisation of R&D and Singapore? In general, do we see a trend for SMEs to invest more in R&D?
Enhancements to the Productivity and Innovation Credit (PIC) scheme in last year's Budget provided support for companies in R&D expenditure and in-house R&D software development. Did SMEs leverage this scheme in their R&D efforts? Is there an increase in investments by SMEs in Singapore on R&D? Have programmes like Growing Enterprise with Technology Upgrade (GET-Up) been successful in supporting in our local enterprises to address the funding, human resource and technology constraints that they face as they innovate? What efforts have been made to seed innovation capacities in our local SMEs – upgrade capabilities as well as acquire IP or technology and gear them for growth?
While there may be programmes to support R&D, fostering R&D capabilities, especially with respect to SMEs is not easy. Effecting significant transformation and innovation is challenging, let alone for an SME. What efforts have been made for collaboration and innovation at the sector level and can trade associations take a leading role in this, as clustering efforts may prove more effective in providing a supportive ecosystem for innovations for SMEs?
Have we been able to also attract top calibre talents in various disciplines to join private sector R&D investments in Singapore, and attract good calibre companies to anchor their operations in Singapore?
I must declare my interest as I work for an IT MNC. Technology can play a key role in not only helping companies improve productivity, but more importantly, compete effectively. In fact, as Thomas Friedman outlined in his book The World is Flat, technology and connectivity have opened up opportunities and to some extent, levelled the playing field for individuals and smaller companies to compete. Today, a start-up can quickly grow and gain significant global presence by leveraging technology. It is a whole new business model and its potential is huge.
SMEs can increase the quality of their products and services, by tapping on the capabilities of ICT. Productivity gains and better insights can also be achieved. As we have seen, broadband connectivity, adoption of mobile and
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smartphone technology and social media have changed the way the businesses engage with the customers. Beyond just online presence, ICT can help businesses cut cost, streamline processes, improve service levels, enhance communication with customers and partners, and can drive more effective distribution of products and services.
Now with cloud services, businesses can leverage technology more effectively, as businesses do not need to invest in infrastructure or resources to support keeping up with the currency of the infrastructures.
Singapore's next generation infocomm infrastructure and global connectivity also provides support for SMEs to operate in this environment. How successful have these programmes been contributing to SMEs' competitiveness in Singapore? Can MTI share with us how SMEs have used these programmes?
Mr Vikram Nair: Mdm Chair, energy demand in Asia continues to grow on the back of continued economic expansion. This, coupled with the rising cost of raw materials that go towards energy production, such as coal, oil and gas, has led to correspondingly high energy prices, and more demand in ASEAN and the region.
This means rising energy cost for household and businesses, which contributes both to rising living cost as well as higher business cost. This affects the competitiveness of our businesses too. What can Singapore do to ensure that our energy supply remains secure in the region, and to support greater economic competitiveness?
Mr Gan Thiam Poh: Mdm Chair, I read that Singapore's newest power station GMR Energy is set to change hands. This will take the number of previous owners to well above half a dozen since 2002. I wish to ask the Minister what is the rationale for selling local power plants to private investors, and whether the Government intends to sell their interest or the local power plants to private investors. How will the Government ensure that the cost of energy is kept to the minimal for all Singaporeans?
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I would also like to ask the Minister whether his Ministry can simplify the PIC application processes further, and whether it is feasible for both big and small companies to work together in innovation and raising productivity for the benefits of both parties.
Ms Sylvia Lim (Aljunied): Madam, many Singaporeans worry about rising electricity bills. According to the Singapore energy statistics 2012 released by EMA, the price index for electricity tariffs that applies to households has seen an increase of about 47% from 2005 to 2011.
The current formula for electricity tariff has managed to protect households from wide fluctuations last seen in 2008. However, we have to continue to look for ways to help Singaporean households manage their expenditure on electricity. Since 2000, the Government has liberalised the retail and electricity market in phases, and believes that the competition among the retailers of electricity benefits consumers with greater efficiency and competitive prices.
To date, the household market which accounts for about 25% of the total electricity demand is still not yet contestable. According to EMA, full retail contestability is still under review. The issue was raised in earlier Committees of Supply under MTI. In 2007, the Government indicated that there was a study on an Electricity Vending System (EVS), which will help to reduce administration and business cost. At last year's COS, the response was – to have full retail contestability, there is a need for a system, like the intelligent energy system (IES). I understand phase one of the IES pilot has been completed, and phase two is on with some testing in households in Punggol.
May I ask what is happened to the EVS? Can MTI also give a preliminary assessment of IES, and whether full retail contestability is likely in the near future?
Mr Lim Biow Chuan: Madam, the power sector is a critical sector for sustaining Singapore's economic growth. Without reliable access to gas and electricity, we will not be able to sustain our standards of living and our industries will not be able to grow.
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As Singapore continues to develop its various industries and the demand for energy grows, it is critical that we plan for the necessary infrastructure to support the growth of these sectors. I understand that the energy sector may be facing a challenge of inadequate workforce. It faces challenges attracting people, especially the younger generation to join the workforce. This may be because of the perceived remote location of the industry players and the perception that the work is not interesting.
Given the tight labour market conditions, does MTI have any plans to ensure that this industry will be able to sustain its manpower demands and the infrastructure developments, such that there is capability to support the growth of the power sector?
Mr Yee Jenn Jong (Non-Constituency Member): Madam, it has been some years since the Government identified clean energy as a key economic growth area. Since 2007, the Government has invested $350 million to fund the development testing and export of clean energy solutions. By 2015, the Government expects clean energy to contribute $1.7 billion to Singapore's GDP and employ around 7,000 people. It is now 2013, how far are we from this target? We have a dozen tidal wind and solar energy MNCs, largely R&D facilities, here but how many sizeable Singapore enterprises have sprung up to export clean energy solutions?
Solar power currently represents just 0.1% of energy generating capacity in Singapore. This is very low, and could be the reason why local enterprises have not taken off. We are too focused on development and testing. Germany is the global leader in solar energy production. The German solar energy industry was enabled not just by R&D but also lessons learnt in system adoption and use, because of the aggressive promotion of the alternative energy market.
Solar energy capabilities are not just about producing and exporting panels. Clean energy solutions require hardware and software integration, with customisation and after-sales services. Without a sizeable local deployment, it will be very difficult for Singapore to export our clean energy solutions expertise. Currently, we only have two small-scale schemes for private companies. One to encourage test bedding in Government facilities, and the other is to offset the capital cost for installation. We need to scale up system adoption and use in the private sector to develop the industry and make the
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market.
I propose that the Government look into three areas. One, fit in tariffs for solar energy producers, and sell the electricity back to the grid on long-term guaranteed contract at slightly marked-up prices. Two, rooftop leasing to encourage building owners to lease out their rooftops to solar energy companies to produce electricity. Three, solar leasing to encourage building owners to rent panels from solar energy companies.
The Government has said that it is not fair to subsidise electricity generation producers. However, the Government provides funding and subsidies in many creative forms to develop promising industries. MTI should study the viability of these schemes and experiment with solar leasing, roof top leasing and FITs.
Dr Lim Wee Kiak (Nee Soon): Mdm Chair, we have heard a lot about new attractions and new developments in our tourism sector over the past year. Our Gardens by the Bay, Resorts World Marine Life Park and the new Mandai River Safari attractions that house our newly arrived pandas are new attractions that add buzz to our tourism sector.
How have Singaporeans and businesses benefitted from this development? Can we expect any more new exciting development in the years ahead for Singapore? Just as in the rest of our sectors, the tourism sector will have to face global economic uncertainty, keen regional competition and labour constraints in the years ahead. Will we be able to maintain our attractiveness as a tourism destination? What are MTI's strategy to ensure that this can be achieved?
Mr Seah Kian Peng: Mdm Chair, Singapore has achieved good growth in our tourism sector over the last few years. However, our domestic resource constraints, in particular, manpower could limit the rate at which this important sector can continue to grow. Concerns about manpower availability will heighten following news of a further reduction of the overall dependency ratio ceiling (DRC) in the Services sector. Given both external and domestic constraints, can Singapore continue to remain competitive as a tourism
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destination in the region? Can MTI also update us on how our tourism sector could transform itself further so as to remain competitive?
Ms Faizah Jamal: Madam, the NHB and the NLB have been very active in documenting the history of old Singapore through interviews with people, especially our senior citizens in creating heritage trails as well as in using modern technology like apps to make these rich experiences available to the public. Just to name a few are the Memory Project and the recently established Kampong Glam Heritage Trail and the My Queenstown app.
My concern with such self-guided trails and apps is that it precludes the rewarding experience of engaging face-to-face with the very people who provide these stories. So, in keeping with the theme of this year's Budget of \"harnessing the value of older citizens\" and to enhance the good work of NHB and NLB, would the Minister consider licensing such seniors who have the inclination and the standards expected as specialised heritage guides where they not only guide visitors onsite but also are paid for their time and contribution.
My suggestion is also in view of the questions raised in this House some months ago concerning tour guides who are not only not licensed but who also gave inaccurate information. By tapping on the full potential of such senior citizens, we would be able to provide tours that are credible and authentic as these tours are based on rich personal experiences which in turn provide for a more exciting experience for visitors.
Specialised guides are not new. In a scheme some years ago, STB tested and licensed qualified Singaporeans as specialised nature guides to provide a more educational and fulfilling experience for visitors of our nature reserves.
I am mindful of the need to protect the work of licensed general tourist guides who might reasonably be concerned that my suggestion might tread on their territory. I will counter that by suggesting that like the nature guides scheme which is limited to specific nature areas, these specialised heritage guides are limited only to their sphere and place of residence. In this way, we can create not only a new quality industry but at the same time a more humane industry where we manifest the importance and pride we place on the inherent value of our people, our places and our relationships with each other.
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Mr Zaqy Mohamad (Chua Chu Kang): Madam, the National Productivity and Continuing Education Council (NPCEC) was set up in 2010, and is responsible for driving the national effort to achieve 2%-3% productivity growth per year over a decade.
However, last year, in spite of various measures, productivity growth was negative for 2012. Can MTI update on the progress of the productivity drive, and whether it is realistic to continue to aim to achieve this 2%-3% productivity improvement target year-on-year?
The main thrust of the productivity drive today, assumes that the tightening of low-skilled foreign manpower and putting higher levies on the unskilled workforce will force companies to transform and of course, hopefully, rely on a more productive and Singapore core of workers.
In doing so, I would like to highlight some potential blind spots which the Ministry could watch out for that may impede the productivity targets that the Ministry aims to achieve.
First, we face a risk of what I call \"poach-tivity\". \"Poach-tivity\", a term I borrowed, is the risk that with the tightening of foreign manpower, local workers are poached and wages rise when they are hired by competitors, but not because they have improved productivity or capability. The risk is we see wages rise without any improvement to productivity in this merry-go-round poaching across the industry. This \"poach-tivity\" will also favour the larger players and cause an extreme shortage of manpower among SMEs which are not able to afford the higher salaries.
An example was cited by a business owner of how an F&B outlet had a number of its local staff poached by its neighbour, a much a larger franchise seeking to expand. The local staff were paid about 30% more and they moved over. I am actually happy that the local staff are paid better, but this will not help the productivity drive.
Second, profit substitution from the property market or \"property-vity\". A number of businesses realised that it may be more productive to invest in property in Singapore and abroad. In recent times, some businesses have also realised that they can actually make better profit from property investment and rent collection as a landlord rather than transforming their core businesses to
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deliver the bottomline because this can be more tedious. This distracts companies from improving their productivity as their bottomline targets are met from alternative means, that is, the property market.
Can the Ministry comment on the challenges and barriers that it views as important for us to overcome in order to achieve the desired productivity objectives? How do we avoid the situations of \"poach-tivity\" and \"property-vity\" from distracting businesses from the productivity agenda?
Madam, many of the efforts under the NPCEC are still driven by the Government. For example, the sectoral productivity roadmaps are top-down plans developed by Government agencies, with some consultation with trade associations and chambers.
There are many companies and trade associations that have good ideas to improve productivity and can do more to help their sectors. Can the Ministry elaborate on some of the ground-up initiatives that it is also seeing and how these can complement the top-down approach in driving productivity?
Madam, if I may also relay a concern that a number of some SMEs have spoken about. They are taken aback by some of the narratives that they have heard in the news and on the ground. Such comments include companies that cannot adapt may have to exit the market. Many SMEs are aware of the Government's direction to improve sectoral productivity, but the pace of change may not be something they can adapt to, especially the small businesses and especially start-ups. Some may have the potential to grow but their progress may be prematurely halted in this whole-of-economy transformation.
Now, moving on to the concerns of social entrepreneurs. If small commercial companies are feeling the pressure of having to boost their productivity significantly, what more of social enterprises? These are companies but they are also businesses that rely on society's goodwill in exchange for business and cost-efficiency. This sector was certainly an area that we promoted in recent years to build our social capital. But if social enterprises start to close in significant numbers, this will also reverse what the Government was trying to achieve in this space.
The Chairman:\tSo, we have added two words to our dictionary – \"poach-tivity\" and \"property-vity\". Assoc Prof Fatimah Lateef.
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Assoc Prof Fatimah Lateef (Marine Parade): Madam, the term productivity has become a favourite tagword as we embark on the transformation and restructuring of our economy. The term is used so often but can indeed be quite unclear and may mean different things to different people.
Productivity is the ratio of output versus the resources consumed in the process. It can be measured by a single input resource such as manpower utilisation or for multiple resources. There can also be many different types of productivity measurements depending on the types of resources considered. A customised definition, which may be industry-specific will be helpful.
I am glad to hear the Minister's announcement of a sectoral approach on this. With the proposed centre to assist SMEs, can the Ministry set up specific consultation clinics that can give customised or targeted help and advice to those who require it, in planning improvement for their businesses? Also, can we have some satellite centres in different districts, maybe tagged to the CDCs, WDA or CETs for greater accessibility?
Whilst there have been much focus and emphasis on increasing productivity of the lower and middle level workers, we must also not forget the higher and the upper end as well because this essentially deals with sound management practices, organisation culture as well as mindset change which are important in productivity as well. I hope the Ministry will not lose sight of this group in the messaging and reinforcement.
The Chairman: Mr Sam Tan, you have two cuts, please take them together.
The Senior Parliamentary Secretary to the Minister for Foreign Affairs and Acting Minister for Culture, Community and Youth (Mr Sam Tan Chin Siong): Thank you. My first cut is on productivity. Mdm Chair, given our tight labour market and land constraints, future economic growth must depend on productivity growth, yet productivity growth was negative in 2012. This is an alarm that we cannot take lightly. Government started the productivity movement a long time ago and some of us may still remember Teamy, the Productivity Bee which was launched in 1982. But between 2000 and 2009, productivity only grew by 0.8% a year. Some people said this was a lost decade. The Finance Minister has also given sobering statistics that our productivity is behind some of the Asian new industrialised economies and the advanced economies. We really need to play catch up now or we will lose in the
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economic rat race.
Productivity is sensitive to economic cycles. As current business cycles are ever shorter and risk ever higher, it will be very tough for the SMEs to have sufficient financial resources to invest long term to raise their productivity. Hence, SMEs need Government's help to achieve the 2%-3% annual productivity growth target by 2020. SMEs are naturally understandable to be very anxious about this target and they have expressed reservations to achieve this target which they think is rather ambitious.
Therefore, can the Minister share with us the new initiatives that MTI is introducing to help companies raise productivity on a sustainable basis?
My second cut is on internationalisation. Mdm Chair, the buzzwords for Singapore going overseas have changed over the years – regionalisation, internationalisation, growing the second wing and so on, and so forth. Business realities too, have changed as many other countries' fortunes grow or decline. But our ambition remains high, that is, Singapore businesses must internationalise if they are to grow.
With the recent announcement of tighter curbs on the foreign labour force, businesses had told us that they are facing an ever sharper labour crunch than before. According to the 2011 and 2012 Internationalisation Survey conducted by IE Singapore, the majority of the companies in Singapore indicated that manpower will be a significant challenge in terms of higher costs of manpower and also the availability of the appropriate talent. This problem will be starker for SMEs which will inevitably feel the impact of the recent adjustments in foreign workers' policy more than the MNCs. But whether they are big or small, for companies keen to internationalise, such a manpower crunch will cost many downstream difficulties in expanding operations overseas.
As businesses contend with slower growth prospects coupled with severe resource constraints, and rising business costs in Singapore, more SMEs are taking a serious look at opportunities overseas. According to a survey by SMEs, a key strategy for SMEs to cope with the rising costs is actually to set up shop outside Singapore. Even as Singapore companies go overseas, we can still try to help them add value to Singapore, perhaps, by having their headquarters or the R&D facilities set up in Singapore. Can the Minister tell us what are the other ways that he is thinking of to ensure that all is not lost, even if we cannot stop
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companies from venturing overseas?
In addition, to succeed commercially overseas, companies need to deploy the right people with the right capabilities to manage these overseas operations. With a tight domestic labour market, it will be increasingly difficult to find suitable people to fill such overseas positions. This may pose additional challenges for companies looking to internationalise. While companies want to expand overseas, they may not be able to find the needed manpower to do so. With tight manpower, how is the Government helping the companies deal with manpower shortage issues that may hinder their overseas operations?
Mr Inderjit Singh (Ang Mo Kio): Madam, so far, Parliament has spent a lot of time debating only one part of the productivity equation and that is how companies can emerge as more competitive. And that part that we have rightly debated is cost, which is the bottom part of the productivity. We need to spend some time talking about the numerical part of the equation and that is the demand part. How can companies grow their demand faster than what domestic demand can provide?
In this respect, internationalisation is crucial for SMEs, given our small domestic market. Can the Ministry share if there are any interesting high growth regions or sectors that the companies that want to internationalise should focus on?
Also, will the Government give more help to SMEs in this area, especially given the manpower constraints that they may face domestically? We may want to assist companies to move part of their operators overseas, for example, to the Iskandar development area.
What is the Ministry planning to help escalate the internationalisation process? We could think of things like providing some of them tax status like pioneer tax status. In the past, that was to attract companies into Singapore, and maybe we want to incentivise some of the companies to become pioneers in restructuring and relocating part of their operations overseas. Some form of similar tax incentives may be one way of helping companies to decide to internationalise.
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The Second Minister for Trade and Industry (Mr S Iswaran): First, let me thank Members for their comments and ideas, and allow me to elaborate on MTI's plans for the energy, R&D and tourism sectors in support of the transformation that we are seeking at a larger level in our economy.
Let me start with energy which is a critical resource for any economy. It is a key factor of production. Our aim is to strike a balance between energy security, economic competitiveness and environmental sustainability. To that end, we seek to diversify our energy sources, promote a competitive industry and build capabilities so that we can ensure a reliable and competitively-priced energy supply for Singaporean households and businesses.
Mr Vikram Nair has quite rightly observed that Singapore will face greater competition from the region in securing our energy supplies. ASEAN countries are net importers of energy and they accounted for about 20% of the growth in global energy demand in the past five years, which is quite significant.
That share is set to grow, with Southeast Asia's energy demand expected to expand by 80% over the next 25 years. Strong economic growth has fuelled the regional demand for energy, especially natural gas, which accounts for 80% of electricity generated in Singapore. So, it is essential that we diversify our energy sources and options to strengthen our energy security.
Our Liquefied Natural Gas (LNG) terminal, which will commence operations in the second quarter of this year, will broaden our access to fuel sources worldwide, and it will also catalyse opportunities in LNG-related businesses such as trading and bunkering. To ensure that our infrastructure can cater to future needs, we are also building a fourth LNG tank and that will boost our terminal throughput capacity to 9 million metric tonnes per annum (mtpa) and that should come on stream some time in 2015, 2016.
We are also studying possible frameworks for the future import of LNG beyond the first tranche of 3 million metric tonnes per annum (mtpa) which was awarded to BG Group. EMA has concluded its first round of industry consultations last year and will conduct a second round this year to seek views on the proposed supply framework and implementation details.
Mr Gan Thiam Poh asked for the rationale behind the privatisation of the generation companies (gencos). Privatisation has helped to increase competition among the five active today gencos in Singapore. The case Mr Gan mentioned is the sixth which has yet to start actually generating. Privatisation
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and the competition that ensues drive innovation, production efficiency, and ultimately maintain competitive pressure on energy prices to the benefit of consumers. This is not a theoretical construct. We have seen evidence of it in Singapore in practise.
As a result of privatisation and competition, our gencos have progressively switched from oil-fired plants to more efficient natural gas-fired plants. Had we continued to rely on less efficient generation technology, our electricity tariffs today would be at least 15% higher. So, there is a tangible benefit for all Singaporeans arising from this.
In fact, the gencos are continuing their investments in energy efficient technologies. Over the next two years, more than 2,000 MW of new generation capacity will be added to our market. That is about 20% of the current installed capacity. This increased capacity will come from Combined Cycle Gas Turbines (CCGTs), which will further enhance competition and, importantly, the efficiency gains in our electricity market.
We are also progressively increasing competition in the electricity retail market to further help consumers manage their energy costs. In particular, I would like to inform Ms Sylvia Lim and indeed all Members of the House that we will be lowering the contestability threshold in phases for commercial and industrial (C&I) consumers from the current monthly consumption of 10 MWh to 8 MWh on 1 April 2014, and then to 4 MWh on 1 October 2014. In addition, consumers will be allowed to aggregate the electricity demand at different locations in Singapore in order to meet the prevailing consumption threshold.
What does it mean in practical terms? When these measures are implemented in full, it will allow about 70,000 accounts to benefit from increased retail competition in the sale of electricity, up from the current 13,000 accounts.
Let me put it in another way. Our Town Councils will be a key beneficiary – all Town Councils would be able to negotiate for electricity retail packages at competitive market prices for their accounts.
SMEs across all sectors will also benefit. For example, in the wholesale and retail trade sector, the number of companies eligible for contestability will nearly triple from the current 1,600 to around 4,200. These include SMEs like Home-Fix D.I.Y Pte Ltd, who would be able to aggregate demand across their 23 stores islandwide, as well as single location companies like Habitat Coffee,
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which would benefit from the lowering of the contestability threshold to 4 MWh.
We are moving in stages to ensure that the back-end systems can scale up to effectively support the implementation process because we are talking about order of magnitude of increases the accounts that will have to be supported through these enhanced retail contestability measures.
Beyond these initial two phases, we are looking at how we can further expand and indeed cover the entire retail electricity market and open it up to competition, a point that Ms Sylvia Lim has raised. There have been several studies done and part of the reason is because of the question on how much technology should be involved, and whether we should be involved. Ms Lim talked about the intelligent energy system, involvement of smart meters, backend payment systems because some countries have proceeded with technology intensive solutions. Others have taken a more rudimentary approach, just aggregation of accounts and then, they allow that to be contested.
We want to be sure that, first, when we embark on this, we are able to do this in a systematic way and extend to all households because we have 1.2 million households. Second, when we do so, we also have a clear idea of the capacity in the system at the backend. We are working on it. We should be able to share more in due course, in terms of timelines. The reason why the studies are so involved is precisely because of both the technical nature and the scale of the market.
Notwithstanding these efforts, we recognise that energy costs may still be a cause for concern for some households. Our policy is to allow the price of our energy to reflect its true cost and not to subsidise energy consumption, which would be wasteful and unsustainable. Instead, we provide targeted assistance, Members are well aware of this, especially for low- and middle income households through the permanent Utility-Save (U-Save) rebates which announced in last year's Budget. This year's Budget has doubled the U-Save rebates across all categories of HDB households via an additional one-off GST Voucher-U-Save special payment.
To illustrate the impact, what it means is that the total U-Save rebates of $520 for a 1-room HDB household will, on average, cover 15 months worth of electricity bills. In other words, effectively, it is more than fully covered. For a 2-room household, it will be equivalent of 10 months; for a 3-room household, six months; and for a 4-room household, four months. These U-Save rebates are substantial and will go a long way in helping our households cope with
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increases in energy costs, and of course they can respond to the price signal by modifying the electricity consumption behaviour as well.
Looking ahead, a key thrust of our energy strategy is to build capabilities and encourage innovation in the evolving energy sector. As Mr Lim Biow Chuan has pointed out, it is critical that we build up our manpower capacity and capabilities to support the continued growth in the power sector. To that end, EMA is currently working closely with the industry and stakeholders to implement and supplement the recommendations of the Power Sector Manpower Taskforce. This was released earlier this year.
The power sector in Singapore will need around 2,400 technical professionals over the next 10 years. To re-brand the power sector and attract fresh talent, we have worked with industry players and other stakeholders to offer scholarships to students from ITEs, polytechnics and universities. Such scholarships have allowed youths like Nathaniel Tan and Aloysius Lin – both recipients of Senoko Energy's inaugural ITE scholarships – to pursue meaningful career opportunities in the power sector. Over the next 10-15 years, we will need more young Singaporeans like Nathaniel and Aloysius to join their more experienced colleagues, in assuming key technical and leadership positions in the power sector. There is an opportunity and we are trying to encourage more young people to take it seriously and to pursue careers on this quite rewarding sector.
Separately, Mr Yee Jenn Jong has asked about greater support for the adoption of renewable energy in Singapore. Mdm Chair, while we are supportive of efforts to promote renewable energy, firstly, we must note that there are inherent limitations to its applicability to Singapore's circumstances given the current state of technology. Firstly, Singapore is alternative energy disadvantaged because of our size, our climate and our geography which significantly constrain the scope to deploy renewables. The costs of deploying renewable technology systems are still relatively high today compared to energy from the grid. Moreover, these sources are intermittent, variable and, hence, cannot generate base-load electricity reliably.
We do not subsidise the consumption of renewables. Mr Yee has asked, why can we not consider fit-in tariffs like the Germans? In fact, the Germans are actually scaling back their fit-in tariffs now. The reason is simple. They are not scaling back because they have attained their clean energy objectives. What they have realised is that having spent billions of euros, they have found that it is actually an inefficient way of getting the industry or the clean energy sector moving, and in particular, in the context of solar power. What has happened
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instead is that there has been a large scale importation of low-cost photo-voltage cells and the panels from low-cost manufacturers in China.
We have to look at it in context. Subsidising consumption is likely to give us wrong outcomes. What we have chosen to do, however, is to work with the industry upstream, investing in research, development and demonstration (RD&D) projects. This is materially different, although Mr Yee seems to think they are the same. They are not. Because when you invest upstream, we are talking about working on measures to enhance the economic feasibility and liability through technology advancement which will then make its adoption a natural consequence from an economic point of view, as opposed to subsidising consumption which masks the true cost and leads to sub-optimum outcomes.
We are investing in R&D and building capabilities to facilitate the entry of renewables. For example, the Energy Innovation Programme Office (EIPO) supports solar energy research through the Solar Energy Research Institute of Singapore (SERIS) and Energy Research Institute at NTU (ERI@N). In addition, the Solar Capability Scheme (SCS) motivates the private sector to offset part of the capital cost involved in installing solar technologies in energy efficient buildings. The Clean Energy Research and Test-bedding (CERT) programme provides opportunities for Government agencies to partner private companies to develop and test-bed clean energy applications using Government facilities in Singapore.
Mr Yee and others have asked about the examples. There are several examples of companies, local companies as well, moving in this direction. One example is eco-system which is involved in the project on solar powered Park and Charge stations and electric vehicle infrastructure. This is an important part of developing a new idea, to see how we can support the evolution of clean energy applications.
Another example is Daily Life Renewable Energy which works with EMA on the Pulau Ubin micro-grid which we have also worked on as a test-bed on how we can use – it is a test-bed infrastructure, really, on renewable energies in the context of a small micro-grid infrastructure.
These efforts in renewable energy underscore the importance of R&D as an important enabler in our economic transformation. R&D has benefited our
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companies, particularly SMEs, by building up their innovative capabilities. This is a point that many Members have referred to directly and indirectly. R&D helps our SMEs to transform, move up the value chain, and most importantly, seize higher value growth opportunities. We have seen a growth in the number of SMEs involved actively in R&D. Ms Jessica Tan has asked this question. Business expenditure on R&D by SMEs has grown at a Compound Annual Growth Rate (CAGR) of 3% between 2001 and 2011, to reach $551 million in 2011.
Our SMEs also benefit from R&D tie-ups with multi-national corporations through intra-industry collaborations, such as the A*STAR Aerospace Programme, and the Industry Consortium in Industrial Coating and Packaging (ICAP). This is an eco-system within the industry where the big companies and our SMEs work together. By integrating across the R&D value chain, SMEs and MNCs can leverage and build on each others' capabilities.
In the Infocomm Technology (ICT) area, which Ms Jessica Tan highlighted, SMEs are supported by A*STAR's newly established Business Analytics Translational Centre (BATC). BATC builds capabilities in SMEs by involving them in its user-led innovation projects and gearing SMEs for growth. By leveraging on technologies developed from the BATC, SMEs can add analytics solutions to their suite of capabilities that are being offered.
Further, we are committed to enhancing the transfer of technologies to SMEs and providing support for commercialisation. About 70% of A*STAR's licensing deals are executed with SMEs. We have seen an increase in the successful commercialisation of R&D efforts. Today, Exploit Technologies Pte Ltd (ETPL), the commercialisation arm of A*STAR, has granted over 400 licenses for A*STAR technologies with the possibility of more than $500 million of new commercial revenues for licensees. It has also spun off more than 40 start-up companies.
To help our SMEs enhance their competitive edge, A*STAR provides technical advice, technology road-mapping and secondment of A*STAR researchers to SMEs through its GET-Up programme. Since its inception in 2003, GET-Up has helped more than 400 SMEs and over 400 research scientists and engineers (RSEs) have been seconded to more than 240 companies through this programme. Just to give Members one example, PJI Contract, a local company that specialises in industrial flooring, water-proofing and surface protection, it is through GET-Up that PJI Contract was matched to a nano (a titanium dioxide) technology from A*STAR, which it licensed and developed into new products, such as the Delta Nano Hygiene spray. Over 10% of its sales revenue in 2012
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can be attributed to the GET-Up programme under this specific initiative.
We are also introducing the Technology Adoption Programme (TAP) to make technology enhancement more accessible to companies, particularly SMEs. A point that Ms Jessica Tan and other Members have stressed. Through this $51 million programme managed by A*STAR, we will introduce a team of experienced intermediaries to link companies up with the solution providers from the public and private sectors which can best meet their productivity needs. In the picture on the top left is Mr Seow Yit Yuee. He is 57 years old and he is an example of the kind of intermediaries we are talking about. He has worked in EDB for nine years and A*STAR for 20 years, and he has a rich technical knowledge as well as a deep understanding of industry needs. In the last three years, he engaged over 250 companies to address their technology needs, and this resulted in more than 180 collaborative projects.
Intermediaries like Mr Seow will work with A*STAR's Research Institutes, SPRING's SME Centres, as well as Productivity Centres and Centres of Innovation to facilitate this engagement. We aim to help companies achieve more than 1,000 technology adoptions over three years. This will be done through customisation, technology transfer, training and deployment of various technologies, including ICT, RFID and robotics. Where there are no suitable technological solutions for our companies, technology developers in A*STAR and our tertiary institutions will aim to identify and translate at least 20 novel technologies to be employed and applied in our companies over the next three years.
We will pilot this programme in six sectors. It is a question of which sectors and how we would apply them. Specifically, they are in Construction, Food Manufacturing, Precision Engineering, Marine, Aerospace and Retail. These have good potential to harness technology to enhance productivity. Companies in these sectors can use the Productivity and Innovation Credit (PIC) Scheme to offset their costs of adopting the technologies. In FY 2011, over 500 SMEs claimed PIC for R&D that they have undertaken, up from about 430 in FY 2010. The total PIC expenditure by SMEs in 2011 was about $183 million. So, there is momentum. Of course, we can do more and that is why we are embarking on this Technology Adoption Programme (TAP) effort. I want to assure Ms Jessica Tan and all Members of our resolve to continue supporting our SMEs through their business transformation and R&D journey.
R&D also catalyses new growth areas. For example, Singapore is seeing more personal care companies, such as P&G, L'Oreal and Amore Pacific, collaborating with A*STAR to conduct R&D in Singapore. With their focus on
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customised solutions for Asian consumers, they also help to strengthen Singapore's positioning in the regional personal care industry.
Recently, I also announced our efforts in developing our satellite industry through the Office for Space Technology and Industry (OSTIn). In this regard, this year's Budget, as Deputy Prime Minister Tharman has announced, has established a $90-million Satellite Industry Development Fund. Part of this Fund will support public-private partnerships in R&D to build up our satellite capabilities. For example, NUS and NTU have established their own space-related R&D programmes, which have attracted industry collaborations that could be the nucleus of a new knowledge-intensive industry in our economy.
As more companies anchor their R&D facilities here, they also create high-value jobs for Singaporeans. For example, in the energy and maritime sectors, Lloyd's Register announced the establishment of a Group Technology Centre in Singapore with an investment of $35 million. The centre is expected to employ 150 full-time staff performing technical research within five years. Our total, in terms of gross expenditure on R&D (GERD) in 2011, reached a high of $7.4 billion or 2.3% of GDP. And importantly, I think this goes to the point that Ms Jessica Tan raised; the business component of it was two-thirds. Two-thirds of this spend was from the business community. So, I think it demonstrates that we are able to capitalise, elicit and commensurate an appropriate response from the business community from this R&D initiative. Our total R&D manpower, including researchers, postgraduate students, technicians and support staff, grew by 4% from 43,000 in 2010 to nearly 45,000 in 2011.
A*STAR will support such growth by continuing its strategy of developing local research talent, for example, through its A*STAR Science Award for the Polytechnics. The award provides Polytechnic students with an avenue to pursue their interest in science, and to encourage them to pursue a career in R&D. Ms Chua Pei Qi was a recipient of this inaugural award in 2012. She is a final year student at the School of Engineering in Nanyang Polytechnic and has a particular interest in green technology.
Finally, let me address Members' questions on the tourism sector. Tourism is one example of an industry vertical where we seek economic and business transformation to achieve quality growth.
Last year, we saw the introduction of several new products such as the Giant Panda Forest, Marine Life Park and best-in-class cruise ships calling at the new Marina Bay Cruise Centre. These have strengthened our value proposition
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as a vibrant and attractive tourist destination – 14.4 million tourists visited us in 2012, accounting for a record level of tourism receipts of $23 billion. Over a five-year period since 2008, tourism receipts have grown at a compounded annual rate of 10.4%, and visitor arrivals at 9.2%.
STB forecasts 2013 tourism receipts to be in the range of $23.5 billion to $24.5 billion, an increase of about 2.2% to 6.5% from 2012 depending on which point of the range you look at, and visitor arrivals of about 14.8 million to 15.5 million, an increase of 2.8% to 7.6%.
Looking ahead, our visitor arrivals cannot continue to grow indefinitely and sustainably at the rates we have seen in recent years. Dr Lim Wee Kiak has pointed out that regional competition for the tourism pie is intensifying. Domestically, our land and manpower constraints mean we need to find new ways to do more with less. The next phase of tourism growth would thus have to come from increasing the yield through visitor spend, rather than just visitor numbers. This transformation and change is timely because, externally, the expected rise in Asian tourism over the coming years presents a window of opportunity for us to attract discerning travellers who seek out differentiated and value-added experiences.
Internally, we have the essential building blocks in place to continue maintaining our edge as a premier tourist destination. Taking our workforce as an example, Mr Seah Kian Peng would be pleased to know that the STB, Sentosa Development Corporation (SDC) and WDA have been working jointly to raise the capabilities of Singaporeans so that they can take on the higher value jobs generated by our tourism developments over the years. Through initiatives such as Sentosa's Train and Raise (STAR) programme, Singaporeans like 29-year-old Noorzabidah Bte Buang have been able to pick up new skills like budgeting and human resources management, and rise through the ranks to assume greater responsibilities that realise their potential.
Our local companies are also well-poised to benefit from this transformation. Lighting company SMM Pte Ltd is a case in point. As part of the 2012 Singapore Grand Prix, SMM worked with STB and international lighting consultants to implement a lighting solution and develop a poster mesh that preserved the Old Supreme Court's iconic façade amidst construction works. This is a first for Singapore with interesting future application possibilities for the company. As we push for quality, yield-driven growth, we can expect more of such opportunities for our SMEs to partner world-class players and
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eventually come into their own.
What we need now, Madam, in the tourism sector, is strong content, especially in business and leisure events. Such \"software\" is hard to replicate and will help differentiate Singapore from our competitors, who might be catching up in terms of hardware, infrastructure and even volume. Strong content also helps to maximise the value we can derive from our current infrastructure.
In that regard, we will strengthen our \"software\" through new, large-scale lifestyle events. We will continue to work closely with the industry to facilitate content curation and delivery. Take Singapore's growing visual art landscape as an example. Today, the privately organised Art Stage Singapore is one of Singapore's highest profile contemporary art fairs. To augment the impact of this event, STB worked closely with industry to catalyse and co-locate other visual arts events around Art Stage. The inaugural Art Week in January 2013 recorded high footfall, strong sales and good international media coverage. The success of Art Week demonstrates the potential of building a spectrum of lifestyle offerings around a marquee event. STB will continue to complement the industry's efforts to introduce other large-scale innovations.
STB is also committed to fostering innovation and test-bedding of new ideas which might be smaller in scale. So, to this end, STB will establish a new Kickstart Fund with an initial funding of S$5 million to support start-up type lifestyle concepts with strong tourism potential and scalability. This includes pop-up entertainment, dining, retail or arts events, as some examples. The scheme will also provide entrepreneurs access to business advice from experienced mentors from the industry. Over time, this scheme can help catalyse the development of compelling lifestyle concepts here, and they can add to the software that will enhance our cityscape. STB will announce the details and call for applications soon.
Even as we seek out and anchor higher value tourism products here, we will also help companies and workers move up the value chain and benefit from such growth opportunities. One example is our 2,000-strong tourist guiding industry. Today, the industry comprises mostly Singaporean guides from a diversity of backgrounds and with a variety of interests. Many like Ms Tare Lee Yong and Mr Sng Soon Huat, provide general guiding services in Singapore's vernacular languages. Other guides offer more niche services. For example, Mdm Geraldene Lowe-Ismail has been conducting heritage walking tours around Singapore. And Geraldene offers tourists a mix of historical tidbits, infused with her own personal memories. I think that is the kind of tour guides
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that Ms Faizah Jamal was talking about.
As we push for quality, yield-driven growth, opportunities abound for our tourist guides to create unique itineraries for discerning travellers who are willing to spend more for customised or bespoke experiences.
This entails more targeted training, as Ms Faizah Jamal has alluded to. STB is fully committed to working with the industry on such capability development efforts, and I would encourage all stakeholders to highlight to STB any skills gaps that need redress. In the specific examples that Ms Faizah Jamal highlighted on NLB and NHB, for example, the tourist guides that are licensed today are, in general, providing a guiding service to the tourists who come to Singapore. If there are specific niche areas which are run by statutory boards, I think the most productive way to take the conversation forward is to see how those statutory boards can work with STB to allow these niche tourist guides to develop and provide the relevant service. STB's primary interest is to ensure that the guides are well trained, maintain a high quality, because they also receive compensation. I think if there are niche areas, then I think these are specific statutory board discussions that need to take place.
We will study further Ms Faizah Jamal's specific suggestion of licensing and accreditation of niche tours according to tourist guides' residency areas or specific focal point. Singaporeans today already enjoy a natural advantage in guiding given our deeper and more nuanced understanding of our heritage, history and tourism offerings. We want to enhance our capabilities in this important area, but I also want to stress that we want to be careful not to unnecessarily constrain the industry with onerous regulatory or certification-type requirements. We need to find a balance because there are also a lot of excitement and interest in the voluntary aspects, and we need to preserve that enthusiasm and vigour in this space.
Other segments of the tourism sector are also keen to enhance productivity and move up the value chain, and we will support them in this journey.
Hotels are evolving their business and operating models, using technology and new management methods. For example, Fullerton Hotel worked with STB to refine its multi-skilling initiative. The scheme prepared Mr Daanish Louis Chandrasegran, a security officer, to also help with F&B services. Daanish Louis has benefited from his expanded role and skills. The hotel has also benefited
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from the productivity gains.
Beyond the hotel industry, travel agents are also raising their game. The National Association of Travel Agents Singapore (NATAS) has been working with WDA on an accreditation framework for the travel agent sector. This framework enhances the professional standards of travel management practices. I look forward to NATAS launching the framework later this week.
Mdm Chair, if I can conclude, I have highlighted MTI's efforts in three areas – ensuring secure and competitively priced energy; leveraging on R&D to promote innovation and productivity, especially among our SMEs; and seeking high yield in the tourism sector through differentiated products and experiences. These are essential elements in support of our larger overall effort to raise productivity, attain quality growth and achieve economic transformation. We look forward to the support of all stakeholders in this important endeavour.
The Senior Minister of State for Trade and Industry (Mr Lee Yi Shyan): Madam, I too like to thank the Members who have spoken on productivity and internationalisation. They are two related topics and a key determinant to the success of our restructuring.
Assoc Prof Fatimah Lateef highlighted that the concept of productivity differs between sectors. Yes, it is true that different sectors measure productivity in ways that make more sense to them. This is why the National Productivity and Continuing Education Council adopted a sectoral approach towards driving productivity growth. Consulting closely with the respective trade associations and chambers, we developed customised productivity roadmaps to tackle the different challenges that each sector faces. We also complement macro level measurements with sector specific indicators.
Likewise, our public outreach effort is also tailored to specific sector. For instance, under the \"Way to Go\" national productivity campaign, we highlight stories of best practices in different industries. Many Members would have read some of the stories in The Business Times and Lianhe Zaobao in the year-long education and outreach campaign.
Mr Sam Tan and Mr Zaqy Mohamad asked about the progress of these productivity efforts. Year to year, headline productivity numbers fluctuate. In 2010, our productivity shot up by 11.1%. In 2012, it declined by 2.6%. Productivity measures are sensitive to economic cycles. A sharp drop in product prices can, for instance, mask the improvement made in labour productivity. In
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the long run, however, the value added per worker ought to rise, reflecting rising productivity. The Government remains therefore fully committed to helping our industries achieve long-term and sustainable productivity growth.
Sector by sector, we are implementing customised productivity roadmaps systematically. In the retail industry, for instance, 200 retailers have undertaken productivity and services upgrading projects. Two hundred CEOs and productivity managers have participated in training, and 14,000 retail workers took classes at different levels offered by WDA. Clearly, a lot more retailers and retail professionals can benefit from these programmes, and we have the capacity to train them.
Besides reaching out to more, SPRING will also go deeper. It will introduce more in-depth projects designed to help integrate the supply chain and promote wider adoption of technology, such as integrated point-of-sale systems and inventory management systems. Embracing technology at the industry level will bring about a larger quantum of productivity improvements.
At the firm level, we also have committed $180 million in grants to about 10,000 companies. Among them, 90% were SMEs. Again, we have the capacity to fund more firm level projects and we want more firms to step forward.
At the national level, we have committed about $1 billion from the National Productivity Fund to support the many sectoral plans and horizontal programmes. One new initiative we are introducing is the Collaborative Industry Projects (CIPs). We will extend the collaborative industry projects to six more industry verticals led by SPRING, including food services, retail, food manufacturing, furniture manufacturing, printing and packaging, and textile and fashion. The objective of these CIPs is to help achieve a step change in the productivity of a large group of companies by encouraging them to work together in areas that bring them the benefits of integration and economies of scale.
To give an example, SMEs in the F&B sector can reduce their manpower requirements by aggregating demand and collectively outsourcing their food preparations to suppliers. They could also pool logistic assets, such as warehouses and delivery trucks, to benefit from economies of scale. Hopefully, CIPs can also bring about greater integration in the supply chain and reduce wastage and inefficiency. CIPs could also potentially see new players and modify industry structure in the longer term.
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We will commit $90 million for such projects over the next three years in the six sectors led by SPRING and will roll out the first call for projects in the second half of this year. Mdm Chair, may I speak in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Beyond the sectoral level, we also need individual companies to initiate change on the ground. As our restructuring efforts gather pace, more companies now recognise the importance of productivity and innovation as the only way to achieve quality growth.
We will continue to work closely with companies for productivity improvements across all sectors. We urge more to come forward and tap the programmes available to help them enhance and develop higher value capabilities. In order to make the shift towards productivity-driven growth, companies will increasingly need to re-examine their growth strategy and fundamental business models, and to contemplate new ways of creating value that they have not done before. In short, they need to move out of their comfort zones and cannot stay unchanged.
It will not be an easy and straightforward road as businesses have to make difficult adjustments. We also recognise that businesses have many other concerns on their minds. Time is needed to introduce productivity improvements and for them to bear fruit. The Government is committed to supporting businesses, especially our SMEs, during this transition period.
There are those who have managed this transition well. Consider the example of Freshening Industries, an SME manufacturer of hygiene wipes. This SME started in 1994, with humble beginnings, and it grew steadily through its pursuit of quality and development of customised products for each client. Freshening Industries now exports to more than 33 countries and supplies more than 5,000 restaurants, major airlines and global hotel chains. The distribution channel has increased to more than 35 countries.
Freshening Industries' success can be attributed to the company offering tailor-made services and customised products developed according to their customers' needs. The company has also been pro-active in its pursuit to improve productivity, tapping into the incentives provided by the Government. Freshening Industries embarked on its productivity journey in 2010, with the help from a productivity consultant at an Enterprise Development Centre (EDC). It started with an initial productivity assessment through the IMPACT benchmarking tool, moved on to adopting the 5S methodology for workplace
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organisation before implementing other improvements like Business Intelligence and Customer Relationship Management software. Managers at each level were trained to upgrade their leadership skills to guide the effort.
All these improvements were supported by the programmes from SPRING and the Employment and Employability Institute (e2i). The costs were also claimable under the Productivity and Innovation Credit (PIC). Results have been tangible. An increase in productivity of more than 10% helped it cope with the tight labour market and rising business costs.
Freshening Industries is a typical SME, which faces similar challenges and difficulties with the rest. We hope their successful transformation will inspire many others to do the same. The restructuring process may not be easy, but there are those who have done it. As the saying goes – when there is a will, there is a way. Let us work together.
(In English): Mdm Chair, as I alluded to earlier, everything being equal, rising sales of a company will also raise productivity. This is important because many productivity discussions focus on labour productivity and omit revenue generation and value creation, just like Mr Inderjit Singh has highlighted.
Internationalisation is very crucial in raising a company's productivity. Singapore firms need to look beyond our small domestic market and tap into new regional demands. The BreadTalk group started as a one-shop company in the year 2000. Today, the group has over 700 outlets under eight brands in 15 countries. BreadTalk has tackled productivity challenge from all angles. It has creatively differentiated itself through product innovation and has continually revamped its business model. It has evolved from a one shop to many chains, one brand to eight brands, in-shop baking to central kitchen and a local company to a regional player. These efforts have helped BreadTalk to grow its revenues and profits. By expanding boldly into new overseas markets, BreadTalk has enhanced its competitiveness and enjoyed economies of scale. BreadTalk now has more resources to invest in technology and do product development. It enjoys strong brand recognition internationally.
Soon, BreadTalk will open its new international headquarters building at Paya Lebar. By then, it will create more skilled and high-paying jobs for Singaporeans, in areas such as regional HQ management, product
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development, training and logistics and so on.
From the above example, it is clear that, at some point, our SMEs must transcend our small domestic market to realise their next stage of growth. Singapore is fortunate in that we are at the centre of growth in Asia, just as Minister Lim has highlighted earlier. China has a rising middle class of around 300 million, while India has 160 million. Consumer demand is also growing in the ASEAN economies with their youthful demographics. Our SMEs are indeed well placed to take advantage of these opportunities at our door step.
Further away are emerging markets, such as those in Latin America, Africa, the Middle East, Russia, Central and South Asia, offering some niche opportunities for our export businesses. Though less well known, Singapore businesses are already trading with, or investing in some of these economies. With the right strategy, our firms will find niche opportunities in these markets.
Ms Jessica Tan, Mr Teo Siong Seng and Mr Inderjit Singh will be glad to know that in 2012, IE Singapore assisted over 15,500 companies in their internationalisation drive, and supported 6,000 companies through its incentive programmes. IE Singapore also launched the Global Company Partnership (GCP) to help companies internationalise by providing support in four key areas, that is, capability building, manpower development, market access and financing.
To help SMEs accelerate their pace of internationalisation, IE Singapore is launching an $18 million Market Readiness Assistance (MRA) programme. MRA can be applied to individual company or trade associations. For individual companies, IE Singapore will co-fund up to 50% of the eligible costs associated with foreign market assessment and market entry, including legal advice, tax advisory and consultancy services, up to a maximum of $20,000 per company per year. IE Singapore will launch this programme on 1 April and expects to benefit up to 1,000 companies. For trade associations and chambers, IE Singapore will co-fund the cost of hiring in-market agents to seek out overseas business opportunities for the association members.
In addition, IE Singapore will continue to organise iAdvisory seminars and clinics for companies seeking new markets or overseas growths. These seminars will cover topics, such as issues related to tax regulations, restructuring and relocation.
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Mr Sam Tan asked how the Government can help internationalising companies cope with manpower constraints. Under the Global Company Partnership (GCP) programme, IE Singapore will be setting aside $20 million to help businesses address three critical manpower challenges: attracting talent, developing talent, and establishing an international manpower strategy.
Under the programme, IE Singapore will provide more overseas training opportunities and scholarships for local undergraduates to prepare them for international careers, match young talents to internationalising companies, and help key company executives acquire international HR expertise. Hopefully, our firms will learn to recruit, develop and retain talents suited for regional and cross-cultural operations.
Mdm Chair, companies can raise productivity in many ways. Fundamentally, they have to find ways to raise revenues and reduce costs. Mr Zaqy Mohamad warned against \"poach-tivity\" and \"property-vity\". We agree that in the long term, these are not viable strategies. By putting off much needed productivity improvements, companies will eventually face a crunch again. Raising productivity is the only means to achieve sustainable growth. We discussed some examples of successful SMEs doing so. Their experiences show that it requires commitment and great efforts but it is possible.
Many SMEs have told me they understand the need to change and restructure. The question now is not why and what, but how. As we endeavour to create the most conducive support system for change, let us work together on the \"hows\" by gleaning best practices from other industries and markets, by brainstorming individually and collectively. I believe we can do it. In fact, we must succeed in order to arrive at the next phase of quality growth.
The Chairman: Mr Liang Eng Hwa, you can take your two cuts together.
Mr Liang Eng Hwa (Holland-Bukit Timah): Thank you, Madam. In Mandarin, please.
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(In Mandarin): [Please refer to Vernacular Speech.] A recent survey by IE Singapore found that 75% of SMEs have presence in South East Asia and about 30% in China. Our SMEs have also presence in other emerging markets, such as India and the Middle East. We can see from here that our SMEs are highly vibrant and malleable.
Our economy is becoming more mature and economic growth will slow down in the future, meaning the growth in domestic market will also be limited. With further tightening of the foreign labour policy, we should do more to help SMEs internationalise, raise their awareness of international competition and improve their business management skills.
To help SMEs to stay competitive in the local as well as the international arena, MTI has announced that SPRING and IE Singapore has undertaken a SME Review to understand how the government can better help the SME sector cope with the new operating environment and the international competition. Just now I heard some announcements in Senior Minister of State Lee Yi Shyan's speech. I hope MTI can continue to help our SMEs.
With further reduction in Dependency Ratio Ceiling, both Association of Small and Medium Enterprises (ASME) and the Singapore Business Federation (SBF) have publicly mentioned that it will affect the business operation of their members.
Minister Lim Swee Say has also said that the companies must undergo economic restructuring. It must get the pace right. Too slow and Singapore would lose its competitiveness; both economic growth and growth in employment opportunities will slow down, wages will also stagnate. On the other hand, if we move too fast, companies may close down. He further added that companies must take the next three years to transform and productivity is the key to ensure sustainable business and economic growth. I agree with his view that transformation and restructuring need to be done in gradual steps. We do not want a situation where wages go ahead of productivity, leading to the recession faced by Singapore in the 1980s.
In view of these, I would like to ask what outcomes does the SME Review seek to achieve, given that many of our SMEs will have to undergo business restructuring and transformation.
When SPRING and IE Singapore conducted the SME Review, have they consulted family businesses and micro-enterprises to make sure that the SME
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Review is inclusive and relevant to these small and medium enterprises?
There has been a lot of help announced in this Budget. However, one common feedback is that SMEs found it difficult to access the Government's schemes or found it hard to understand the wide range of help available. A recent study of 521 companies conducted by SCCCI and NTU revealed that about 78% of the companies surveyed said that excessive documentation required during the application process for the various schemes was their greatest challenge.
I would like to ask the Minister whether we can improve on this. For example, can the Government allocate more resources to the EDCs to help SMEs tide over this difficult period?
The Chairman: Mr Inderjit Singh is not here. Dr Chia Shi-Lu.
Dr Chia Shi-Lu (Tanjong Pagar): Mdm Chair, the business environment is challenging and the Government has, over the years unveiled many comprehensive and generous support measures to assist existing SMEs, and encourage entrepreneurs and innovators. However, many businesspeople that I have spoken to, although being happy with these measures, still find it difficult to properly leverage on all these schemes and incorporate them into their business model, and there are still many who may not actually know about the multiplicity of such schemes. Also, many business owners and aspiring business owners are still unsure about where they can obtain help for their businesses when they need them.
To the Government's credit, the Government has supported the setting up of many programmes, such as the Enterprise Development Centres and similar programmes such as the SME Infocomm Resource Centres, which aim to help SMEs grow and improve their efficiency. I would, however, propose that the Government further refines and expands on these programmes to make these centres truly comprehensive and one-stop and, therefore, more accessible and effective. Such SME-centric centres can become even more efficient and targeted in their approaches, and are found in many other jurisdictions, such as Hong Kong, Penang and the EU. These centres should also complement existing EDC functions which serve to guide and promote entrepreneurship and innovation amongst our citizens of all ages in their working life.
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I also urge the Ministry to do more in terms of outreach, not just to our existing SMEs, but also to the smaller SMEs or micro-enterprises which, although small, are still numerous in our high street economy. Aside from media initiatives, perhaps a more directed and targeted approach to engage small businesses should be developed.
Mr Gerald Giam Yean Song (Non-Constituency Member):Madam, many of the Government's productivity assistance schemes focus on helping SMEs improve productivity within their companies. But in order to raise productivity on a larger scale within industries, the Government should look into funding and building more common infrastructure and systems that SMEs can tap. These large scale systems are often beyond the ability of individual SMEs to develop on their own.
An example of such a system is the National Electronic Health Records (NEHR) developed by MOH. This is not only used by hospitals, but in the pipeline, also many private GP clinics, to share patient information and increase the efficiency and accuracy of diagnoses.
Next, the Government is one of the biggest buyers of goods and services from SMEs. It can better support companies as they strive to increase productivity, through the way tender requirement specifications are structured. For example, Government tender requirements for the development and maintenance of enterprise IT systems sometimes specify that vendors' personnel must work on-site, when some roles can be run from offsite using secure remote access, saving travelling time. Providing more flexibility in tender specifications for companies to innovate can result in not only improved productivity but can also reduce costs for the Government.
And lastly, the Government should provide more incentives to help SMEs recruit local staff and talent. This is at the top of many SMEs' wish list for Budget 2013, according to an ASME survey. I had earlier proposed a New Hire Wage Credit that will pay for a quarter of the salaries of new Singaporean hires for half a year, provided they have been unemployed or out of the workforce for at least four months. I hope the Government will seriously consider this proposal because I believe it can help SMEs attract more Singaporeans and reduce reliance on foreign workers.
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Mr Ong Teng Koon (Sembawang): Mdm Chair, SMEs are an important part of our business landscape. They account for more than 90% of our enterprises, contribute to more than half of our GDP and employ more than half of our workforce.
However, it is not easy to start a new business or to be an SME owner in Singapore today. Besides having to find the right business model operating under intense competition and working under tight labour constraints, there is also a need to comply with our tax laws.
Many SMEs do not have professional staff to handle tax matters, which are usually dealt with by business owners or an accounting staff cum book-keeper. The Government needs to help SMEs minimise their compliance costs even as we ensure they pay their fair share of taxes in corporate tax, income tax and GST. What plans does the Government have to reach out to these new business owners and SMEs, to raise their awareness about their tax compliance requirements?
Mrs Lina Chiam:Madam, to enhance the local business eco-system, we suggest that the Government invests an amount of up to $500 million on micro and small set-ups through investment instruments, such as equities, for near break-even stages and loans for seed stages. For the past decades, Singapore's economy had grown through a heavy emphasis on foreign direct investment. We need to make a significant push for locally driven growth which is necessary to diversify the economy and the job market. In a high fixed cost living environment like Singapore, where our HDB flats and CPF constitute a large amount of our savings, Singaporeans may find it inhibitive to be risk-taking entrepreneurs. An existing agency should be tasked with a new agenda to manage the fund and invest prudently with the mandate to grow innovative ideas. Existing schemes, such as the SPRING's Start-up Enterprise Development Scheme, may not be adequately geared towards the intended outcome because of too many unimportant rigid rules. A start-up does not necessarily need to move from the seed to the revenue and profit-generating stage. At any moment, the fund manager should be able to add value by providing merger and acquisition opportunities or advise that the entities be liquidated. An agency with an overview of a wide range of industries, such as
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IE Singapore or EDB, should be tasked to take up the role.
Test-bedding space and flexible business space may not be accessible to idea generators and micro-entrepreneurs. Special spaces may be required to support short-term businesses to accommodate a diversified mix of business activities ranging from retail, light manufacturing, storage and commercial. The most relevant Government organ to lead this task will be the Jurong Town Corporation (JTC).The agency should leverage on its inhouse expertise to create convenient and affordable business and mix-style spaces, allowing small-scale tests of unique business models. Each company may also use the venue for test-bedding of ideas for up to three years. Sustainable businesses can then graduate into the market. Incentives that build up manpower capabilities to direct funding and grants extended to subsidise the growth of industries should be carefully considered. Could the Government instead re-invest the money in schemes and provide productivity of businesses? The schemes should allow employees to upgrade their professional skill sets. The Government can provide financial certification support for financiers' audit and accounting certification support for accountants and the same time should apply to other professionals in the engineering and service sectors.
Subsidising undergraduate fees by examination may no longer be sufficient to maintain a competitive labour force. We propose that the Government should provide preferential rate loans to prospective post-graduates to pursue an advanced degree so as to enhance the competitiveness of our manufacturing and financial workforce globally. Qualifiable degrees should have specialised Masters in engineering and science.
The Chairman: Mrs Chiam, your time is up. Mr Yee Jenn Jong.
Mr Yee Jenn Jong: Madam, the service economy is increasingly important to Singapore. Excluding financial and insurance, the service sector had 135,000 enterprises and employed 1.35 million workers in 2010.
The 2012 SME Development Survey highlighted that 50% more service sector SMEs found bank financing a challenge compared to the previous year. This is despite the availability of Government-backed loans through financial institutions. The survey also found more SMEs facing cash flow and liquidity problems.
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Service sector SMEs generally require working capital financing, such as supplier invoice financing, working capital term loans and factoring. They are generally asset light with little collaterals. Financial institutions are cautious and tend to make unsecured lending only to bigger mid-sized SMEs. With the Basel III minimum adequacy requirement, banks are likely to tighten loans to smaller and riskier SMEs.
Government lending to SMEs has been implemented in countries such as USA, South Korea and Malaysia, to address market failure in working capital financing loans to SMEs. A Government-led SME bank will be useful for the following:
(1) SMEs with track record of less than three years. SMEs have highlighted that banks generally offer financing to SMEs with more than three years of track record.
(2) SMEs with small scale operations. Financial institutions tend to focus on mid-sized enterprises.
(3) SMEs with intangible assets. Many knowledge or technology-based companies have intangible intellectual properties which banks are unable to assess. I understand there were previously Government-backed unsecured loans to start-ups through the now defunct Keppel-Tat Lee Bank called TechFinancing. Is the Government supporting more of such schemes?
To alleviate concern that the SME bank will crowd out private sector lenders, the SME bank can be a lender of last resort to the under-served small SMEs. Alternatively, the Government can form tighter partnerships with existing financial institutions to serve this market.
The Chairman: Mr Yee, your time is up. Ms Low Yen Ling, you have two cuts. Please take them together.
Ms Low Yen Ling (Chua Chu Kang):Madam, as we restructure our economy to keep pace with changes, we also seek new areas of potential to create growth industries for the future. Deputy Prime Minister Tharman's announcement on the expansion of PACT (Partnerships for Capability Transformation) beyond the manufacturing sector is, indeed, a very welcomed one. I would like to suggest that beyond capability building and productivity,
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there is the potential for new opportunities and even creation of new growth industries.
Besides sharing best practices, I hope PACT can lead our SMEs to co-create solutions, conduct R&D and apply the power of business analytics with MNCs or industry partners. There is now unparalleled demand for new products and services brought about by global and regional trends of urbanisation, hyper-connectivity and the rising wave of middle class consumers. New solutions and innovations have the potential to spark off nascent industries. As plans to extend manufacturing into robotics, 3D printing and satellite industries take shape, how can our Singapore SMEs be part of this new growth?
I hope the Ministry of Trade and Industry can elaborate on how PACT will advance the collaborative advantage for our SMEs. For instance, are there any specific industries targeted by this programme as it broadens beyond manufacturing? How will such collaborations involve trade associations and business chambers? For micro-SMEs, will there be a chance for them to band together for additional clout? If there should be substantial R&D investments, how will the risks be shared between SMEs and MNCs? Are there prospects for marketing the co-developed product or services internationally?
To this end, I have observed how Korean SMEs often join forces together to seek out new markets and opportunities overseas. This is also how Japanese SMEs tap on each other's strengths to penetrate markets abroad. While I am very cheered by the Senior Minister of State Lee's announcement earlier, may I suggest that IE Singapore look into how it can better support SMEs in this area? In addition to the overseas business trips and the additional initiatives mentioned by Senior Minister of State Lee, can IE Singapore also work out something to ensure that the SMEs will benefit from the presence of a dedicated business representative to market the SMEs' business objectives and products overseas?
Next, SME Talent Programme. Last Friday, Deputy Prime Minister Tharman highlighted how, and I quote, \"age discrimination leaves older workers vulnerable\". I am deeply heartened by our Government's acknowledgement of the difficulties our mature Singaporean workers face in finding jobs.
In my maiden speech in 2011, I gave the example of how a resident in Bukit Gombak, in his 50s, who was back then an ex-General Manager of an MNC,
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managed to find work with our help after some months of searching. He was hired eventually by a local SME in the marine industry to be their Service Manager. The company tapped on his extensive experience to help them engage their MNC clients.
So, our mature PMEs are, indeed, a very valuable human capital that the SMEs can better tap on. To this end, I would like to urge MTI to consider extending the SME Talent Programme to PMEs 40 years old and above. Why limit the programme to only the school leavers? Our mature PMEs can also provide a boost to our SMEs as we look to develop a stronger base of globally competitive Singapore enterprises.
As our life span grows longer, the \"60s\" is our new \"40s\". Our workforce has become more educated and exposed to global trends and changes. These mature workers have stood the tests of economic restructuring in the past − many of them have come through the oil crisis, financial recessions in the 80s and 90s, and also the Asian financial crisis. So, extending the SME Talent Programme to mature Singaporean workers will certainly give them a pipeline of opportunity to join our SMEs, and allow them to stay in the workforce longer and contribute with their skills and life experience.
(In Mandarin): [Please refer to Vernacular Speech.] Last Friday, Deputy Prime Minister Tharman, in his conclusion of the Budget debate, highlighted how age discrimination leaves older workers vulnerable. I am deeply heartened by our Government's acknowledgement of the difficulties our mature workers face in finding jobs. There has always been quite a number of older residents coming to the Meet-the-People Session seeking help in securing work.
In my maiden speech in 2011, I gave the example of how a resident in his 50s and an ex-General Manager of an MNC managed to find work with our help after some months of searching. He was hired by a local SME in the marine industry to be their Service Manager. The company tapped on his extensive experience to help them deal with their MNC clients. Why is SPRING's SME Talent Programme only limited to the school leavers?
WDA has set the foundation for PMETs to move across industries. There are many courses promoting \"T-shaped\" competency which equip participants with a broad knowledge of horizontal skills, such as management, finance and business operations. Mature PMETs will benefit from such training and gain the ability to move into adjacent growth areas or new industries more easily.
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Due to technology and the globalised economy, constant and rapid changes are now the new normal. As life-span grows longer, \"60s\" are the new \"40s\". Our workforce has become more educated and exposed to global trends and changes. These mature workers have stood the test of economic restructuring. Many of them have also come through the oil crises, financial recessions in the 1980s and 1990s, and the Asian contagion.
If we hire them, we can ensure that these valuable skills and experience can be passed on to the next generation. More importantly, to help mature workers stay employable, we need to keep them in the job market as long as possible, for instance, paid temporary internship is one way for mature workers to move into a new skill or industry. Such programmes will also allow workers to try new jobs while gaining experience and education. Likewise, extending the SME Talent Programme to mature workers will give them a pipeline of opportunity of joining our SMEs and stay in the workforce longer.
Mr Lim Biow Chuan: Madam, I declare my interest in this topic as the President of the Consumers' Association of Singapore (CASE). For the past few years, complaints against time-share companies have always ranked amongst the top in the complaints list of CASE. In 2011, there were 1,458 cases against time-share related companies. Last year, the figure rose to 1,870 cases.
CASE has nothing against the legitimate sale of time-share related holiday products. For some time-share companies, we have not received any complaints at all. However, what we object to is the manner in which the sales were conducted. Consumers frequently complained that they were subject to high pressure sales tactics. After many hours of persuasion, they were pressured into paying a large deposit to buy a time-share product. Sometimes, the product is also described as a membership in a travel club or holiday club. Consumers were not told of the permanent annual maintenance cost involved in buying the time-share membership. There were also complaints that consumers face difficulties booking the holiday facilities. Now, if consumers were to try to cancel the contract, they were not allowed to do so. They cannot get back their deposits and they were threatened with law suits for non-payment of the annual maintenance cost.
Recently, CASE recorded more cases where companies represent to consumers that they can sell the time-share membership on their behalf. To aggravate the problem, not only do they pay for a time-share product, they also pay again to these companies to try to sell their time-share product. CASE is
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appealing to the Government to do more to protect consumers from unscrupulous businesses. We urge MTI to amend the Consumer Protection (Fair Trading) Act (CPFTA) to disallow time-share companies or similar kind of businesses from collecting deposits from consumers until the expiry of the cooling-off period. Sellers of such products should also be mandated to provide full disclosure of the annual cost of membership and other expenses before the contract is signed.
The Chairman:\tMr Hawazi Daipi is not here. Minister of State Teo Ser Luck.
The Minister of State for Trade and Industry (Mr Teo Ser Luck):\tMdm Chair, first, let me thank all the Members for raising concerns and issues, and also suggestions for the SME sector. I am quite glad to know that there is so much interest and because of that, they came up with some good suggestions to some of the problems that SME faces. We could consider them. I will try to address some of the issues brought up and also the suggestions as far as I can. If I cannot, Members can ask supplementary questions later.
Our SMEs definitely face challenges now – labour crunch and economic uncertainties. SMEs form about 90% of the registered entities in Singapore. They come in different forms, shapes and sizes. Some relatively large, most are medium to small to micro-enterprises. Because of that, the challenges are great. When we implement schemes and programmes, sometimes one size does not fit all. You need to customise, not only based on the size of the company and the different phases of the business cycle that they are in, but also the sector and industry that they are in.
Nevertheless, we will do our best. As Members know, in the Budget that was announced by Deputy Prime Minister Tharman, two-thirds of the $5.3 billion Transition Support Programme is expected to go to our SMEs. That is a huge chunk of it that we will put in. But the question will be how we allocate the funds and the budget so that these are effectively used by the SMEs and truly benefit them.
I am fully aware of the need to help them and help our SMEs succeed, even to survive in these difficult times in the economic uncertainties. SPRING and IE Singapore have been working hard over the years to look at the different schemes, rolling out the different programmes to help our SMEs. I have commissioned a review of all the SME programmes and strategies moving
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forward. It revolves around a few key outcomes, some strategies and key thrusts. Summarising them all, it revolves around three numbers: \"2-3-8\". Very auspicious. Two outcomes, three broad thrusts and eight strategies.
Many Members asked about this review: what is the outcome of it? What do you get out of it? What kind of new programmes? I am heartened to say that many of the business sectors came forward. Trade associations like SBF, their SME committee, Chinese Chamber of Commerce, ASME and other trade associations have given very good suggestions. In fact, many of the suggestions even went to Ministry of Finance and they helped to provide some of the measures and programmes that were rolled out. I thank them all for working with us to strategise strategies for the SMEs.
Let me share with Members the two outcomes for SMEs – these are the two key objectives. First, we want a productive, vibrant and strong SME sector. With that, you create good jobs. And that is the second outcome. We want good quality jobs for our Singaporeans and workers.
To do so, we will focus on helping SMEs along three broad thrusts. Basically, for any company to work, you need to look at the revenue, the top line, that is the cost component, or how you manage the cost, and make it more productive. Make the money work for you and then you look at the bottom line.
First, the top line. We have to tap on opportunities for growth. Second, drive productivity; make sure it is efficient and effective. The money that works for you gives you that kind of return that you need to sustain your business. The Government plays its role, thirdly, to provide a conducive business environment for the SMEs.
We want our SMEs to do well domestically and we also want them to grow overseas. So, there comes the first thrust – to grow them overseas and globally as well. But we want to be able to create the opportunities, and get SMEs to identify and exploit those opportunities.
First is to collaborate. This collaboration will have to be supported by partnerships, and we call this scheme Partnerships for Capability Transformation (PACT). This was requested by Ms Low Yen Ling.
PACT currently supports large enterprises in qualifying advanced manufacturing parts and processes from Singapore-based suppliers. Many of the SMEs are suppliers to MNCs and big companies. They are a network of
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suppliers. The Government will now expand PACT to include non-manufacturing sectors and a wider range of activities that involve collaborations between large enterprises and SMEs. As long as they are suppliers, and they circle around the bigger enterprises, they can work together to collaborate. Grants from EDB and SPRING will now be available to both large enterprises and SMEs to facilitate these collaborations. Many Members have mentioned that.
First, large enterprises could transfer their knowledge and share best practices to SMEs in the course of supplier sourcing. Whether it is supplier sourcing, outsourcing practices and operations, they collaborate together. This will help SMEs improve their productivity. Many a time, it is either the core of it which is the large enterprise that the suppliers supply to that comes up with some state-of-the-art thinking or more advanced way of doing certain things in product development, logistics or operations, in order to be more competitive, and the supplier benefits from there. We want that to be collaborative, so there is a programme to help them partner.
For example, local department store Metro embarked on a Mobile POS & Supplier Integration Project to upgrade its productivity. Nine of Metro's SME suppliers were also upgraded as they had to build their competencies to integrate with Metro's system. That helps to automate or computerise some of the processes between the suppliers and big companies – in this case, Metro. The processes will be more seamless and automated. That helps in the productivity drive for the small enterprises.
Another form of collaboration is for SMEs to come together to develop and test innovative new solutions with large enterprises. Some Members have asked how we put in IT for the different smaller enterprises. It can be driven by these large enterprises to help the small enterprises to computerise.
One example would be the recent tie-up between local medical technology firm AWAK Technologies and US medical giant Baxter International to develop and commercialise a wearable artificial kidney. Through these partnerships and collaborations, our SMEs can grow and their capabilities will be strengthened and widened. This is important, because as they collaborate, opportunities are vast. When the suppliers and SMEs develop that kind of capabilities, some of them can be exported. Some of these capabilities can go overseas.
Senior Minister of State Lee mentioned about the Market Readiness Accessibility (MRA) overseas. A few Members asked how can large and small
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companies come together to form consortiums and look for opportunities overseas. This is how it works.
We cannot look at the schemes by themselves. Let us say you want the big and small companies to come together. It can be done under PACT, come together and collaborate, and tap on the scheme of Market Readiness Accessibility (MRA), develop the agent's or market representative's network. So two schemes together; the companies develop an opportunity as a whole, and they compete overseas. When the schemes are combined together, many companies will benefit. No one scheme can work alone. If you integrate them, they will give a greater benefit.
We also have schemes where we try to develop our promising local enterprises to go overseas – that is under the Global Company Partnership. We handhold them to look at where are the opportunities. Some individual companies can be identified as \"Star Players\" and they can grow their footprints and networks overseas, market their products and services overseas. This is where IE Singapore will customise some of their approaches and help them to go overseas.
Under the second thrust – productivity, innovation and capability upgrading, we will look at the cost component. How can it drive productivity improvements within the company? Re-look at their business model, operating model, and make sure that the cost they are investing within the company will give the returns that they need, and to make sure that the money works for them.
Under the second thrust of this SME review, we enhance support for SMEs in productivity, innovation and capability upgrading. To advance beyond that, the Government will continue to support companies in capability upgrading. Last year, more than 560 companies benefited from capability upgrading projects supported by SPRING and IDA. More SMEs can now tap on the PIC bonus and vouchers. For micro-enterprises, the PIC vouchers will be absolutely suitable and relevant. These are smaller scale in terms of the amount, $5,000. On top of that, with the PIC bonus, they receive a return to their investment in assets and equipment that help them in productivity.
Very importantly, within the cost component of the enterprise will be manpower and talent. Many Members have spoken about this. Right now, with the labour crunch, both at the mid- to lower levels, how do SMEs find these talents? We are especially concerned about the managerial and supervisory levels. We have suggested that we can continue the education of our SME
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workers to provide a pipeline for our SMEs. So SMEs can continue to upgrade their current SME workers through re-skilling and upgrading their knowledge.
To enhance the human capital of SMEs, SPRING will also offer a suite of assistance to help SMEs groom their business leaders. For example, the Advanced Management Programme co-funds courses for SME CEOs through executive MBAs and executive development courses. This is where the bosses go back to school to learn strategic planning and run their business more efficiently.
To strengthen SMEs' middle management, the Management Development Scholarship (MDS) co-funds scholarships for promising executives, currently in the SMEs, to pursue MBAs and part-time degrees. Support is also available from WDA and MOM for older workers to upgrade their skills.
Many Members were also interested in the SME Talent scheme. The SME Talent scheme is to make sure that there is a strong and deep collaboration between the ITEs and polytechnics with the SME sector. Many of the graduating students or students in these institutions may not have that kind of interest to join the SME sector. They may not feel that it gives them that kind of career path that is clear, and it does not give them stability. On the contrary, the SME sector would provide them that opportunity to be entrepreneurial, and also to broaden their experience in business.
I have had a dialogue with Polytechnic students. When I explained to them the SMEs' appeal, they did not see that side of the drawing power of the SMEs. For example, if the talents fit into the SMEs, many of these SMEs will consider these talents as rare talents in their companies, unlike in big companies where they draw in a group of them. Whatever opportunities to go overseas, set up subsidiaries, venture abroad, and do market assessment, the opportunities will be given to that talent. That exposes the person tremendously, broadens the horizons tremendously for the business sector, and to run the company. Not only will you perform certain functions that you have been trained in, or you have studied for and got your diploma or ITE certificate from, you are going to broaden it. If you are an Accounting graduate from a Polytechnic or you studied Accounting in ITE, you go into a SME, you are not only going to do finance or accounting, but you get the chance to do sales, marketing, operations, IT and all functions across the board.
When I talk to SME bosses, they are definitely most welcoming for these talents to experience all of it. It is always difficult for SMEs to draw talents and
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they want to retain them. So, we roll out this SME Talent scheme to fit as many of the talents as possible into the SME sector, to encourage our local graduates and talents to venture out with the SMEs, to be able to grow and broaden their horizons within that sector. That will strengthen our SME sector as a whole. That is where we try to target as many of the Polytechnic graduates as possible.
The SME Talent scheme will be made available for students in every single year at the ITE or Polytechnic. It is not just the graduating year, but it is also from the entry year, second year and third year. It depends on the courses and how keen they are. Allowances and training will all be paid for.
The Germans have the apprenticeship programme. All of us would know that there is a scholarship programme that is quite widely available in Singapore. The SME Talent scheme positions between the apprenticeship as well as the scholarship programme. It gives the assurance of a job; it pays for you even when you are studying; and at least you will have not just an internship, but traineeship during the holidays as you will be working in the SMEs.
Ms Low Yen Ling has mentioned about the golden years of workers; \"60\" becomes \"40\". We truly believe that. We want everyone to be actively ageing and contributing to the economy. There are many of the current schemes in this area as well. One of the schemes is the Business Advisory Programme. The Business Advisory Programme facilitates the process for the very experienced – maybe you are working in the MNC or in another function – but you want to make a mid-career switch. Through the Business Advisory Programme, we will match you with an SME for you to provide certain advisory roles in the SMEs, before you can be employed full time. If you can find the right chemistry and right company, and the company finds that you are the right and appropriate person, they can do the match up. Immediately, you will be employed permanently. The Business Advisory Programme is one programme that the mid-career switch individual or executive can consider.
Let me come to the question on productivity. Mrs Lina Chiam's question on plant and machinery: the PIC Bonus announced at Budget allows companies to receive up to $15,000 in cash over three years. That is on top of the tax deductions they already enjoy from productivity investments that qualify for PIC grants.
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I encourage SMEs to tap on other kinds of programmes as well. It is not just PIC Bonus. SMEs really have to relook at their business model and see what kinds of schemes that are suitable for them. They should not just look at one scheme or two.
The Wage Credit Scheme, for example, cannot be looked at in isolation. The Wage Credit Scheme should be looked at from the productivity angle as well. How productive can they be; have they hit certain indicators within the company before you want to talk about increasing pay and putting the Wage Credit in place. There is only three years that you can work on. So, there is a lot of urgency.
A combination of schemes gives you the most benefit. We want to encourage SMEs to tap on them. The Government can only do so much because the SMEs have the domain knowledge to know what they need. That is where we need the SMEs to come forward to look at and review their own model.
We also encourage SMEs to tap on the Collaborative Industry Projects (CIPs) programme which will help the sector as a whole to improve productivity through shared services and other innovative solutions. One of the initiatives under IDA's iSPRINT is to drive CIPs for infocomm technology solutions.
With iSPRINT funding, for example, Bugis Street Development implemented an integrated Point of Sale, Inventory Control and Cashless Payment system for 800 retail shops at Bugis Street. This allowed the retailers to decrease the cost of technology adoption due to economies of scale while improving productivity and customer service at the same time.
I believe the Member Mr Gerald Giam had mentioned about putting in IT as a whole. This is one programme where they can come together, have an industry focus. For a lot of the projects to be successful, you need a very proactive trade association to take the lead, or a cluster of companies coming together to drive it and say that \"we can do some of these things and centralise them\". We have experimented with centralised kitchens. There have also been centralised logistics services.
Many of the outsourcing services make these things possible. Collaborative efforts, where they all achieve economies of scale. This is extremely important for the micro enterprises, such as the heartland stores in the community. They can actually come together; perhaps some stores can come together and look at procurement; some stores come together and look at joint promotions. There
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are many of these activities that are possible. I will come in later to roll out the SME Centres that will help network and bring together some of these projects to make them possible; to work with the businesses and make these collaborations possible. Mdm Chairman, let me speak in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] The main thrust of the SME Review surrounds three numbers: \"2-3-8\". It seeks to achieve two outcomes, focus on three areas and involves eight strategies. This is very important because this can help the development of the SME sector. We hope to create a pro-business environment for the SMEs.
Mr Yee Jenn Jong and Mrs Lina Chiam asked about financing support for SMEs and start-ups. Currently, the financial institutions in Singapore have already catered substantially to the financing needs of our SMEs. Many financial institutions have dedicated SME lending units, and offer a variety of banking facilities customised for them. Based on the MAS' Annual SME Financing Survey 2012, as at June 2012, the financial institutions' stock of total outstanding SME loans was $64.5 billion, which is a very substantive sum. The financial institutions' extensive global networks enable them to support SMEs much better than by a Government-run SME bank. For example, if they were to set up a business in China, this private financial institution will be able to help them better. A Government-run SME bank can only offer financing in Singapore and cannot provide a wide network owned by private institutions.
In addition, SPRING works closely with 14 Participating Financial Institutions to provide financing support to such SMEs through the risk-sharing of loans made to SMEs. These programmes include the Loan Insurance Scheme (LIS) and LIS+ that provide loans for working capital and trade financing, the Local Enterprise Finance Scheme (LEFS) that provides loans for the purchase of equipment and assets as well as a Micro Loan Programme for micro-enterprises with 10 or fewer employees. Such Government financing support helps good SMEs, which may not have built up strong track record as yet, to pursue worthwhile but possibly higher risk projects.
For entrepreneurs and innovative start-ups, SPRING also provides financing through initiatives, such as the SPRING Start-up Enterprise Development Scheme (SPRING SEEDS), which is an equity-based co-financing scheme.
Mr Liang Eng Hwa, Mr Ong Teng Koon and Dr Chia Shi-Lu were concerned about how we can reach out to our SMEs. I will address this with the last two
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strategies under the SME Review. The strategies are represented by the acronym \"UP\", as it represents progress for our SMEs and Singapore.
We will upgrade our five Enterprise Development Centres at ASME, SMF, SCCCI, SMCCI and SICCI into the SME Centres. These one-stop SME Centres will allow better outreach, education and engagement of our SMEs, and will become the focal points for business networking and for all Government agencies to reach out with their SME assistance programmes.
We have received positive feedback on the satellite centre set up by ASME in North East CDC. We will, therefore, work through the various industry associations to set up more satellite SME Centres in areas with a high concentration of SMEs.
We have received feedback that some SMEs have found it difficult to understand the schemes available to them. SPRING has undertaken a streamlining exercise for their schemes to address the feedback. The various programmes which SPRING used to offer will be streamlined into one Capability Development Grant (CDG), which supports SMEs in productivity improvement and capability development. SPRING has also simplified and standardised its application forms to just two pages. In the past, it was 11 pages. At the same time, SPRING will be introducing a new online grant portal to reduce paperwork for businesses. The CDG will take effect from 1 April 2013. In brief, SMEs can now look forward to assistance in five easy-to-remember broad categories – toolkit, voucher, grant, tax incentive and loan.
SPRING will be providing more details on each of these recommendations. Based on our recommendations under the SME Review, our SMEs can do it, and the Government will seek to amplify their capabilities. This way, we can all head upwards towards a better future.
I would like to reply to Mr Teo Siong Seng's comment on PEP. PEP is a very important institution that helps to streamline the processes. Mr Teo has said that if the carrot was hung too high, then the little rabbit will not be able to grab it. I do not know who hang up the carrot. The carrot is usually planted on the ground. I can inform Mr Teo that we will not set the threshold too high. We will plant the carrot on the ground so that the rabbit can get it easily without jumping about.
(In English): We have also not forgotten our drive to create the greater culture to do start-ups and also to create that risk-taking culture within our
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young to step out of the comfort zone and to start up their own businesses and take ownership. It is important because as SMEs, in meeting the challenges in business, some may be successful, others may not be. We constantly need renewal of the business sector. New enterprises need to be injected and need to grow and we need new products as well.
Whenever there are entrepreneurship projects, we will do our best to support and, hopefully, there can be a spark of brilliance somewhere where the products and services become global. And we can produce global champions and regional champions in our business sector.
Mr Inderjit Singh and Mr Vikram Nair had asked how we can develop start-ups and the entrepreneurial spirit in our youth. Developing innovative start-ups will remain an important focus, even as a part of this economic restructuring. I have cited many of the helps that the start-ups can tap on. In Action Community for Entrepreneurship (ACE) – where I am chairman – we have grants that are given out. The grants used to have an age limit of 26 years and below. We have since opened up to benefit as many start-ups as possible, and it has no age limit. It does not have to be technologically focused. As long as you have a good idea, you are competitive and you have a differentiation, we will be there to give you the grants as best as we can, to as many start-ups as possible.
For entrepreneurship culture, it has to go beyond the grant. We have to build an eco-system and a conducive environment for people to want to start business. The business sector must be exciting enough and the consumer market in Singapore has to be exciting enough to be able to build businesses. We need passionate individuals. We need to inculcate that even when they are younger. This year, ACE has rolled out a programme where entrepreneurs adopt schools. The entrepreneurs can adopt their old schools and they get involved in entrepreneurship education within the school. We are piloting with a few schools and we have seen very good feedback from entrepreneurs who were involved. They actually go into the classes to teach about risk-taking and the students get attached to the entrepreneurs themselves.
For the start-ups that are already in place, one example is the Start-Up Launch Pad. We provide the facilities. One very famous location is Ayer Rajah Block 71. That has now become sort of a test-bedding centre for new products, in fact, for the start-ups, too. They are jointly initiated by JTC and MDA in 2011. Besides the tangible assistance from the space provided, Block 71 also provides intangible synergies by creating a vibrant start-up community for networking and collaboration. The networking and collaboration for the start-ups, to me, are the first and primarily most important. In business, it is about your network
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– who you know, what you know and where are the business opportunities. Mentorship is a focus. And also developing platforms where we link venture capitalists to the start-ups so that they can get their series A funding, they get a second series funding to be injected into their business, for new capital.
On cultivating young entrepreneurs, as I mentioned, we start them young. We go into the schools and also into the Universities as well. Universities and Polytechnics have incubators. These incubators encourage students to start their business and they incubate for a period of time and, hopefully, they graduate into the marketplace. Some of them during the incubation period already went into the marketplace to test demand for their products and services, and they can continue to refine and tweak the best they can. They have mentors to help them as they do trial and error.
But this is not a rosy picture. For any start-ups, the probability is that more than half may not succeed. That is one thing that we have to teach our young, which is that if they embark on the journey of entrepreneurship, it is about learning about failures and not always wealth and successes. They learn about failures, but come back stronger and more resilient; try again. And that is where we should be coming from and that is the best educational value of entrepreneurship.
Mr Lim Biow Chuan has asked MTI to review regulations on time-share products. The main legislation protecting consumers against errant timeshare companies today is the Consumer Protection (Fair Trading) Act, or CPFTA. Under the CPFTA, CASE may obtain injunction orders against errant traders for unfair practices, such as misleading claims and pressure selling, while consumers themselves may take civil action against them. Besides the CPFTA, the Police can also take action against fraudulent timeshare companies under the Penal Code.
I announced at MTI's COS last year that we will review the CPFTA. Since then, we have sought inputs from CASE and completed a study of overseas legislations in this industry to come up with a series of proposed amendments. These would include disallowing the collection of deposits during the cooling-off period, and requiring sellers to provide key information on the contract before the consumer signs it.
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Madam, the Government remains fully committed to support our SMEs in the restructuring. The transition will not be easy during this economic uncertainty. I continue to urge our companies to take advantage of the assistance that the Government has implemented and work together towards achieving quality growth. Enterprises of any types can come forward, look at the schemes and their business models, and continuously review what exactly is most suitable for them to be able to get stronger. While we encourage companies to be on the productivity movement, we can understand that some companies still face constraints and they feel that they need to take a much longer time. However, they have to take the first step. If they are willing to take the first step, the schemes will always be there to help them.
Mr Zaqy Mohamad mentioned about social enterprises. I want to assure him that social enterprises are included because they are treated as enterprises as a whole. As they are registered as an enterprise, they can still tap on the schemes. Social enterprise is one of the hardest organisations to run because it is an enterprise with a social cause. But, first and foremost, their business model must be viable and sustainable. If they are commercially viable, they will then be able to earn that kind of return to sustain themselves to meet their social mission, and that is very difficult. But we treat social enterprises as an enterprise itself, and they can continue to tap on the scheme as well.
Lastly, let me encourage companies to continue to look at the different schemes. I know the schemes out there are quite massive. But we hope, within this year itself, to roll out as many SME centres as we can. Currently, the plan is for about five SME Centres as a hub and satellite centres as spokes. These satellite centres will be within the community while the big SME Centre will be a one-stop shop that will be initiated and developed by the Trade Associations.
Some Members have asked for the centres to be situated or located within their constituencies. Ms Jessica Tan, Mr Sitoh Yih Pin and Assoc Prof Fatimah Lateef have mentioned that they would like some of the SME Centres to be located there. We will study it, and I think there is a possibility that an office or a satellite centre can be situated there. We will work with the Trade Associations to do that. I think it is important for the community, the business sector and the Government to all work together in these difficult times, in this transitioning process, as the economy restructures, and we will go through that every step of the way in this journey.
The Chairman:\tWe have a bit of time for clarification. Mr Yee Jenn Jong.
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Mr Yee Jenn Jong: Thank you, Madam. I would like to seek two clarifications from the Second Minister. First is that I do not think I got a reply to my query as to the update of how the clean energy industry is developing against the stated target of $1.7 billion in contribution to GDP and employment of 7,000 by 2015, which is just two years away.
The second clarification is that the Second Minister reiterated that the Government does not subsidise energy use. The Government has, however, found it necessary sometimes to support some industries. For example, in the high-speed broadband industry, it subsidies infrastructure which, in a way, is bringing down the cost to consumers. Germany may have scaled down the FIT support, but it had used FIT to jump start the solar industry to become the leader in the world today in this industry. So, I urge the Government to look beyond R&D support to have schemes to kick-start large-scale pilot use of renewable energy in the private sector and not just focus on R&D.
Mr S Iswaran : Madam, I thank the Member for his questions. The number in terms of the Clean Energy Programme or the clean technology that he sought is that $1.82 billion has been achieved versus the target of $1.7 billion. In terms of employment, we are also on track to achieve the targets that we have talked about.
On the Member's point on feed-in tariffs (FITs) and, in general, consumption subsidies, I am not sure how the analogy with high-speed infrastructure compares. But let me put it this way. First, on the Germans' experience, I think he used this phrase \"a leader in the space\". Actually, what the experience in Germany shows is that when they had FITs, yes, the adoption of solar technology in usage was widespread, but it did not succeed in bringing down the cost of solar panels in Germany, and neither did it enhance the productivity and the technology of German companies. What they ended up doing was that many of the panels that were brought in were coming from China, and so on. That is one of the reasons why they had a rethink on how they have to do this. Because when you have a certain amount of funds there, you have to ask yourself, where it is best deployed to achieve your clean energy objective.
I am not sure why the Member doubts the value of upstream investments, because that, in fact, will yield the most durable outcomes. If you invest correctly in the technology upfront, and you are able to bring it closer, if not too great parity, then it would naturally become a technology that would be adopted by industry and consumers alike, because the economic logic would
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be something quite compelling.
Mr Yeo Guat Kwang (Ang Mo Kio): Madam, last year, the Ministry took swift action to add lemon into the Consumer Protection (Fair Trading) Act, but I do not understand why this time round, when it comes to time-share, it took so long. What I mean is that for the time-share regulation, I hope that the Ministry could really expedite it because every delay means that there will be consumers falling victim and every case is one case too many.
Mr Teo Ser Luck:\tMadam, Mr Lim Biow Chuan, President of CASE, as well as Mr Yeo Guat Kwang have been advocating for amendment to the law on time-share. Public consultations on this amendment took place from January to March 2013 and within March, we are still doing consultation. But let me assure the Members that although we are currently studying the feedback to fine-tune the provisions, we will roll out the amended law by the second half of the year.
The Chairman:\tMs Jessica Tan, do you wish to withdraw your amendment?
Ms Jessica Tan Soon Neo: Madam, I thank Minister Lim Hng Kiang, Second Minister Iswaran, Senior Minister of State Lee Yi Shyan as well as Minister of State Teo Ser Luck for covering a wide range of areas that our Members have brought up, and addressing them. I was glad to see that there were strong strategies to continue to strengthen our economy and make sure that commitment and support are given to the SMEs. I was a little bit troubled that quite a few acronyms were used, from TAP, GCP, MRA to PACT. But I was glad to hear Minister of State Teo Ser Luck summarise it nicely in \"2-3-8\". Two outcomes, three thrusts and eight strategies. Thank you very much for that, although some people would have loved one more digit. With that, Madam, I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $696,050,700 for Head V ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $5,241,362,300 for Head V ordered to stand part of the Development Estimates. (proc text)]
The Chairman: Order. I propose to take the break now.
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[(proc text) Thereupon Mdm Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
Mdm Speaker: Order. I suspend the Sitting and will take the Chair again at 4.35 pm.
Sitting accordingly suspended
at 4.10 pm until 4.35 pm.
Sitting resumed at 4.35 pm
[Mdm Speaker in the Chair]
[(proc text) Debate\tin Committee of Supply resumed. (proc text)]
[Mdm Speaker in the Chair]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head M (Ministry of Finance) ","subTitle":null,"sectionType":"OS","content":"Mrs Josephine Teo: Mdm Chair, I beg to move, \"That the total sum to be allocated for Head M of the Estimates be reduced by $100\".
Madam, what efforts has MOF taken to strengthen private sector procurement and contract management? The public sector sets out the key procurement principles of fairness, a level playing field for all would-be suppliers, value for money to ensure effective and efficient use of public revenue and probity to minimise possibility of corruption. Hence, apart from ensuring sound procurement decision, public sector officers in procurement face an additional challenge – that of the requirement for transparency.
Effective procurement involves not only getting the best purchase price. All too often, focus is on purchase price which is sometimes only a fraction of total cost. It is also important that procurement focuses on managing total cost. To fully achieve effective and efficient use of public funds, there needs to be a more holistic approach to procurement and cost management.
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Deep understanding of cost drivers, having a good handle on what actual costs are and what causes them is important in driving and achieving some procurement decisions. Other considerations of leveraging technology to improve procurement, supply management operations and effective deployment of technologies within the supply strategy can achieve good value for an organisation.
Mustering supply chain management requires on-going study. I would like to ask what investments MOF is making in continual training to keep officers in charge of procurement up-to-date.
Providing quality citizen services is an important consideration for procurement decisions as well. There continues to be increased demand for better quality, faster and cheaper services. To achieve this and balancing the demand for the requirement of transparency is a challenge. As has been pointed out by the Auditor-General's Report on lapses found, rather than a lack of rules, public officers failing to follow existing procurement rules and principles have been the cause.
While driving the adherence to principles of procurement and ensuring prudent spending of public funds, what measures are in place to enable officers to make the most effective and not just safe decisions on the utilisation of public funds? With the recent lapses and the greater scrutiny on public sector procurement, how can we ensure that officers do not become so risk-averse that they just take the safe path in making decisions of procurement rather than the right decision? For example, just going for the lowest price bid, as any decision to select a higher cost solution would require justification and scrutiny.
Last year, Deputy Prime Minister Tharman mentioned that MOF is looking into having a career track for procurement officers. Can MOF give an update on the status of this and the decision on the matter? Madam, let me move to my second cut.
Madam, as we push for more inclusive growth, what is the proportion of the Government tenders awarded to SMEs in terms of value and number of contracts? Has this trend been increasing or decreasing over the years? What were the scope of tenders for products and services that lend themselves more suitable for SMEs to participate? What more can the Government do to provide opportunities for SMEs to participate in Government tenders? How much have
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specific measures – like targeted scope so that SMEs can bid for specific deals that match their expertise or smaller contract value, sourcing for innovative solutions and e-procurement practices – have helped to address market gaps in SMEs' access to public-sector procurement?
What measures have been taken to level the playing field for SMEs to participate in Government tenders? Are there procurement payment policies that take into account the payment policy for small businesses based on the value of the contract? Are there measures to encourage SMEs to learn and understand the rules of public procurement participation in Government tenders? Are there more targeted industry sector engagement and dialogues to help suitable companies understand better the scope of procurement? This increased understanding of scope and needs would encourage more participation and stronger competition for tenders.
The focus would also enable participation from a diverse and specialised supply base for companies. To encourage a level playing field, scope of the tenders should encourage focus on the core competencies of our companies. This will allow companies, especially SMEs, to be more competitive and focused on differentiating their bids.
This will also enable the Government to get the best skilled companies to provide product or service regardless of its size and influence. Has GeBIZ, the Government's online procurement portal, been effective in helping SMEs stay up-to-date on the request for quotations and tenders, and has it increased their participation in tenders?
What has been done to look across procurement by Government to access the areas where opportunities can be made available for greater SME participation? Madam, let me move to my third cut.
Mdm Chair, cost of living concerns have been expressed in this House and over the last week as we discussed the Budget. While our median total household incomes have risen in the last five years by 17%, lower end wages have been stagnant and re-rating has taken too long.
Low-wage workers form the bottom 20% of the Singaporean workforce and include casual and contract workers. Apart from being paid low wages, these
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workers usually suffer poor work and employment conditions. As we speak about a better Singapore and a more inclusive society, what measures are being taken to raise the real wages of low-wage workers in Singapore and to ensure that they have fair employment conditions and opportunities to upgrade their skills to enable them to have better job opportunities?
MOF announced last year the Government's full support for the Best Sourcing Initiative for cleaning, that is the Government will only procure from accredited companies for cleaning contracts. The Government is an important buyer of cleaning services and has an impact in setting the tone and influencing the wage level of workers in this sector, signalling that lowest cost does not always equate to value.
Can the Ministry provide an update on these efforts? How effective have these efforts been in raising the wages of low-wage workers in the cleaning sector? Are there other sectors that the Government is supporting for services it procures? Have these efforts contributed to the enhancement of industry standards and quality of service? How are improvements tracked? If there are improvements in standards and efficiencies, what measures are in place to ensure that increased returns enjoyed by contractors are also shared with their workers? What more can be done to re-rate the pay levels of low-wage workers as well as their employment conditions?
Mrs Lina Chiam: Mdm Chair, we suggest that Government offers trading and execution fee rebates and various allowances to kick-start growth of the local fund management industry. Creating back-office and documenting jobs is not a wise strategy over the long term. Take a look at some of the banks' back-office parks in Singapore. What is the proportion of locals? Let us create an eco-system for local driven asset management firms. These firms could have a more regional flavour, and unlike international funds, are less likely to relocate expatriates even for entry level jobs.
Singapore has been a financial centre for 20 years. We believe that the pool of local talent is sufficient to create a base load of talent requirements. We have received feedback that the key factor behind why the exchange volume is not growing is the huge difference in commissions with other financial centres.
In Singapore, trading fees amount to $60 nett in a two-way trade. This is a huge difference from our competitors in the US and Hong Kong, where the
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commission is a fraction of ours. This holds huge implication for small financial firms and investors. If we want to enhance our competitiveness in the global financial arena, reducing our commissions by at least 10 times may be necessary. Premium service brokers can continue to charge higher commissions if they can command the fee.
The Chairman: Mr Inderjit Singh is not here. Mr Ong Teng Koon.
Mr Ong Teng Koon: Mdm Chair, there has been feedback from business owners to suggest that disbursements of PIC benefits can be bureaucratic and slow moving. For example, a business owner cannot receive a claim if he presents an electronic receipt instead of a paper one, or that a business owner has to wait for over six months to receive a claim which might have helped to ease his cash flow.
Can the Ministry elaborate on plans to make disbursements from the PIC scheme more timely? Can the Ministry also elaborate on how it is reaching out to the business community to brief them and address their questions on the Wage Credit Scheme? Which agency will be administering this scheme?
Mr Gerald Giam Yean Song:\tMdm Chair, it is common for high-income earners to earn much more from their capital gains and other investments than from their wages and salaries. In the United States, where income inequality is almost as high as Singapore's, economist Joseph Stiglitz has pointed out that salaries and wages account for only about 9% of the income of the top 400 income earners; interest and dividends account for 16% and capital gains account for a sizeable 57% of their total income.
According to a reply from the Minister for Finance to my Parliamentary Question on 14 November 2012, capital gains do not need to be reported in Singapore since they are not taxable. This being the case, is there any official data on the total income of individuals in Singapore, including their salaries, wages, interest, dividends and capital gains from the sale of properties, shares and financial instruments? If not, how does the Government determine the total income of individuals in Singapore for the purpose of measuring the true income and
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wealth distribution among the population? In the absence of mandatory reporting of capital gains, could the Government explore ways to require simple but accurate ways to report and collect this data?
I think these are important matrices to measure. They could help policymakers plan more effective and progressive redistributive policies for future budgets. These can, in turn, help to improve the well-being of Singaporeans, while balancing the need for Singapore to remain an attractive destination to work and invest.
Mr Alex Yam (Chua Chu Kang): Mdm Chair, the hon Member, Mr Lee Kuan Yew once said and I quote, \"The past was not pre-ordained. Nor is the future. There are as many unexpected problems ahead as there were in the past.\" Madam, these words hold true even today. But more so because Singapore will be marking a significant milestone in 2015 as we celebrate the 50th anniversary of our nationhood. As we come to this milestone, it is perhaps important for us to recognise that we have come far as an economy, as a people and as a nation.
Our people have met unexpected hardships in the past with quiet courage and production, which has allowed our nation and people to thrive and prosper together. I therefore suggest that the Government consider a one-off cash incentive to be called the Singapore 50 Fund to recognise all generations of Singaporeans who have contributed to nation-building.
One way is for it to be introduced as a system, similar to the early SingTel share offer, which gives Singaporeans a stake in the nation's progress. Singaporeans should at the same time be given the option to donate the incentive back to a central pool to be called a Silver Resilience Fund to care for older Singaporeans who have contributed the most towards the early efforts of securing our nation's future.
Madam, indeed, the past was not pre-ordained, nor is our future. We share not only a common history, but shoulder together the responsibility for our common future.
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Mr Laurence Lien (Nominated Member): Mdm Chair, Singapore's giving has been on a slightly increasing trend as a percentage of GDP. I think we can do more to foster generosity through encouraging giving of all kinds. Here are three proposals for MOF.
One, tax deduction for a wider list of gifts-in-kind. Many companies have new products that they are willing to give away to charity. This is particularly since Singapore is home to many MNCs with export/import functions. Currently, the 250% tax deduction is only given for a very limited number of products. Why computers and not other products? MOF should consider applying the tax deduction to a wider range of donated goods. One way to prevent abuse on the valuation is to allow deductions only if the value is significant, and there is an intermediary to ensure an audited trail of calculation of the fair market value. An even more conservative approach to value the donated inventory is to take the lower of fair market value or the cost of the goods.
Two, MOF should allow single tax deduction for overseas giving through Singapore-registered charities.
MOF's stance is that allowing a tax deduction and lifting the 80:20 rule would mean more resources being channelled overseas, which could otherwise be used to strengthen charitable activities in Singapore and improve the well-being of Singaporeans. But this thinking is flawed, because:
(a) NVPC's Individual Giving Survey shows that donors who donate overseas are bigger givers in Singapore than those who donate locally only;
(b) Helping our neighbours will help Singapore improve our image and gain us friends and soft power. Direct people-to-people help can be more effective than Government aid in improving foreign relations. This benefits Singaporeans ultimately; and
(c) Singapore has benefited from external aid in our history and has a duty to help other countries.
Lastly, paying GST on donated goods is a bug-bear for many donors, leaving a bitter taste in their mouth. Can MOF exempt GST on donated goods, or at least set up a fund to reimburse charities for the GST payable?
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The Chairman: Mr Alvin Yeo, you have two cuts. Please take them together.
Mr Alvin Yeo (Chua Chu Kang): Thank you, Mdm Chair. My first cut is on charitable donations in kind. As Singapore's success leads to rising prosperity and a growing middle and upper class, it is vital that we do not leave anyone behind. We all bear responsibility to ensure that the destitute and the disabled and those unable to fend for themselves get the support that they need. To that end, we have to foster a culture of the more able helping the less able in society.
Nor is it sufficient to simply pay our taxes, whether it be income, property, vehicle taxes or GST, and leave it to the state to look after the needy. There will always be gaps in what the Government agencies can provide and always supplementary assistance that private individuals and organisations can offer. To that end, I would urge the Minister for Finance to enhance the conditions under which private entities and persons can make donations to worthy causes.
Currently, charitable donations in monetary form attract 2.5 times tax relief and it is indeed heartening to note that the amounts of donations are rising each year. But donations in kind, apart from a very limited category, as enumerated by Mr Laurence Lien, or in the form of services, do not attract any relief at all. This has led to some odd results.
In the high profile case brought by the National Kidney Foundation (NKF) against its former Chief Executive, a leading law firm was civic-minded enough to represent the NKF for free. But the way they had to do it was to render invoices for their legal work and then donate the fees received back to the NKF so as to obtain the proper tax reliefs.
In another incident, the same charitable organisation, the NKF, had a new dialysis centre built for them by a leading construction company who charged them the princely sum of $1. However, because their donation was in the form of materials and services in constructing the centre, it attracted no tax relief for the real cost of constructing the centre. So, we have two civic-minded organisations doing their part to help those in need but with very different outcomes in terms of receiving the Government's encouragement in the form of tax relief.
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Do we really want such different results when the charitable intention is present in both cases? Do we want to force private entities to go through circuitous means to obtain the tax relief that their good work merits? Would charities attract more donations if these could be rendered in kind or in the form of services and treated the same in terms of tax relief?
The last question is perhaps the most significant, and I believe the answer is yes. Like Mr Laurence Lien, I do believe that difficulties in valuation of such services can be addressed as issues of valuation are, in other aspects, the tax scope. I would, therefore, urge the Government to widen the net of donations which attract tax relief and better foster the spirit of giving.
Madam, social enterprise is a business that is not only focused on profit but also aims to benefit the needy, disadvantaged groups and achieve overall social change. It is a revenue-generating business, not a charity. This is the definition taken from the website of ComCare Enterprise Fund.
I believe social enterprises can play a larger role in the levelling up of different stratas of society. This is because, fundamentally, those who are disadvantaged prefer to work to support themselves rather than to rely purely on handouts. It is the spirit of self-reliance which we should encourage. Not only is it better for the individual's sense of personal dignity, it reinforces the culture of taking steps to help oneself, rather than to wallow in one's personal misery.
However, it should be recognised that those who start social enterprises are not all seasoned men or women of business. There are, it is true, successful entrepreneurs who are motivated to start such enterprises. However, there are also those who are not experienced in running start-ups but who take the plunge nonetheless out of a motivation to help others. At the same time, those who are employed by social enterprises may not be able to work at the same pace over the same output on account of personal disability. Or they may simply need more time and training to get up to the same productivity level as those employees without disability. All this means is that the first few years of the social enterprise are very challenging. This is true for any business, but particularly so for social enterprises, given the factors I have mentioned before.
There are many sources of funding available for social enterprises. Obtaining funding is not a critical problem at this point in time. These funds include the ComCare Enterprise Fund, the Golden Opportunities! Fund, the
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Enhanced Open Door Fund, catering to different segments and different social interests. Many of these provide seed funding up to a specified cap and for a fixed duration like two or three years.
The funding options are clearly a great help. However, in order to build a sustainable social enterprise, one which will not fail after a few years, it is important that it gets support after the initial years, to be able to carry on as a viable business. It would be helpful if they are able to enjoy concessionary rates of tax for a specified period of time, for example, five or 10 years, and subject to renewal upon review by the relevant authorities. This is akin to the Pioneer Tax status we give for strategic industries which we are trying to encourage. It may even be more helpful if they are allowed to carry forward losses sustained in the initial years to offset against future profits to reduce or even extinguish their tax liabilities. All this, of course, pre-supposes that these social enterprises generate enough profits to be able to be subject to tax.
In terms of the expenses they incur, as training is a key aspect of any business that employs those under disability or with other disadvantages, double deductions for skills training courses or special equipment required by those under disability should also be extended. If we consider that social enterprises are something that is worth building, let us give them all the help we can towards developing into a sustainable business which will help the disadvantaged play a fulfilling role in society.
Ms Tan Su Shan: Madam, we are an open economy with little control over external demand. Hence, our tightening policies are at risk of creating a downward spiral as they make us less competitive. If this causes GDP to slide, our productivity will slide too. At the same time, we are embarking on an ambitious fiscal spend, alongside a fast ageing population. This could take a toll on our fiscal health.
Hence, Madam, I have longer term concerns about our fiscal sustainability, and this can be summarised in seven short points.
One, ambitious spend on transport and public housing. In transport alone, the Government has committed to spending $60 billion by 2017. The building of more HDB flats also comes at a time when MOM has raised foreign worker levies for the fourth time. Will the continued hikes in levies result in higher infrastructural cost, or housing cost, which will ultimately be borne by
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Singaporeans?
Two, higher cost of labour. Will the higher cost of labour lead to a wage spiral? Will the tighter labour policies affect our expansion plans? Some economists have predicted that our tight labour policy could cost us 1.3% of growth this year. This slower growth would also affect our tax receipts.
Three, cost of higher inflation. As the cost of doing business rises, some of this is passed on to consumers. Hence, the Government has been giving handouts, subsidies and top-ups through welfare assistance schemes to meet this higher cost of living. But if the inflation we are creating becomes structural, how long more can we keep giving these handouts?
Four, property market declines, and likely COE declines, causing a drop in stamp duty receipts. Stamp duty receipts, as well as car vehicle taxes, contributed 0.7% of 2012's budget surplus. It is, hence, clear that property market declines, and likely COE declines, would affect our revenue base.
Five, hollowing out of industries. Our corporate and income tax receipts are also at risk from the restructuring efforts as many companies end up closing down or relocating. According to ASME, 30% of SMEs are thinking of relocating. ACRA statistics suggest that the ratio of new firms coming in versus the ratio of firms shutting down has been dropping. Again, what are MOF's projections regarding the net loss of income from this?
Six, ageing population. As our population ages, the need for more healthcare and social subsidies will also rise.
Seven, expansion of our university cohort by 60%, coupled with significant education subsidies, means our education budget would also increase dramatically.
Madam, my point is that we cannot take our nation's fiscal sustainability for granted. I call on MOF to address all these issues and continue to ensure that Singapore progresses on a sound financial footing. If we are unable to reach our productivity or growth targets, then we will need to adjust to slower growth and trade-offs, which will impact our fiscal sustainability even further.
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The Chairman: Mr Nicholas Fang is not here. Mr Zaqy Mohamad is also not here. Mr Baey Yam Keng.
Mr Baey Yam Keng (Tampines): Madam, on Chinese New Year's eve, an old lady was knocked down by a motorcyclist in Tampines. She passed away the following day. The family was naturally distraught and asked for an appeal-for-witnesses signboard to be put up. The Duty IO said that it would be done within 24 hours. Unfortunately, the contractor could not be contacted as he had already closed for Chinese New Year. In the end, the family had to wait a few days for the sign because the Traffic Police had outsourced the entire function. Not a single department in the Traffic Police had an extra sign which could be used.
A few months ago, at my CCC meeting, a RC member raised some issues about a lift upgrading project in the estate. HDB updated at the subsequent meeting that the contact of the contractor had been given to the RC member to follow up. He was expecting the RC member, who is a volunteer, to liaise with the contractor on that issue. These incidents, both happening within two months, made me wonder if we should study and pre-empt the downside of outsourcing.
The Government's decision to outsource certain functions was based on the assumption that the external agent would be able to provide a better service at a lower cost. Yes, saving taxpayers' money is important. However, there is an inherent conflict in such an arrangement. A company's motivation is profit maximisation. Cost reduction for some businesses simply means cutting corners. When complaints arise, the Government department involved loses public trust. Although errant contractors can be penalised and excluded from future contracts, this does not guarantee that the next contractor will do any better. Sometimes, the root cause or constraint of a problem is merely transferred from the Government to the private contractor.
Based on the Yellow Pages rule, the Government was not to dabble in activities of the private sector, so as to concentrate on its core services. Yes, I agree that the Traffic Police should focus on the investigation of the accident, but losing control over witness signboards has caused a delay in reaching out to potential eye witnesses. Would that not affect its core service too? By outsourcing the upgrading work to a contractor, it appears that HDB has also outsourced its accountability. I would expect the HDB to follow up on the
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complaint by the Residents' Committee member and deal with its contractors directly.
In the long run, farming out services to external agencies could also lead to a decline of competencies in the public sector. I would like to suggest that the Government rein in the enthusiasm of outsourcing and consider moving some functions back within the Government to regain control of our public service standards and restore accountability.
The Minister of State for Finance (Mrs Josephine Teo): Mdm Chair, I thank the hon Members for their cuts.
Their comments and suggestions filed can be organised around three themes: first, ensuring an effective and accountable Government; second, enabling quality growth; and third, supporting an inclusive society. Before I proceed to address each of these themes, let me first give an update on the Government's support for the best sourcing initiative, which Ms Jessica Tan and some others have spoken about.
Madam, as part of our efforts to raise the wages of low-wage workers, the National Environment Agency (NEA), the NTUC and the Government agencies that procure cleaning services, have been working closely with cleaning companies to adopt the Progressive Wage Model. MOE, which is the single largest buyer of cleaning services within the Government, has taken the lead. All of its contractors are now on board.
Effectively, this means about half of all cleaners employed under Government contracts, or over 3,500 cleaners, now receive basic wages of at least $1,000 per month. Further, with training, improved skills and bigger job scopes, the cleaners can earn more.
The Government and NTUC are working closely to reach out to the remaining cleaning contractors. With the support of the cleaning contractors, we expect that by the end of this year, the vast majority of cleaners on Government contracts will be earning progressive wages.
In addition, for all new contracts called from 1 April 2013, the Government will engage only cleaning companies accredited under the NEA's Enhanced Clean Mark Accreditation Scheme. Henceforth, local cleaners on Government contracts will be paid according to the Progressive Wage Model.
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As Government contracts cover just about 10% of the cleaning workforce, it is essential to get private sector service buyers to also come on board. MEWR will be announcing at its COS further steps to support this national effort.
For the security sector, starting from 1 April 2013, the Government will procure only from security agencies that are well graded by the Police. An important pillar of assessment is their grading of the HR practices, including their wage practices. The Government, working closely with the tripartite partners, will be further enhancing the security grading scheme as part of our efforts to uplift the wages and working conditions of security officers. MOM will be announcing details of these efforts at its Committee of Supply (COS).
Madam, Ms Jessica Tan asked about efforts being undertaken to strengthen Government procurement, which is an important part of ensuring an effective and accountable Government. Our procurement system is fundamentally sound. Nevertheless, we have taken significant steps to strengthen its governance. This includes reviewing procurement rules and procedures, training and equipping public officers adequately to perform their roles, as well as ensuring regular audits to provide an independent check.
Last year, we tightened our rules on the handling of single bids to ensure they provide value for money and also extended the minimum opening period for submission of quotations to allow more time to potential vendors to respond. We are mindful not to make the rules overly cumbersome as it could end up being a deterrent to businesses. As Ms Tan has rightly suggested, good procurement officers do not merely follow rules and procedures, but add value by finding the most effective solutions.
There are over 2,000 officers across the Public Service today who perform procurement roles as part of their job responsibilities. However, not all agencies have dedicated procurement teams. In some agencies, procurement could be decentralised to many different officers for whom procurement is a secondary role. It is also likely viewed as an administrative support function, rather than as a profession. As a result, there are uneven standards of procurement capabilities across the Public Service.
This is not satisfactory. MOF is therefore working with PSD to develop a Procurement Specialist Track, with professional development opportunities and proper career pathways. The Procurement Specialist Track will help professionalise the practice of procurement by giving officers greater recognition and more opportunities to develop deep skills and knowledge.
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More importantly, it will help procurement officers to accumulate experience and be discerning when evaluating bids.
MOF is working with various agencies to identify opportunities to cluster their procurement functions, where feasible, so that capabilities are more centralised and there are more career options for procurement officers.
In tandem with these efforts, we have also put in place additional measures to reinforce the accountability and responsibility of supervisors. Complaints about procurement practices are brought to the attention of the Permanent Secretary or CEO in-charge and investigated. MOF also shares audit findings on procurement lapses and common pitfalls with public sector Directors of Finance and at various management forums. To help officers who are responsible for approving procurements, MOF has developed checklists to guide them on what to look out for before giving approval.
Madam, our system handles over 80,000 procurements each year and the vast majority of these are processed by our officers in accordance with well-established guidelines. However, even with the best of efforts, there will be instances of lapses or misconduct. Therefore, there is no substitute for robust audit and enforcement, along with the willingness to acknowledge problems and correct them. We are confident that our efforts will raise standards further.
Mr Baey raised concerns about the accountability of agencies when outsourcing. Outsourcing allows the Government agencies to tap on the private sector if the latter is better placed to perform those functions or deliver the services. It is not always a matter of reducing costs. Often, outsourcing can lead to more innovative or efficient solutions that benefit the public.
For instance, one outsourced contractor that provides services to clear storm-damaged trees from roads was able to reduce their response time by up to 60%, to within 30 minutes. As an added bonus, two workers are now able to do this job, compared to a team of five to eight persons previously.
I would like to assure Mr Baey that whether a Government agency outsources a particular function or performs it in-house, it is expected to maintain high service standards and be fully accountable for its delivery. As a buyer of services, agencies are expected to spell out clearly the required service level standards in their tender specifications and clarify with vendors if there are ambiguities.
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Contract management after tender award is equally important, and should be done on an on-going basis to ensure that the project remains on schedule and the agreed service standards can be met. Penalising contractors and excluding them from future contracts is only a last resort.
There is, of course, room for improvement and it need not involve moving functions back in-house. If the Government were to take back all the functions that it has outsourced, we will have a significantly larger Public Service and reduced business opportunities for the private sector.
A better approach is to ensure that suppliers of services to Government meet the desired standards, including their adoption of the Progressive Wage Model, and to train the public officers to manage outsourced contracts better. We will also remind agencies that whilst the functions can be outsourced, accountability for service cannot.
That said, Mr Baey can be assured that the Public Service does not hesitate to retain various functions within its fold when there are good reasons to do so. For example, the Centre for Public Project Management (CP2M) was set up in January 2011 to retain and strengthen public sector expertise to advise the Government on infrastructure projects. This includes rendering project management services to agencies which may need extra help when dealing with large and complex projects.
Madam, several Members spoke about measures to facilitate businesses, in particular SMEs, which play an important part in our pursuit of quality growth. Ms Jessica Tan asked about the proportion and trend of Government tenders awarded to SMEs.
All suppliers are given equal opportunities to be awarded Government contracts. In 2012, for larger value purchases for which tenders rather than quotations are required, about 20% were awarded to small companies with less than $250,000 of net tangible assets. Over 60% of tenders valued up to $100,000 were awarded to such companies. This figure has been quite stable over the last five years. An even larger percentage of purchases of lower value are awarded to small companies.
As a signatory to the WTO Agreement on Government Procurement and a number of Free Trade Agreements, Singapore is obliged to be non-discriminatory in our Government procurement practices. For procurement that is covered by these agreements, we cannot discriminate in favour of local
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companies.
Hence, to help local SMEs, our focus has been, and continues to be, on strengthening their capabilities and competitiveness. For instance, a significant portion of Budget 2013 goes towards helping our local enterprises to improve their competitiveness and productivity.
To facilitate businesses' access to public sector procurement, the Government publishes upcoming procurement opportunities. For instance, a listing of indicative Government procurement opportunities is published on GeBIZ, which is the Government's electronic procurement portal, and this informs suppliers of potential tenders valued $200,000 or above for the financial year ahead. It gives them a heads-up so that they can plan whether or not to bid for it.
The Building and Construction Authority (BCA) briefs the construction industry annually on upcoming public sector construction projects. This enables the contractors, project managers and consultants to prepare themselves to bid for Government projects. Similarly, IDA organises the Infocomm Technology (ICT) Industry Briefings every year to highlight potential upcoming Government ICT projects. Businesses can also sign up for free alerts on Government procurement opportunities via GeBIZ or subscribe to email notifications via SPRING's Enterprise One portal.
To help businesses better understand Government procurement processes and policies, we are currently developing a supplier guide, which will also include useful tips for businesses participating in Government procurement.
Madam, I thank Mr Ong Teng Koon for his comments about the PIC scheme and how it needs to better help our businesses. I would like to share with him that based on the tax returns filed to-date for Year of Assessment 2012, 56% of active SMEs with at least one employee, or about 33,000 companies, have taken up the PIC scheme. So, it is 56% of all active SMEs with at least one employee. The take-up rate is quite encouraging although there is more to be done.
Last year, in response to industry feedback, we enhanced the PIC Scheme, taking into consideration the needs of small businesses. For example, we increased the PIC cash payout rate from 30% to 60% and removed the requirement for in-house training programmes to be certified by WDA or ITE, if
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they cost less than $10,000 per year.
This year, to help SMEs further, we introduced the PIC Bonus and made it easier for businesses to enjoy PIC benefits for IT and automation equipment. We also extended the list of items that qualify for PIC, to include Intellectual Property in-licensing.
Some businesses may still have the impression that it is difficult to make PIC claims. In fact, the process is fairly straightforward − the claims are made as part of the annual tax filing process which all businesses would have to carry out every year. But I agree with Mr Ong that it is important to make timely disbursements from the PIC.
Under the PIC Scheme, businesses can receive the benefits in the form of tax deductions, or convert this into a cash payout. The vast majority of PIC claimants so far have chosen to receive it in the form of a tax deduction. In other words, it is automatically offset against their taxes. This process is straightforward.
Businesses can also apply to IRAS to receive their benefits in cash. This can be done quarterly, or when they file their annual tax returns. IRAS is committed to making all payouts within three months. To date, 80% of the applications for quarterly cash payout are actually paid out within two months.
Similarly, for the PIC Bonus that was announced on Budget Day, businesses can automatically get their PIC Bonus when they submit their annual tax return or together with their PIC cash payout every quarter.
Over the past week, several Members have spoken about the importance of adequately communicating and explaining Government policies and programmes. I fully agree with them.
IRAS has been actively reaching out to businesses to increase their awareness of PIC through PIC seminars, dedicated hotline and email notifications. IRAS also runs PIC clinics that provide one-to-one consultation to help businesses, especially SMEs, claim PIC. To date, we have reached out to more than 850 businesses through the PIC clinics and more than 33,000 business representatives through the PIC seminars. In response to requests by the business community, we have also conducted some of these sessions in Mandarin.
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Although businesses have found these seminars useful, some remain unsure how they can benefit from the schemes. It will require more work from the businesses themselves, the trade associations, as well as the Government, to encourage more SMEs to come on board. The trade associations, in particular, can play an important multiplier role. We want to work with them to reach out to as many businesses as possible. Ultimately, however, businesses are in the best position to assess how best they can make use of the various schemes to transform their companies. Indeed, they have the responsibility to do so.
Mr Ong Teng Koon has also asked about outreach efforts on the Wage Credit Scheme (WCS). We will apply the lessons learnt from the outreach experience that we have had with the PIC Scheme as we promote and implement the WCS.
Since the Budget announcement, MOF has reached out to the business community to raise awareness of the WCS and help them understand how they can benefit from it. We have engaged over 150 representatives from the trade associations and Chambers, and over 1,000 representatives from businesses. In the upcoming weeks, we will meet with other stakeholders, including members of the Singapore National Employers Federation, ASME and NTUC.
IRAS will be administering the WCS with the help of the CPF Board. It will tap on its existing outreach platforms to further engage businesses. Over the next few weeks, more details of the scheme will be published on IRAS' website, including detailed answers to the questions that many have asked. A dedicated hotline and email for enquiries have also been set up. And there will be a WCS calculator for businesses to compute their payouts.
IRAS will ensure that businesses receive their WCS payments as quickly as possible. By the end of March 2014, businesses will receive their payments for wage increases given in 2013 via cheque or their GIRO account. To make it easier for businesses to benefit, the payment will be automatic and no application will be required.
Madam, please allow me to make some comments in Mandarin about the WCS.
(In Mandarin): [Please refer to Vernacular Speech.] When we were implementing the PIC Scheme, we realised that it would take some time before the businesses could understand and benefit from it. We will apply the lessons
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learnt from the outreach experience that we have had with the PIC Scheme lessons as we promote and implement the WCS.
Since the Budget announcement, MOF has reached out to the business community to raise awareness of the WCS, and help them understand how they can benefit from it. We have engaged over 150 representatives from Trade Associations and Chambers, and over 1,000 representatives from businesses. In the upcoming weeks, we will meet with other stakeholders, including members of the Singapore National Employers Federation, ASME and NTUC.
IRAS will be administering the WCS. It will tap on its existing outreach platforms to further engage businesses and explain to them the details of the WCS. Over the next few weeks, MOF and IRAS will be working together to publish more details of the scheme on our website. The public can go to the IRAS website to obtain more details, including answers to the questions that many have asked, and there will be a WCS calculator for businesses to compute their payouts. We have also set up a dedicated hotline and email for enquiries so that businesses can easily obtain the information they need. IRAS will also include information on the WCS in its outreach programme.
(In English): Madam, I will continue in English. Mrs Lina Chiam had a suggestion to use tax rebates to help grow the asset management industry. I would just share that Singapore has a vibrant asset management industry with a diverse range of players. This includes large and small fund managers of both traditional and alternative funds.
Over the past five years, the total assets managed by Singapore-based asset managers have grown at an average rate of 11% per annum to reach S$1.34 trillion at end-2011. This is higher than our average GDP growth rate over the same period.
Singapore has introduced several incentives, such as grants and concessionary tax rates, to promote the asset management industry. For example, we provide grants for the training of fund managers and offer tax exemption on income derived by fund vehicles managed or advised out of Singapore. They achieve a similar effect as introducing tax rebates and, because they have worked well, we will continue to use them as a way of promoting the industry.
Mrs Chiam had a question on commissions. In fact, MAS is best placed to address this, but I would just share very briefly that the commissions of stock
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brokerages were liberalised. In other words, they are not set by the Government or the Stock Exchange − this was done more than a decade ago. So, the market is competitive and the commissions are lower than before. And if the commissions are still too high, regional and global competition will force them down.
Mrs Chiam also asked about whether Singaporeans are able to take up the opportunities that the thriving asset management industry is offering. The Government encourages the employment of Singaporeans through non-tax tools, such as economic grants and manpower development programmes. For example, last year, MAS announced that it would introduce new schemes to boost the Singaporean leadership and talent pipeline in the financial sector. These schemes are aimed at increasing opportunities for Singaporean finance professionals to be groomed through structured leadership programmes and to gain international exposure which is critical to be successful in this sector. MAS will also provide scholarships to Singaporeans under the Financial Scholarship Programme so as to build our own pool of specialist talent and help them go further. Concurrently, there are training programmes, such as those offered by the Institute of Banking and Finance based on the Financial Industry Competency Standards, which focus on raising the overall competency and enabling the career mobility of Singaporeans at all levels. So, I would like to assure Mrs Chiam that these measures are very much a priority for the MAS.
Madam, Mr Alvin Yeo and Mr Laurence Lien have both raised questions relating to how we shape a more inclusive society, an important facet of which is the culture of giving. I agree with their basic approach of wanting to foster a culture of having the more able help the less fortunate in our society. Our incentives for philanthropy have, in fact, been significantly enhanced. There are also many more examples that show Singaporeans' generosity in supporting charitable causes. Many donors give anonymously, whether or not they receive a benefit in return. Nonetheless, they appreciate that the Government recognises their generosity through various measures, such as the 250% tax deduction introduced in 2009.
We have also introduced matching grants for donations to support the Institutes of Higher Learning through the Singapore Universities Trust (SUT) and the long-term care sector through the Community Silver Trust (CST). In this year's Budget, we announced further support for the arts and culture sector by matching private donations through the new Cultural Donation Matching Fund.
Both the tax deduction scheme and matching grants have been well received. For example, the Government matched donations of over $200 million
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with disbursements from the SUT and the CST in 2010 and 2011. Aided by favourable economic conditions, the total amount of tax-deductible donations to local Institutions of a Public Character (IPCs) rose from $896 million in 2011 to a record $1.1 billion in 2012. The 250% tax deduction scheme was extended in 2011 for another five years, to 2015. MOF intends to review the scheme again before it expires.
As Mr Lien has noted, certain gifts-in-kind already qualify for tax deduction. These are shares, computers, land, buildings and works of art. About $3 million in computer donations and $18 million in arts and artefacts received tax deductions from 2005 to 2011.
We agree that there is scope to expand the qualifying list of in-kind donations, including services, to support more of such giving. Given the very wide range of possible gifts, we will have to find an appropriate and not overly cumbersome way for the valuation of gifts. This is not to make things difficult or circuitous, as Mr Alvin Yeo described it. This is not to make it circuitous for the potential donors but to ensure a sense of fairness and equitability. MOF and MCCY will study how it is done in other countries and will also be happy to work with the National Volunteer and Philanthropy Centre and other community partners to develop a sensible way to value non-standard gifts. Mr Lien suggested fair market value as well as at cost. These are certainly ways in which we can value the gifts, but we also have to look at all the non-standard gifts in totality and find a sensible way to handle all of them.
An increasing number of Singaporeans donate to overseas causes. Singapore-based charities have also been involved in overseas philanthropic work. These are by themselves worthy initiatives. Madam, charities are allowed to raise funds publicly in support of overseas disaster relief. In 2007, we also relaxed the 80:20 rule with respect to the use of private donations for other overseas work.
We have explained previously why we would prefer not to further relax the 80:20 rule and grant tax deductions with respect to donations for overseas causes made to Singapore-registered charities. Doing so would mean more resources, especially foregone tax revenues, being channelled overseas. We have to consider this carefully, especially when such resources could otherwise have been used to meet the needs of the local charitable sector, which is still developing. Nonetheless, we will study how we can encourage the local IPCs
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who are already doing charity work in the region.
Mr Alvin Yeo also suggested granting more incentives to social enterprises, which are businesses set up to advance social causes. Social enterprises play an important role in empowering the disadvantaged and building an inclusive community. During the Budget debates, Miss Penny Low cited two successful examples overseas – Zipcars and Airbnb – which have done well for themselves while addressing a social need.
What makes some social enterprises more effective, compared to the Government or charities, in meeting certain social needs? For one thing, they are better able to harness the creativity and entrepreneurial skills of the private sector. Second, through building viable business models that are responsive to changing market needs, social enterprises can provide meaningful and sustainable ways of supporting their clients.
The Government's support must, therefore, help to bring forth these qualities rather than blunt them. Existing grants and incentives available to start-ups and SMEs are applicable to social enterprises as well. These include the three-year tax exemption for start-up companies. As is the case for all businesses, losses can already be carried forward indefinitely to offset future taxable income. Social enterprises will also benefit from the Productivity and Innovation Credit, as well as the Wage Credit Scheme, announced in this year's Budget.
These help alone are insufficient as, unlike businesses with financial bottom-lines, a social enterprise also has a social bottom-line. Getting both right is often very challenging. That is why we extend grant-support and, more importantly, help to nurture them through capability-building initiatives. One example of this is the Social Enterprise Capability Development Programme, which provides 80% co-funding for social enterprises to attend management courses. MSF is also exploring a Social Enterprise Mentorship Programme with corporations and chambers of commerce so that social enterprises can pick up relevant business skills.
Besides benefiting from the PIC, social enterprises that train or employ the less advantaged can also tap on the ComCare Enterprise Fund (CEF) provided by the MSF to fund their start-up and expansion costs. Since its inception, the CEF has committed $11 million to support more than 90 projects, such as Dignity Kitchen and Bizlink Centre.
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More recently, MSF launched the inaugural President's Challenge Social Enterprise Award in 2012 to recognise outstanding social enterprises. MSF also partnered MediaCorp in its programme called \"Social Inc\" which is currently being aired. All of these initiatives enhance the branding and public awareness of our social enterprises.
Of course, beyond Government, social enterprises have the strong support of community partners. For instance, Tote Board provides funding and incubational support to social enterprises through the Social Enterprise Hub (SE Hub), which it established in 2011. One of SE Hub's investments is the chain of \"Laksania\" cafes, which trains and employs persons with disabilities.
These types of support are more significant than additional tax privileges. This is because most of our social enterprises do not have much taxable profits. In fact, in the US where the social enterprise landscape is vibrant and dynamic, social enterprises, too, do not benefit from special tax incentives. Their success lies in having a strong and supportive eco-system, which is also how we should grow local social enterprises to be part and parcel of the inclusive society in Singapore.
Let me now move to Mrs Chiam's suggestions on helping the lower income groups, which has always been a priority for the Government. Many of our social policies are means-tested and tilted in their favour. This has the broad support of Members as we saw during the Budget debate.
Our progressive system of tax and benefits is designed very much to support the lower income. In total, over their lifetime, a young low-income couple with two children can expect to receive more than $600,000 in benefits in real terms.
But redistribution in itself is not enough. What matters greatly is how we redistribute, not only how much. This is, indeed, the reason we put so much emphasis on sustaining mobility and raising the prospects of success for lower income families. This year, we strengthened interventions early in a child's life, by enhancing our provision of quality and affordable pre-schooling, and extending learning support in primary schools and beyond.
Madam, Mr Alex Yam suggested that the Government considers a Singapore 50 Fund to recognise Singaporeans' contributions to nation-building. Twenty fifteen will, indeed, be an important milestone for Singapore as we celebrate our Golden Jubilee year. It will provide us the opportunity to reflect on
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how Singapore has progressed over the years, and also look ahead to the future as one people. To celebrate this important year, we are planning programmes and activities that will involve all Singaporeans.
MCCY will share more details on how the community can play a part in the 2015 celebrations in their COS. We welcome all ideas on how to celebrate this occasion, such as the idea raised by Mr Alex Yam.
Madam, I will now address some of the questions raised by Ms Tan Su Shan. Ms Tan asked if the tightened foreign worker policies would lead to higher Government development costs for public infrastructure.
Construction costs vary greatly from project to project. Material and equipment costs tend to make up the largest component, as much as 70%, and these costs can fluctuate quite significantly, depending on global demand and supply. This explains why estimates have to be revised from time to time and why any adjustments may not be due to manpower alone.
If there is no reduction in manpower usage in these projects, construction costs will, indeed, increase a little as a result of the tightening measures. This is why our approach has to be to provide every support to those firms which make an effort to raise construction productivity and reduce manpower usage.
The public sector will also take the lead by setting higher standards with respect to labour-saving designs and more efficient construction methods. These include standardised layouts and greater use of pre-cast materials, without sacrificing quality design. We will focus sharply on improving productivity to contain cost increases in public projects.
The Government has also set up systems such as the Gateway Process and Value Management workshops to strengthen the rigour of the approval process for large development projects. These initiatives will become even more important during this period when we aim to transit to a higher level of construction productivity.
Ms Tan also raised the question of fiscal sustainability, as social spending rises with the ageing population, while revenues from some sources may weaken as the economy restructures. Several Members raised similar concerns during the Budget debate – Dr Lily Neo, Mr Ong Teng Koon and Mr Edwin Tong. These concerns point to the need to continue our long-standing practice of
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prudent fiscal planning.
Let me outline some of the ways in which we do that. First, we must ensure that we spend wisely. As the Deputy Prime Minister said during the Budget round-up speech, \"It is not just about spending more, it is about spending better.\" We have to use taxpayers' monies carefully, to make sure our expenditure gets the best value, and our programmes are both effective and efficient. This is why, despite keeping social spending relatively low, our social outcomes are not inferior to many countries by most international reckonings.
For instance, our spending per capita on primary school education is about $7,000, which is lower than in many advanced countries like the US which spends about $9,400. Similarly, our spending per capita on secondary school education is also lower than in the US. Yet, most international assessments place our school system as amongst the best, internationally, and well above that of the US, based on outcomes for students of all abilities.
Second, while providing broad-based support to give all Singaporeans the chance to achieve their aspirations, social spending is directed at Singaporeans who need the most help. For instance, the Workfare Income Supplement (WIS) scheme is targeted at older low-wage workers, to encourage them to stay in employment. And in healthcare, we aim to support both lower and middle-income Singaporeans.
Third, we have to ensure that we have a resilient revenue structure. The changes we made over the last five years, to enhance revenues through changes to the Net Investment Returns (NIR) framework and by raising the GST rate, have given us the fiscal space to make significant investments in infrastructure as well as to expand our social spending. As social spending increases, especially with our population getting significantly older over the next 10 to 15 years, we will, in time, have to consider how best to seek additional revenue sources.
In doing so, as emphasised by Deputy Prime Minister Tharman when he rounded up the Budget debate, we must maintain a tax regime that is fair and equitable, as well as be able to sustain our economic dynamism.
Turning now to Mr Gerald Giam's question, our approach to collecting information on the income and wealth of Singaporeans takes into account our tax policies, as well as the ease with which accurate capture is achievable. Employment income and property wealth are the basis of our tax regime.
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Further, they are relatively easy to capture compared to investment income, such as the sale of shares in private businesses, and wealth assets such as art and wine collections.
It would take a much more elaborate system to track all possible sources of income and wealth of Singaporeans. For example, in the US, the instructions for individuals filing a federal income tax return run to 108 pages – it is quite a tome. There are other problems. For example\t, it would be difficult to verify the declared value of certain types of wealth such as properties overseas or art and wine collections.
Even if we can overcome these difficulties, we have to recognise the practical reality that income and wealth holdings can be migrated to other tax jurisdictions. This will also be easiest amongst those who are wealthy, much more so than amongst middle income Singaporeans.
To avoid paying high taxes in their home countries, sophisticated taxpayers will often engage in tax planning which is legal and permissible. In other words, as several other countries have found, a more elaborate tax system does not mean much more taxes collected from the very high-income and wealthy as they can park their income and wealth elsewhere. This is particularly so in the case of small countries.
Therefore, instead of focusing on how comprehensively the income and assets of the wealthy are taxed, we look at ensuring that they contribute a good share of the total taxes that we collect.
As was highlighted during the Budget debate, the bulk of taxes in Singapore is paid by higher income earners and the wealthy. At the individual level, the top 10% of the employed workforce contribute 90% of personal income tax collections. At the household level, and including GST and all other taxes, the top 20% of households accounted for slightly over 50% of all taxes paid, while the bottom 20% paid 7%.
At the same time, we have ensured that the bulk of benefits are received by the lower and middle income earners. Overall, we have a progressive tax and benefits system that is fair, effective and practical. And we have taken steps in this Budget to enhance this progressivity, such as through changes to Workfare,
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property tax and vehicle taxes, while maintaining a competitive tax regime.
In conclusion, Madam, let me once again thank all Members for their comments and suggestions. To sum up, ensuring an effective and accountable Government, enabling quality growth, and supporting an inclusive society, remain very much at the core of MOF's efforts. There are no shortcuts to achieving these objectives. What is important is that we continue to take pragmatic steps to make this a better home for all Singaporeans.
The Chairman:\tAny clarifications? Yes, Mr Gerald Giam.
Mr Gerald Giam Yean Song: Madam, I thank the Minister of State for her response to my questions. I understand the challenge in collecting all this tax information. But the thrust of my question is asking MOF if it thinks it is important to plug this gap in information, regarding the total incomes of all Singaporeans, so that it can better plan its redistributive policy? Or does the Government think that it is not important to know such information?
Mrs Josephine Teo: Madam, there has to be a policy purpose to collecting information or the Government will be inundated with all kinds of information which we would then have to figure out what to do with them. It has to be driven by the policy purpose. The key point, I think, is that the Member's interest in wanting to know more is really to get a sense of whether the taxes are contributed fairly by different segments of our society. And so, in my earlier response, as I have highlighted, the way we look at it is to focus on whether the higher income groups are contributing a good share towards our tax collections. That is the way we look at it.
We should not over-estimate how much this additional information collection can yield us. It is quite instructive to look at the experience in other countries. First, as a small country, we have to be practical and we have to consider how easy it is for monies to flow elsewhere. You can have a very elaborate system to try and collect the information, but you cannot prevent the money from flowing to other tax jurisdictions. For example, Hong Kong is another small and open economy. It does not have a capital gains tax. That is one challenge.
The second challenge: even for large countries, to mitigate the effects on individuals and businesses, they often end up with very complicated tax codes, with all kinds of exemptions. A good case in point is the UK. In the UK, people sit on their assets without selling and realising the gains from their assets. To
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avoid paying inheritance tax, they give their assets to their spouses. After a whole tremendous amount of information collection, a lot of reporting and a lot of lawyers getting involved, what is the net effect of these efforts? What, in fact, is added to the coffers of the government? In fact, very little. Capital gains tax contributes to less than 1% of total revenues for the UK government. Inheritance tax – 0.6%. So, after all these efforts, not a lot to show for it.
The Chairman:\tMs Jessica Tan, do you wish to withdraw your amendment?
Ms Jessica Tan Soon Neo: Madam, I would like to thank Minister of State Mrs Josephine Teo for taking the time to patiently answer all our questions and covering the areas that address quality growth for an inclusive society. I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $673,716,700 for Head M ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $135,615,700 for Head M ordered to stand part of the Development Estimates. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head J (Ministry of Defence)","subTitle":null,"sectionType":"OS","content":"Dr Lim Wee Kiak: Mdm Chairperson, I beg to move, \"That the total sum to be allocated for Head J of the Estimates be reduced by $100\".
The global and regional security landscape is challenging. In tandem with international security rearrangements and realignments due to the rise of Asian powers and the slow decline of the Western powers preoccupied with domestic economic woes, there will be significant changes. The defence spending of the Western powers will be reduced under domestic pressure and the forward projection of forces and influences will similarly be reduced.
The rise of Asia on the economic front will provide Asian powers the necessary resources to expand defence expenditure and extend their influence in our region. This is evident by China's annual increment and steady modernisation of its military, and as she operationalises her aircraft carriers.
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The net effect is expanded and extended capabilities of China's strategic forces.
Against this interesting backdrop of shifting powers, what is MINDEF's assessment of our regional security environment and what are the key challenges ahead? Can MINDEF give an update on the regional security situation and the challenges confronting the region, as well as its efforts to manage these challenges?
The Sino-American relationship is complex and multi-faceted. US has also, in recent years, accelerated and reinforced American presence in the Asia-Pacific with forward deployment of forces in Australia and also in Singapore. Will this lead to a further increase in Chinese presence or a race for dominance in our region?
How will the leadership changes in the US and China and the evolving US-China relationship impact on the regional security situation?
A strong US military presence in the South China Sea will help in maintaining a balance. With a new leadership in China, President Xi may likely adopt a \"hard ball\" approach especially in respect of the Senkaku/Diaoyu Islands dispute. US is obliged to assist Japan in the event of hostility. China is also involved in territorial disputes with some ASEAN countries too. US involvement may be unavoidable in the case of the Philippines too.
Where are the likely security flash points, if any, in the near future? What is MINDEF's assessment on the Korean Peninsula, Middle East, Afghanistan and South China Sea? How will these developments affect Singapore?
What is the status of our bilateral defence relationships with our neighbours, the major powers, and our key regional partners? In particular, what are our defence relationships with our immediate neighbours – Malaysia and Indonesia?
Singapore is a small country with limited resources. Despite our long-term investment in defence, we remain vulnerable. We need to engage ASEAN as a grouping to strengthen our defenses collectively similar to other regional groupings. What are the challenges to regional defence arrangements? What is MINDEF's strategy on leveraging on regional defence arrangements to enhance Singapore security?
The ASEAN Defence Ministers' Meeting (ADMM)-Plus is the highest ministerial level mechanism of defence cooperation in the region. Can the
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Minister provide insights into the initiatives Singapore will propose to intensify cooperation through the ADMM-Plus process?
MINDEF has played an active role towards building the regional security architecture. MINDEF has hosted the Shangri-La Dialogue and also the Five Power Defence Arrangements. What plans are in place to make the Shangri-La Dialogue and the Five Power Defence Arrangements relevant for Singapore in the face of the 21st century security needs?
Over the last week, many Singaporeans were alarmed by what happened in Sabah. What are the lessons that we can learn from the current security situation in Sabah? Some people asked me whether our neighbour approached MINDEF for assistance. If they do approach us, will MINDEF assist?
The Chairman: Ms Ellen Lee, you have three cuts. Please take them together.
Ms Ellen Lee (Sembawang): Mdm Chair, Singapore's security and stability are inevitably dependent on our ties with our neighbours – Malaysia and Indonesia – given our close proximity. What is the state of our bilateral defence relationships with our immediate neighbours and has the recent intrusion of a small group of Filipino militants into Sabah affected these relationships in any way?
The major powers play an important role in the security and stability of our region. How has MINDEF continued to advance our defence relationships with major powers like the US and China?
Given North Korea's threats to continue with its nuclear tests, does MINDEF intend to change the direction of its efforts?
MINDEF previously announced that it had agreed to the US' request to deploy the Littoral Combat Ship to Singapore on a rotational basis. Can MINDEF provide an update on the deployment and the reactions of regional neighbouring countries, including China?
The support of key partners like Australia and France is critical to the SAF, given that the SAF conducts a significant portion of its training overseas. Can
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MINDEF provide an update on our defence ties with key partner countries, particularly those which we have training arrangements with?
Next, on regional security architecture. The ASEAN Defence Ministers' Meeting (ADMM)-Plus is an off-shoot of the ADMM. It is an important regional institution established in Hanoi in 2010 that brings together the defence establishments of the 10 ASEAN countries and eight other key regional players, namely, Australia, China, India, Japan, New Zealand, South Korea, Russia and the USA for dialogue and practical cooperation.
Have the Experts' Working Groups within the ADMM-Plus that were set up to look into humanitarian assistance and disaster relief, counter-terrorism, peace-keeping operations and medical aid expanded their scope of operations? If so, what are the other areas? Which countries were such assistance and relief provided to and how successful were they? Can MINDEF provide an update on the progress of the ADMM-Plus and the extent of MINDEF's contributions to these efforts and what more will MINDEF be doing in this aspect?
Mdm Chair, on international deployments, the SAF has contributed to international peace-keeping efforts by sending our troops to countries like Afghanistan. So far, our soldiers have done a wonderful job in the peace-keeping process, and worked alongside troops from other participating countries, learning and gaining valuable insights and experiences that would otherwise not be available to us as we live in a relatively combat-free region.
The media reported suicide bombings by the Taleban, which raised questions of the security of troops belonging to nations contributing to the reconstruction efforts in Afghanistan. Can MINDEF provide an update on our contributions to the reconstruction efforts in Afghanistan?
Our SAF has also been contributing to the anti-piracy efforts at the Gulf of Aden in order to ensure safe passage of ships and vessels passing through the Gulf. The online media have reported a decrease in piracy in the Gulf of Aden this year but this state of affairs is considered fragile. Can the Minister give an update on our contributions to the international counter-piracy efforts in the
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Gulf of Aden?
Dr Lim Wee Kiak: Mdm Chairperson, the Defence Budget takes up the largest proportion of Government spending annually. MINDEF also has the largest manpower resource as all young Singaporean men need to serve 22 to 24 months of national service and thereafter another 10 to 13 years as NSmen in their units. MINDEF also has one of the largest shares in land use for military facilities and training.
Given so much fiscal, human and land resources, can MINDEF provide an update on its approach to managing the Defence Budget, the human resources and the land resources? How does MINDEF ensure that it obtains the best value from our Defence spending and optimise use of the resources?
We already have one of the longest serving military service in the world of 22 to 24 months. I would like to reiterate my previous call for a review of the National Service to be reduced further to 18 to 20 months if possible, given the tough global competition our young Singaporean males face in education and in the job market. Can National Service be reduced to 18 to 20 months full-time NS and five high-key and two low-key ICTs?
In the recent Debate on Singapore's population, there were concerns on the adequacy of our limited resources catering to a growing population, especially for land. I would like to understand from MINDEF what is its review for the land use that MINDEF has currently? What are the planning considerations with regard to land requirements? How often are the plans reviewed? Do we have enough facilities and local training areas to meet SAF's training needs and operational requirements? Will we have to spend more to have training overseas? How will the Defence Budget be affected over time, as stated in the White Paper? What is the impact on the SAF of the recently released Land Use Plan? Will SAF's training and operational effectiveness be affected?
Ms Sylvia Lim: Madam, Transparency International (TI) has recently come up with a government defence anti-corruption index, where countries are ranked from A to F on corruption risk in defence. Singapore was rated D+, which TI defines as indicating a high risk of corruption. MINDEF has issued a response reiterating that it is prudent in managing its resources, has its own audit
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mechanisms and does not tolerate corruption.
While the Government's position is well known, it is still worth studying TI's observations about Singapore. Countries which fared better had higher scores for political oversight, financial corruption risk and integrity in defence procurement. In political oversight, TI even singles out our Defence Supply Committee as being \"provided with minimal information to guide decision-making\".
I think we should continue to review how much more information about MINDEF's spending can be shared with Parliamentarians and the general public to reduce corruption risk. Australia and Germany managed to be graded A, and the USA was graded B, even though arguably they have equally compelling security concerns about transparency. Can we be a bit more transparent? It is interesting that every now and then, international publications such as Jane's Defence Reviews make revelations about specific purchases of military hardware by the SAF and yet we seem to survive the disclosure.
Has the Government closed its mind on this issue, or is it studying how MINDEF can move towards more oversight to minimise corruption risk?
Dr Lim Wee Kiak: Mdm Chairperson, the pace of life in Singapore has intensified, and our NSmen face increasing pressures managing their work, family life and NS commitments. How have MINDEF and the SAF taken this into account, and helped NSmen to balance all their commitments?
We in Singapore actually have a marvellous tool for integration, that is, National Service (NS). Very few countries have such an option. It is at NS where young Singaporeans get to mix around with fellow Singaporeans regardless of race, language, religion and family background. Although there is a certain degree of that in our national education system, the integration during NS is more thorough and meaningful as we are all brought together for an important purpose – to defend our homeland.
I would suggest that we focus closely at the social dimension, at the composition of our units. We should look at ways to further the use of NS as an integration tool for our PRs and new citizens. I hope that MINDEF will make a review. The two years of NS is vital. Once the attitude and commitments are
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locked in, much of the hard work of integration would have been achieved.
It is disturbing to hear that a significant portion of PRs took advantage of our education system and avoided doing NS. This will be perceived as unfair to Singaporeans who have served NS. The situation has prompted Mr Hri Kumar to suggest imposing an NS Duty Tax on PRs and foreigners living in Singapore. What is MINDEF doing to address this particular issue?
Instead of imposing a special tax on PRs and foreigners, some have called for more actions by the Government to reward and recognise Singaporeans who have served. What are the current benefits and rewards accorded to our NSmen and their families for the sacrifices to defend the country? Can SAF review and enhance our recognition and rewards to all our NSmen and their families?
Many NSmen have voiced strong opinions as to why they are fighting if in the near future, foreigners make up a large portion of the resident population; they would not willingly lay down their lives to protect the people who have no allegiance to Singapore. NS resolve requires a strong emotional attachment to the cause, and I fear that this is being eroded by the current sentiment against the influx of foreigners. What can MINDEF do to rectify this?
Mr Zainudin Nordin (Bishan-Toa Payoh): Mdm Chair, we do not have to look far outside our country to know that we need a strong defence force to ensure the security of our country. Central to this defence is National Service (NS). Nearly every Singaporean man commits to the defence of our country through full-time NS and Reservist duties. The compulsory service spans over multiple years. This is a solemn duty that they carry out, sometimes at risk of personal injury. They do so to protect the lives of their loved ones, and their country. It is not a small sacrifice to ensure that we can all enjoy peace and stability.
Madam, we have heard calls and questions over the years from different quarters and individuals about the importance and the relevance of NS in this new world. Some had proposed changes to the objectives and role of NS. Others had even suggested that Singapore's national security policies are outdated.
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Though I had personally not served the NS, I am a strong believer in its vital importance and role. Even those who had not served NS could totally relate with the story and content of the movies \"Ah Boys to Men\" 1 and 2. Not to mention those who had served NS. It is something which all Singaporeans appreciate.
Madam, I respect and admire the citizens who have served this country with full commitment and are selfless in their mission. I hope we can do more to recognise and appreciate the NSmen and families of these NSmen.
With this in view, may I ask the Ministry what more can be done to recognise the contributions of our NSmen? Beyond monetary incentives, is there a way of recognising their contributions in a way that speaks more to the heart than to the wallet? What more is the Ministry doing to increase awareness and acceptance of NS, and the contributions of the NSmen to Singapore and Singaporeans?
Are there plans to review the NS policy in view of the constantly changing geo-political landscape of the region and the world?
Mr Pritam Singh (Aljunied): Mdm Chairperson, NS has remained the bedrock of nation-building since 1967. With the Government opening the door to large numbers of foreigners in a short space of time over the last decade, foreigners and new citizens have, to varying degrees, been accused of enjoying a security umbrella without the need to do NS. In addition, Government data released through parliamentary questioning revealed that about 25% of all who give up their citizenship each year from 2007 to 2011 were naturalised citizens. These perceptions and realities should prompt us to look at ways to increase the prospects of integration, at least between Singaporeans and new citizens, for nation-building purposes.
The unique role of NS as a social adhesive boasts a generational track record. So far, the Government's efforts have been tailored towards putting the contribution of NSmen into distinct relief by sharpening the difference between Singaporeans and foreigners through a monetary approach.
In 2010, the Government announced details of the NS Recognition Award which saw every Singaporean NSman getting up to either $9,000 or $10,500 deposited into their Post-Secondary Education and CPF accounts over 10 years.
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Even then, the limits of monetary incentives and monetary solutions were aptly put by a Straits Times reporter who addressed the issue succinctly, \"money cannot be the only language Singaporeans speak. People want to feel proud of being Singaporean.\"
Earlier in 2010, in response to proposals that new citizens should be made to serve some form of NS, the Defence Minister Dr Ng Eng Hen came out to say that NS was meant to serve a critical national need, not fulfil social goals. Three years later, with a perceptibly strong and negative undercurrent to the Government's population policies today, a reassessment of NS' utility as a tool of integration is necessary.
At its heart is the question of public buy-in towards the Government's immigration policies – buy-in which has so far remained very fitful. As MINDEF takes up the largest chunk of the country's Budget, it would be worthwhile looking at the role NS can play in the integration of new citizens, especially since it can equally be argued that integration is not just a social objective, but that it serves – especially with the passing of the Population White Paper – a critical national purpose too.
The pace of integration between citizens and new citizens is slow. Taken on its own, there is nothing wrong with this, since integration should not be hurried. It is also quite difficult to have an absolute fix on the depth and quality of integration so far, except the visceral outbursts against foreigners that many in this House have come to know of. But integration can be enhanced and deepened by common experiences and shared values – and in this regard, NS presents itself as a ready platform.
Today, Singaporean males have accepted that they can be called up for NS for up to 40 days a year for 10 years, and that is after they have completed their two-year full-time NS stint. The point about NS is that Singaporean males do not just serve two years of NS, they serve a 10-year NS training cycle when they enter the workforce as well.
While it may be operationally and bureaucratically inefficient to get new citizens to serve full-time NS for two years, it is not in the realm of imagination to conceive of new citizens up to the age of 30, serving a 10-year NS cycle till they are 40 years old, which is the current statutory age limit of service for many Singaporean NSmen.
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Recently, the SAF has raised some battalions specifically for the purposes of protection of key installation duties, with a specific vocation raised for this – the security trooper. These soldiers, amongst other duties, help patrol key installations. Without undermining the importance of such responsibilities, one can conceive the development of a training programme implemented to train new citizens for NS duties over a 10-year NS training cycle with the first three years set aside to train new citizen soldiers on the rules of engagement and specific vocational training relevant to the protection of key installations. When deployed, these new citizens can be envisaged to patrol jointly with Singaporean NSmen vocationally trained as security troopers who have completed their two-year cycle, so no distinction is made between new or old citizens as they perform their duties as Singaporeans.
Mdm Chairperson, this is just one example of how the 10-year NS training cycle can be employed to serve both national and social needs. In the event there is concern by some that this requirement would deter foreigners from taking up Singapore citizenship, then an adverse inference should necessarily be drawn against the applicant.
The experience of some European countries with immigration already portends the prospects of a nasty reaction to it. Before Singapore reaches this point, the Government should look towards strategies that can substantively deepen the quality of integration between new citizens and Singaporeans. In my view, NS is the national institution that is uniquely suited to play this role.
Mr Desmond Lee (Jurong): Madam, an NSman has many roles and responsibilities – juggling family, career, community and NS. NS obligations are significant and they carry some risks. 2LT Kamalasivam's courageous act of shielding his trainee during the recent grenade incident underscores this, and he deserves a significant commendation for that.
NS is the price of our freedom, and the burden that every male citizen carries. How we value and recognise the sacrifices that our citizens, fathers, brothers, sons, friends and colleagues make as NSmen is therefore important. Important because it has a direct impact on the conversation about citizenship, and about what we are defending here in Singapore.
On the tangible front, while more can be done, the Government has made many improvements over the years, such as the NSmen tax relief, NS
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Recognition Award, Budget bonuses for NSmen, and so on.
Although the Government has always framed its appreciation of NSmen in much wider terms, it is important to remind ourselves never to let it be framed or misportrayed in purely financial tangible terms. NS cannot be price-tagged.
That is not to say that Government should cut back on these benefits. These should continue but often the underlying message is important for different reasons. So, when NSmen receive SAFRA membership and vouchers in the mail, it is not only the material aspect that was appreciated, but the fact that the gesture was made. That also explains why, when the NS Recognition Award was announced, those who had completed their cycles of NS or whose awards were pro-rated, felt under-appreciated. Such awards must, therefore, be carefully designed, sensitively managed, otherwise they become counter-productive.
The Government's gestures of appreciation are important, but they are ultimately at the high level. It is equally, if not more important, that these translate into everyday experiences on the ground for NSmen. Small gestures can mean a lot and ground units play a big role in walking the talk. For instance, when recalling NSmen, the cardinal rule must be to make good use of training time. Continue to show more empathy and flexibility when NSmen apply for deferment or time-off for important work or family reasons. Quickly complete the pilot trial to allow NSmen to bring their work and phone devices into camp – set up work centres so that they can make good use of training down-time to catch up on their external work obligations. Make special effort to engage NSmen, address concerns that they raise, no matter how mundane, and proactively close the loop with them. Give NSmen meaningful roles to play when they are back in unit. These small gestures will be reciprocated by most NSmen in their attitudes to training.
One example of a unit that has walked the talk over the years is 160 Sqn, a Ground-Based Air Defence unit that has both active and NSmen, all known fondly as \"Gunners\". Their motto is \"Alert Always\". They were featured in PIONEER magazine last year. The unit actively cultivates and supports NS cohesion by inviting NSmen back for Squadron activities such as Change of Command Parades and Squadron anniversaries. NSmen are closely consulted and involved in operational and training matters.
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In turn, NSmen have over the decades reciprocated by performing well during all ICTs. The unit's NS Alumni, which has members across all generations, actively organises activities for the unit. And when the unit goes on live firing exercises abroad, NSmen and those who have already MR-ed will pay their own way to join the exercise to lend moral and even technical support, even though they are not recalled.
There are many other examples of such informal, supportive networks throughout the SAF, and I encourage MINDEF to identify, support and encourage these ground-up efforts.
In short, the messaging about the value of NS is critical, but so is the everyday experience of NSmen on the ground.
Mr Ong Teng Koon: Mdm Chair, during last year's COS, I asked how MINDEF was going to recognise the many contributions of our soldiers to national defence reaching an important milestone of 45 years.
National Service (NS) has come a long way since its introduction in 1967, from the initial hesitation of parents to send their children to be trained to defend our country to the present day mindset of accepting NS as a rite of passage into adulthood.
We celebrated the 45th anniversary of NS in 2012. I understand that in recognising this important milestone, there is a whole series of events and exciting give-aways to all NS personnel.
Working under the theme of \"NS45: From father to son\", there is an Open House at the F1 Pit Stop with more than 100,000 people attending. Perhaps, at some point in time, we might want to think about bringing some of these exhibits to the heartlands to bring about even greater awareness and endorsement from the public.
Can the Ministry provide an update on the NS45 celebrations and Singaporeans' response to the commemorative efforts?
The Chairman:\tMinister Ng Eng Hen.
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The Minister for Defence (Dr Ng Eng Hen): Mdm Chair, please let me thank Members of the House for their very incisive questions and comments, and I thank them overall for their continued support to build up a solid defence for Singapore. Members have asked many difficult questions on wide-ranging topics. I do not think it is possible within the short time that we have to address all the affairs of the world, so we will try to address the substantive questions that Members have asked.
Dr Lim Wee Kiak and Ms Ellen Lee asked for an update on the security situation in our region. I think they have summarised it very well. There are increasing tensions in the South and East China Seas. The South China Sea is in our backyard and Singapore will not be able to avoid the consequences if this region becomes more troubled, or worse still, when missteps are made.
Further away, as Members have pointed out, North Korea has threatened to void its 1953 armistice agreement with South Korea, after the UN Security Council imposed additional sanctions. Members have touched on the recent intrusion into Sabah by armed followers of the purported heir to the former Sulu Sultanate. I think this episode reminds us that security challenges can be unpredictable and precipitous. No, the Malaysians have not asked for our help. I think they are well capable of taking care of their defence challenges.
Against this backdrop, I think it is more important for us to understand that the Asian countries have increased their defence spending. The figures are quite telling. Over the last decade, Asian countries spent US$305 billion on defence, up from US$177 billion before – a 72% increase compared to a 12% increase in Europe over the same time period.
Indeed, by one estimate, Asia's military spending is said to have overtaken Europe's in 2012. Absolute numbers. Some Members have rightly pointed out the reason. As their economies grow, countries in the region are modernising their militaries, procuring new fighters, submarines and armoured vehicles. In this context, ASEAN and extra-regional countries must do our utmost to ensure that the region remains peaceful and stable. This was a point that Dr Lim Wee Kiak made, especially with US and China.
Amid these tensions, MINDEF is working hard within the platforms that Members mentioned – the ADMM, the ADMM-Plus, the Shangri-La Dialogue, the Five Power Defence Arrangements, and other bilateral or multilateral platforms – because we want to improve military-to-military relations to build
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confidence and reduce the risks of miscalculation.
Some Members have asked for an update on the ADMM-Plus. A major effort this year is the ADMM-Plus disaster relief and military medicine exercise hosted by Brunei, which is the Chair of ASEAN. I am happy to report that when we floated this idea, both the US and China are actively contributing to the exercise, and this is occurring amid their renewed leadership. We have actually full support and participation from militaries of 18 nations – 10 plus eight – and this is very encouraging because it strengthens the ADMM-Plus as a platform for strategic dialogue and practical cooperation.
The point is, as a small country, Singapore's external environment sets our defence posture. Asia's defence spending on the whole, as I have cited, has risen considerably. Singapore is monitoring this trend closely, but for now, I think we can continue to avoid sharp increases or dips in our own defence spending. This is the most effective way in stretching each defence dollar as it allows MINDEF to plan long term. As Dr Lim Wee Kiak said, yes, we have the larger share in terms of resources, whether it is manpower or finances and we agree; we recognise it. But steady defence spending allows MINDEF to plan long term and avoid disruptive changes arising from fluctuating expenditure year to year. This is why MINDEF is able to make opportunity buys of strategic assets in the past and optimise our training systems because we can plan longer term.
Our defence expenditure, including this year's, has grown steadily in nominal terms but kept pace more or less in real terms – by about 4% nominal growth annually, on average, over the last decade.
Mdm Chair, the SAF has come a long way since it was stood up. Then, when the SAF was stood up, we had only two infantry battalions, a couple of naval patrol craft that we inherited from the British, and no air force to speak of. Today, the SAF is a professional and integrated defence force capable of responding to a range of traditional and unconventional threats. Jane's Defence Weekly – I think Ms Sylvia Lim mentioned this – a reputable defence publication commented that \"the SAF of [today is] by far the most advanced military force in Southeast Asia.\"
This was not achieved overnight. It is the result of the steady commitment to defence and 45 years of NS, which Mr Ong Teng Koon highlighted. The success and progress of the SAF has been built through the sweat and sacrifices of committed NSmen led by bright, dedicated and capable commanders. I fully
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recognise that the SAF takes its fair, some say unfair, share of bright people and long may it be so because it is important.
The SAF leverages on advanced technology to modernise our equipment and systems, and to multiply our capabilities. There are three crucial factors: steady, prudent defence spending; capable and committed SAF soldiers; the use of advanced technology. These three crucial factors have allowed us to build a credible defence force despite the unique vulnerabilities of a small country. When we started, no one believed we could build a credible defence force.
These are the reasons why our frigates can operate with about 70 men, half that in other navies. Or why our High Mobility Artillery Rocket System needs a crew of only three men, compared to eight for other artillery systems which are shorter ranged and less accurate.
Investing steadily over the long term allows MINDEF to keep a constant lookout for platforms with cutting-edge capabilities that can provide Singapore with that strategic advantage. For this reason, we joined the Joint Strike Fighter (JSF) Programme as a Security Cooperation Participant (SCP) back in 2004. The JSF, as some Members know, now the F-35, has the potential to be the most advanced multi-role fighter aircraft for decades to come.
Though the F-35 is still in development, we are nonetheless interested in the platform for our future needs. The F-35 will be the vanguard of next generation fighter aircraft when operational. Our F-5s are nearing the end of their operational life and our F-16s are at their midway mark. For the longer term, the RSAF has identified the F-35 as a suitable aircraft to further modernise our fighter fleet. We are now in the final stages of evaluating the F-35. So, in the interest of transparency, I am telling Members that we are now in the final stages of evaluating the F-35. MINDEF will have to be satisfied that this state-of-the-art multi-role fighter meets our long-term needs, is on track to be operationally capable and, most importantly, is a cost-effective platform. I have given many necessary caveats before we make a final decision but we are evaluating the platform.
Again planning ahead, MINDEF is also looking to replace our ageing Challenger-class submarines which were built in the 1960s. The replacement submarines will have significantly improved capabilities and will enhance our ability to keep our sea lines of communications safe.
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Our plans for new fighters, submarines, the Army's recently operationalised Leopard tanks and Terrex Infantry Carrier Vehicles, the Air Force's G550 Airborne Early Warning Aircraft and the Navy's Formidable-class frigates with Sikorsky naval helicopters – taken together – will ensure that the SAF remains a credible and effective force to serve our defence needs for the next decade or two.
Many Members here have said and I agree with them, even if we have the most sophisticated platforms and systems, ultimately our defences are only as strong as the resolve and commitment of our people to defend Singapore and our way of life. In fact, I think we ought to be wary of complacency because we have a technologically advanced SAF. The temptation is always that because it is so sophisticated, you do not need the man in the loop and that will be a tragic and costly mistake. Or to think that the peace in our neighbourhood is a given. The security in our region can turn unpredictably.
A decade ago, no one could predict that the territorial disputes would escalate tensions in the South China Sea, or that a few hundred gunmen with rifles and grenade launchers would intrude into eastern Sabah. My family and I spent a very nice holiday in Sabah one or two years ago – ldyllic. From mountain to sea within two hours. The base camp of Kota Kinabalu – very tranquil. The best goreng pisang I have tasted in a long time because they used a special kind of banana. Mee goreng also, as they say, very sedap. Then you take a ride to the sea. World Heritage sites that you can dive into; from the shore, natural corals. Who could have predicted that a few hundred gunmen with rifles and grenade launchers would go into Sabah?
For the SAF, we have to ensure that above all, our NSmen, who form its \"backbone\", are capable and have the resolve to defend Singapore, if ever similar circumstances fall upon us. This is why we must keep NS strong.
So, how do we ensure that our NSmen continue to have the commitment and capabilities to defend Singapore? We talk about how the SAF has transformed itself into the third generation (3G) SAF. But as Members here have pointed out, we should be mindful that at the same time, Singapore itself has been transformed – a 3G Singapore. A very different one from that when NS was started 45 years ago. The city, the people, the values, the aspirations are not the same.
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Younger Singaporeans, our NSmen today are indeed more educated and talented. More PRs will serve NS. We have to respond to these changes and ensure that the commitment of a new generation of NSmen remains strong. At the same time, we must find ways to use their abilities more effectively in the SAF. Mr Desmond Lee is correct – meaningful roles that match their capabilities.
I received an appeal recently. A young man going into full-time NS was downgraded because his X-rays showed some early changes in his spine. He had some back pain so he went for an MRI. But he feels fit and wants to be in the combat vocation and, in fact, wants to be an infantry officer. Such appeals are few. We do get more appeals from NSFs who want to use their talents in music, the arts, dance and sports during NS. But the details are not as important as the main challenge, which is that if our NSmen feel their abilities are being put to the best of use and if they believe in what they are fighting for, it will engender greater commitment and contributions in building a stronger SAF.
We may not be able to satisfy all their requests. In fact, we would not be able to satisfy all requests. I quite expect after saying this that I would get a deluge of requests from a variety of NSmen who want to use their multi-talents to help the SAF. We may not be able to satisfy all of them. At the end of the day, we recognise that the SAF must be operationally-ready and fighting fit. But I believe that NSmen can and want to play a larger role in our SAF and the commitment is there.
Many here are good examples of this already. Mr Teo Siong Seng and Mr Zaqy Mohamad who have completed their ORNS. Mr Zaqy Mohamad is only 38. I asked him how come he has completed his ORNS. He said that he has done 10 cycles – each year one. So, he has completed it. Dr Lim Wee Kiak and Dr Chia Shi-Lu now serving in the Navy; Mr Nicholas Fang, Mr Vikram Nair and Mr Pritam Singh in the Army; and Mr Desmond Lee in the Air Force.
We often cite Finland for its strong education system. I visited Finland many times to study them. I will give you a tip. You can go in winter and summer. It is actually only very cold or very, very cold. It makes very little difference. But worth studying. Less is known that, like us, the Finns also have NS. I think Dr Lim Wee Kiak mentioned it. In the Finnish system, NSmen can indicate how they want to serve in their NS. You decide what you want to do. You have a choice of vocation. It does not end up in their system with NSmen only choosing the less demanding roles or the least demanding roles. Indeed, some choose more demanding roles such as pilots, intelligence officers, special forces and so on. Some choose to be officers or to be in vocations that lengthen their NS period. If you choose a particular vocation, you require more training, you are
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required to serve longer and they choose it!
This is a different organising principle in their society that explains their NS and education system. If I can characterise it, there is a first hurdle in their system that all must cross to make sure that standards do not slip. Beyond that, the approach is \"spring-boards to success, not hurdles\". You choose how high you want to go and the spring-board will be provided. Now, not all will jump gracefully. The dives would not be spectacular for some, but this approach encourages NSmen to go higher and contribute more.
Singapore is obviously not Finland. We have a different culture, security risks, needs and people. Compared to us, they are a much older society, a long history and certainly more homogenous. Comparing our NS systems, we have certain strengths and weaknesses, and they have theirs. I think we must adopt and adapt what we think are good practices from other systems to improve ours. In fact, the SAF already has a similar practice where we ask full-time NSmen to indicate if they want to become commanders after they go through their Basic Military Training. And I will tell you that the majority want to become commanders.
In building commitment, it surely must be the right direction to maximise the potential and talents of NSmen, and allow them to play a greater role in our national defence. We should study how we can provide more spring-boards for NSmen.
Secondly, several Members asked how we can better help our NSmen meet their duties and recognise their efforts. Dr Lim Wee Kiak, Mr Zainudin Nordin and Mr Desmond Lee talked about this.
Like them, I am alive to the demands that NS places on our NSmen. Members here send many letters of appeals to MINDEF or to me on behalf of their residents. I read them and we look at them. Some examples. A Mr Yu has dutifully served his in-camp trainings (ICTs). But his next ICT coincided with the first month on a new job. Another Mr Charles needed to look after his mother who was receiving cancer treatment. In these deserving cases, we granted them deferment from their ICT. But I acknowledge that many do not get excused because their Commanding Officer (CO), who is also an NSman, has decided that the individuals who asked for deferment are needed to get his unit operationally ready. We should support these COs because we entrusted them with the responsibility. This House, Singaporeans entrusted the CO with the responsibility to get his unit operationally ready. And sometimes, he has to
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make that difficult decision when people ask for deferment.
Members like Asst Prof Eugene Tan and Mr Hri Kumar in recent debates have also pointed out that some employers seem to discriminate against NSmen in their work. I know that this complaint upsets all Members in this House. It undermines a strong NS. MINDEF will work harder to reach out to more employers. Each year, we work hard to motivate employers to support NS. I present awards to those who are our staunchest advocates of NS such as Ya Kun, Canon and URA. If Singaporeans know of specific employers who adopt unfriendly practices at their workplace towards NSmen, please let me know and we will make best efforts to remedy the situation.
Despite these demands, I think all Members here support NS. I have not heard a single Member, who, despite the difficulties and the demands placed on NS, say, \"Let's relook it\". Some of you have shared your own positive NS experience and strongly affirm that NS is part and parcel of being a Singaporean – Mr Ong Teng Koon, Mr Hri Kumar and Mr Pritam Singh.
Some of you have suggested that we should make it part of the integration journey for PRs and new citizens, albeit at a reduced level. Mr Pritam Singh mentioned that. Mr Hri Kumar has thought hard on this issue and asked how we can better address those who renounce their PRs, such as through higher penalties or taxes. Whether you agree with specific proposals by various Members or not, it may not be as important as what we can all agree on – that NS is very much a duty and honour for all those who make Singapore our home. That is the starting point.
We, in this House, appreciate the commitment of our NSmen and the sacrifices they make. All of us recognise that if we do not defend Singapore ourselves, no one else will. Each of us has to uphold our duty to serve NS. But I also heed your calls that we can do more to match the abilities of our NSmen, increase their engagement and commitment, recognise their efforts and find ways to help them fulfil their NS duties, even on a daily basis. Where we can, we should look into ways to reduce the impact on their studies, work and family commitments.
Members here have raised many issues. Some of these issues have been raised by public members as well. To respond to this feedback, I have decided to convene a committee to strengthen NS. It will be called the Committee to Strengthen NS. I will chair the Committee. There will be two working groups. Senior Minister of State Chan Chun Sing will lead the Working Group on
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\"Support for NS\" to see how we can maximise the abilities of NSmen for the SAF and help NSmen fulfil their duties. We will also look into increasing support from various groups, such as families, employers, schools, permanent residents, new citizens and the broader community. Senior Parliamentary Secretary Dr Maliki will chair the Working Group on \"Recognition and Benefits for NSmen\". Some Members, including Mr Zainudin Nordin, had asked about this.
I want to say from the outset that I know this Committee will receive many requests. We will be open to views and ideas. But let us agree on common goals to set the Committee in the right direction. Our most important goals are to strengthen Singapore, strengthen NS and the SAF, and serve all Singaporeans, in that order. It is an important order – Singapore first, SAF and NS second, personal interest of all Singaporeans next. Often, it comes in the reverse order but we should set the direction right. The Committee must ensure that NS must still be focused on defending Singapore, that it is fair to all and universally applied, that it must engender a commitment and hopefully love for our country. We should avoid using this as an exercise to serve narrow interests or inflict unnecessary or unfair hardship on any particular group. That would be a negative outcome. This exercise must bring our nation together, not divide us; it must strengthen NS and Singapore, not weaken it. If we do this well, NS will have strong support for many years to come.
To achieve these purposes, we want to include in the Committee and Working Groups members with a good appreciation of the issues so as to provide good, workable and affordable ideas to strengthen NS. Good, workable and affordable. Obviously, Members will be included and I hope you will not turn us down. We intend to consult widely with various groups of Singaporeans. We hope to complete the Committee's work within a year.
Let me now address other issues or update Members. Since the last time we met, there have been safety concerns. I updated the House in November 2012 and there have been some developments, and I thought I would just quickly update Members.
We recently started the SAF Care Fund to allow the public to show their support for severely disabled servicemen. Thus far, we have received $1 million in contributions, mainly through the generosity of The Lee Foundation. And MINDEF will provide a one-to-one matching grant of up to $2.5 million to support this effort. We intend to obtain the Institution of Public Character (IPC)
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status for this Fund.
I have explained before that our compensation and welfare schemes provide significantly higher amounts and assistance than civilian schemes. I want to be clear that we do not detract from our goal to prevent all injuries and death. Let me provide an update in terms of safety measures.
I told the House the last time that we wanted to create additional posts for full-time Safety Officers. The first batch of these additional safety officers have been trained and sent to the units and will report directly to their Unit Commanders. This will ensure better compliance with training safety regulations.
I also informed the House previously that we would start an SAF Inspectorate for safety. On further review, we have decided to elevate this SAF Inspectorate to a Directorate for Safety and Systems Review. As a Directorate, it will report directly to the Permanent Secretary of Defence and the Chief of Defence Force. The Directorate will also set up external review panels which will submit recommendations to the Minister for Defence.
The first external review panel will be on training safety, and will include experts and professionals from outside the SAF to validate the safety practices in our units and determine if they match up with best practices of industries and other militaries. We decided to do this because rather than ad hoc committees formed after incidents occur, this standing panel will provide oversight and direction for the longer term. This way, it will be more impactful.
Ms Ellen Lee and Dr Lim Wee Kiak asked about our bilateral defence relations with our neighbours and key partners. Our relations with our neighbours are excellent. For Malaysia, we have regular tri-service interactions all the way from the Minister to rank-and-file. Last year, I met my counterpart, Minister Zahid Hamidi, six or seven times. He is recently a little bit busy, so I will wait until he is less busy to meet him again.
We have also reinforced our strong and close relationship with Indonesia in the past year. We held our first bilateral joint level counter-terrorism exercise last year and co-hosted the first ASEAN Maritime Security Information-Sharing Exercise.
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Some asked about our defence ties with other partners. Our defence ties with the US are strong, multi-faceted and mutually beneficial. Our F-16s, F-15s and Apache helicopters train extensively in the US because they have a larger training space. Just a tidbit of information – the training air space our F-15s have in the US is 100 times the size of Singapore.
Ms Ellen Lee asked about the Littoral Combat Ships (LCS). This is in line with the 1990 Memorandum of Understanding and the 2005 Strategic Framework Agreement, which our neighbours understand. The LCS will be deployed to Singapore on a rotational basis. The first will arrive next month. It will not be based here, but will sail out, make port calls in the region, and engage other regional navies.
Our defence relationships with China are warm and friendly. I met Chinese leaders – then-Vice President Xi Jinping and Defence Minister General Liang Guanglie – during my visit there last year. Both Vice President Xi and General Liang have expressed confidence that the defence relationship between China and Singapore could be further enhanced through high-level strategic dialogues, as well as interactions and exercises, including exchanges between young officers. We are following up with specific programmes to achieve this.
Our ties with partners such as Brunei, Thailand, Australia, New Zealand, India, France and Germany remain strong. I am happy to report that we renewed the Air Force Bilateral Agreement with India last year. This allows the RSAF to continue joint military training in India with the Indian Air Force until 2017. We also renewed the Oakey Agreement with Australia, which allows the RSAF to continue its helicopter training in Australia until 2027.
Ms Ellen Lee also asked about our contributions to Afghanistan and the Gulf of Aden. Thank you for saying that our SAF has done a wonderful job; I think they will appreciate that. Over the last six years, we have deployed close to 500 servicemen to Afghanistan, as part of the International Security Assistance Force (ISAF). The experience gained by our soldiers has been invaluable and we have incorporated lessons learnt into our operational doctrines and practices. Singapore will be completing our mission in Afghanistan by June this year. Our deployments to Afghanistan have supported the larger international efforts to prevent extremists from using Afghanistan as a base to export terrorism, including to our region, and Singaporeans can be proud of our contributions to this effort.
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As for the Gulf of Aden, the SAF has taken over command of CTF 151 for a third time until June as part of our contributions against international piracy. Ms Ellen Lee is correct that this made a difference because piracy attacks have come down.
Mdm Chair, our strong defence today is a result of continuous and strong support from Members of this House and from Singaporeans alike to build a credible SAF. A strong defence is the bedrock upon which Singapore's peace and prosperity rest. We must continue to strengthen NS to build a solid defence.
There are some questions which Members have asked. But I will defer these to after further questions, and allow my colleagues, Senior Minister of State Chan Chun Sing and Senior Parliamentary Secretary Dr Maliki, to respond.
The Chairman: Dr Lim Wee Kiak, please take your two cuts together.
Dr Lim Wee Kiak: Mdm Chairperson, the recent fatalities that had occurred in SAF during training have shaken public confidence. Although a thorough investigation was done for each incident and follow-up actions were also done diligently to improve our training safety profile, parents of young Singaporean males are still concerned with the safety of their sons, as they are preparing to enter NS.
The review of safety lapses at the unit and individual level did not allay these fears. Despite having a robust training safety regulation, accidents still do occur due to failure to comply with these regulations. I am heartened by the announcement by the Minister that was made last year as well as the update that was just given, regarding the series of safety measures implemented, and that more safety officers are on the ground now.
Every fatality is a tragedy to the family and loved ones involved. It is important for MINDEF to give full assistance to the affected families as they seek closure. To one family, there seems to be many questions unanswered. I received emails from relatives of a deceased NSF, claiming that SAF was not transparent and did not provide the answers to their questions. I hope MINDEF can look into and review their post-incident management process for this affected family. Perhaps more can be done to help this family to seek closure.
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The recent grenade accident leaving two NSFs injured also raised concerns among parents. I must compliment the officer, Second Lieutenant Kamalasivam, for acting bravely, selflessly and decisively to avert another tragedy. Every local drama production on our army scene, including \"Army Daze\", \"新兵小传\" and the recent \"Ah Boys to Men\" movies, will always include live grenade scenes. Many parents are asking whether live grenade throwing is really required, after all the recruits only throw that once in their entire training. Can such live training be done during transition to war? Is there a safer substitute to live grenade? Can SAF look at a safer option with a grenade that may still explode with less fragmentation and cost less harm in the event of a mishap?
The accident last December, which left RSN serviceman ME2 Jason Chee seriously injured, reminds us of the risk that our servicemen face as they keep Singapore safe. Can the Minister update us on whether the SAF Care Fund will be used in the rehabilitation for ME2 Jason Chee?
[Deputy Speaker (Mr Charles Chong) in the Chair]
During the inauguration of the medical simulation training centres in August 2012, Minister had announced that MINDEF was reviewing its medical support system to provide better care for our national servicemen. Can MINDEF provide an update on the review?
The medical check-up before enlistment as well as before Fitness for Instruction (FFI) is important to detect any medical ailments. Many felt that the level of fitness of our new enlistees and NSmen is less due to the increasing affluence and generally more sedate lifestyle of today's youth with more sophisticated medical equipment, it is possible to detect certain ailments such as heart diseases, which may be difficult to detect under the current medical check-up system. We can certainly afford a more detailed and robust check-up, as each and every detection is potentially one life saved.
As we put our servicemen through rigorous training and operational duty, it is also critical that the SAF has a robust medical system to support them and look after their well-being. How is the SAF harnessing the expertise within our national healthcare system, which is renowned internationally for its high standards, to ensure high standards in medical care for NSmen?
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Ms Irene Ng Phek Hoong (Tampines): Sir, as we put our NSmen through rigorous and realistic training, we must do our utmost to prevent training deaths which could be avoided with stricter medical screening and a more robust safety system.
In recent news reports, we read of two incidents; one which sadly ended in tragedy, another where tragedy was averted by prompt action.
In the latter, we are heartened by the bravery and quick thinking of safety officer S Kamalasivam when a recruit bungled a live grenade throw. He told the recruit what to do, pulled him down, and shielded him from the blast. Luckily, they escaped with only slight injuries. However, it should not be left to the safety officer to ensure that such accidents do not happen again.
Are the safety procedures for live grenade exercises effective enough and are the dummy grenades used during practice a realistic enough tool for teaching one how to handle a live grenade?
In another incident, NSman Ee Chun Sheng was lagging behind in a navigation exercise and left to his fate by his teammates in 2011. He was found breathless after he \"broke contact\" with his team. He died of cardiac failure.
Could his death have been avoided by tighter medical screening and by better support from his teammates and medical care? Was any action taken against his teammates for leaving him behind?
The military has a macho self-image, and sometimes, the recruits' efforts to live up to that image can mean being harsh on the weaker ones or acting tough.
Sir, these two incidents highlight the need for a greater focus on encouraging a safety culture through leader and individual responsibility and accountability, as well as teamwork. Can the Minister give an update on MINDEF's efforts to strengthen training and operational safety, and to improve the medical support system for our NSmen?
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Mrs Lina Chiam: Sir, we have recently heard cases of NSmen, NSFs and regulars going beyond the call of duty, at times even risking their own lives. I believe it is only right that those who are willing to give their lives should have their lives well taken care of. For a start, our NSFs should have free universal health insurance coverage. As I understand, NSFs have to opt in to purchase insurance coverage at about $16 if they want additional coverage. We need to take into considerations lower ranking NSFs from low-income family.
Another issue concerns compensation for death or injury of servicemen. MINDEF pegs this to compensation paid out under the Workmen's Compensation Act. I understand they also pay out discretionary sums above the benchmark amount. But there is no recourse for a civil suit, if there is a good case for an affected serviceman to pursue higher compensation. Could the Minister spell out the clearer framework of compensation in such cases, rather than rely on discretionary case-by-case basis of compensation?
Mr Ong Teng Koon: Mr Chairman, since the inception of the Singapore Armed Forces (SAF) in 1967, we have spared no effort and made tremendous investments in maintaining a strong deterrent force. While we pour no small amount into maintaining our defence, we adhere to a policy of making no enemies.
That said, our attempts to uphold the quality of our defence forces must also evolve with the changing education attainment of our recruits.
More than 45 years ago, our defence force would have comprised of men with fairly little or no education. The idea of a \"hokkien peng\" was the norm rather than the exception.
Education in Singapore has, however, come a long way since those early years. Deputy Prime Minister Tharman said we are ranked third best in the World Economic Forum Global Competitiveness Report, and we rank well regularly in the PISA and TIMSS reports. This is because we not only have top students who do well, but because we have resilient students and quality across the board.
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Our soldiers are now a highly educated bunch. Naturally, they would have the expectation of taking on roles commensurate with their higher education attainments and aspirations. Can the Ministry highlight how it allows servicemen to take on more responsibilities and play more meaningful roles?
Mr Chairman, with higher education attainment, young Singaporeans of today are also more technologically savvy and are used to a learning environment that encourages experiential and self-directed learning.
Military exercises in many parts of the world are also taking on a different tone, with more emphasis placed on technology. We have seen the use of unmanned aerial vehicles in the Middle East, the widespread use of satellites and computers for command and control, not to mention the increasing focus on security in cyberspace to protect the integrity of our computer systems. The training of our soldiers must also evolve accordingly to the changing security landscape and take on a technological bent.
In addition, we should also look at how technology can help the SAF to be more efficient by cutting downtime during training. I am thus excited to learn that the SAF has set up an Apps Innovation Office to this end.
Can the Ministry further provide an update on how it is enhancing its learning and training efforts to keep pace with the learning habits of the new generation of NSmen to ensure that it harnesses their full abilities?
The Chairman: Dr Intan, you have got three minutes for both of your cuts.
Dr Intan Azura Mokhtar (Ang Mo Kio): Thank you, Mr Chairman. Young Singaporeans today are more technologically savvy and are very comfortable in getting information on the go, using smart mobile devices, and communicating through email or tweets. Can MINDEF provide an update on how it is enhancing its learning and training efforts to stay relevant with the learning and info-communication proclivities of a younger generation of NSmen, to ensure that there is little or no disconnect between what they need to learn and know, and how this is conveyed to them?
In addition, our younger generation of NSmen is getting more well-educated and is likely to have higher aspirations. They are also likely to want to contribute in more meaningful ways to the SAF and share their ideas on how things are carried out. Can MINDEF highlight how it allows our NSmen to take on more responsibilities, share their ideas and views, and play a greater role in
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the SAF?
Total defence has been around for about three decades. Although students in schools continue to learn about total defence and observe Total Defence Day, there are still Singaporeans who remain indifferent about it. Some even question the relevance of total defence today, in our current state of relative peace and stability.
However, we know that the defence of Singapore depends on the will of Singaporeans to support the need for a strong SAF and, more importantly, to take personal responsibility in getting involved in the defence of our nation.
How does the Ministry ensure that Singaporeans continue to understand and appreciate the importance of Total Defence? And how does the Ministry continue to ensure that Singaporeans remain committed to our defence?
Most Singaporeans today keep themselves informed through various channels – online, print media, broadcast media, social media – just to name a few. MINDEF has sought to keep up with this trend and has started to use different media platforms to engage Singaporeans and keep them informed on defence issues, just like what we received in our collateral package earlier. Can the Ministry provide an update on its efforts in this area?
The Chairman: Mr Alex Yam – two cuts, three minutes.
Mr Alex Yam: Mr Chairman, on 23 December 1965, when the late hon Member Mr Goh Keng Swee introduced the Singapore Army Bill before this House, he started with an old Chinese adage: 好男不当兵, 好铁不打钉. The meaning is that good men do not become soldiers nor good iron makes nails. The saying had its roots in the old imperial military, where ordinary people were press-ganged into war for the selfish gains of ambitious men.
Fast forward to today's modern SAF, we no longer fight for selfish men but for our own defence – as a common responsibility of citizenship. Our citizen army has become a defining aspect of life as a Singaporean, a social leveller, a
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common joy, or perhaps, a common lament, for the Singaporean boy.
As the reviewing officer for the graduation of a recent BMT batch, I was certainly heartened to hear from a number of young men and women who were passionate about the defence of our nation and considered it both a duty as well as a possible vocation.
Many fellow reservists that I served with still look forward to our annual ICTs. But as our social landscape changes, so too does NS, and defence becomes caught up in the debate about being Singaporean.
As we find more new citizens in our midst, within a rapidly changing geo-political landscape and the tremendous growth of technology, I ask the Ministry to relook at how defence can continue to play an important role as a social leveller, and to ensure that future generations of Singaporeans continue to remain committed to the defence of our land, to boost confidence in our capabilities and to assure Singaporeans of the paramount need for a strong cohesive military. This brings me to my second cut as well.
Sir, the tremendous growth of technology has also meant a rapid reliance on social media as a means of communication. With it come advantages and equal risks. Has the Ministry kept pace with the growth of the social media? And has it used it effectively to outreach?
Recently, there has been a spate of confessions online – confessions of a different kind. Across Facebook, a number of confessions starting from within tertiary institutions have now spread beyond the education sphere. SAF Confessions now has close to 23,000 followers and is growing; it is certainly a platform for many to share training stories or trade battle scars, but I seek the Ministry's reassurance that amidst the much laudable sharing and camaraderie that security discipline is not compromised.
Sir, Mr Goh Keng Swee in his speech to this House also said that: \"Whatever the time may be, it would be useless to only think about building up your defence forces. The time to do so is now.\" The work of building a credible and strong SAF is a common responsibility and we should never let up and always keep a strong focus.
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The Leader of the House (Dr Ng Eng Hen): Mr Chairman, may I seek your consent to move that the Chairman do leave the Chair, so that I can move a motion to extend the current session before my colleagues reply?
The Chairman: I give my consent.
[(proc text) Resolved, \"That the Chairman do leave the Chair.\" – [Dr Ng Eng Hen]. (proc text)]
[(proc text) Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
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[(proc text) Question put, and agreed to. (proc text)]
[(proc text) Resolved, \"That the proceedings on the business of Supply be proceeded with beyond 7.30 pm.\"– [Dr Ng Eng Hen]. (proc text)]
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[Mr Deputy Speaker in the Chair]
The Senior Minister of State for Defence (Mr Chan Chun Sing): Mr Chairman, MINDEF is deeply appreciative of Singaporeans' support for our defence and security. We owe it to Singapore and Singaporeans to be good stewards of the resources entrusted to us – be it money, land or time, issues which Dr Lim Wee Kiak asked about.
MINDEF takes a long-term view towards building our capabilities, which the Defence Minister has spoken about. Through steady defence expenditure and by stretching each defence dollar, we are able to build up a strong SAF to
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meet our defence needs.
Likewise, we also plan long term for SAF's land use. Over the years, while the size of the SAF units may have become smaller, their operational capabilities have become more sophisticated and they require more extensive training space. For example, a typical infantry battalion used to require a 24 kilometres square training area for a manoeuvre exercise. Today, with motorisation and other advanced systems, the same unit can easily operate and dominate a 40 kilometres square area.
To meet our training requirements, MINDEF uses a combination of simulation as well as local and overseas training. Our investments in simulation, like the marksmanship trainers, allow us to achieve much higher throughput at much lower costs. It also allows us to correct our soldiers' fundamentals before we deploy them out for more costly outfield exercises. Innovative concepts like the Multi-Mission Range Complex where we combine seven rifle ranges into one, take ideas from concepts like the multi-storey golf driving ranges stacked on top of each other, and bowling centres equipped with individual computer diagnostics to aid the bowlers. All these make good use of the finite land space we have.
For local training, MINDEF has over the years consolidated our training plots to use the spaces we have more effectively. There will be two main training areas – the live firing and manoeuvring areas in the West and the offshore training area in Pulau Tekong. We have also synergised the usage of Army and Air Force training areas, where possible. For institutional land use, we have continued to intensify the use of our camps and equipping centres to the extent we can, subject to operational, security and safety requirements.
When it comes to time, we know how precious time is to our servicemen. Where possible, we continually challenge ourselves to make it more convenient for our NSmen to come back, to train and to serve. For in-camp training, where possible, preparatory modules are given to NSmen to better prepare them before they return for their in-camps. To allow NSmen to stay connected when they are off-duty, we have designated zones that are in non-sensitive areas where they can access the Internet and stay in touch with their work commitments. Another good example is how we have evolved our mobilisation system to allow our NSmen to be mobilised much more efficiently, while increasing their confidence and operational readiness many times.
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Mr Chairman, if I may have your permission to share with this House some slides on the changes to our mobilisation system. Our more experienced NSmen might remember that mobilisation exercises used to be a fairly tedious process. In the past, our NSmen would have to report for mobilisation at various schools and camps, after which they would have to go and collect equipment from various locations before returning to the mobilisation for equipping. All these take time. Actual equipping and force preparation only begin after this. It is a sequential process one after another.
Today, our NSmen report to our Mobilisation and Equipping Centres or the MECs as we call them. The equipment that they need are already in the Centres, the ammunition that they need will be \"pushed\" to them; likewise, other supplies. And all these ammunition and other supplies are \"pushed\" to them in pre-packed modules whereby they do not need to go round to collect from different stations. It is unlike the previous method where we have the proverbial Chinese medicine shop where people have to go to different stations to collect their different types of ammunition and equipment. In the new system, you go to one place, you get the entire package that is configured for your respective units.
This saves much time. The time saved can now be used for our NSmen to undergo currency training that includes shooting the SAR 21 rifle, chemical defence, first aid, and other training that may be required specific to that unit. All these are done concurrently which allow our NSmen to not only be ready in a much shorter time but also to have a much higher level of proficiency within the time allocated to them. Having said that, we will not rest on our laurels and we will continue to seek further improvements.
At this point of time, I would like to share with Dr Lim and Ms Irene Ng some issues on safety. Indeed, like what Ms Irene Ng said, safety is of utmost concern to the SAF. Good safety practices need to come from a few good practices. First, we must have good systems to make sure that our procedures and our operating methods, tactics, are safe. More important than good systems, we need good people and good commanders who not only know how to work the system but, at the same time, they must have an eye for danger and be able to react when circumstances change. This is the fundamental building block of the SAF system – good systems and good people.
Dr Lim asked if we can do away with grenade training. Let me assure Dr Lim that this is actually one of the defining moments for all the recruits' training, and we would like to train our recruits and our soldiers as they would operate in war. But before they do any live training for the grenade, they actually go
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through various sessions starting with dummy grenades, progressing to something that is almost the exact replica of the actual grenade before they go on to embark on throwing the live grenade. So, there are proper procedures in place. But having said that, we still need commanders with a keen sense of danger, who know his men and his machine, to ensure that our recruits and all our soldiers are safe. Having said that, I must reiterate that the military has inherent risks in everything it does. It is incumbent upon all men and commanders to make sure that they stay alert and not be complacent just because there are training rules and safety regulations in place. Training rules and safety regulations cannot be a crutch to a sense of vigilance required in all our soldiers.
I would also like to respond to Mrs Lina Chiam's comment about compensation. Let me assure Mrs Lina Chiam that compensation is not on a case-by-case basis. MINDEF has a proper system to look at compensation. In fact, the MINDEF Compensation Board is chaired by a senior legal officer from the Attorney-General's Chambers (AGC). So, it is not just an internal MINDEF process. And if there is any concern with this, there is also an appeal process. So, it is not a case-by-case basis, but there is a proper system to ensure that compensation is done fairly.
Next, if I may move on to the SAF Medical System. The well-being of our servicemen is also an important priority for MINDEF. Let me update the House on how we are improving our medical care for our servicemen which Dr Lim, Ms Irene Ng and Mrs Lina Chiam have asked about. We had reviewed our medical system in 2012. The review was co-led by BG Benedict Lim, Commandant of the SAFTI Military Institute and Assoc Prof Eillyne Seow, Divisional Chairman of the Ambulatory and Diagnostic Medicine at Tan Tock Seng Hospital. The review concluded that our medical system, which covers medical classification and screening, is fundamentally sound. Nevertheless, we will continue to improve and look for partnerships and initiatives to provide better care for our servicemen.
For example, the SAF has been collaborating with the National Heart Centre Singapore to leverage on their advanced cardiac diagnostic capabilities to provide timely and quality cardiac screening for our soldiers.
The SAF will also be collaborating with Jurong Health Services to provide specialised emergency medical services as well as training in this field. This will
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enhance medical support for our soldiers training in western part of Singapore. It will also allow the SAF to benchmark our standard of emergency care.
The SAF is currently exploring having experienced Family physicians serve as in-house physicians in selected SAF medical centres, and also to mentor our more junior doctors. The SAF will continue to harness the medical expertise and experience at the national level to ensure that our servicemen can have peace of mind when they train hard in service of our nation.
Mr Chairman, Ms Sylvia Lim asked about Transparency International's \"D+\" grading for Singapore in its Government Defence Anti-Corruption Index 2013. Transparency International's assessment of corruption risk is weighted heavily towards the availability of public information in its defined risk areas of political, finance, personnel, operations and procurement risk. For example, we would have scored higher if we released information about how much we spend on sensitive operations and classified research and development projects. But Singapore does not publicise such details of our defence and security expenditures as it would compromise our security. To reduce the risks of corruption, MINDEF has instead put in place several layers of internal and external checks.
Internally, officers that are in positions to approve projects are subject to security vetting regularly. The checks conducted as part of the vetting process would include credit bureau checks and checks on the assets held by the officers and their family members to identify any indications of unexplained wealth. In addition, the officers are regularly rotated to reduce the risk of them being cultivated by suppliers.
MINDEF also conducts regular reviews of our financial and procurement procedures, and MINDEF's Internal Audit Department (IAD) also performs regular audit checks. As part of our processes, we utilise data analytics to spot outliers and investigate each and every such incident. IAD's audit reports and the follow-up actions are reviewed by the MINDEF Audit Committee chaired by the Permanent Secretary (Defence Development), which meets every two months. On an annual basis, a comprehensive report that grades how MINDEF and the SAF agencies perform is also submitted by the IAD to the Minister for Defence.
Externally, MINDEF is audited by the Auditor-General who submits an annual report to the President and Parliament for scrutiny. That annual report is publicly available. Over the years, the Auditor-General has identified areas in
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MINDEF's procurement and payments systems for improvement, which MINDEF has rectified.
MINDEF, like the rest of the Government, has zero tolerance towards corruption. Our defence procurement process is widely recognised to be of the highest standards. Suppliers know that MINDEF has high expectations and that we drive a hard bargain when it comes to pricing. We have also been described as a \"reference customer\" – that means that when Singapore buys a platform, it sets a benchmark for cost effectiveness for that platform.
We have studied the Transparency International report in detail and will decide where more information can be released, so long as it does not compromise our security goals. We are confident that our current systems and processes to guard against corruption remain robust. Nevertheless, we will regularly view our processes to ensure that we remain corruption-free, because we owe this to Singapore and Singaporeans to be good stewards of the resources entrusted to us.
Let me now hand it over to Senior Parliamentary Secretary Dr Maliki who will speak on our training efforts and Total Defence.
The Senior Parliamentary Secretary to the Minister for Defence (Dr Mohamad Maliki Bin Osman): Mr Chairman, Mr Ong Teng Koon and Dr Intan Mokhtar asked how we are improving our learning and training systems. Given the changing profiles of our NSFs, who are more accustomed to self-learning and team-based discussions, our systems must also keep pace to enable our soldiers to learn, train and develop professionally.
Over the years, the SAF has introduced modern instructional methods, simulation technologies and interactive applications that enhance our soldiers' training experience. Senior Minister of State Chan spoke briefly about our investment in simulators and about the Multi-Mission Range Complex earlier. Other new training facilities to be launched this year include the Murai Urban Live-Firing Facility for coordinated live-firing training in urban settings; the Air Force's Tower and Radar simulators, which feature 360-degree projection systems; and the Navy's shore-based emulator facility that will enable realistic warfare training for multiple ships simultaneously.
LEARNet is another platform that has made learning more interactive and effective through portable devices. Since its pilot implementation in 2009, soldiers have been able to learn at their own pace, share feedback on training
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lessons, and apply their learning out in the field. A significant benefit of LEARNet is the classroom time saved. For example, it now takes approximately four to five hours less to learn how to operate the SAR 21 rifle, leaving more time for hands-on practice.
With your permission, Mr Chairman, I would like to share a screenshot of a LEARNet module. Members will see a screenshot from an exercise to test recruits on the correct sequence of stripping the SAR 21. The exercise also brings recruits step-by-step through the cleaning, maintenance and assembly of the SAR 21. The training of our soldiers has been enhanced as a result, and the SAF is now ready to extend LEARNet progressively across to the rest of our units.
Fighting systems, such as the Terrex vehicle that we have developed in recent years, also take into account the profiles of the new generation of soldiers, allowing them to very quickly learn how to operate these systems. For instance, the Battlefield Management System in our Terrex adopts an interface that is similar to the touch-screen multimedia devices that youths today are comfortable with, and our soldiers can easily see where friendly and hostile forces are on an intuitive touch-screen display.
Mr Chairman, in recognition of its commitment to being a world-class learning organisation, the SAF has been awarded Asia's Most Admired Knowledge Enterprise Award for three consecutive years since 2010. Overall, the SAF's training transformation will allow for a more engaging and effective training experience for our Regulars, NSmen and NSFs.
Mr Ong also asked how the SAF meets the aspirations of today's servicemen. Over the years, various steps have been taken to recognise our servicemen as strategic and active contributors to the SAF, including implementing enhanced career schemes – for Officers, Warrant Officers and Military Experts – that cater to different aspirations and organisational needs.
We provide a competitive career proposition by offering meaningful employment to maximise the individual serviceman's potential, providing unique opportunities for our servicemen to serve in operational deployments, and developing our servicemen through continuing education and professional military training.
Sir, complementing our efforts in Military Defence is our Total Defence framework. Dr Intan asked about MINDEF's plans to ensure public
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understanding of the importance of Total Defence. We agree with Dr Intan that this is a very important aspect of Total Defence. That is why our Total Defence campaigns in recent years have sought to engage Singaporeans at a more emotional level and encourage ground-up initiatives. This year's campaign, for example, themed \"Will You Stand With Me?\", carried the message that when Singaporeans stand together and work as one, just as we did during the SARS outbreak a decade ago, we can overcome any challenge.
This message further came alive through the key component of this year's campaign, the Total Defence Challenge, in which 25 teams comprising SAF personnel, students, active agers and people with disabilities worked together to complete tasks embodying each pillar of Total Defence. Corporate donors also showed their support for the Challenge, matching in dollar value the points accumulated by the teams, and donated some $224,000 to the Community Chest.
MINDEF also runs N.E.mation!, a digital animation competition for youths, as part of our Total Defence engagement efforts. I am pleased that the number of story submissions has increased from around 800 in the past few years to a record 1,122 entries this year. We also ran the first ciNE65 short film competition in 2011 and received an encouraging 72 entries. We have just launched the second run of ciNE65 and will continue to explore various platforms to allow different segments of society to share their take on what defending Singapore and the Singapore identity means to them.
Mr Chairman, Mr Alex Yam and Dr Intan asked how MINDEF ensures public commitment to defence and confidence in the SAF. MINDEF reaches out to grassroots leaders, employers, trade union leaders and other stakeholders through regular dialogue sessions and visits to SAF units, and also through the Advisory Council on Community Relations in Defence (ACCORD). In collaboration with MOE, MINDEF works with all 30 Post-Secondary Education Institutions under the SAF-School Partnership Programme to organise student engagement activities. To reach out to more Singaporeans, we also held the Army Open House for the first time in the city last year at the F1 Pit Building, which attracted a record turnout of 188,000 visitors.
Beyond these outreach efforts to bring the SAF closer to Singaporeans, our NS system, as a key institution of Singapore society, is the best opportunity to enhance Singaporeans' commitment to defence. NS is more than just the obligations of NSFs and NSmen – it should be the commitment of every family member and employer. Support from family members and employers is critical
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for our NSFs and NSmen to continue performing their defence roles.
Most of us will recognise Resorts World Sentosa (RWS) as the company that operates Universal Studios Singapore. What you might not know is that RWS actually employs more than 2,500 NSmen amongst its staff, and has put in place a range of processes to support NS, such as revamping its HR system for supervisors to efficiently manage their employees' NS commitments and allowing the recently issued NS45 vouchers to be used at its attractions and shops. In recognition of its commendable support for NS, RWS was awarded the Meritorious Defence Partner Award in July 2012 at the Total Defence Symposium.
Some of you might have also watched 2LT Zacky go through Officer Cadet School (OCS) in the cyberpioneerTV web-series Every Singaporean Son II. While 2LT Zacky had initially found the training at OCS to be physically and mentally challenging, the constant support and encouragement from his parents spurred him on and he eventually emerged as the third best graduate in his infantry cohort. Such examples underscore the invaluable role that employers and families play in supporting NS.
Mr Alex Yam and Dr Intan Mokhtar also asked about MINDEF's online engagement efforts. We actively use social media to reach out to different segments of Singaporeans. There are currently nearly 400 video clips on life in the SAF on our cyberpioneerTV YouTube channel, which has received close to 11 million views and 20,000 subscribers. MINDEF's vibrant online presence is also reflected with more than 33,000 users \"liking\" the cyberpioneer Facebook page, where we post updates and photos of ceremonies, exercises and more. These efforts help to deepen public understanding of and support for NS and defence.
Recognising the power of social media platforms, the Army also launched its Facebook page earlier this month. Our cyberpioneer and Army Facebook pages are useful platforms for our servicemen to celebrate their shared stories of service, rites of passage, camaraderie and sacrifice. This ground-up sharing of common experiences can help to enhance our servicemen's cohesion and engage them more deeply. MINDEF manages the associated risks of social media participation by educating our servicemen to use social media responsibly, and reminding them that their exchanges, even on non-official platforms, should not compromise safety and security.
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Mr Chairman, it is also encouraging to see Singaporeans driving initiatives which help to strengthen commitment to defence. Some Members may have watched the Jack Neo movies \"Ah Boys to Men\" and \"Ah Boys to Men 2\". The films struck a chord with many Singaporeans with their candid portrayal of Army life, becoming the highest-grossing Singapore film of all time!
This sentiment was vividly captured by Ms Heng Shu Qing, who wrote after watching the first instalment that, \"'Ah Boys to Men' tells a story that will touch the heart of every Singaporean. It is not merely just a laugh but to remind us that our independence did not come by so easily. So love our land and never take it for granted.\" We look forward to more such initiatives, which bring richness to our NS story and underscore the public support for NS.
With your permission, Mr Chairman, I have asked the Clerk to place on the Members' seats additional materials that show how MINDEF has been engaging the public on defence issues. One of the materials is a DVD with the top 10 N.E.mation! Seven clips. Let me conclude by showing you this year's winning clip, produced by four young students from Ahmad Ibrahim Secondary School last December, when they were in Secondary 2. On screen is a picture of the team at the award ceremony last month. You can see the happy faces of the young people. And you will see the clip a little later on. It warms the heart to know that young Singaporeans understand the challenges we face.
Mr Chairman, may I have your permission to screen the video? [A video was shown to hon Members.]
The Chairman: Hon Members, are there any clarifications? Dr Lim Wee Kiak, please.
Dr Lim Wee Kiak:\tMr Chairman, Sir, I would like the Minister to reply to my earlier question in my cut regarding families seeking closure in terms of post-incident management in SAF.
Dr Ng Eng Hen: Mr Chairman, I concur with the Member and in previous instances when Members have brought up the topic like Ms Irene Ng. That is certainly an area that MINDEF can pay attention to and improve on. We are trying to learn from other militaries that have to do a lot more of that. Training is a part of it. I would say that the heart of our commanders is there. When each incident happens, the CO, the Brigade Commander up to the Chiefs, the heart
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is there. In these difficult circumstances, especially when there is a loss of life, sometimes, it takes months and years for them to have closure. We promise to be patient and to walk with them. Some family members, of course, struggle with resentment and doubt, whether SAF could have done more, could have been more transparent, as the Member has rightly pointed out. So, I want to assure the Member that we are sensitive to this and certainly want to improve in this area.
Ms Irene Ng Phek Hoong:\tA follow-up question, Mr Chairman. I wonder whether the Minister would consider setting up a NS memorial to recognise the sacrifices of our sons to NS and also to recognise the efforts that they have put in over the years since NS has been set up. A central part of memorial can be to pay tribute to those who have died while in service. It could be training-related deaths or could be from operational duties. But there is no shame for us to acknowledge that there have been deaths in NS. It is a fact for militaries all over the world, whether they are conscription or whether they are regular standing army, that military training involves danger. And that is why we pay special tribute to our NSmen. Having a national memorial could also help to give some closure to the bereaved families of those who have lost their sons.
Dr Ng Eng Hen: I am open to these ideas and what the Member says makes sense. But I also want Members to recognise that we take reference from other militaries with a much longer history. We have an army museum. We have other elements that we can use. What I am trying to say is this is a very sensitive subject. There are countries with a very long history, who have fought real wars. We do not know whether in our history that one day, as we have in the past, we may have to fight another war. I take the grief of individual families but I think we also want to give a certain perspective to the different circumstances of sacrifice and heroism. They mean different things in different contexts.
So, we should be a little circumspect because we are still a very young nation. It is not for want of wanting to do it. We certainly want to respond to their acts. Indeed, each injury and each sacrifice is a loss. But I think Members can understand that heroism and sacrifice may mean different things across a country that is 50 years old, across a country that is 200 years old, across a country that is 500 years old.
Ms Irene Ng Phek Hoong:\tSir, the Minister did not address my question earlier on the importance of fostering teamwork in military culture and specifically the incident regarding NSman Ee Chun Sheng who was left behind.
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He broke contact with his team and he died of cardiac failure. Can I ask the Minister and the Senior Minister of State what is MINDEF's position on this issue of being left behind by teammates and whether any action has been taken against them?
Mr Chan Chun Sing: We fully agree with Ms Irene Ng on the importance of teamwork. In fact, I think for all NSmen that have gone through NS, they know the first rule in BMT that they were taught is the buddy system, from the very first day. The buddy system. You never walk alone, you never do things on your own but you always do things in pairs. This is something that is very valuable to us in the military and we expect all our people to do so.
On the specific case in this particular instance, I think we will let the investigations wrap up. If there is any mistake made by the individuals concerned, we will apply the military justice system accordingly.
The Chairman:\tIf there are no more clarifications, Dr Lim, would you like to withdraw your amendment?
Dr Lim Wee Kiak: Mr Chairman, I know it is late now. It leaves me to thank the Minister Dr Ng Eng Hen, Senior Minister of State Mr Chan Chun Sing as well as Senior Parliamentary Secretary Dr Maliki for their very comprehensive replies to all the questions. I know that there are a lot more work that needs to be done to build up public confidence and the road ahead of us is still long. Sir, I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $11,895,000,000 for Head J ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $440,000,000 for Head J ordered to stand part of the Development Estimates. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply Reporting Progress","subTitle":null,"sectionType":"OS","content":"Dr Ng Eng Hen: Sir, may I seek your consent to move that progress be reported now and leave be asked to sit again tomorrow?
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The Chairman: I give my consent.
[(proc text) Resolved, \"That progress be reported now and leave be asked to sit again tomorrow.\" – [Dr Ng Eng Hen]. (proc text)]
[(proc text) Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
Dr Ng Eng Hen: Mr Deptuy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 2013/2014, and ask leave to sit again tomorrow.
Mr Deputy Speaker: So be it.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Adjournment","subTitle":null,"sectionType":"OS","content":"[(proc text) Resolved, \"That Parliament do now adjourn.\" – [Dr Ng Eng Hen]. (proc text)]
Adjourned accordingly at 7.42 pm.
\tPage: 189
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